Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 28, 2016 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | GBLI | |
Entity Registrant Name | GLOBAL INDEMNITY PLC | |
Entity Central Index Key | 1,494,904 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Ordinary Shares A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 13,429,780 | |
Ordinary Shares B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 4,133,366 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fixed maturities: | ||
Available for sale, at fair value (amortized cost: $1,297,465 and $1,308,333) | $ 1,310,957 | $ 1,306,149 |
Equity securities: | ||
Available for sale, at fair value (cost: $102,899 and $100,157) | 122,779 | 110,315 |
Other invested assets | 32,635 | 32,592 |
Total investments | 1,466,371 | 1,449,056 |
Cash and cash equivalents | 63,779 | 67,037 |
Premiums receivable, net | 86,469 | 89,245 |
Reinsurance receivables, net | 108,452 | 115,594 |
Funds held by ceding insurers | 19,356 | 16,037 |
Federal income taxes receivable | 4,656 | 4,828 |
Deferred federal income taxes | 39,337 | 34,687 |
Deferred acquisition costs | 55,141 | 56,517 |
Intangible assets | 23,211 | 23,607 |
Goodwill | 6,521 | 6,521 |
Prepaid reinsurance premiums | 38,401 | 44,363 |
Receivable for securities sold | 172 | |
Other assets | 70,121 | 49,630 |
Total assets | 1,981,815 | 1,957,294 |
Liabilities: | ||
Unpaid losses and loss adjustment expenses | 664,382 | 680,047 |
Unearned premiums | 278,561 | 286,285 |
Ceded balances payable | 11,718 | 4,589 |
Payable for securities purchased | 1,921 | |
Contingent commissions | 9,392 | 11,069 |
Debt | 173,162 | 172,034 |
Other liabilities | 60,236 | 53,344 |
Total liabilities | 1,199,372 | 1,207,368 |
Commitments and contingencies (Note 9) | ||
Shareholders' equity: | ||
Ordinary shares, $0.0001 par value, 900,000,000 ordinary shares authorized; A ordinary shares issued: 16,568,674 and 16,424,546, respectively; A ordinary shares outstanding: 13,429,780 and 13,313,751, respectively; B ordinary shares issued and outstanding: 4,133,366 and 4,133,366, respectively | 3 | 3 |
Additional paid-in capital | 532,498 | 529,872 |
Accumulated other comprehensive income, net of taxes | 23,279 | 4,078 |
Retained earnings | 329,911 | 318,416 |
Total shareholders' equity | 782,443 | 749,926 |
Total liabilities and shareholders' equity | 1,981,815 | 1,957,294 |
Ordinary Shares A | ||
Shareholders' equity: | ||
A ordinary shares in treasury, at cost: 3,138,894 and 3,110,795 shares, respectively | (103,248) | (102,443) |
Total shareholders' equity | $ 2 | $ 2 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Available for sale, amortized cost | $ 1,297,465 | $ 1,308,333 |
Available for sale, at cost | $ 102,899 | $ 100,157 |
Ordinary shares, par value | $ 0.0001 | $ 0.0001 |
Ordinary shares, shares authorized | 900,000,000 | 900,000,000 |
Ordinary Shares A | ||
Ordinary shares, shares issued | 16,568,674 | 16,424,546 |
Ordinary shares, shares outstanding | 13,429,780 | 13,313,751 |
Treasury shares, cost | 3,138,894 | 3,110,795 |
Ordinary Shares B | ||
Ordinary shares, shares issued | 4,133,366 | 4,133,366 |
Ordinary shares, shares outstanding | 4,133,366 | 4,133,366 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Revenues: | |||||
Gross premiums written | $ 133,569 | $ 150,148 | $ 429,254 | $ 459,532 | |
Net premiums written | 115,051 | 122,497 | 357,233 | 394,606 | |
Net premiums earned | 119,553 | 124,707 | 358,993 | 380,921 | |
Net investment income | 8,795 | 8,852 | 25,103 | 26,234 | |
Net realized investment gains (losses): | |||||
Other than temporary impairment losses on investments | (2,214) | (4,641) | (4,481) | (6,879) | |
Other net realized investment gains (losses) | 4,142 | (6,137) | (4,576) | (337) | |
Total net realized investment gains (losses) | 1,928 | (10,778) | (9,057) | (7,216) | |
Other income | 7,852 | 1,279 | 9,603 | 2,408 | |
Total revenues | 138,128 | 124,060 | 384,642 | 402,347 | |
Losses and Expenses: | |||||
Net losses and loss adjustment expenses | 72,162 | 77,691 | 215,057 | 226,870 | |
Acquisition costs and other underwriting expenses | 48,129 | 50,934 | 148,761 | 150,118 | |
Corporate and other operating expenses | 5,006 | 3,567 | 13,064 | 19,441 | |
Interest expense | 2,233 | 1,595 | 6,677 | 2,635 | |
Income (loss) before income taxes | 10,598 | (9,727) | 1,083 | 3,283 | |
Income tax expense (benefit) | 1,063 | (5,981) | (10,412) | (10,882) | |
Net income (loss) | $ 9,535 | $ (3,746) | $ 11,495 | $ 14,165 | |
Net income (loss) | |||||
Basic | [1] | $ 0.55 | $ (0.15) | $ 0.67 | $ 0.56 |
Diluted | [1] | $ 0.54 | $ (0.15) | $ 0.66 | $ 0.55 |
Weighted-average number of shares outstanding | |||||
Basic | 17,254,843 | 25,463,994 | 17,241,040 | 25,452,991 | |
Diluted | [2] | 17,540,060 | 25,463,994 | 17,515,854 | 25,684,931 |
[1] | For the quarter ended September 30, 2015, "diluted" loss per share is the same as "basic" loss per share due to a net loss for the period. | ||||
[2] | For the quarter ended September 30, 2015, "weighted average shares outstanding - basic" was used to calculate "diluted earnings per share" due to a net loss for the period. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Net income (loss) | $ 9,535 | $ (3,746) | $ 11,495 | $ 14,165 |
Other comprehensive income (loss), net of tax: | ||||
Unrealized holding gains (losses) | 2,076 | (9,078) | 22,081 | (9,808) |
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss) | (3) | (1) | (4) | (1) |
Reclassification adjustment for (gains) losses included in net income (loss) | (781) | 2,199 | (2,474) | (517) |
Unrealized foreign currency translation gains (losses) | (89) | 23 | (402) | 187 |
Other comprehensive income (loss), net of tax | 1,203 | (6,857) | 19,201 | (10,139) |
Comprehensive income (loss), net of tax | $ 10,738 | $ (10,603) | $ 30,696 | $ 4,026 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Additional Paid-in Capital | Accumulated other comprehensive income, net of deferred income tax | Retained Earnings | Treasury Shares | Ordinary Shares A | Ordinary Shares ATreasury Shares | Ordinary Shares B |
Number at Dec. 31, 2014 | 3,064,815 | 16,331,577 | 12,061,370 | |||||
Ordinary shares issued under share incentive plans | 121,812 | |||||||
A ordinary shares purchased | 11,895 | |||||||
Ordinary shares issued to directors | 36,321 | |||||||
Elimination of shares indirectly owned by subsidiary | 34,085 | |||||||
B ordinary shares converted to A ordinary shares | 7,928,004 | 7,928,004 | ||||||
Ordinary shares redeemed | (8,260,870) | |||||||
Ordinary shares issued in connection with American Reliable acquisition | 267,702 | |||||||
Number at Dec. 31, 2015 | 3,110,795 | 16,424,546 | 4,133,366 | |||||
Balance at Dec. 31, 2014 | $ 519,590 | $ 23,384 | $ 466,717 | $ (101,404) | $ 2 | $ 1 | ||
Other comprehensive income (loss): | ||||||||
Change in unrealized holding gains (losses) | (19,436) | |||||||
Change in other than temporary impairment losses recognized in other comprehensive income | (10) | |||||||
Unrealized foreign currency translation gains (losses) | 140 | |||||||
Other comprehensive income (loss), net of tax | (19,306) | |||||||
A ordinary shares purchased, at cost | $ (333) | |||||||
Share compensation plans | 10,272 | |||||||
Ordinary shares redeemed | (189,770) | |||||||
Elimination of shares indirectly owned by subsidiary | $ (706) | |||||||
Tax benefit on share-based compensation expense | 10 | |||||||
Net income | 41,469 | |||||||
Balance at Dec. 31, 2015 | $ 749,926 | 529,872 | 4,078 | 318,416 | $ (102,443) | $ 2 | $ 1 | |
Ordinary shares issued under share incentive plans | 115,712 | |||||||
A ordinary shares purchased | 28,099 | |||||||
Ordinary shares issued to directors | 28,416 | |||||||
Number at Sep. 30, 2016 | 3,138,894 | 16,568,674 | 4,133,366 | |||||
Other comprehensive income (loss): | ||||||||
Change in unrealized holding gains (losses) | 19,607 | |||||||
Change in other than temporary impairment losses recognized in other comprehensive income | (4) | |||||||
Unrealized foreign currency translation gains (losses) | (402) | (402) | ||||||
Other comprehensive income (loss), net of tax | 19,201 | 19,201 | ||||||
A ordinary shares purchased, at cost | $ (805) | |||||||
Share compensation plans | 2,499 | |||||||
Tax benefit on share-based compensation expense | 127 | |||||||
Net income | 11,495 | 11,495 | ||||||
Balance at Sep. 30, 2016 | $ 782,443 | $ 532,498 | $ 23,279 | $ 329,911 | $ (103,248) | $ 2 | $ 1 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 11,495 | $ 14,165 |
Adjustments to reconcile net income to net cash used for operating activities: | ||
Amortization of the value of business acquired | 22,823 | |
Amortization and depreciation | 4,757 | 3,761 |
Amortization of debt issuance costs | 92 | 16 |
Restricted stock and stock option expense | 2,499 | 9,671 |
Deferred federal income taxes | (10,847) | (8,984) |
Amortization of bond premium and discount, net | 7,398 | 10,557 |
Net realized investment losses | 9,057 | 7,216 |
Gain on disposition of subsidiary | (6,872) | |
Equity in the earnings of equity method limited liability investments | (3,749) | (1,448) |
Changes in: | ||
Premiums receivable, net | 2,776 | 18,971 |
Reinsurance receivables, net | 7,142 | 5,373 |
Funds held by ceding insurers | (3,319) | 661 |
Unpaid losses and loss adjustment expenses | (15,665) | (35,452) |
Unearned premiums | (7,724) | 4,608 |
Ceded balances payable | 7,129 | (11,909) |
Other assets and liabilities, net | (19,348) | (13,199) |
Contingent commissions | (1,677) | (2,909) |
Federal income tax receivable/payable | 172 | (2,048) |
Deferred acquisition costs, net | 1,376 | (32,160) |
Prepaid reinsurance premiums | 5,962 | 9,081 |
Net cash used for operating activities | (9,346) | (1,206) |
Cash flows from investing activities: | ||
Cash release from escrow for business acquisition | 113,696 | |
Acquisition of business, net of cash acquired | (92,336) | |
Proceeds from sale of fixed maturities | 279,659 | 290,580 |
Proceeds from sale of equity securities | 34,976 | 34,161 |
Proceeds from sale of preferred stock | 1,540 | |
Proceeds from maturity of fixed maturities | 61,437 | 146,870 |
Proceeds from limited partnership distribution | 6,350 | 4,287 |
Proceeds from disposition of subsidiary, net of cash and cash equivalents disposed of $1,269 | 16,937 | |
Amounts paid in connection with derivatives | (11,527) | (7,072) |
Purchases of fixed maturities | (344,514) | (485,153) |
Purchases of equity securities | (34,945) | (32,434) |
Purchases of other invested assets | (2,643) | (2,250) |
Net cash provided by (used for) investing activities | 5,730 | (28,111) |
Cash flows from financing activities: | ||
Net borrowings under margin borrowing facilities | 1,050 | 21,114 |
Proceeds from issuance of subordinated notes | 100,000 | |
Debt issuance cost | (14) | (3,659) |
Tax benefit on share-based compensation expense | 127 | 58 |
Purchase of A ordinary shares | (805) | (333) |
Net cash provided by financing activities | 358 | 117,180 |
Net change in cash and cash equivalents | (3,258) | 87,863 |
Cash and cash equivalents at beginning of period | 67,037 | 58,823 |
Cash and cash equivalents at end of period | $ 63,779 | $ 146,686 |
Consolidated Statements of Cas8
Consolidated Statements of Cash Flows (Parenthetical) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Proceeds from disposition of subsidiary, cash disposed | $ 1,269 |
Principles of Consolidation and
Principles of Consolidation and Basis of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
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 in July, 2010. The Company’s A ordinary shares are publicly traded on the NASDAQ Global Select Market under the trading symbol “GBLI.” The Company manages its business through three business segments: Commercial Lines, Personal Lines, and Reinsurance Operations. The Company’s Commercial Lines, managed in Bala Cynwyd, Pennsylvania, offers specialty property and casualty insurance products in the excess and surplus lines marketplace. The Company manages its Commercial Lines by differentiating them into three product classifications: Penn-America, which markets property and general liability products 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 Commercial Lines business segment and are not considered individual business segments because each product has similar economic characteristics, distribution, and coverage. The Company’s Personal Lines segment, via the American Reliable Insurance Company (“American Reliable”) product classification, offers specialty personal lines and agricultural coverage through general and specialty agents with specific binding authority on an admitted basis and is managed in Scottsdale, Arizona. 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 Company, Ltd. (“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 Commercial Lines and Personal Lines segments comprise the Company’s U.S. Insurance Operations (‘Insurance Operations”). See Note 12 for additional information regarding segments. On September 30, 2016, Diamond State Insurance Company sold all the outstanding shares of capital stock of one of its wholly owned subsidiaries, United National Specialty Insurance Company, to an unrelated party. Diamond State Insurance Company received a one-time payment of $18.7 million and recognized a pretax gain of $6.9 million which is reflected in other income (loss). This transaction will not have an impact on the Company’s ongoing business operations. Going forward, any business previously written by United National Specialty Insurance Company has been and will be written by other companies within the Company’s U.S. Insurance Operations. The interim consolidated financial statements are unaudited, but 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 unaudited consolidated financial statements include all adjustments that are, in the opinion of management, of a normal recurring nature and are necessary for a fair statement of results for the interim periods. Results of operations for the quarters and nine months ended September 30, 2016 and 2015 are not necessarily indicative of the results of a full year. The accompanying notes to the unaudited consolidated financial statements should be read in conjunction with the notes to the consolidated financial statements contained in the Company’s 2015 Annual Report on Form 10-K. 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. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2016 | |
Investments | 2. Investments The amortized cost and estimated fair value of investments were as follows as of September 30, 2016 and December 31, 2015: (Dollars in thousands) Amortized Cost Gross Gross Estimated Fair Value Other than As of September 30, 2016 Fixed maturities: U.S. treasury and agency obligations $ 79,290 $ 1,549 $ — $ 80,839 $ — Obligations of states and political subdivisions 167,430 3,315 (49 ) 170,696 — Mortgage-backed securities 104,222 2,765 (38 ) 106,949 — Asset-backed securities 250,766 1,731 (297 ) 252,200 (6 ) Commercial mortgage-backed securities 175,469 372 (1,188 ) 174,653 — Corporate bonds and debt 391,277 5,073 (695 ) 395,655 — Foreign corporate bonds 129,011 982 (28 ) 129,965 — Total fixed maturities 1,297,465 15,787 (2,295 ) 1,310,957 (6 ) Common stock 102,899 22,225 (2,345 ) 122,779 — Other invested assets 32,635 — — 32,635 — Total $ 1,432,999 $ 38,012 $ (4,640 ) $ 1,466,371 $ (6 ) (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 Cost Gross Gross Estimated Fair Value Other than As of December 31, 2015 Fixed maturities: U.S. treasury and agency obligations $ 106,303 $ 1,140 $ (321 ) $ 107,122 $ — Obligations of states and political subdivisions 203,121 2,576 (457 ) 205,240 — Mortgage-backed securities 157,753 2,113 (743 ) 159,123 — Asset-backed securities 261,008 435 (1,421 ) 260,022 (9 ) Commercial mortgage-backed securities 142,742 — (2,352 ) 140,390 — Corporate bonds 334,720 685 (3,294 ) 332,111 — Foreign corporate bonds 102,686 194 (739 ) 102,141 — Total fixed maturities 1,308,333 7,143 (9,327 ) 1,306,149 (9 ) Common stock 100,157 16,118 (5,960 ) 110,315 — Other invested assets 32,592 — — 32,592 — Total $ 1,441,082 $ 23,261 $ (15,287 ) $ 1,449,056 $ (9 ) (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”). 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% and 5% of shareholders’ equity at September 30, 2016 and December 31, 2015, respectively. The amortized cost and estimated fair value of the Company’s fixed maturities portfolio classified as available for sale at September 30, 2016, 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 Cost Estimated Due in one year or less $ 81,811 $ 82,130 Due after one year through five years 633,977 642,829 Due after five years through ten years 47,779 48,727 Due after ten years through fifteen years — — Due after fifteen years 3,441 3,469 Mortgage-backed securities 104,222 106,949 Asset-backed securities 250,766 252,200 Commercial mortgage-backed securities 175,469 174,653 Total $ 1,297,465 $ 1,310,957 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 September 30, 2016: Less than 12 months 12 months or longer (1) Total (Dollars in thousands) Fair Value Gross Fair Value Gross Fair Value Gross Fixed maturities: Obligations of states and political subdivisions $ 17,372 $ (44 ) $ 677 $ (5 ) $ 18,049 $ (49 ) Mortgage-backed securities 3,123 (27 ) 309 (11 ) 3,432 (38 ) Asset-backed securities 52,109 (185 ) 19,260 (112 ) 71,369 (297 ) Commercial mortgage-backed securities 82,291 (571 ) 57,970 (617 ) 140,261 (1,188 ) Corporate bonds and debt 43,156 (626 ) 6,507 (69 ) 49,663 (695 ) Foreign corporate bonds 19,869 (28 ) — — 19,869 (28 ) Total fixed maturities 218,520 (1,481 ) 84,723 (814 ) 303,243 (2,295 ) Common stock 24,387 (2,079 ) 2,027 (266 ) 26,414 (2,345 ) Total $ 242,907 $ (3,560 ) $ 86,750 $ (1,080 ) $ 329,657 $ (4,640 ) (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, 2015: Less than 12 months 12 months or longer (1) Total (Dollars in thousands) Fair Value Gross Fair Value Gross Fair Value Gross Fixed maturities: U.S. treasury and agency obligations $ 79,496 $ (321 ) $ — $ — $ 79,496 $ (321 ) Obligations of states and political subdivisions 49,708 (373 ) 7,732 (84 ) 57,440 (457 ) Mortgage-backed securities 63,759 (743 ) — — 63,759 (743 ) Asset-backed securities 203,381 (1,404 ) 4,843 (17 ) 208,224 (1,421 ) Commercial mortgage-backed securities 118,813 (2,005 ) 21,577 (347 ) 140,390 (2,352 ) Corporate bonds 211,364 (3,269 ) 2,120 (25 ) 213,484 (3,294 ) Foreign corporate bonds 63,860 (697 ) 5,129 (42 ) 68,989 (739 ) Total fixed maturities 790,381 (8,812 ) 41,401 (515 ) 831,782 (9,327 ) Common stock 36,798 (5,960 ) — — 36,798 (5,960 ) Total $ 827,179 $ (14,772 ) $ 41,401 $ (515 ) $ 868,580 $ (15,287 ) (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 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 has a 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. 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: Obligations of states and political subdivisions Mortgage-backed securities (“MBS”) – Asset-backed securities (“ABS”) - Commercial mortgage-backed securities (“CMBS”) - Corporate bonds and debt - Foreign bonds Common stock The Company recorded the following other than temporary impairments (“OTTI”) on its investment portfolio for the quarters and nine months ended September 30, 2016 and 2015: Quarters Ended September 30, Nine Months Ended (Dollars in thousands) 2016 2015 2016 2015 Fixed maturities: OTTI losses, gross $ (108 ) $ — $ (201 ) $ (23 ) Portion of loss recognized in other comprehensive income (pre-tax) — — — — Net impairment losses on fixed maturities recognized in earnings (108 ) — (201 ) (23 ) Equity securities (2,106 ) (4,641 ) (4,280 ) (6,856 ) Total $ (2,214 ) $ (4,641 ) $ (4,481 ) $ (6,879 ) The following table is an analysis of the credit losses recognized in earnings on fixed maturities held by the Company for the quarters and nine months ended September 30, 2016 and 2015 for which a portion of the OTTI loss was recognized in other comprehensive income. Quarters Ended September 30, Nine Months Ended (Dollars in thousands) 2016 2015 2016 2015 Balance at beginning of period $ 31 $ 31 $ 31 $ 50 Additions where no OTTI was previously recorded — — — — 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 — — — (19 ) Balance at end of period $ 31 $ 31 $ 31 $ 31 Accumulated Other Comprehensive Income, Net of Tax Accumulated other comprehensive income, net of tax, as of September 30, 2016 and December 31, 2015 was as follows: (Dollars in thousands) September 30, 2016 December 31, 2015 Net unrealized gains (losses) from: Fixed maturities $ 13,492 $ (2,184 ) Common stock 19,880 10,158 Deferred taxes (10,093 ) (3,896 ) Accumulated other comprehensive income, net of tax $ 23,279 $ 4,078 The following tables present the changes in accumulated other comprehensive income, net of tax, by component for the quarters and nine months ended September 30, 2016 and 2015: Quarter Ended September 30, 2016 (Dollars in thousands) Unrealized Gains Foreign Currency Accumulated Other Beginning balance $ 22,511 $ (435 ) $ 22,076 Other comprehensive income (loss) before reclassification 2,073 (89 ) 1,984 Amounts reclassified from accumulated other comprehensive (loss) (781 ) — (781 ) Other comprehensive income (loss) 1,292 (89 ) 1,203 Ending balance $ 23,803 $ (524 ) $ 23,279 Quarter Ended September 30, 2015 (Dollars in thousands) Unrealized Gains Foreign Currency Accumulated Other Beginning balance $ 20,201 $ (99 ) $ 20,102 Other comprehensive (loss) before reclassification (9,009 ) (47 ) (9,056 ) Amounts reclassified from accumulated other comprehensive income 2,129 70 2,199 Other comprehensive income (loss) (6,880 ) 23 (6,857 ) Ending balance $ 13,321 $ (76 ) $ 13,245 Nine Months Ended September 30, 2016 (Dollars in thousands) Unrealized Gains Foreign Currency Accumulated Other Beginning balance $ 4,200 $ (122 ) $ 4,078 Other comprehensive income (loss) before reclassification 22,075 (400 ) 21,675 Amounts reclassified from accumulated other comprehensive (loss) (2,472 ) (2 ) (2,474 ) Other comprehensive income (loss) 19,603 (402 ) 19,201 Ending balance $ 23,803 $ (524 ) $ 23,279 Nine Months Ended September 30, 2015 (Dollars in thousands) Unrealized Gains Foreign Currency Accumulated Other Beginning balance $ 23,647 $ (263 ) $ 23,384 Other comprehensive (loss) before reclassification (9,413 ) (209 ) (9,622 ) Amounts reclassified from accumulated other comprehensive income (loss) (913 ) 396 (517 ) Other comprehensive income (loss) (10,326 ) 187 (10,139 ) Ending balance $ 13,321 $ (76 ) $ 13,245 The reclassifications out of accumulated other comprehensive income for the quarters and nine months ended September 30, 2016 and 2015 were as follows: (Dollars in thousands) Amounts Reclassified from Quarters Ended September 30, Details about Accumulated Other Comprehensive Income Components Affected Line Item in the Consolidated Statements of Operations 2016 2015 Unrealized gains and losses on available for sale securities Other net realized investment (gains) $ (3,384 ) $ (2,042 ) Other than temporary impairment losses on investments 2,214 4,641 Total before tax (1,170 ) 2,599 Income tax expense (benefit) 389 (470 ) Unrealized gains on available for sale securities, net of tax $ (781 ) $ 2,129 Foreign currency items Other net realized investment losses $ — $ 108 Income tax (benefit) — (38 ) Foreign currency items, net of tax $ — $ 70 Total reclassifications Total reclassifications, net of tax $ (781 ) $ 2,199 (Dollars in thousands) Amounts Reclassified from Comprehensive Income Nine Months Ended September 30, Details about Accumulated Other Comprehensive Income Components Affected Line Item in the Consolidated Statements of Operations 2016 2015 Unrealized gains and losses on available for sale securities Other net realized investment (gains) $ (8,214 ) $ (9,168 ) Other than temporary impairment losses on investments 4,481 6,879 Total before tax (3,733 ) (2,289 ) Income tax expense 1,261 1,376 Unrealized gains and losses on available for sale securities, net of tax $ (2,472 ) $ (913 ) Foreign currency items Other net realized investment (gains) losses $ (4 ) $ 609 Income tax expense (benefit) 2 (213 ) Foreign currency items, net of tax $ (2 ) $ 396 Total reclassifications Total reclassifications, net of tax $ (2,474 ) $ (517 ) Net Realized Investment Gains (Losses) The components of net realized investment gains (losses) for the quarters and nine months ended September 30, 2016 and 2015 were as follows: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2016 2015 2016 2015 Fixed maturities: Gross realized gains $ 434 $ 110 $ 1,252 $ 1,589 Gross realized losses (147 ) (1,451 ) (291 ) (1,692 ) Net realized gains 287 (1,341 ) 961 (103 ) Common stock: Gross realized gains 3,345 3,494 8,068 9,418 Gross realized losses (2,462 ) (4,860 ) (5,292 ) (7,731 ) Net realized gains 883 (1,366 ) 2,776 1,687 Preferred stock: Gross realized gains — — — 96 Gross realized losses — — — — Net realized gains — — — 96 Derivatives: Gross realized gains 1,955 — — — Gross realized losses (1,197 ) (8,071 ) (12,794 ) (8,896 ) Net realized gains (losses) 758 (8,071 ) (12,794 ) (8,896 ) Total net realized investment gains (losses) $ 1,928 $ (10,778 ) $ (9,057 ) $ (7,216 ) The proceeds from sales of available-for-sale securities resulting in net realized investment gains for the nine months ended September 30, 2016 and 2015 were as follows: Nine Months Ended September 30, (Dollars in thousands) 2016 2015 Fixed maturities $ 279,659 $ 290,580 Equity securities $ 34,976 $ 34,161 Preferred stock $ — $ 1,540 Net Investment Income The sources of net investment income for the quarters and nine months ended September 30, 2016 and 2015 were as follows: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2016 2015 2016 2015 Fixed maturities $ 8,131 $ 8,673 $ 22,729 $ 24,709 Equity securities 698 703 2,647 2,419 Cash and cash equivalents 44 32 111 59 Other invested assets 909 193 3,806 1,535 Total investment income 9,782 9,601 29,293 28,722 Investment expense (1) (987 ) (749 ) (4,190 ) (2,488 ) Net investment income $ 8,795 $ 8,852 $ 25,103 $ 26,234 (1) Investment expense for the nine months ended September 30, 2016 includes $1.5 million in upfront fees necessary to enter into a new investment. See Note 9 for additional information on the Company’s $40 million commitment related to this new investment. The Company’s total investment return on a pre-tax basis for the quarters and nine months ended September 30, 2016 and 2015 were as follows: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2016 2015 2016 2015 Net investment income $ 8,795 $ 8,852 $ 25,103 $ 26,234 Net realized investment gains (losses) 1,928 (10,778 ) (9,057 ) (7,216 ) Change in unrealized holding gains and (losses) 2,061 (10,420 ) 25,398 (15,575 ) Net realized and unrealized investment returns 3,989 (21,198 ) 16,341 (22,791 ) Total investment return $ 12,784 $ (12,346 ) $ 41,444 $ 3,443 Total investment return % (1) 0.8 % (0.7 %) 2.7 % 0.2 % Average investment portfolio (2) $ 1,530,599 $ 1,800,993 $ 1,522,247 $ 1,788,777 (1) Not annualized. (2) 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 September 30, 2016, the Company held insurance enhanced asset backed and credit securities with a market value of approximately $33.1 million. Approximately $13.7 million of these securities were tax free municipal bonds, which represented approximately 0.9% 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 “A+.” Approximately $5.4 million of these bonds are pre-refunded with U.S. treasury securities, of which $0.5 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 $8.3 million of tax free insurance enhanced municipal bonds, $0.5 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 with Ratings without Rating Insurance Insurance AA $ 509 $ — A — 509 Total $ 509 $ 509 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 September 30, 2016, is as follows: (Dollars in thousands) Financial Guarantor Total Pre-refunded Government Exposure Net of Pre-refunded Securities Ambac Financial Group $ 1,512 $ 455 $ — $ 1,057 Assured Guaranty Corporation 3,500 — — 3,500 Municipal Bond Insurance Association 3,229 — — 3,229 Gov’t National Housing Association 498 — 498 — Total backed by financial guarantors 8,739 455 498 7,786 Other credit enhanced municipal bonds 4,923 4,923 — — Total $ 13,662 $ 5,378 $ 498 $ 7,786 In addition to the tax-free municipal bonds, the Company held $19.4 million of insurance enhanced bonds that are comprised of $18.3 million of taxable municipal bonds and $1.1 million of asset-backed securities, 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 ($3.8 million), Ambac Financial Group ($0.9 million), Assured Guaranty Corporation ($14.6 million), and Financial Guaranty Insurance Group ($0.1 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 September 30, 2016. 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 September 30, 2016 and December 31, 2015: Estimated Fair Value (Dollars in thousands) September 30, 2016 December 31, 2015 On deposit with governmental authorities $ 26,203 $ 38,815 Intercompany trusts held for the benefit of U.S. policyholders 601,052 643,216 Held in trust pursuant to third party requirements 67,924 66,544 Letter of credit held for third party requirements 4,292 5,598 Securities held as collateral for borrowing arrangements (1) 97,638 95,647 Total $ 797,109 $ 849,820 (1) Amount required to collateralize margin borrowing facilities. Variable Interest Entities A Variable Interest Entity (VIE) refers to an investment in which an investor holds a controlling interest that is not based on the majority of voting rights. Under the VIE model, the party that has the power to exercise significant management influence and maintain a controlling financial interest in the entity’s economics is said to be the primary beneficiary, and is required to consolidate the entity within their results. Other entities that participate in a VIE, for which their financial interests fluctuate with changes in the fair value of the investment entity’s net assets but do not have significant management influence and the ability to direct the VIE’s significant economic activities are said to have a variable interest in the VIE but do not consolidate the VIE in their financial results. The Company has variable interests in several VIE’s for which it is not the primary beneficiary. These investments are accounted for under the equity method of accounting as their ownership interest exceeds 3% of their respective investments. The fair value of one of the Company’s variable interest VIE’s was $29.1 million and $32.6 million as of September 30, 2016 and December 31, 2015, respectively. The Company’s maximum exposure to loss from this variable interest VIE, which factors in future funding commitments, was $51.1 million at September 30, 2016 and $52.6 million at December 31, 2015. The fair value of the remaining three variable interest VIE’s, which were acquired in 2016, were $3.6 million at September 30, 2016. The Company is not able to accurately estimate future funding requirements for the remaining three variable interest VIE’s due to related debt components of the underlying investments that are not considered variable interest VIE’s. If the entire future funding commitments of these three investments were considered variable interest VIE’s, the Company’s maximum exposure to loss from the remaining VIE’s at September 30, 2016 would be $24.6 million. The Company’s investment in variable interest VIE’s is included in other invested assets on the consolidated balance sheet with changes in fair value recorded in the statement of operations. |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments | 3. 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 (losses) in the consolidated statement of operations. The Company is ultimately responsible for the valuation of the interest rate swaps. To aid in determining the estimated fair value of the interest rate swaps, the Company relies on the forward interest rate curve and information obtained 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 September 30, 2016 and December 31, 2015: (Dollars in thousands) September 30, 2016 December 31, 2015 Derivatives Not Designated as Hedging Instruments under ASC 815 Balance Sheet Location Notional Fair Value Notional Fair Value Interest rate swap agreements Other liabilities $ 200,000 $ (24,388 ) $ 200,000 $ (15,256 ) 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 quarters and nine months ended September 30, 2016 and 2015: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) Statement of Operations Line 2016 2015 2016 2015 Interest rate swap agreements Net realized investment gains (losses) $ 758 $ (8,071 ) $ (12,794 ) $ (8,896 ) As of September 30, 2016 and December 31, 2015, the Company is due $4.4 million and $4.5 million, respectively, for funds it needed to post to execute the swap transaction and $25.2 million and $17.3 million, respectively, for margin calls made in connection with the interest rate swaps. These amounts are included in other assets on the consolidated balance sheets. 4. Fair Value Measurements |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Measurements | 4. 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. The following table presents information about the Company’s invested assets and derivative instruments measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value. As of September 30, 2016 Fair Value Measurements (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets: Fixed maturities: U.S. treasury and agency obligations $ 79,325 $ 1,514 $ — $ 80,839 Obligations of states and political subdivisions — 170,696 — 170,696 Mortgage-backed securities — 106,949 — 106,949 Commercial mortgage-backed securities — 174,653 — 174,653 Asset-backed securities — 252,200 — 252,200 Corporate bonds and debt — 378,795 16,860 395,655 Foreign corporate bonds — 129,965 — 129,965 Total fixed maturities 79,325 1,214,772 16,860 1,310,957 Common stock 122,779 — — 122,799 Total assets measured at fair value (1) $ 202,104 $ 1,214,772 $ 16,860 $ 1,433,736 Liabilities: Derivative instruments $ — $ 24,388 $ — $ 24,388 Total liabilities measured at fair value $ — $ 24,388 $ — $ 24,388 (1) Excluded from the table above are limited liability companies and limited partnerships of $32.6 million at September 30, 2016 whose fair value is based on net asset value as a practical expedient. As of December 31, 2015 Fair Value Measurements (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets: Fixed maturities: U.S. treasury and agency obligations $ 101,264 $ 5,858 $ — $ 107,122 Obligations of states and political subdivisions — 205,240 — 205,240 Mortgage-backed securities — 159,123 — 159,123 Commercial mortgage-backed securities — 140,390 — 140,390 Asset-backed securities — 260,022 — 260,022 Corporate bonds — 332,111 — 332,111 Foreign corporate bonds — 102,141 — 102,141 Total fixed maturities 101,264 1,204,885 — 1,306,149 Common stock 110,315 — — 110,315 Total assets measured at fair value (1) $ 211,579 $ 1,204,885 $ — $ 1,416,464 Liabilities: Derivative instruments $ — $ 15,256 $ — $ 15,256 Total liabilities measured at fair value $ — $ 15,256 $ — $ 15,256 (1) Excluded from the table above are limited partnerships of $32.6 million at December 31, 2015 whose fair value is based on net asset value as a practical expedient. 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. 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. For the Company’s material debt arrangements, the current fair value of the Company’s debt at September 30, 2016 and December 31, 2015 was as follows: September 30, 2016 December 31, 2015 (Dollars in thousands) Carrying Value Fair Value Carrying Value Fair Value Margin Borrowing Facilities $ 76,696 $ 76,696 $ 75,646 $ 75,646 7.75% Subordinated Notes due 2045 (1) 96,466 99,706 96,388 91,748 Total $ 173,162 $ 176,402 $ 172,034 $ 167,394 (1) As of September 30, 2016 and December 31, 2015, the carrying value and fair value of the 7.75% Subordinated Notes due 2045 are net of unamortized debt issuance cost of $3.5 million. The fair value of the margin borrowing facilities approximates its carrying value due to the facilities being due on demand. The 7.75% subordinated notes due 2045 are publicly traded instruments and are classified as Level 1 in the fair value hierarchy. There were no transfers between Level 1 and Level 2 during the quarters ended September 30, 2016 or 2015. The following table presents changes in Level 3 investments measured at fair value on a recurring basis for the quarters and nine months ended September 30, 2016 and 2015: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2016 2015 2016 2015 Beginning balance $ 11,220 $ — $ — $ — Total gains (realized / unrealized): Amortization of bond premium and discount, net 27 — 30 — Included in accumulated other comprehensive income 534 — 531 — Purchases 5,079 — 16,299 — Distributions — — — — Ending balance $ 16,860 $ — $ 16,860 $ — The investments classified as Level 3 in the above table consist of privately placed securities with unobservable inputs. The Company does not have access to daily valuations; therefore, market trades, performance of the underlying assets, and key risks are considered in order to estimate fair values of these middle market corporate debt instruments. Fair Value of Alternative Investments Other invested assets consist of limited liability companies and limited partnerships whose fair value is based on the net asset value per share practical expedient. The following table provides the fair value and future funding commitments related to these investments at September 30, 2016 and December 31, 2015. September 30, 2016 December 31, 2015 (Dollars in thousands) Fair Value Future Fair Value Future Real Estate Fund, LP (1) $ — $ — $ — $ — European Non-Performing Loan Fund, LP (2) 29,073 22,014 32,592 20,014 Private Middle Market Loans, LLC (3) 3,562 21,058 — — Total $ 32,635 $ 43,072 $ 32,592 $ 20,014 (1) 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. (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 ability to sell or transfer its limited partnership interest without consent from the general partner. 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. Based on the terms of the partnership agreement, the Company anticipates its interest in this partnership to be redeemed in 2020. (3) This interest consists of three separate equity investments in limited liability companies whereby the Company is also a lender via separate loan agreements. Typical financing is used for growth, acquisitions, or buyouts. The Company classifies their portion of the middle market corporate debt as fixed maturities. The Company has committed $40 million to this investment strategy, including both the equity and financing provisions. While the Company is not able to estimate the proportion of future funding commitments between equity and financing, the total remaining commitment is $21.1 million. Based on the terms of the investment management agreement, the Company anticipates its interest to be redeemed no later than 2024. Limited Liability Companies and Limited Partnerships with ownership interest exceeding 3% The Company uses the equity method to account for investments in limited liability companies and limited partnerships where its ownership interest exceeds 3%. The equity method of accounting for an investment in a limited liability company and limited partnership requires that its cost basis be updated to account for the income or loss earned on the investment. The investment income associated with these limited liability companies or limited partnerships, which is reflected in the statement of operations, was $0.9 million and $0.1 million during the quarters ended September 30, 2016 and 2015, respectively, and $3.7 million and $1.4 million during the nine months ended September 30, 2016 and 2015, respectively. Pricing The Company’s pricing vendors provide prices for all investment categories except for investments in limited liability companies and limited partnerships whose fair value is based on net asset values as a practical expedient. Two vendors provide prices for equity and fixed maturity securities. The following is a description of the valuation methodologies used by the Company’s pricing vendors for investment securities carried at fair value: • Common stock 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. • Data from commercial vendors is aggregated with market information, then converted into a prepayment/spread/LIBOR curve model used for commercial mortgage obligations (“CMO”). CMOs are categorized with mortgage-backed securities in the tables listed above. For asset-backed securities, data derived from market information along with trustee and servicer reports is converted into spreads to interpolated swap yield curve. For both asset classes, evaluations utilize standard inputs plus new issue data, monthly payment information, and collateral performance. The evaluated pricing models incorporate discount rates, loan level information, prepayment speeds, treasury benchmarks, and LIBOR and swap curves. • For obligations of state and political subdivisions, a multi-dimensional relational model is used to evaluate securities. The pricing models 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 mortgage-backed securities, 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 or may potentially change. • 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 the quarters and nine months ended September 30, 2016 and 2015, the Company has not adjusted quotes or prices obtained from the pricing vendors. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Taxes | 5. Income Taxes The statutory income tax rates of the countries where the Company does business are 35% in the United States, 0% in Bermuda, 0% in the Cayman Islands, 0% in Gibraltar, 29.22% in the Duchy of Luxembourg, and 25% on non-trading income, 33% 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 expected annual taxable income of the Company in each country to estimate the annual income tax expense. Generally, during interim periods, the Company will divide total estimated annual income tax expense by total estimated annual pre-tax income to determine the expected annual income tax rate used to compute the income tax provision. The expected annual income tax rate is then applied against interim pre-tax income, excluding net realized gains and losses and distributions from limited liability companies and limited partnerships, and that amount is then added to the actual income taxes on net realized gains and losses, discrete items and distributions from limited liability companies and limited partnerships. However, when there is significant volatility in the expected effective tax rate, the Company records its actual income tax provision in lieu of the estimated effective income tax rate. 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 quarters and nine months ended September 30, 2016 and 2015 were as follows: Quarter Ended September 30, 2016: (Dollars in thousands) Non-U.S. Subsidiaries U.S. Subsidiaries Eliminations Total Revenues: Gross premiums written $ 51,900 $ 123,770 $ (42,101 ) $ 133,569 Net premiums written $ 51,900 $ 63,151 $ — $ 115,051 Net premiums earned $ 54,155 $ 65,398 $ — $ 119,553 Net investment income 11,556 5,828 (8,589 ) 8,795 Net realized investment gains (losses) 58 1,870 — 1,928 Other income (loss) (10 ) 7,862 — 7,852 Total revenues 65,759 80,958 (8,589 ) 138,128 Losses and Expenses: Net losses and loss adjustment expenses 27,932 44,230 — 72,162 Acquisition costs and other underwriting expenses 24,651 23,478 — 48,129 Corporate and other operating expenses 2,906 2,100 — 5,006 Interest expense 2,081 8,741 (8,589 ) 2,233 Income (loss) before income taxes $ 8,189 $ 2,409 $ — $ 10,598 Quarter Ended September 30, 2015: (Dollars in thousands) Non-U.S. Subsidiaries U.S. Subsidiaries Eliminations Total Revenues: Gross premiums written $ 67,543 $ 140,268 $ (57,663 ) $ 150,148 Net premiums written $ 67,534 $ 54,963 $ — $ 122,497 Net premiums earned $ 70,532 $ 54,175 $ — $ 124,707 Net investment income 10,644 4,783 (6,575 ) 8,852 Net realized investment gains (losses) (1,256 ) (9,522 ) — (10,778 ) Other income (loss) (11 ) 1,290 — 1,279 Total revenues 79,909 50,726 (6,575 ) 124,060 Losses and Expenses: Net losses and loss adjustment expenses 39,849 37,842 — 77,691 Acquisition costs and other underwriting expenses 30,504 20,430 — 50,934 Corporate and other operating expenses 1,648 1,919 — 3,567 Interest expense 1,501 6,669 (6,575 ) 1,595 Income (loss) before income taxes $ 6,407 $ (16,134 ) $ — $ (9,727 ) Nine Months Ended September 30, 2016: (Dollars in thousands) Non-U.S. Subsidiaries U.S. Subsidiaries Eliminations Total Revenues: Gross premiums written $ 141,297 $ 394,312 $ (106,355 ) $ 429,254 Net premiums written $ 141,283 $ 215,950 $ — $ 357,233 Net premiums earned $ 162,594 $ 196,399 $ — $ 358,993 Net investment income 36,791 13,888 (25,576 ) 25,103 Net realized investment gains (losses) 128 (9,185 ) — (9,057 ) Other income (loss) 17 9,586 — 9,603 Total revenues 199,530 210,688 (25,576 ) 384,642 Losses and Expenses: Net losses and loss adjustment expenses 84,154 130,903 — 215,057 Acquisition costs and other underwriting expenses 71,758 77,003 — 148,761 Corporate and other operating expenses 7,181 5,883 — 13,064 Interest expense 6,233 26,020 (25,576 ) 6,677 Income (loss) before income taxes $ 30,204 $ (29,121 ) $ — $ 1,083 Nine Months Ended September 30, 2015: (Dollars in thousands) Non-U.S. Subsidiaries U.S. Subsidiaries Eliminations Total Revenues: Gross premiums written $ 289,940 $ 411,310 $ (241,718 ) $ 459,532 Net premiums written $ 289,892 $ 104,714 $ — $ 394,606 Net premiums earned $ 214,667 $ 166,254 $ — $ 380,921 Net investment income 32,146 13,594 (19,506 ) 26,234 Net realized investment gains (losses) (1,643 ) (5,573 ) — (7,216 ) Other income (loss) (77 ) 2,485 — 2,408 Total revenues 245,093 176,760 (19,506 ) 402,347 Losses and Expenses: Net losses and loss adjustment expenses 115,654 111,216 — 226,870 Acquisition costs and other underwriting expenses 92,368 57,750 — 150,118 Corporate and other operating expenses 3,395 16,046 — 19,441 Interest expense 2,325 19,816 (19,506 ) 2,635 Income (loss) before income taxes $ 31,351 $ (28,068 ) $ — $ 3,283 The following table summarizes the components of income tax expense (benefit): Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2016 2015 2016 2015 Current income tax expense (benefit): Foreign $ 84 $ 67 $ 289 $ 228 U.S. Federal 146 (579 ) 146 (2,126 ) Total current income tax expense (benefit) 230 (512 ) 435 (1,898 ) Deferred income tax expense (benefit): U.S. Federal 833 (5,469 ) (10,847 ) (8,984 ) Total deferred income tax expense (benefit) 833 (5,469 ) (10,847 ) (8,984 ) Total income tax expense (benefit) $ 1,063 $ (5,981 ) $ (10,412 ) $ (10,882 ) 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: Quarters Ended September 30, 2016 2015 (Dollars in thousands) Amount % of Pre- Tax Income Amount % of Pre- Tax Income Expected tax provision at weighted average rate $ 933 8.8 % $ (5,580 ) (57.4 %) Adjustments: Tax exempt interest (101 ) (1.0 ) (107 ) (1.1 ) Dividend exclusion (3 ) 0.0 (175 ) (1.8 ) Other 234 2.2 (119 ) (1.2 ) Actual tax on continuing operations $ 1,063 10.0 % $ (5,981 ) (61.5 %) The effective income tax rate for the quarter ended September 30, 2016 was 10.0%, compared to an effective income tax benefit rate of 61.5% for the quarter ended September 30, 2015. The increase is primarily due to capital gains and the gain on the sale of United National Specialty Insurance Company during the quarter ended September 30, 2016. Taxes were computed using a discrete period computation because a reliable estimate of an effective tax rate could not be made. Nine Months Ended September 30, 2016 2015 (Dollars in thousands) Amount % of Pre- Tax Income Amount % of Pre- Tax Income Expected tax provision at weighted average rate $ (9,896 ) (913.8 %) $ (9,595 ) (292.3 %) Adjustments: Tax exempt interest (304 ) (28.1 ) (326 ) (9.9 ) Dividend exclusion (480 ) (44.3 ) (588 ) (17.9 ) Other 268 24.8 (373 ) (11.4 ) Actual tax on continuing operations $ (10,412 ) (961.4 %) (10,882 ) (331.5 %) The effective income tax benefit rate for the nine months ended September 30, 2016 was 961.4%, compared to an effective income tax benefit rate of 331.5% for the nine months ended September 30, 2015. The increase is primarily due to losses incurred in the Company’s U.S. operations. Taxes were computed using a discrete period computation because a reliable estimate of an effective tax rate could not be made. The Company has an alternative minimum tax (“AMT”) credit carryforward of $11.0 million and $10.9 million as of September 30, 2016 and December 31, 2015, respectively, which can be carried forward indefinitely. The Company has a net operating loss (“NOL”) carryforward of $10.1 million and $1.9 million as of September 30, 2016 and December 31, 2015, respectively, which will expire in 2036 and 2035, respectively. The Company has a Section 163(j) (“163(j)”) carryforward of $3.9 million and $3.1 million as of September 30, 2016 and December 31, 2015, respectively, which can be carried forward indefinitely. The 163(j) carryforward is for disqualified interest paid or accrued to a related entity that is not subject to U.S. tax. |
Liability for Unpaid Losses and
Liability for Unpaid Losses and Loss Adjustment Expenses | 9 Months Ended |
Sep. 30, 2016 | |
Liability for Unpaid Losses and Loss Adjustment Expenses | 6. Liability for Unpaid Losses and Loss Adjustment Expenses Activity in the liability for unpaid losses and loss adjustment expenses is summarized as follows: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2016 2015 2016 2015 Balance at beginning of period $ 683,850 $ 769,299 $ 680,047 $ 675,472 Less: Ceded reinsurance receivables 111,579 138,497 108,130 123,201 Net balance at beginning of period 572,271 630,802 571,917 552,271 Purchased reserves, gross 1,410 1,119 1,410 89,489 Less: Purchased reserves ceded (641 ) 1,119 (641 ) 12,800 Purchased reserves, net 2,051 — 2,051 76,689 Incurred losses and loss adjustment expenses related to: Current year 81,579 86,203 239,991 244,041 Prior years (9,417 ) (8,512 ) (24,934 ) (17,171 ) Total incurred losses and loss adjustment expenses 72,162 77,691 215,057 226,870 Paid losses and loss adjustment expenses related to: Current year 49,704 53,512 113,090 113,573 Prior years 35,147 56,385 114,302 143,661 Total paid losses and loss adjustment expenses 84,851 109,897 227,392 257,234 Net balance at end of period 561,633 598,596 561,633 598,596 Plus: Ceded reinsurance receivables 102,749 130,913 102,749 130,913 Balance at end of period $ 664,382 $ 729,509 $ 664,382 $ 729,509 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. In the third quarter of 2016, the Company reduced its prior accident year loss reserves by $9.4 million, which consisted of a $6.5 million decrease related to Commercial Lines and a $2.9 million decrease related to Reinsurance Operations. The $6.5 million reduction of prior accident year loss reserves related to Commercial Lines primarily consisted of the following: • General Liability: • Property: The $2.9 million reduction related to Reinsurance Operations was from the property lines. Ultimate losses were lowered in the 2014 and 2015 accident years based on a review of the experience reported from cedants. In the third quarter of 2015, the Company decreased its prior accident year loss reserves by $8.5 million, which consisted of a $7.3 million decrease related to Commercial Lines and a $1.2 million decrease related to Reinsurance Operations. The $7.3 million decrease related to Commercial Lines primarily consisted of the following: • Professional: • General Liability: The $1.2 million decrease in aggregate related to Reinsurance Operations was primarily due to lower than expected emergence on property catastrophe contracts for accident years 2009 to 2013. In the first nine months of 2016, the Company decreased its prior accident year loss reserves by $24.9 million, which consisted of an $18.8 million decrease related to Commercial Lines and a $6.1 million decrease related to Reinsurance Operations. The $18.8 million decrease related to Commercial Lines primarily consisted of the following: • General Liability: • Property: The $6.1 million reduction related to Reinsurance Operations was from the property lines. Ultimate losses were lowered for the 2013 through 2015 accident years due to lower than expected emergence of catastrophe losses. In the first nine months of 2015, the Company decreased its prior accident year loss reserves by $17.2 million, which consisted of a $12.9 million decrease related to Commercial Lines and a $4.3 million decrease related to Reinsurance Operations. The $12.9 million decrease related to Commercial Lines primarily consisted of the following: • Property: • Umbrella: • Professional: • General Liability: The $4.3 million decrease in aggregate related to Reinsurance Operations was primarily due to improved results reported by the Company’s cedants on property contracts for accident years 2009 through 2014. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2016 | |
Shareholders' Equity | 7. Shareholders’ Equity Repurchases of the Company’s A ordinary shares No shares were repurchased during the quarters ended September 30, 2016 and 2015. During the nine months ended September 30, 2016 and 2015, the Company repurchased 28,099 shares and 11,895 shares, respectively, with an average price paid of $28.64 per share and $ 28.03 per share, respectively. Please see Note 12 of the notes to the consolidated financial statements in Item 8 Part II of the Company’s 2015 Annual Report on Form 10-K for more information on the Company’s repurchase program. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions | 8. Related Party Transactions Fox Paine & Company As of September 30, 2016, Fox Paine beneficially owned shares having approximately 84% 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. Global Indemnity Reinsurance was a limited partner in Fox Paine Capital Fund, II, which was managed by Fox Paine & Company. 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. In connection with the Company’s share redemption in 2015, Global Indemnity Reinsurance elected to redeem its shares in Fox Paine Capital Fund II, and as a result, the Company no longer held an interest in Fox Paine Capital Fund II as of November 10, 2015. All of Global Indemnity Reinsurance’s allocable Global Indemnity plc shares that were held by Fox Paine Capital Fund, II were transferred into a new unrelated liquidating partnership. There were no distributions received from Fox Paine Capital Fund II during the quarters ended September 30, 2016 or 2015. During the nine months ended September 30, 2015, the Company received a distribution of $0.8 million from Fox Paine Capital Fund II. The Company did not receive any distributions from Fox Paine Capital Fund II during the nine months ended September 30, 2016. The Company relies on Fox Paine to provide management services and other services related to the operations of the Company. The Company incurred management fees of $0.5 million and $0.4 million during the quarters ended September 30, 2016 and 2015, respectively, and $1.5 million and $1.4 million during the nine months ended September 30, 2016 and 2015, respectively, as part of the annual management fee paid to Fox Paine. As of September 30, 2016 and December 31, 2015, unpaid management fees, which were included in other liabilities on the consolidated balance sheets, were $4.1 million and $2.6 million, respectively. In connection with the acquisition of American Reliable, the Company agreed to pay to Fox Paine an investment banking fee of 3% of the amount paid plus the additional capital required to operate American Reliable on a standalone basis and a $1.5 million investment advisory fee, which in the aggregate, totaled $6.5 million. This amount is included in corporate and other operating expenses on the Company’s Consolidated Statements of Operations during the nine months ended September 30, 2015. As payment for these fees, 267,702 A ordinary shares of Global Indemnity were issued under the Global Indemnity plc Share Incentive Plan (the “Plan”) in May, 2015. These shares cannot be sold until the earlier of five years after January 1, 2015 or a change of control. Cozen O’Connor The Company incurred $0.2 million and $0.6 million for legal services rendered by Cozen O’Connor during the quarter and nine months ended September 30, 2015, respectively. Stephen A. Cozen, the chairman of Cozen O’Connor, was a member of the Company’s Board of Directors until he resigned effective December 31, 2015. Crystal & Company The Company incurred brokerage fees with Crystal & Company, an insurance broker, of $0.1 million during each of the quarters ended September 30, 2016 and 2015 and $0.2 million during each of the nine months ended September 30, 2016 and 2015. James W. Crystal, the chairman and chief executive officer of Crystal & Company, was a member of the Company’s Board of Directors until he resigned effective July 24, 2016. Hiscox Insurance Company (Bermuda) Ltd. Global Indemnity Reinsurance is a participant in two reinsurance agreements with Hiscox Insurance Company (Bermuda) Ltd. (“Hiscox Bermuda”) while Steve Green, the President of Global Indemnity Reinsurance, was a member of Hiscox Bermuda’s Board of Directors. Steve Green was a member of the Hiscox Bermuda’s Board of Directors until May, 2014. The Company estimated that the following earned premium and incurred losses related to these agreements have been assumed by Global Indemnity Reinsurance from Hiscox Bermuda: Quarters Ended September 30, (Dollars in thousands) 2016 2015 Assumed earned premium $ (2 ) $ 47 Assumed losses and loss adjustment expenses (209 ) (167 ) Nine Months Ended September 30, (Dollars in thousands) 2016 2015 Assumed earned premium $ 51 $ 2,294 Assumed losses and loss adjustment expenses (419 ) 476 Net balances due to Global Indemnity Reinsurance under this agreement are as follows: (Dollars in thousands) September 30, 2016 December 31, Net payable balance $ (114 ) $ (110 ) |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies | 9. Commitments and Contingencies 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. Commitments During 2014, the Company entered into a $50 million commitment to purchase an alternative investment vehicle which is comprised of European non-performing loans. As of September 30, 2016, the Company has funded $28.0 million of this commitment leaving $22.0 million as unfunded. In June, 2016, the Company entered into a $40 million commitment with an investment manager that provides financing for middle market companies. Typical financing arrangements are used for growth, acquisitions, or buyouts. This investment vehicle targets companies with $10 - $50 million in earnings before interest, taxes, depreciation, and amortization. As of September 30, 2016, the Company has funded $18.9 million of this commitment leaving $21.1 million as unfunded. Of the $18.9 million funded, $16.3 million and $2.6 million, respectively, was invested in middle market corporate debt and three separate equity investments in limited liability companies. |
Share-Based Compensation Plans
Share-Based Compensation Plans | 9 Months Ended |
Sep. 30, 2016 | |
Share-Based Compensation Plans | 10. Share-Based Compensation Plans Options No stock options were awarded during the quarters ended September 30, 2016 and 2015. No unvested stock options were forfeited during the quarters ended September 30, 2016 and 2015. The Company did not award any stock options during the nine months ended September 30, 2016. During the nine months ended September 30, 2015, the Company awarded 200,000 stock options with a strike price of $28.37 which were subsequently forfeited during the nine months ended September 30, 2016. No unvested stock options were forfeited during the nine months ended September 30, 2015. Restricted Shares No restricted shares were issued to employees during the quarters ended September 30, 2016 and 2015. During the nine months ended September 30, 2016, the Company granted 121,346 A ordinary shares, with a weighted average grant date value of $28.97 per share, to key employees under the Plan. Of the shares granted during the nine months ended September 30, 2016, 11,199 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 a true-up of bonus year underwriting results as of the third anniversary of the grant. 5,309 were granted to another key employee and vest 100% on February 7, 2019. 8,253 were issued to other key employees and vest 33% on the first and second anniversary of the grant and vest 34% on the third anniversary of the grant contingent on meeting certain performance objectives and subject to Board approval. The remaining 96,585 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 third anniversary of the grant subject to a true-up of bonus year underwriting results and are subject to Board approval. During the nine months ended September 30, 2015, the Company issued 138,507 A ordinary shares, with a weighted average grant date value of $28.37 per share, to key employees under the Plan. Of the shares granted during the nine months ended September 30, 2015, 10,574 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 and an additional 44,058 were granted to the Company’s Chief Executive Officer and other key employees which vest 100% on January 1, 2018. The remaining 83,875 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 third anniversary of the grant subject to a true-up of bonus year underwriting results and are subject to Board approval. During the quarters ended September 30, 2016 and 2015, the Company issued 8,802 and 9,392 A ordinary shares, respectively, at a weighted average grant date value of $29.70 and $26.17 per share, respectively, to non-employee directors of the Company under the Plan. During the nine months ended September 30, 2016 and 2015, the Company issued 28,416 and 27,437 A ordinary shares, respectively, at a weighted average grant date value of $29.40 and $27.31 per share, respectively, to non-employee directors of the Company under the Plan. All of the shares issued to non-employee directors of the Company in 2016 and 2015 were fully vested but subject to certain restrictions. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share | 11. 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: (Dollars in thousands, Quarters Ended September 30, Nine Months Ended September 30, except share and per share data) 2016 2015 2016 2015 Net income (loss) $ 9,535 $ (3,746 ) $ 11,495 $ 14,165 Basic earnings per share: Weighted average shares outstanding – basic 17,254,843 25,463,994 17,241,040 25,452,991 Net income (loss) per share $ 0.55 $ (0.15 ) $ 0.67 $ 0.56 Diluted earnings per share: Weighted average shares outstanding – diluted (1) 17,540,060 25,463,994 17,515,854 25,684,931 Net income (loss) per share $ 0.54 $ (0.15 ) $ 0 .66 $ 0.55 (1) For the quarter ended September 30, 2015, “weighted average shares outstanding – basic” was used to calculate “diluted earnings per share” due to a net loss for the period. A reconciliation of weighted average shares for basic earnings per share to weighted average shares for diluted earnings per share is as follows: Quarters Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Weighted average shares for basic earnings per share 17,254,843 25,463,994 17,241,040 25,452,991 Non-vested restricted stock 176,087 — 165,011 128,942 Options 109,130 — 109,803 102,998 Weighted average shares for diluted earnings per share 17,540,060 25,463,994 17,515,854 25,684,931 If the Company had not incurred a loss in the quarter ended September 30, 2015, 25,704,931 weighted average shares would have been used to compute the diluted loss per share calculation. In addition to the basic shares, weighted average shares for the diluted calculation would have included 138,261 shares of non-vested restricted stock and 102,676 share equivalents for options. The weighted average shares outstanding used to determine dilutive earnings per share for the quarters ended September 30, 2016 and 2015 do not include 300,000 and 512,500 options, respectively, which were deemed to be anti-dilutive. The weighted average shares outstanding used to determine dilutive earnings per share for the nine months ended September 30, 2016 and 2015 do not include 300,000 and 512,500 options, respectively, which were deemed to be anti-dilutive. The following table summarizes options which are deemed to be anti-dilutive at September 30, 2016: Grant Date Expiration Date Outstanding Strike Price February 9, 2014 February 10, 2024 300,000 $ 32.38 300,000 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2016 | |
Segment Information | 12. Segment Information The Company manages its business through three business segments: Commercial Lines, managed in Bala Cynwyd, Pennsylvania, offers specialty property and casualty products designed for product lines such as Small Business Binding Authority, Property Brokerage, and Programs. Personal Lines, managed in Scottsdale, Arizona, offers specialty personal lines and agricultural coverage. Reinsurance Operations, managed in Bermuda, provides reinsurance solutions through brokers and primary writers including insurance and reinsurance companies. On September 30, 2016, Diamond State Insurance Company sold all the outstanding shares of capital stock of one of its wholly owned subsidiaries, United National Specialty Insurance Company, to an unrelated party. Diamond State Insurance Company received a one-time payment of $18.7 million and recognized a pretax gain of $6.9 million which is reflected in other income (loss). This transaction will not have an impact on the Company’s ongoing business operations. Going forward, any business previously written by United National Specialty Insurance Company has been and will be written by other companies within the Company’s U.S. Insurance Operations. The following are tabulations of business segment information for the quarters and nine months ended September 30, 2016 and 2015. Quarter Ended September 30, 2016: (Dollars in thousands) Commercial Personal Reinsurance Operations (2) Total Revenues: Gross premiums written $ 50,214 $ 73,557 (6) $ 9,798 $ 133,569 Net premiums written $ 45,754 $ 59,499 $ 9,798 $ 115,051 Net premiums earned $ 48,179 $ 60,816 $ 10,558 $ 119,553 Other income (loss) 7,031 832 (11 ) 7,852 Total revenues 55,210 61,648 10,547 127,405 Losses and Expenses: Net losses and loss adjustment expenses 23,887 42,888 5,387 72,162 Acquisition costs and other underwriting expenses 19,362 (3) 25,097 (4) 3,670 48,129 Income (loss) from segments $ 11,961 $ (6,337 ) $ 1,490 $ 7,114 Unallocated Items: Net investment income 8,795 Net realized investment gains 1,928 Corporate and other operating expenses (5,006 ) Interest expense (2,233 ) Income before income taxes 10,598 Income tax expense (1,063 ) Net income 9,535 Total assets $ 757,267 $ 512,190 $ 712,358 (5) $ 1,981,815 (1) Includes business ceded to the Company’s Reinsurance Operations. (2) External business only, excluding business assumed from affiliates. (3) Includes federal excise tax of $132 relating to cessions from Commercial Lines to Reinsurance Operations. (4) Includes federal excise tax of $304 relating to cessions from Personal Lines to Reinsurance Operations. (5) Comprised of Global Indemnity Reinsurance’s total assets less its investment in subsidiaries. (6) Includes $7,328 of business written by American Reliable that is ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement. Quarter Ended September 30, 2015: (Dollars in thousands) Commercial Personal Reinsurance Operations (2) Total Revenues: Gross premiums written $ 52,920 $ 87,349 (6) $ 9,879 $ 150,148 Net premiums written $ 49,325 $ 63,302 $ 9,870 $ 122,497 Net premiums earned $ 48,916 $ 62,132 $ 13,659 $ 124,707 Other income (loss) 102 1,188 (11 ) 1,279 Total revenues 49,018 63,320 13,648 125,986 Losses and Expenses: Net losses and loss adjustment expenses 22,832 48,899 5,960 77,691 Acquisition costs and other underwriting expenses 20,686 (3) 25,779 (4) 4,469 50,934 Income (loss) from segments $ 5,500 $ (11,358 ) $ 3,219 $ (2,639 ) Unallocated Items: Net investment income 8,852 Net realized investment losses (10,778 ) Corporate and other operating expenses (3,567 ) Interest expense (1,595 ) Loss before income taxes (9,727 ) Income tax benefit 5,981 Net loss (3,746 ) Total assets $ 1,005,435 $ 572,807 $ 740,377 (5) $ 2,318,619 (1) Includes business ceded to the Company’s Reinsurance Operations. (2) External business only, excluding business assumed from affiliates. (3) Includes federal excise tax of $258 relating to cessions from Commercial Lines to Reinsurance Operations. (4) Includes federal excise tax of $310 relating to cessions from Personal Lines to Reinsurance Operations. (5) Comprised of Global Indemnity Reinsurance’s total assets less its investment in subsidiaries (6) Includes $18,749 of business written by American Reliable that is ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement. Nine Months Ended September 30, 2016: (Dollars in thousands) Commercial Personal Reinsurance Operations (2) Total Revenues: Gross premiums written $ 157,335 $ 236,978 (6) $ 34,941 $ 429,254 Net premiums written $ 141,764 $ 180,542 $ 34,927 $ 357,233 Net premiums earned $ 143,699 $ 183,631 $ 31,663 $ 358,993 Other income 7,354 2,232 17 9,603 Total revenues 151,053 185,863 31,680 368,596 Losses and Expenses: Net losses and loss adjustment expenses 78,605 122,748 13,704 215,057 Acquisition costs and other underwriting expenses 58,752 (3) 78,381 (4) 11,628 148,761 Income (loss) from segments $ 13,696 $ (15,266 ) $ 6,348 $ 4,778 Unallocated Items: Net investment income 25,103 Net realized investment losses (9,057 ) Corporate and other operating expenses (13,064 ) Interest expense (6,677 ) Income before income taxes 1,083 Income tax benefit 10,412 Net income 11,495 Total assets $ 757,267 $ 512,190 $ 712,358 (5) $ 1,981,815 (1) Includes business ceded to the Company’s Reinsurance Operations. (2) External business only, excluding business assumed from affiliates. (3) Includes federal excise tax of $391 relating to cessions from Commercial Lines to Reinsurance Operations. (4) Includes federal excise tax of $918 relating to cessions from Personal Lines to Reinsurance Operations. ( 5) Comprised of Global Indemnity Reinsurance’s total assets less its investment in subsidiaries. (6) Includes $30,910 of business written by American Reliable that is ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement. Nine Months Ended September 30, 2015: (Dollars in thousands) Commercial Personal Reinsurance Operations (2) Total Revenues: Gross premiums written $ 161,746 $ 249,564 (6) $ 48,222 $ 459,532 Net premiums written $ 149,647 $ 196,785 $ 48,174 $ 394,606 Net premiums earned $ 149,244 $ 191,472 $ 40,205 $ 380,921 Other income (loss) 420 2,065 (77 ) 2,408 Total revenues 149,664 193,537 40,128 383,329 Losses and Expenses: Net losses and loss adjustment expenses 82,474 129,997 14,399 226,870 Acquisition costs and other underwriting expenses 61,317 (3) 74,590 (4) 14,211 150,118 Income (loss) from segments $ 5,873 $ (11,050 ) $ 11,518 $ 6,341 Unallocated Items: Net investment income 26,234 Net realized investment losses (7,216 ) Corporate and other operating expenses (19,441 ) Interest expense (2,635 ) Income before income taxes 3,283 Income tax benefit 10,882 Net income 14,165 Total assets $ 1,005,435 $ 572,807 $ 740,377 (5) $ 2,318,619 (1) Includes business ceded to the Company’s Reinsurance Operations. (2) External business only, excluding business assumed from affiliates. (3) Includes federal excise tax of $787 relating to cessions from Commercial Lines to Reinsurance Operations. (4) Includes federal excise tax of $957 relating to cessions from Personal Lines to Reinsurance Operations. (5) Comprised of Global Indemnity Reinsurance’s total assets less its investment in subsidiaries (6) Includes $41,749 of business written by American Reliable that is ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement. |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2016 | |
New Accounting Pronouncements | 13. New Accounting Pronouncements The following are new accounting guidance issued in 2016 which have not yet been adopted. In August 2016, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance regarding the classification of certain cash receipts and cash payments within the statement of cash flows. The new guidance addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. This guidance is effective for public business entities for fiscal periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. Although the Company is still evaluating the impact of this new guidance, the Company does not anticipate it will have a material impact on its financial condition, results of operations, or cash flows. In June, 2016, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance surrounding the measurement of credit losses on financial instruments. For assets held at amortized cost basis, the new guidance replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of information for credit loss estimates. For available for sale debt securities, credit losses should be measured similar to current GAAP; however, the new guidance requires that credit losses be presented as an allowance rather than as a write-down. This guidance is effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early application of this new guidance is permitted as of the fiscal years beginning after December 15, 2018 including interim periods within those fiscal years. The Company is still evaluating the impact of this guidance on its financial condition, results of operations, and cash flows. In March, 2016, the FASB issued new accounting guidance surrounding stock compensation. The new guidance simplifies several aspects of the accounting for share-based payment, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This guidance is effective for public entities for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. Although the Company is still evaluating the impact of this new guidance, the Company does not anticipate it will have a material impact on its financial condition, results of operations, or cash flows. In February, 2016, the FASB issued new accounting guidance regarding leases. The new guidance increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This guidance is effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. Although the Company is still evaluating the impact of this new guidance, the Company does not anticipate it will have a material impact on its financial condition, results of operations, or cash flows. In January, 2016, the FASB issued new accounting guidance surrounding the accounting for financial instruments. The new guidance addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. In particular, the guidance requires equity investments, except for those accounted for under the equity method of accounting or those that result in consolidation of the investee, to be measured at fair value with the changes in fair value recognized in net income. It also simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. This guidance is effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early application of this new guidance is permitted as of the beginning of the fiscal year of adoption. The Company is still evaluating the impact of this guidance on its financial condition, results of operations, and cash flows. In 2016, the FASB issued several new accounting pronouncements which provided clarification to existing guidance surrounding revenue from contracts with customers. Long and short duration insurance contracts, which comprise the majority of the Company’s revenues, are excluded from this accounting guidance. This guidance is effective for public business entities for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Although the Company is still evaluating the impact of this new guidance, the Company does not anticipate it will have a material impact on its financial condition, results of operations, or cash flows. |
Principles of Consolidation a22
Principles of Consolidation and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Number of Reportable Business Segments | The Company manages its business through three business segments: Commercial Lines, Personal Lines, and Reinsurance Operations. The Company’s Commercial Lines, managed in Bala Cynwyd, Pennsylvania, offers specialty property and casualty insurance products in the excess and surplus lines marketplace. The Company manages its Commercial Lines by differentiating them into three product classifications: Penn-America, which markets property and general liability products 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 Commercial Lines business segment and are not considered individual business segments because each product has similar economic characteristics, distribution, and coverage. The Company’s Personal Lines segment, via the American Reliable Insurance Company (“American Reliable”) product classification, offers specialty personal lines and agricultural coverage through general and specialty agents with specific binding authority on an admitted basis and is managed in Scottsdale, Arizona. 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 Company, Ltd. (“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 Commercial Lines and Personal Lines segments comprise the Company’s U.S. Insurance Operations (‘Insurance Operations”). See Note 12 for additional information regarding segments. |
Interim Consolidated Financial statements | The interim consolidated financial statements are unaudited, but 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 unaudited consolidated financial statements include all adjustments that are, in the opinion of management, of a normal recurring nature and are necessary for a fair statement of results for the interim periods. Results of operations for the quarters and nine months ended September 30, 2016 and 2015 are not necessarily indicative of the results of a full year. The accompanying notes to the unaudited consolidated financial statements should be read in conjunction with the notes to the consolidated financial statements contained in the Company’s 2015 Annual Report on Form 10-K. |
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. |
Investments Policy | 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 has a 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. |
Derivative Instruments Policy | 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 (losses) in the consolidated statement of operations. The Company is ultimately responsible for the valuation of the interest rate swaps. To aid in determining the estimated fair value of the interest rate swaps, the Company relies on the forward interest rate curve and information obtained from a third party financial institution. |
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. The Company’s pricing vendors provide prices for all investment categories except for investments in limited liability companies and limited partnerships whose fair value is based on net asset values as a practical expedient. Two vendors provide prices for equity and fixed maturity securities. The following is a description of the valuation methodologies used by the Company’s pricing vendors for investment securities carried at fair value: • Common stock 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. • Data from commercial vendors is aggregated with market information, then converted into a prepayment/spread/LIBOR curve model used for commercial mortgage obligations (“CMO”). CMOs are categorized with mortgage-backed securities in the tables listed above. For asset-backed securities, data derived from market information along with trustee and servicer reports is converted into spreads to interpolated swap yield curve. For both asset classes, evaluations utilize standard inputs plus new issue data, monthly payment information, and collateral performance. The evaluated pricing models incorporate discount rates, loan level information, prepayment speeds, treasury benchmarks, and LIBOR and swap curves. • For obligations of state and political subdivisions, a multi-dimensional relational model is used to evaluate securities. The pricing models 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 mortgage-backed securities, 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 expected annual taxable income of the Company in each country to estimate the annual income tax expense. |
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. |
Earnings Per Share Policy | Earnings per share have been computed using the weighted average number of ordinary shares and ordinary share equivalents outstanding during the period. |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Schedule of Amortized Cost and Estimated Fair Value of Investments | The amortized cost and estimated fair value of investments were as follows as of September 30, 2016 and December 31, 2015: (Dollars in thousands) Amortized Cost Gross Gross Estimated Fair Value Other than As of September 30, 2016 Fixed maturities: U.S. treasury and agency obligations $ 79,290 $ 1,549 $ — $ 80,839 $ — Obligations of states and political subdivisions 167,430 3,315 (49 ) 170,696 — Mortgage-backed securities 104,222 2,765 (38 ) 106,949 — Asset-backed securities 250,766 1,731 (297 ) 252,200 (6 ) Commercial mortgage-backed securities 175,469 372 (1,188 ) 174,653 — Corporate bonds and debt 391,277 5,073 (695 ) 395,655 — Foreign corporate bonds 129,011 982 (28 ) 129,965 — Total fixed maturities 1,297,465 15,787 (2,295 ) 1,310,957 (6 ) Common stock 102,899 22,225 (2,345 ) 122,779 — Other invested assets 32,635 — — 32,635 — Total $ 1,432,999 $ 38,012 $ (4,640 ) $ 1,466,371 $ (6 ) (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 Cost Gross Gross Estimated Fair Value Other than As of December 31, 2015 Fixed maturities: U.S. treasury and agency obligations $ 106,303 $ 1,140 $ (321 ) $ 107,122 $ — Obligations of states and political subdivisions 203,121 2,576 (457 ) 205,240 — Mortgage-backed securities 157,753 2,113 (743 ) 159,123 — Asset-backed securities 261,008 435 (1,421 ) 260,022 (9 ) Commercial mortgage-backed securities 142,742 — (2,352 ) 140,390 — Corporate bonds 334,720 685 (3,294 ) 332,111 — Foreign corporate bonds 102,686 194 (739 ) 102,141 — Total fixed maturities 1,308,333 7,143 (9,327 ) 1,306,149 (9 ) Common stock 100,157 16,118 (5,960 ) 110,315 — Other invested assets 32,592 — — 32,592 — Total $ 1,441,082 $ 23,261 $ (15,287 ) $ 1,449,056 $ (9 ) (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”). |
Summary of Amortized Cost and Estimated Fair Value Through Fixed Maturities | The amortized cost and estimated fair value of the Company’s fixed maturities portfolio classified as available for sale at September 30, 2016, 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 Cost Estimated Due in one year or less $ 81,811 $ 82,130 Due after one year through five years 633,977 642,829 Due after five years through ten years 47,779 48,727 Due after ten years through fifteen years — — Due after fifteen years 3,441 3,469 Mortgage-backed securities 104,222 106,949 Asset-backed securities 250,766 252,200 Commercial mortgage-backed securities 175,469 174,653 Total $ 1,297,465 $ 1,310,957 |
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 September 30, 2016: Less than 12 months 12 months or longer (1) Total (Dollars in thousands) Fair Value Gross Fair Value Gross Fair Value Gross Fixed maturities: Obligations of states and political subdivisions $ 17,372 $ (44 ) $ 677 $ (5 ) $ 18,049 $ (49 ) Mortgage-backed securities 3,123 (27 ) 309 (11 ) 3,432 (38 ) Asset-backed securities 52,109 (185 ) 19,260 (112 ) 71,369 (297 ) Commercial mortgage-backed securities 82,291 (571 ) 57,970 (617 ) 140,261 (1,188 ) Corporate bonds and debt 43,156 (626 ) 6,507 (69 ) 49,663 (695 ) Foreign corporate bonds 19,869 (28 ) — — 19,869 (28 ) Total fixed maturities 218,520 (1,481 ) 84,723 (814 ) 303,243 (2,295 ) Common stock 24,387 (2,079 ) 2,027 (266 ) 26,414 (2,345 ) Total $ 242,907 $ (3,560 ) $ 86,750 $ (1,080 ) $ 329,657 $ (4,640 ) (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, 2015: Less than 12 months 12 months or longer (1) Total (Dollars in thousands) Fair Value Gross Fair Value Gross Fair Value Gross Fixed maturities: U.S. treasury and agency obligations $ 79,496 $ (321 ) $ — $ — $ 79,496 $ (321 ) Obligations of states and political subdivisions 49,708 (373 ) 7,732 (84 ) 57,440 (457 ) Mortgage-backed securities 63,759 (743 ) — — 63,759 (743 ) Asset-backed securities 203,381 (1,404 ) 4,843 (17 ) 208,224 (1,421 ) Commercial mortgage-backed securities 118,813 (2,005 ) 21,577 (347 ) 140,390 (2,352 ) Corporate bonds 211,364 (3,269 ) 2,120 (25 ) 213,484 (3,294 ) Foreign corporate bonds 63,860 (697 ) 5,129 (42 ) 68,989 (739 ) Total fixed maturities 790,381 (8,812 ) 41,401 (515 ) 831,782 (9,327 ) Common stock 36,798 (5,960 ) — — 36,798 (5,960 ) Total $ 827,179 $ (14,772 ) $ 41,401 $ (515 ) $ 868,580 $ (15,287 ) (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 Temporary Impairments on Investments | The Company recorded the following other than temporary impairments (“OTTI”) on its investment portfolio for the quarters and nine months ended September 30, 2016 and 2015: Quarters Ended September 30, Nine Months Ended (Dollars in thousands) 2016 2015 2016 2015 Fixed maturities: OTTI losses, gross $ (108 ) $ — $ (201 ) $ (23 ) Portion of loss recognized in other comprehensive income (pre-tax) — — — — Net impairment losses on fixed maturities recognized in earnings (108 ) — (201 ) (23 ) Equity securities (2,106 ) (4,641 ) (4,280 ) (6,856 ) Total $ (2,214 ) $ (4,641 ) $ (4,481 ) $ (6,879 ) |
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 for the quarters and nine months ended September 30, 2016 and 2015 for which a portion of the OTTI loss was recognized in other comprehensive income. Quarters Ended September 30, Nine Months Ended (Dollars in thousands) 2016 2015 2016 2015 Balance at beginning of period $ 31 $ 31 $ 31 $ 50 Additions where no OTTI was previously recorded — — — — 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 — — — (19 ) Balance at end of period $ 31 $ 31 $ 31 $ 31 |
Schedule of Accumulated Other Comprehensive Income, Net of Tax | Accumulated other comprehensive income, net of tax, as of September 30, 2016 and December 31, 2015 was as follows: (Dollars in thousands) September 30, 2016 December 31, 2015 Net unrealized gains (losses) from: Fixed maturities $ 13,492 $ (2,184 ) Common stock 19,880 10,158 Deferred taxes (10,093 ) (3,896 ) Accumulated other comprehensive income, net of tax $ 23,279 $ 4,078 |
Changes in Accumulated Other Comprehensive Income | The following tables present the changes in accumulated other comprehensive income, net of tax, by component for the quarters and nine months ended September 30, 2016 and 2015: Quarter Ended September 30, 2016 (Dollars in thousands) Unrealized Gains Foreign Currency Accumulated Other Beginning balance $ 22,511 $ (435 ) $ 22,076 Other comprehensive income (loss) before reclassification 2,073 (89 ) 1,984 Amounts reclassified from accumulated other comprehensive (loss) (781 ) — (781 ) Other comprehensive income (loss) 1,292 (89 ) 1,203 Ending balance $ 23,803 $ (524 ) $ 23,279 Quarter Ended September 30, 2015 (Dollars in thousands) Unrealized Gains Foreign Currency Accumulated Other Beginning balance $ 20,201 $ (99 ) $ 20,102 Other comprehensive (loss) before reclassification (9,009 ) (47 ) (9,056 ) Amounts reclassified from accumulated other comprehensive income 2,129 70 2,199 Other comprehensive income (loss) (6,880 ) 23 (6,857 ) Ending balance $ 13,321 $ (76 ) $ 13,245 Nine Months Ended September 30, 2016 (Dollars in thousands) Unrealized Gains Foreign Currency Accumulated Other Beginning balance $ 4,200 $ (122 ) $ 4,078 Other comprehensive income (loss) before reclassification 22,075 (400 ) 21,675 Amounts reclassified from accumulated other comprehensive (loss) (2,472 ) (2 ) (2,474 ) Other comprehensive income (loss) 19,603 (402 ) 19,201 Ending balance $ 23,803 $ (524 ) $ 23,279 Nine Months Ended September 30, 2015 (Dollars in thousands) Unrealized Gains Foreign Currency Accumulated Other Beginning balance $ 23,647 $ (263 ) $ 23,384 Other comprehensive (loss) before reclassification (9,413 ) (209 ) (9,622 ) Amounts reclassified from accumulated other comprehensive income (loss) (913 ) 396 (517 ) Other comprehensive income (loss) (10,326 ) 187 (10,139 ) Ending balance $ 13,321 $ (76 ) $ 13,245 |
Reclassifications Out of Accumulated Other Comprehensive Income | The reclassifications out of accumulated other comprehensive income for the quarters and nine months ended September 30, 2016 and 2015 were as follows: (Dollars in thousands) Amounts Reclassified from Quarters Ended September 30, Details about Accumulated Other Comprehensive Income Components Affected Line Item in the Consolidated Statements of Operations 2016 2015 Unrealized gains and losses on available for sale securities Other net realized investment (gains) $ (3,384 ) $ (2,042 ) Other than temporary impairment losses on investments 2,214 4,641 Total before tax (1,170 ) 2,599 Income tax expense (benefit) 389 (470 ) Unrealized gains on available for sale securities, net of tax $ (781 ) $ 2,129 Foreign currency items Other net realized investment losses $ — $ 108 Income tax (benefit) — (38 ) Foreign currency items, net of tax $ — $ 70 Total reclassifications Total reclassifications, net of tax $ (781 ) $ 2,199 (Dollars in thousands) Amounts Reclassified from Comprehensive Income Nine Months Ended September 30, Details about Accumulated Other Comprehensive Income Components Affected Line Item in the Consolidated Statements of Operations 2016 2015 Unrealized gains and losses on available for sale securities Other net realized investment (gains) $ (8,214 ) $ (9,168 ) Other than temporary impairment losses on investments 4,481 6,879 Total before tax (3,733 ) (2,289 ) Income tax expense 1,261 1,376 Unrealized gains and losses on available for sale securities, net of tax $ (2,472 ) $ (913 ) Foreign currency items Other net realized investment (gains) losses $ (4 ) $ 609 Income tax expense (benefit) 2 (213 ) Foreign currency items, net of tax $ (2 ) $ 396 Total reclassifications Total reclassifications, net of tax $ (2,474 ) $ (517 ) |
Components of Net Realized Investment Gains (Losses) | The components of net realized investment gains (losses) for the quarters and nine months ended September 30, 2016 and 2015 were as follows: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2016 2015 2016 2015 Fixed maturities: Gross realized gains $ 434 $ 110 $ 1,252 $ 1,589 Gross realized losses (147 ) (1,451 ) (291 ) (1,692 ) Net realized gains 287 (1,341 ) 961 (103 ) Common stock: Gross realized gains 3,345 3,494 8,068 9,418 Gross realized losses (2,462 ) (4,860 ) (5,292 ) (7,731 ) Net realized gains 883 (1,366 ) 2,776 1,687 Preferred stock: Gross realized gains — — — 96 Gross realized losses — — — — Net realized gains — — — 96 Derivatives: Gross realized gains 1,955 — — — Gross realized losses (1,197 ) (8,071 ) (12,794 ) (8,896 ) Net realized gains (losses) 758 (8,071 ) (12,794 ) (8,896 ) Total net realized investment gains (losses) $ 1,928 $ (10,778 ) $ (9,057 ) $ (7,216 ) |
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 nine months ended September 30, 2016 and 2015 were as follows: Nine Months Ended September 30, (Dollars in thousands) 2016 2015 Fixed maturities $ 279,659 $ 290,580 Equity securities $ 34,976 $ 34,161 Preferred stock $ — $ 1,540 |
Schedule of Investment Income | The sources of net investment income for the quarters and nine months ended September 30, 2016 and 2015 were as follows: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2016 2015 2016 2015 Fixed maturities $ 8,131 $ 8,673 $ 22,729 $ 24,709 Equity securities 698 703 2,647 2,419 Cash and cash equivalents 44 32 111 59 Other invested assets 909 193 3,806 1,535 Total investment income 9,782 9,601 29,293 28,722 Investment expense (1) (987 ) (749 ) (4,190 ) (2,488 ) Net investment income $ 8,795 $ 8,852 $ 25,103 $ 26,234 (1) Investment expense for the nine months ended September 30, 2016 includes $1.5 million in upfront fees necessary to enter into a new investment. See Note 9 for additional information on the Company’s $40 million commitment related to this new investment. |
Schedule of Total Investment Return | The Company’s total investment return on a pre-tax basis for the quarters and nine months ended September 30, 2016 and 2015 were as follows: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2016 2015 2016 2015 Net investment income $ 8,795 $ 8,852 $ 25,103 $ 26,234 Net realized investment gains (losses) 1,928 (10,778 ) (9,057 ) (7,216 ) Change in unrealized holding gains and (losses) 2,061 (10,420 ) 25,398 (15,575 ) Net realized and unrealized investment returns 3,989 (21,198 ) 16,341 (22,791 ) Total investment return $ 12,784 $ (12,346 ) $ 41,444 $ 3,443 Total investment return % (1) 0.8 % (0.7 %) 2.7 % 0.2 % Average investment portfolio (2) $ 1,530,599 $ 1,800,993 $ 1,522,247 $ 1,788,777 (1) Not annualized. (2) 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 with Ratings without Rating Insurance Insurance AA $ 509 $ — A — 509 Total $ 509 $ 509 |
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 September 30, 2016, is as follows: (Dollars in thousands) Financial Guarantor Total Pre-refunded Government Exposure Net of Pre-refunded Securities Ambac Financial Group $ 1,512 $ 455 $ — $ 1,057 Assured Guaranty Corporation 3,500 — — 3,500 Municipal Bond Insurance Association 3,229 — — 3,229 Gov’t National Housing Association 498 — 498 — Total backed by financial guarantors 8,739 455 498 7,786 Other credit enhanced municipal bonds 4,923 4,923 — — Total $ 13,662 $ 5,378 $ 498 $ 7,786 |
Summary of Estimated Fair Values of Bonds Held on Deposit | The fair values were as follows as of September 30, 2016 and December 31, 2015: Estimated Fair Value (Dollars in thousands) September 30, 2016 December 31, 2015 On deposit with governmental authorities $ 26,203 $ 38,815 Intercompany trusts held for the benefit of U.S. policyholders 601,052 643,216 Held in trust pursuant to third party requirements 67,924 66,544 Letter of credit held for third party requirements 4,292 5,598 Securities held as collateral for borrowing arrangements (1) 97,638 95,647 Total $ 797,109 $ 849,820 (1) Amount required to collateralize margin borrowing facilities. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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 September 30, 2016 and December 31, 2015: (Dollars in thousands) September 30, 2016 December 31, 2015 Derivatives Not Designated as Hedging Instruments under ASC 815 Balance Sheet Location Notional Fair Value Notional Fair Value Interest rate swap agreements Other liabilities $ 200,000 $ (24,388 ) $ 200,000 $ (15,256 ) |
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 quarters and nine months ended September 30, 2016 and 2015: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) Statement of Operations Line 2016 2015 2016 2015 Interest rate swap agreements Net realized investment gains (losses) $ 758 $ (8,071 ) $ (12,794 ) $ (8,896 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Company's Invested Assets and Derivative Instruments Measured at Fair Value on Recurring Basis | The following table presents information about the Company’s invested assets and derivative instruments measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value. As of September 30, 2016 Fair Value Measurements (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets: Fixed maturities: U.S. treasury and agency obligations $ 79,325 $ 1,514 $ — $ 80,839 Obligations of states and political subdivisions — 170,696 — 170,696 Mortgage-backed securities — 106,949 — 106,949 Commercial mortgage-backed securities — 174,653 — 174,653 Asset-backed securities — 252,200 — 252,200 Corporate bonds and debt — 378,795 16,860 395,655 Foreign corporate bonds — 129,965 — 129,965 Total fixed maturities 79,325 1,214,772 16,860 1,310,957 Common stock 122,779 — — 122,799 Total assets measured at fair value (1) $ 202,104 $ 1,214,772 $ 16,860 $ 1,433,736 Liabilities: Derivative instruments $ — $ 24,388 $ — $ 24,388 Total liabilities measured at fair value $ — $ 24,388 $ — $ 24,388 (1) Excluded from the table above are limited liability companies and limited partnerships of $32.6 million at September 30, 2016 whose fair value is based on net asset value as a practical expedient. As of December 31, 2015 Fair Value Measurements (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets: Fixed maturities: U.S. treasury and agency obligations $ 101,264 $ 5,858 $ — $ 107,122 Obligations of states and political subdivisions — 205,240 — 205,240 Mortgage-backed securities — 159,123 — 159,123 Commercial mortgage-backed securities — 140,390 — 140,390 Asset-backed securities — 260,022 — 260,022 Corporate bonds — 332,111 — 332,111 Foreign corporate bonds — 102,141 — 102,141 Total fixed maturities 101,264 1,204,885 — 1,306,149 Common stock 110,315 — — 110,315 Total assets measured at fair value (1) $ 211,579 $ 1,204,885 $ — $ 1,416,464 Liabilities: Derivative instruments $ — $ 15,256 $ — $ 15,256 Total liabilities measured at fair value $ — $ 15,256 $ — $ 15,256 (1) Excluded from the table above are limited partnerships of $32.6 million at December 31, 2015 whose fair value is based on net asset value as a practical expedient. |
Current Fair Value of Debt | For the Company’s material debt arrangements, the current fair value of the Company’s debt at September 30, 2016 and December 31, 2015 was as follows: September 30, 2016 December 31, 2015 (Dollars in thousands) Carrying Value Fair Value Carrying Value Fair Value Margin Borrowing Facilities $ 76,696 $ 76,696 $ 75,646 $ 75,646 7.75% Subordinated Notes due 2045 (1) 96,466 99,706 96,388 91,748 Total $ 173,162 $ 176,402 $ 172,034 $ 167,394 (1) As of September 30, 2016 and December 31, 2015, the carrying value and fair value of the 7.75% Subordinated Notes due 2045 are net of unamortized debt issuance cost of $3.5 million. |
Changes in Level 3 Investments Measured at Fair Value on a Recurring Basis | The following table presents changes in Level 3 investments measured at fair value on a recurring basis for the quarters and nine months ended September 30, 2016 and 2015: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2016 2015 2016 2015 Beginning balance $ 11,220 $ — $ — $ — Total gains (realized / unrealized): Amortization of bond premium and discount, net 27 — 30 — Included in accumulated other comprehensive income 534 — 531 — Purchases 5,079 — 16,299 — Distributions — — — — Ending balance $ 16,860 $ — $ 16,860 $ — |
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 September 30, 2016 and December 31, 2015. September 30, 2016 December 31, 2015 (Dollars in thousands) Fair Value Future Fair Value Future Real Estate Fund, LP (1) $ — $ — $ — $ — European Non-Performing Loan Fund, LP (2) 29,073 22,014 32,592 20,014 Private Middle Market Loans, LLC (3) 3,562 21,058 — — Total $ 32,635 $ 43,072 $ 32,592 $ 20,014 (1) 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. (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 ability to sell or transfer its limited partnership interest without consent from the general partner. 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. Based on the terms of the partnership agreement, the Company anticipates its interest in this partnership to be redeemed in 2020. (3) This interest consists of three separate equity investments in limited liability companies whereby the Company is also a lender via separate loan agreements. Typical financing is used for growth, acquisitions, or buyouts. The Company classifies their portion of the middle market corporate debt as fixed maturities. The Company has committed $40 million to this investment strategy, including both the equity and financing provisions. While the Company is not able to estimate the proportion of future funding commitments between equity and financing, the total remaining commitment is $21.1 million. Based on the terms of the investment management agreement, the Company anticipates its interest to be redeemed no later than 2024. |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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 quarters and nine months ended September 30, 2016 and 2015 were as follows: Quarter Ended September 30, 2016: (Dollars in thousands) Non-U.S. Subsidiaries U.S. Subsidiaries Eliminations Total Revenues: Gross premiums written $ 51,900 $ 123,770 $ (42,101 ) $ 133,569 Net premiums written $ 51,900 $ 63,151 $ — $ 115,051 Net premiums earned $ 54,155 $ 65,398 $ — $ 119,553 Net investment income 11,556 5,828 (8,589 ) 8,795 Net realized investment gains (losses) 58 1,870 — 1,928 Other income (loss) (10 ) 7,862 — 7,852 Total revenues 65,759 80,958 (8,589 ) 138,128 Losses and Expenses: Net losses and loss adjustment expenses 27,932 44,230 — 72,162 Acquisition costs and other underwriting expenses 24,651 23,478 — 48,129 Corporate and other operating expenses 2,906 2,100 — 5,006 Interest expense 2,081 8,741 (8,589 ) 2,233 Income (loss) before income taxes $ 8,189 $ 2,409 $ — $ 10,598 Quarter Ended September 30, 2015: (Dollars in thousands) Non-U.S. Subsidiaries U.S. Subsidiaries Eliminations Total Revenues: Gross premiums written $ 67,543 $ 140,268 $ (57,663 ) $ 150,148 Net premiums written $ 67,534 $ 54,963 $ — $ 122,497 Net premiums earned $ 70,532 $ 54,175 $ — $ 124,707 Net investment income 10,644 4,783 (6,575 ) 8,852 Net realized investment gains (losses) (1,256 ) (9,522 ) — (10,778 ) Other income (loss) (11 ) 1,290 — 1,279 Total revenues 79,909 50,726 (6,575 ) 124,060 Losses and Expenses: Net losses and loss adjustment expenses 39,849 37,842 — 77,691 Acquisition costs and other underwriting expenses 30,504 20,430 — 50,934 Corporate and other operating expenses 1,648 1,919 — 3,567 Interest expense 1,501 6,669 (6,575 ) 1,595 Income (loss) before income taxes $ 6,407 $ (16,134 ) $ — $ (9,727 ) Nine Months Ended September 30, 2016: (Dollars in thousands) Non-U.S. Subsidiaries U.S. Subsidiaries Eliminations Total Revenues: Gross premiums written $ 141,297 $ 394,312 $ (106,355 ) $ 429,254 Net premiums written $ 141,283 $ 215,950 $ — $ 357,233 Net premiums earned $ 162,594 $ 196,399 $ — $ 358,993 Net investment income 36,791 13,888 (25,576 ) 25,103 Net realized investment gains (losses) 128 (9,185 ) — (9,057 ) Other income (loss) 17 9,586 — 9,603 Total revenues 199,530 210,688 (25,576 ) 384,642 Losses and Expenses: Net losses and loss adjustment expenses 84,154 130,903 — 215,057 Acquisition costs and other underwriting expenses 71,758 77,003 — 148,761 Corporate and other operating expenses 7,181 5,883 — 13,064 Interest expense 6,233 26,020 (25,576 ) 6,677 Income (loss) before income taxes $ 30,204 $ (29,121 ) $ — $ 1,083 Nine Months Ended September 30, 2015: (Dollars in thousands) Non-U.S. Subsidiaries U.S. Subsidiaries Eliminations Total Revenues: Gross premiums written $ 289,940 $ 411,310 $ (241,718 ) $ 459,532 Net premiums written $ 289,892 $ 104,714 $ — $ 394,606 Net premiums earned $ 214,667 $ 166,254 $ — $ 380,921 Net investment income 32,146 13,594 (19,506 ) 26,234 Net realized investment gains (losses) (1,643 ) (5,573 ) — (7,216 ) Other income (loss) (77 ) 2,485 — 2,408 Total revenues 245,093 176,760 (19,506 ) 402,347 Losses and Expenses: Net losses and loss adjustment expenses 115,654 111,216 — 226,870 Acquisition costs and other underwriting expenses 92,368 57,750 — 150,118 Corporate and other operating expenses 3,395 16,046 — 19,441 Interest expense 2,325 19,816 (19,506 ) 2,635 Income (loss) before income taxes $ 31,351 $ (28,068 ) $ — $ 3,283 |
Components of Income Tax Expense (Benefit) | The following table summarizes the components of income tax expense (benefit): Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2016 2015 2016 2015 Current income tax expense (benefit): Foreign $ 84 $ 67 $ 289 $ 228 U.S. Federal 146 (579 ) 146 (2,126 ) Total current income tax expense (benefit) 230 (512 ) 435 (1,898 ) Deferred income tax expense (benefit): U.S. Federal 833 (5,469 ) (10,847 ) (8,984 ) Total deferred income tax expense (benefit) 833 (5,469 ) (10,847 ) (8,984 ) Total income tax expense (benefit) $ 1,063 $ (5,981 ) $ (10,412 ) $ (10,882 ) |
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: Quarters Ended September 30, 2016 2015 (Dollars in thousands) Amount % of Pre- Tax Income Amount % of Pre- Tax Income Expected tax provision at weighted average rate $ 933 8.8 % $ (5,580 ) (57.4 %) Adjustments: Tax exempt interest (101 ) (1.0 ) (107 ) (1.1 ) Dividend exclusion (3 ) 0.0 (175 ) (1.8 ) Other 234 2.2 (119 ) (1.2 ) Actual tax on continuing operations $ 1,063 10.0 % $ (5,981 ) (61.5 %) Nine Months Ended September 30, 2016 2015 (Dollars in thousands) Amount % of Pre- Tax Income Amount % of Pre- Tax Income Expected tax provision at weighted average rate $ (9,896 ) (913.8 %) $ (9,595 ) (292.3 %) Adjustments: Tax exempt interest (304 ) (28.1 ) (326 ) (9.9 ) Dividend exclusion (480 ) (44.3 ) (588 ) (17.9 ) Other 268 24.8 (373 ) (11.4 ) Actual tax on continuing operations $ (10,412 ) (961.4 %) (10,882 ) (331.5 %) |
Liability for Unpaid Losses a27
Liability for Unpaid Losses and Loss Adjustment Expenses (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2016 2015 2016 2015 Balance at beginning of period $ 683,850 $ 769,299 $ 680,047 $ 675,472 Less: Ceded reinsurance receivables 111,579 138,497 108,130 123,201 Net balance at beginning of period 572,271 630,802 571,917 552,271 Purchased reserves, gross 1,410 1,119 1,410 89,489 Less: Purchased reserves ceded (641 ) 1,119 (641 ) 12,800 Purchased reserves, net 2,051 — 2,051 76,689 Incurred losses and loss adjustment expenses related to: Current year 81,579 86,203 239,991 244,041 Prior years (9,417 ) (8,512 ) (24,934 ) (17,171 ) Total incurred losses and loss adjustment expenses 72,162 77,691 215,057 226,870 Paid losses and loss adjustment expenses related to: Current year 49,704 53,512 113,090 113,573 Prior years 35,147 56,385 114,302 143,661 Total paid losses and loss adjustment expenses 84,851 109,897 227,392 257,234 Net balance at end of period 561,633 598,596 561,633 598,596 Plus: Ceded reinsurance receivables 102,749 130,913 102,749 130,913 Balance at end of period $ 664,382 $ 729,509 $ 664,382 $ 729,509 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Premium and Losses | |
Estimated Earned Premium and Incurred Losses, and Net Balances Due | The Company estimated that the following earned premium and incurred losses related to these agreements have been assumed by Global Indemnity Reinsurance from Hiscox Bermuda: Quarters Ended September 30, (Dollars in thousands) 2016 2015 Assumed earned premium $ (2 ) $ 47 Assumed losses and loss adjustment expenses (209 ) (167 ) Nine Months Ended September 30, (Dollars in thousands) 2016 2015 Assumed earned premium $ 51 $ 2,294 Assumed losses and loss adjustment expenses (419 ) 476 |
Receivables | |
Estimated Earned Premium and Incurred Losses, and Net Balances Due | Net balances due to Global Indemnity Reinsurance under this agreement are as follows: (Dollars in thousands) September 30, 2016 December 31, Net payable balance $ (114 ) $ (110 ) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share: (Dollars in thousands, Quarters Ended September 30, Nine Months Ended September 30, except share and per share data) 2016 2015 2016 2015 Net income (loss) $ 9,535 $ (3,746 ) $ 11,495 $ 14,165 Basic earnings per share: Weighted average shares outstanding – basic 17,254,843 25,463,994 17,241,040 25,452,991 Net income (loss) per share $ 0.55 $ (0.15 ) $ 0.67 $ 0.56 Diluted earnings per share: Weighted average shares outstanding – diluted (1) 17,540,060 25,463,994 17,515,854 25,684,931 Net income (loss) per share $ 0.54 $ (0.15 ) $ 0 .66 $ 0.55 (1) For the quarter ended September 30, 2015, “weighted average shares outstanding – basic” was used to calculate “diluted earnings per share” due to a net loss for the period. |
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: Quarters Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Weighted average shares for basic earnings per share 17,254,843 25,463,994 17,241,040 25,452,991 Non-vested restricted stock 176,087 — 165,011 128,942 Options 109,130 — 109,803 102,998 Weighted average shares for diluted earnings per share 17,540,060 25,463,994 17,515,854 25,684,931 |
Summarizes Options which Deemed to be Anti-dilutive | The following table summarizes options which are deemed to be anti-dilutive at September 30, 2016: Grant Date Expiration Date Outstanding Strike Price February 9, 2014 February 10, 2024 300,000 $ 32.38 300,000 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Summary of Business Segment Information | The following are tabulations of business segment information for the quarters and nine months ended September 30, 2016 and 2015. Quarter Ended September 30, 2016: (Dollars in thousands) Commercial Personal Reinsurance Operations (2) Total Revenues: Gross premiums written $ 50,214 $ 73,557 (6) $ 9,798 $ 133,569 Net premiums written $ 45,754 $ 59,499 $ 9,798 $ 115,051 Net premiums earned $ 48,179 $ 60,816 $ 10,558 $ 119,553 Other income (loss) 7,031 832 (11 ) 7,852 Total revenues 55,210 61,648 10,547 127,405 Losses and Expenses: Net losses and loss adjustment expenses 23,887 42,888 5,387 72,162 Acquisition costs and other underwriting expenses 19,362 (3) 25,097 (4) 3,670 48,129 Income (loss) from segments $ 11,961 $ (6,337 ) $ 1,490 $ 7,114 Unallocated Items: Net investment income 8,795 Net realized investment gains 1,928 Corporate and other operating expenses (5,006 ) Interest expense (2,233 ) Income before income taxes 10,598 Income tax expense (1,063 ) Net income 9,535 Total assets $ 757,267 $ 512,190 $ 712,358 (5) $ 1,981,815 (1) Includes business ceded to the Company’s Reinsurance Operations. (2) External business only, excluding business assumed from affiliates. (3) Includes federal excise tax of $132 relating to cessions from Commercial Lines to Reinsurance Operations. (4) Includes federal excise tax of $304 relating to cessions from Personal Lines to Reinsurance Operations. (5) Comprised of Global Indemnity Reinsurance’s total assets less its investment in subsidiaries. (6) Includes $7,328 of business written by American Reliable that is ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement. Quarter Ended September 30, 2015: (Dollars in thousands) Commercial Personal Reinsurance Operations (2) Total Revenues: Gross premiums written $ 52,920 $ 87,349 (6) $ 9,879 $ 150,148 Net premiums written $ 49,325 $ 63,302 $ 9,870 $ 122,497 Net premiums earned $ 48,916 $ 62,132 $ 13,659 $ 124,707 Other income (loss) 102 1,188 (11 ) 1,279 Total revenues 49,018 63,320 13,648 125,986 Losses and Expenses: Net losses and loss adjustment expenses 22,832 48,899 5,960 77,691 Acquisition costs and other underwriting expenses 20,686 (3) 25,779 (4) 4,469 50,934 Income (loss) from segments $ 5,500 $ (11,358 ) $ 3,219 $ (2,639 ) Unallocated Items: Net investment income 8,852 Net realized investment losses (10,778 ) Corporate and other operating expenses (3,567 ) Interest expense (1,595 ) Loss before income taxes (9,727 ) Income tax benefit 5,981 Net loss (3,746 ) Total assets $ 1,005,435 $ 572,807 $ 740,377 (5) $ 2,318,619 (1) Includes business ceded to the Company’s Reinsurance Operations. (2) External business only, excluding business assumed from affiliates. (3) Includes federal excise tax of $258 relating to cessions from Commercial Lines to Reinsurance Operations. (4) Includes federal excise tax of $310 relating to cessions from Personal Lines to Reinsurance Operations. (5) Comprised of Global Indemnity Reinsurance’s total assets less its investment in subsidiaries (6) Includes $18,749 of business written by American Reliable that is ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement. Nine Months Ended September 30, 2016: (Dollars in thousands) Commercial Personal Reinsurance Operations (2) Total Revenues: Gross premiums written $ 157,335 $ 236,978 (6) $ 34,941 $ 429,254 Net premiums written $ 141,764 $ 180,542 $ 34,927 $ 357,233 Net premiums earned $ 143,699 $ 183,631 $ 31,663 $ 358,993 Other income 7,354 2,232 17 9,603 Total revenues 151,053 185,863 31,680 368,596 Losses and Expenses: Net losses and loss adjustment expenses 78,605 122,748 13,704 215,057 Acquisition costs and other underwriting expenses 58,752 (3) 78,381 (4) 11,628 148,761 Income (loss) from segments $ 13,696 $ (15,266 ) $ 6,348 $ 4,778 Unallocated Items: Net investment income 25,103 Net realized investment losses (9,057 ) Corporate and other operating expenses (13,064 ) Interest expense (6,677 ) Income before income taxes 1,083 Income tax benefit 10,412 Net income 11,495 Total assets $ 757,267 $ 512,190 $ 712,358 (5) $ 1,981,815 (1) Includes business ceded to the Company’s Reinsurance Operations. (2) External business only, excluding business assumed from affiliates. (3) Includes federal excise tax of $391 relating to cessions from Commercial Lines to Reinsurance Operations. (4) Includes federal excise tax of $918 relating to cessions from Personal Lines to Reinsurance Operations. ( 5) Comprised of Global Indemnity Reinsurance’s total assets less its investment in subsidiaries. (6) Includes $30,910 of business written by American Reliable that is ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement. Nine Months Ended September 30, 2015: (Dollars in thousands) Commercial Personal Reinsurance Operations (2) Total Revenues: Gross premiums written $ 161,746 $ 249,564 (6) $ 48,222 $ 459,532 Net premiums written $ 149,647 $ 196,785 $ 48,174 $ 394,606 Net premiums earned $ 149,244 $ 191,472 $ 40,205 $ 380,921 Other income (loss) 420 2,065 (77 ) 2,408 Total revenues 149,664 193,537 40,128 383,329 Losses and Expenses: Net losses and loss adjustment expenses 82,474 129,997 14,399 226,870 Acquisition costs and other underwriting expenses 61,317 (3) 74,590 (4) 14,211 150,118 Income (loss) from segments $ 5,873 $ (11,050 ) $ 11,518 $ 6,341 Unallocated Items: Net investment income 26,234 Net realized investment losses (7,216 ) Corporate and other operating expenses (19,441 ) Interest expense (2,635 ) Income before income taxes 3,283 Income tax benefit 10,882 Net income 14,165 Total assets $ 1,005,435 $ 572,807 $ 740,377 (5) $ 2,318,619 (1) Includes business ceded to the Company’s Reinsurance Operations. (2) External business only, excluding business assumed from affiliates. (3) Includes federal excise tax of $787 relating to cessions from Commercial Lines to Reinsurance Operations. (4) Includes federal excise tax of $957 relating to cessions from Personal Lines to Reinsurance Operations. (5) Comprised of Global Indemnity Reinsurance’s total assets less its investment in subsidiaries (6) Includes $41,749 of business written by American Reliable that is ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement. |
Principles of Consolidation a31
Principles of Consolidation and Basis of Presentation - Additional Information (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($)SegmentProduct | |
Organization And Basis Of Presentation [Line Items] | |
Date of incorporation | Mar. 9, 2010 |
State of incorporation | Ireland |
Kind of listing | A ordinary shares |
Number of business segments | Segment | 3 |
Proceeds from sale of capital stock | $ 18,700 |
Pretax gain on sale of capital stock | $ 6,872 |
Commercial Lines | |
Organization And Basis Of Presentation [Line Items] | |
Number of product classifications | Product | 3 |
Schedule of Amortized Cost and
Schedule of Amortized Cost and Estimated Fair Value of Investments (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | $ 1,432,999 | $ 1,441,082 | |
Gross Unrealized Gains | 38,012 | 23,261 | |
Gross Unrealized Losses | (4,640) | (15,287) | |
Estimated Fair Value | 1,466,371 | 1,449,056 | |
Other than temporary impairments recognized in AOCI | [1] | (6) | (9) |
Common Shares | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 102,899 | 100,157 | |
Gross Unrealized Gains | 22,225 | 16,118 | |
Gross Unrealized Losses | (2,345) | (5,960) | |
Estimated Fair Value | 122,779 | 110,315 | |
Other Invested Assets | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 32,635 | 32,592 | |
Estimated Fair Value | 32,635 | 32,592 | |
Fixed Maturities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 1,297,465 | 1,308,333 | |
Gross Unrealized Gains | 15,787 | 7,143 | |
Gross Unrealized Losses | (2,295) | (9,327) | |
Estimated Fair Value | 1,310,957 | 1,306,149 | |
Other than temporary impairments recognized in AOCI | [1] | (6) | (9) |
Fixed Maturities | U.S. Treasury and Agency Obligations | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 79,290 | 106,303 | |
Gross Unrealized Gains | 1,549 | 1,140 | |
Gross Unrealized Losses | (321) | ||
Estimated Fair Value | 80,839 | 107,122 | |
Fixed Maturities | Obligations of States and Political Subdivisions | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 167,430 | 203,121 | |
Gross Unrealized Gains | 3,315 | 2,576 | |
Gross Unrealized Losses | (49) | (457) | |
Estimated Fair Value | 170,696 | 205,240 | |
Fixed Maturities | Mortgage Backed Securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 104,222 | 157,753 | |
Gross Unrealized Gains | 2,765 | 2,113 | |
Gross Unrealized Losses | (38) | (743) | |
Estimated Fair Value | 106,949 | 159,123 | |
Fixed Maturities | Asset-backed Securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 250,766 | 261,008 | |
Gross Unrealized Gains | 1,731 | 435 | |
Gross Unrealized Losses | (297) | (1,421) | |
Estimated Fair Value | 252,200 | 260,022 | |
Other than temporary impairments recognized in AOCI | [1] | (6) | (9) |
Fixed Maturities | Commercial Mortgage-Backed Securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 175,469 | 142,742 | |
Gross Unrealized Gains | 372 | ||
Gross Unrealized Losses | (1,188) | (2,352) | |
Estimated Fair Value | 174,653 | 140,390 | |
Fixed Maturities | Corporate Bonds and Debt | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 391,277 | 334,720 | |
Gross Unrealized Gains | 5,073 | 685 | |
Gross Unrealized Losses | (695) | (3,294) | |
Estimated Fair Value | 395,655 | 332,111 | |
Fixed Maturities | Foreign Corporate Bonds | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 129,011 | 102,686 | |
Gross Unrealized Gains | 982 | 194 | |
Gross Unrealized Losses | (28) | (739) | |
Estimated Fair Value | $ 129,965 | $ 102,141 | |
[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 Inform
Investments - Additional Information (Detail) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Gross unrealized losses | $ 4,640,000 | $ 15,287,000 | |
Gross unrealized losses for 12 months or greater | [1] | 1,080,000 | $ 515,000 |
Investments in insurance enhanced asset backed and credit securities | 33,100,000 | ||
Investments in insurance enhanced municipal bonds | 13,662,000 | ||
Ratings without insurance | 509,000 | ||
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% | ||
Municipal Bond Insurance Association | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Investments in asset backed and taxable municipal bonds | $ 3,800,000 | ||
Ambac Financial Group | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Investments in asset backed and taxable municipal bonds | 900,000 | ||
Assured Guaranty Corporation | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Investments in asset backed and taxable municipal bonds | 14,600,000 | ||
Financial Guaranty Insurance Group | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Investments in asset backed and taxable municipal bonds | $ 100,000 | ||
Maximum | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Investments in a single issuer as a percentage of shareholders' equity | 4.00% | 5.00% | |
Financial Guarantors | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Investments in insurance enhanced municipal bonds | $ 8,739,000 | ||
Taxable Municipal Bonds | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Investments in asset backed and taxable municipal bonds | 18,300,000 | ||
Pre-Refunded Securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Investments in insurance enhanced municipal bonds | 5,378,000 | ||
Pre-Refunded Securities | Financial Guarantors | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Investments in insurance enhanced municipal bonds | 455,000 | ||
A+ Rating | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Investments in insurance enhanced municipal bonds | $ 13,700,000 | ||
Insurance enhanced municipal bonds as a percentage of total cash and invested assets | 0.90% | ||
Tax free insurance enhanced municipal bonds | $ 8,300,000 | ||
A Rating | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Ratings without insurance | 509,000 | ||
Obligations of States and Political Subdivisions | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross unrealized losses | 49,000 | ||
Obligations of States and Political Subdivisions | A Rating | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross unrealized losses for 12 months or greater | 5,000 | ||
Mortgage Backed Securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross unrealized losses | 38,000 | ||
Mortgage Backed Securities | Investment Grade Rating | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross unrealized losses for 12 months or greater | 11,000 | ||
Asset-backed Securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross unrealized losses | $ 297,000 | ||
Weighted average credit enhancement | 23.30% | ||
Investments in asset backed and taxable municipal bonds | $ 1,100,000 | ||
Asset-backed Securities | AA Rating | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross unrealized losses for 12 months or greater | 112,000 | ||
Commercial Mortgage-Backed Securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross unrealized losses | $ 1,188,000 | ||
Weighted average credit enhancement | 29.40% | ||
Commercial Mortgage-Backed Securities | A+ Rating | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross unrealized losses for 12 months or greater | $ 617,000 | ||
Corporate Bonds and Debt | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross unrealized losses | 695,000 | ||
Corporate Bonds and Debt | Investment Grade Rating | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross unrealized losses for 12 months or greater | 69,000 | ||
Foreign Corporate Bonds | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross unrealized losses | 28,000 | ||
Common Shares | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross unrealized losses | 2,345,000 | $ 5,960,000 | |
Gross unrealized losses for 12 months or greater | [1] | 266,000 | |
One of the Company's variable interest VIE's | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Significant variable interest in fair value of the non-consolidated VIE | 29,100,000 | 32,600,000 | |
Variable interest entities, maximum exposure to loss | 51,100,000 | $ 52,600,000 | |
The remaining three variable interest VIE's | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Significant variable interest in fair value of the non-consolidated VIE | 3,600,000 | ||
Variable interest entities, maximum exposure to loss | $ 24,600,000 | ||
[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 E
Summary of Amortized Cost and Estimated Fair Value Through Fixed Maturities (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Due in one year or less, Amortized Cost | $ 81,811 | |
Due after one year through five years, Amortized Cost | 633,977 | |
Due after five years through ten years, Amortized Cost | 47,779 | |
Due after ten years through fifteen years, Amortized Cost | 0 | |
Due after fifteen years, Amortized Cost | 3,441 | |
Fixed maturities, amortized cost | 1,297,465 | $ 1,308,333 |
Due in one year or less, Estimated Fair value | 82,130 | |
Due after one year through five years, Estimated Fair value | 642,829 | |
Due after five years through ten years, Estimated Fair value | 48,727 | |
Due after ten years through fifteen years, Estimated Fair value | 0 | |
Due after fifteen years, Estimated Fair value | 3,469 | |
Fixed Maturities, estimated fair value | 1,310,957 | $ 1,306,149 |
Mortgage Backed Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 104,222 | |
Estimated Fair value | 106,949 | |
Asset-backed Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 250,766 | |
Estimated Fair value | 252,200 | |
Commercial Mortgage-Backed Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 175,469 | |
Estimated Fair value | $ 174,653 |
Summary of Securities with Gros
Summary of Securities with Gross Unrealized Losses (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Less than 12 months, Fair Value | $ 242,907 | $ 827,179 | |
Less than 12 months, Gross Unrealized Losses | (3,560) | (14,772) | |
12 months or longer, Fair Value | [1] | 86,750 | 41,401 |
12 months or longer, Gross Unrealized Losses | [1] | (1,080) | (515) |
Total, Fair Value | 329,657 | 868,580 | |
Total, Gross Unrealized Losses | (4,640) | (15,287) | |
Obligations of States and Political Subdivisions | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Total, Gross Unrealized Losses | (49) | ||
Mortgage Backed Securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Total, Gross Unrealized Losses | (38) | ||
Asset-backed Securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Total, Gross Unrealized Losses | (297) | ||
Commercial Mortgage-Backed Securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Total, Gross Unrealized Losses | (1,188) | ||
Corporate Bonds and Debt | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Total, Gross Unrealized Losses | (695) | ||
Foreign Corporate Bonds | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Total, Gross Unrealized Losses | (28) | ||
Common Shares | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Less than 12 months, Fair Value | 24,387 | 36,798 | |
Less than 12 months, Gross Unrealized Losses | (2,079) | (5,960) | |
12 months or longer, Fair Value | [1] | 2,027 | |
12 months or longer, Gross Unrealized Losses | [1] | (266) | |
Total, Fair Value | 26,414 | 36,798 | |
Total, Gross Unrealized Losses | (2,345) | (5,960) | |
Fixed Maturities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Less than 12 months, Fair Value | 218,520 | 790,381 | |
Less than 12 months, Gross Unrealized Losses | (1,481) | (8,812) | |
12 months or longer, Fair Value | [1] | 84,723 | 41,401 |
12 months or longer, Gross Unrealized Losses | [1] | (814) | (515) |
Total, Fair Value | 303,243 | 831,782 | |
Total, Gross Unrealized Losses | (2,295) | (9,327) | |
Fixed Maturities | U.S. Treasury and Agency Obligations | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Less than 12 months, Fair Value | 79,496 | ||
Less than 12 months, Gross Unrealized Losses | (321) | ||
12 months or longer, Fair Value | [1] | 0 | |
12 months or longer, Gross Unrealized Losses | [1] | 0 | |
Total, Fair Value | 79,496 | ||
Total, Gross Unrealized Losses | (321) | ||
Fixed Maturities | Obligations of States and Political Subdivisions | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Less than 12 months, Fair Value | 17,372 | 49,708 | |
Less than 12 months, Gross Unrealized Losses | (44) | (373) | |
12 months or longer, Fair Value | [1] | 677 | 7,732 |
12 months or longer, Gross Unrealized Losses | [1] | (5) | (84) |
Total, Fair Value | 18,049 | 57,440 | |
Total, Gross Unrealized Losses | (49) | (457) | |
Fixed Maturities | Mortgage Backed Securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Less than 12 months, Fair Value | 3,123 | 63,759 | |
Less than 12 months, Gross Unrealized Losses | (27) | (743) | |
12 months or longer, Fair Value | [1] | 309 | |
12 months or longer, Gross Unrealized Losses | [1] | (11) | |
Total, Fair Value | 3,432 | 63,759 | |
Total, Gross Unrealized Losses | (38) | (743) | |
Fixed Maturities | Asset-backed Securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Less than 12 months, Fair Value | 52,109 | 203,381 | |
Less than 12 months, Gross Unrealized Losses | (185) | (1,404) | |
12 months or longer, Fair Value | [1] | 19,260 | 4,843 |
12 months or longer, Gross Unrealized Losses | [1] | (112) | (17) |
Total, Fair Value | 71,369 | 208,224 | |
Total, Gross Unrealized Losses | (297) | (1,421) | |
Fixed Maturities | Commercial Mortgage-Backed Securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Less than 12 months, Fair Value | 82,291 | 118,813 | |
Less than 12 months, Gross Unrealized Losses | (571) | (2,005) | |
12 months or longer, Fair Value | [1] | 57,970 | 21,577 |
12 months or longer, Gross Unrealized Losses | [1] | (617) | (347) |
Total, Fair Value | 140,261 | 140,390 | |
Total, Gross Unrealized Losses | (1,188) | (2,352) | |
Fixed Maturities | Corporate Bonds and Debt | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Less than 12 months, Fair Value | 43,156 | 211,364 | |
Less than 12 months, Gross Unrealized Losses | (626) | (3,269) | |
12 months or longer, Fair Value | [1] | 6,507 | 2,120 |
12 months or longer, Gross Unrealized Losses | [1] | (69) | (25) |
Total, Fair Value | 49,663 | 213,484 | |
Total, Gross Unrealized Losses | (695) | (3,294) | |
Fixed Maturities | Foreign Corporate Bonds | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Less than 12 months, Fair Value | 19,869 | 63,860 | |
Less than 12 months, Gross Unrealized Losses | (28) | (697) | |
12 months or longer, Fair Value | [1] | 5,129 | |
12 months or longer, Gross Unrealized Losses | [1] | (42) | |
Total, Fair Value | 19,869 | 68,989 | |
Total, Gross Unrealized Losses | $ (28) | $ (739) | |
[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 Temporar
Schedule of Other Than Temporary Impairments on Investments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Schedule of Available-for-sale Securities [Line Items] | ||||
OTTI losses, gross | $ (108) | $ (201) | $ (23) | |
Portion of loss recognized in other comprehensive income (pre-tax) | 0 | $ 0 | 0 | 0 |
Net impairment losses on fixed maturities recognized in earnings | (108) | (201) | (23) | |
Equity securities | (2,106) | (4,641) | (4,280) | (6,856) |
Total | $ (2,214) | $ (4,641) | $ (4,481) | $ (6,879) |
Schedule of Credit Losses Recog
Schedule of Credit Losses Recognized in Earnings (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Schedule of Available-for-sale Securities [Line Items] | ||||
Balance at beginning of period | $ 31 | $ 31 | $ 31 | $ 50 |
Additions where no OTTI was previously recorded | 0 | 0 | 0 | 0 |
Additions where an OTTI was previously recorded | 0 | 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 | 0 |
Reductions reflecting increases in expected cash flows to be collected | 0 | 0 | 0 | 0 |
Reductions for securities sold during the period | (19) | |||
Balance at end of period | $ 31 | $ 31 | $ 31 | $ 31 |
Schedule of Accumulated Other C
Schedule of Accumulated Other Comprehensive Income, Net of Tax (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Schedule of Available-for-sale Securities [Line Items] | ||||||
Deferred taxes | $ (10,093) | $ (3,896) | ||||
Accumulated other comprehensive income, net of tax | 23,279 | $ 22,076 | 4,078 | $ 13,245 | $ 20,102 | $ 23,384 |
Fixed Maturities | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Net unrealized gains (losses) | 13,492 | (2,184) | ||||
Common Shares | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Net unrealized gains (losses) | $ 19,880 | $ 10,158 |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning balance | $ 22,076 | $ 20,102 | $ 4,078 | $ 23,384 | $ 23,384 |
Other comprehensive income (loss) before reclassification | 1,984 | (9,056) | 21,675 | (9,622) | |
Amounts reclassified from accumulated other comprehensive income (loss) | (781) | 2,199 | (2,474) | (517) | |
Other comprehensive income (loss), net of tax | 1,203 | (6,857) | 19,201 | (10,139) | |
Ending balance | 23,279 | 13,245 | 23,279 | 13,245 | 4,078 |
Unrealized Gains and Losses on Available for Sale Securities | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning balance | 22,511 | 20,201 | 4,200 | 23,647 | 23,647 |
Other comprehensive income (loss) before reclassification | 2,073 | (9,009) | 22,075 | (9,413) | |
Amounts reclassified from accumulated other comprehensive income (loss) | (781) | 2,129 | (2,472) | (913) | |
Other comprehensive income (loss), net of tax | 1,292 | (6,880) | 19,603 | (10,326) | |
Ending balance | 23,803 | 13,321 | 23,803 | 13,321 | 4,200 |
Foreign Currency Items | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning balance | (435) | (99) | (122) | (263) | (263) |
Other comprehensive income (loss) before reclassification | (89) | (47) | (400) | (209) | |
Amounts reclassified from accumulated other comprehensive income (loss) | 70 | (2) | 396 | ||
Other comprehensive income (loss), net of tax | (89) | 23 | (402) | 187 | |
Ending balance | $ (524) | $ (76) | $ (524) | $ (76) | $ (122) |
Reclassifications Out of Accumu
Reclassifications Out of Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total reclassifications, net of tax | $ (781) | $ 2,199 | $ (2,474) | $ (517) |
Other net realized investment (gains) losses | 4,142 | (6,137) | (4,576) | (337) |
Other than temporary impairment losses on investments | (2,214) | (4,641) | (4,481) | (6,879) |
Income (loss) before income taxes | 10,598 | (9,727) | 1,083 | 3,283 |
Income tax expense (benefit) | (1,063) | 5,981 | 10,412 | 10,882 |
Net income (loss) | 9,535 | (3,746) | 11,495 | 14,165 |
Unrealized Gains and Losses on Available for Sale Securities | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total reclassifications, net of tax | (781) | 2,129 | (2,472) | (913) |
Foreign Currency Items | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total reclassifications, net of tax | 70 | (2) | 396 | |
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 | (3,384) | (2,042) | (8,214) | (9,168) |
Other than temporary impairment losses on investments | 2,214 | 4,641 | 4,481 | 6,879 |
Income (loss) before income taxes | (1,170) | 2,599 | (3,733) | (2,289) |
Income tax expense (benefit) | 389 | (470) | 1,261 | 1,376 |
Net income (loss) | $ (781) | 2,129 | (2,472) | (913) |
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 | 108 | (4) | 609 | |
Income tax expense (benefit) | (38) | 2 | (213) | |
Net income (loss) | $ 70 | $ (2) | $ 396 |
Components of Net Realized Inve
Components of Net Realized Investment Gains (Losses) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Schedule of Available-for-sale Securities [Line Items] | ||||
Total net realized investment gains (losses) | $ 1,928 | $ (10,778) | $ (9,057) | $ (7,216) |
Not Designated as Hedging Instrument | Interest Rate Swap | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Gross realized gains | 1,955 | |||
Gross realized losses | (1,197) | (8,071) | (12,794) | (8,896) |
Total net realized investment gains (losses) | 758 | (8,071) | (12,794) | (8,896) |
Fixed Maturities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Gross realized gains | 434 | 110 | 1,252 | 1,589 |
Gross realized losses | (147) | (1,451) | (291) | (1,692) |
Total net realized investment gains (losses) | 287 | (1,341) | 961 | (103) |
Common Shares | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Gross realized gains | 3,345 | 3,494 | 8,068 | 9,418 |
Gross realized losses | (2,462) | (4,860) | (5,292) | (7,731) |
Total net realized investment gains (losses) | $ 883 | $ (1,366) | $ 2,776 | 1,687 |
Preferred Stock | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Gross realized gains | 96 | |||
Total net realized investment gains (losses) | $ 96 |
Schedule of Proceeds From Sales
Schedule of Proceeds From Sales of Available for Sale Securities (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Fixed maturities | $ 279,659 | $ 290,580 |
Equity securities | $ 34,976 | 34,161 |
Preferred stock | $ 1,540 |
Schedule of Investment Income (
Schedule of Investment Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Schedule of Available-for-sale Securities [Line Items] | |||||
Investment income | $ 9,782 | $ 9,601 | $ 29,293 | $ 28,722 | |
Investment expense | [1] | (987) | (749) | (4,190) | (2,488) |
Net investment income | 8,795 | 8,852 | 25,103 | 26,234 | |
Fixed Maturities | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Investment income | 8,131 | 8,673 | 22,729 | 24,709 | |
Equity Securities | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Investment income | 698 | 703 | 2,647 | 2,419 | |
Cash and Cash Equivalents | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Investment income | 44 | 32 | 111 | 59 | |
Other Invested Assets | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Investment income | $ 909 | $ 193 | $ 3,806 | $ 1,535 | |
[1] | Investment expense for the nine months ended September 30, 2016 includes $1.5 million in upfront fees necessary to enter into a new investment. See Note 9 for additional information on the Company's $40 million commitment related to this new investment. |
Schedule of Investment Income44
Schedule of Investment Income (Parenthetical) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2016 | Dec. 31, 2014 | ||
Schedule of Available-for-sale Securities [Line Items] | |||||||
Investment expense | [1] | $ 987 | $ 749 | $ 4,190 | $ 2,488 | ||
Commitment to purchase alternative investment | $ 40,000 | 40,000 | $ 40,000 | $ 50,000 | |||
Upfront Fees | |||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||
Investment expense | $ 1,500 | ||||||
[1] | Investment expense for the nine months ended September 30, 2016 includes $1.5 million in upfront fees necessary to enter into a new investment. See Note 9 for additional information on the Company's $40 million commitment related to this new investment. |
Schedule of Total Investment Re
Schedule of Total Investment Return (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Net Investment Income [Line Items] | |||||
Net investment income | $ 8,795 | $ 8,852 | $ 25,103 | $ 26,234 | |
Net realized investment gains (losses) | 1,928 | (10,778) | (9,057) | (7,216) | |
Change in unrealized holding gains and (losses) | 2,061 | (10,420) | 25,398 | (15,575) | |
Net realized and unrealized investment returns | 3,989 | (21,198) | 16,341 | (22,791) | |
Total investment return | $ 12,784 | $ (12,346) | $ 41,444 | $ 3,443 | |
Total investment return % | [1] | 0.80% | (0.70%) | 2.70% | 0.20% |
Average investment portfolio | [2] | $ 1,530,599 | $ 1,800,993 | $ 1,522,247 | $ 1,788,777 |
[1] | Not annualized. | ||||
[2] | 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 withou
Municipal Bonds with and without Insurance (Detail) $ in Thousands | Sep. 30, 2016USD ($) |
Financial Statement Details [Line Items] | |
Ratings with insurance | $ 509 |
Ratings without insurance | 509 |
AA Rating | |
Financial Statement Details [Line Items] | |
Ratings with insurance | 509 |
A Rating | |
Financial Statement Details [Line Items] | |
Ratings without insurance | $ 509 |
Summary of Insurance Enhanced M
Summary of Insurance Enhanced Municipal Bonds Backed by Financial Guarantors (Detail) $ in Thousands | Sep. 30, 2016USD ($) |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | $ 13,662 |
Ambac Financial Group | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 1,512 |
Assured Guaranty Corporation | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 3,500 |
Municipal Bond Insurance Association | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 3,229 |
Gov't National Housing Association | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 498 |
Financial Guarantors | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 8,739 |
Other Credit Enhanced Municipal Bonds | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 4,923 |
Pre-Refunded Securities | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 5,378 |
Pre-Refunded Securities | Ambac Financial Group | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 455 |
Pre-Refunded Securities | Financial Guarantors | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 455 |
Pre-Refunded Securities | Other Credit Enhanced Municipal Bonds | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 4,923 |
Government Guaranteed Securities | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 498 |
Government Guaranteed Securities | Gov't National Housing Association | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 498 |
Government Guaranteed Securities | Financial Guarantors | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 498 |
Exposure Net Of Pre-refunded & Government Guaranteed Securities | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | 7,786 |
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 | 1,057 |
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 | 3,500 |
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 | 3,229 |
Exposure Net Of Pre-refunded & Government Guaranteed Securities | Financial Guarantors | |
Schedule of Available-for-sale Securities [Line Items] | |
Investments in insurance enhanced municipal bonds | $ 7,786 |
Summary of Estimated Fair Value
Summary of Estimated Fair Values of Bonds Held on Deposit (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Estimated Fair Value | $ 797,109 | $ 849,820 | |
On Deposit With Governmental Authorities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Estimated Fair Value | 26,203 | 38,815 | |
Intercompany Trusts Held For Benefit Of U.S. Policyholders | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Estimated Fair Value | 601,052 | 643,216 | |
Held In Trust Pursuant To Third Party Requirements | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Estimated Fair Value | 67,924 | 66,544 | |
Letter Of Credit Held For Third Party Requirements | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Estimated Fair Value | 4,292 | 5,598 | |
Securities held as collateral for borrowing arrangements | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Estimated Fair Value | [1] | $ 97,638 | $ 95,647 |
[1] | Amount required to collateralize margin borrowing facilities. |
Summarized Information of Locat
Summarized Information of Location and Gross Amount of Derivatives' Fair Value in Consolidated Balance Sheets (Detail) - Not Designated as Hedging Instrument - Interest Rate Swap - Other Liabilities - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 200,000 | $ 200,000 |
Fair Value | $ (24,388) | $ (15,256) |
Summary of Net Gains (Losses) I
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) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Interest Rate Swap | Net Realized Investment Gains (Losses) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net loss for changes in fair value and net settlements of derivatives | $ 758 | $ (8,071) | $ (12,794) | $ (8,896) |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Detail) - Other Assets - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Funds needed to post execute swap transaction | $ 4.4 | $ 4.5 |
Interest Rate Swap | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Margin calls made in connection with interest rate swaps | $ 25.2 | $ 17.3 |
Company's Invested Assets and D
Company's Invested Assets and Derivative Instruments Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Total invested assets | $ 1,466,371 | $ 1,449,056 | |||
Common Shares | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Total invested assets | 122,779 | 110,315 | |||
Fixed Maturities | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Total invested assets | 1,310,957 | 1,306,149 | |||
Fixed Maturities | U.S. Treasury and Agency Obligations | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Total invested assets | 80,839 | 107,122 | |||
Fixed Maturities | Obligations of States and Political Subdivisions | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Total invested assets | 170,696 | 205,240 | |||
Fixed Maturities | Mortgage Backed Securities | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Total invested assets | 106,949 | 159,123 | |||
Fixed Maturities | Commercial Mortgage-Backed Securities | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Total invested assets | 174,653 | 140,390 | |||
Fixed Maturities | Asset-backed Securities | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Total invested assets | 252,200 | 260,022 | |||
Fixed Maturities | Corporate Bonds and Debt | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Total invested assets | 395,655 | 332,111 | |||
Fixed Maturities | Foreign Corporate Bonds | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Total invested assets | 129,965 | 102,141 | |||
Fair Value, Measurements, Recurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Total invested assets | 1,433,736 | [1] | 1,416,464 | [2] | |
Total invested liabilities | 24,388 | 15,256 | |||
Fair Value, Measurements, Recurring | Derivative instruments | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Total invested liabilities | 24,388 | 15,256 | |||
Fair Value, Measurements, Recurring | Common Shares | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Total invested assets | 122,799 | 110,315 | |||
Fair Value, Measurements, Recurring | Fixed Maturities | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Total invested assets | 1,310,957 | 1,306,149 | |||
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 | 80,839 | 107,122 | |||
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 | 170,696 | 205,240 | |||
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 | 106,949 | 159,123 | |||
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 | 174,653 | 140,390 | |||
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 | 252,200 | 260,022 | |||
Fair Value, Measurements, Recurring | Fixed Maturities | Corporate Bonds and Debt | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Total invested assets | 395,655 | 332,111 | |||
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 | 129,965 | 102,141 | |||
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 | 202,104 | [1] | 211,579 | [2] | |
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 | 122,779 | 110,315 | |||
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 | 79,325 | 101,264 | |||
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 | 79,325 | 101,264 | |||
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 | 1,214,772 | [1] | 1,204,885 | [2] | |
Total invested liabilities | 24,388 | 15,256 | |||
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 | 24,388 | 15,256 | |||
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 | 1,214,772 | 1,204,885 | |||
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 | 1,514 | 5,858 | |||
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 | 170,696 | 205,240 | |||
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 | 106,949 | 159,123 | |||
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 | 174,653 | 140,390 | |||
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 | 252,200 | 260,022 | |||
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Fixed Maturities | Corporate Bonds and Debt | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Total invested assets | 378,795 | 332,111 | |||
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 | 129,965 | $ 102,141 | |||
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 | [1] | 16,860 | |||
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 | 16,860 | ||||
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Fixed Maturities | Corporate Bonds and Debt | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Total invested assets | $ 16,860 | ||||
[1] | Excluded from the table above are limited liability companies and limited partnerships of $32.6 million at September 30, 2016 whose fair value is based on net asset value as a practical expedient. | ||||
[2] | Excluded from the table above are limited partnerships of $32.6 million at December 31, 2015 whose fair value is based on net asset value as a practical expedient. |
Company's Invested Assets and53
Company's Invested Assets and Derivative Instruments Measured at Fair Value on Recurring Basis (Parenthetical) (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other investment in limited liability companies and limited partnership | $ 32,635 | $ 32,592 |
Current Fair Value of Debt (Det
Current Fair Value of Debt (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt | $ 173,162 | $ 172,034 | |
Debt, fair value | 176,402 | 167,394 | |
7.75% Subordinated Notes due 2045 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt | [1] | 96,466 | 96,388 |
Debt, fair value | [1] | 99,706 | 91,748 |
Margin borrowing facilities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt | 76,696 | 75,646 | |
Debt, fair value | $ 76,696 | $ 75,646 | |
[1] | As of September 30, 2016 and December 31, 2015, the carrying value and fair value of the 7.75% Subordinated Notes due 2045 are net of unamortized debt issuance cost of $3.5 million. |
Current Fair Value of Debt (Par
Current Fair Value of Debt (Parenthetical) (Detail) - 7.75% Subordinated Notes due 2045 - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Subordinated Notes percentage | 7.75% | |
Subordinated Notes due date | 2,045 | |
Unamortized Debt Issuance Costs | $ 3.5 | $ 3.5 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Equity in the earnings of liability companies or partnerships | $ 900 | $ 100 | $ 3,749 | $ 1,448 |
7.75% Subordinated Notes due 2045 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Subordinated Notes percentage | 7.75% | 7.75% | ||
Subordinated Notes due date | 2,045 | |||
Fair Value, Inputs, Level 1 | 7.75% Subordinated Notes due 2045 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Subordinated Notes percentage | 7.75% | 7.75% | ||
Subordinated Notes due date | 2,045 |
Changes in Level 3 Investments
Changes in Level 3 Investments Measured at Fair Value on Recurring Basis (Detail) - Other Invested Assets - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Beginning balance | $ 11,220 | |||
Included in accumulated other comprehensive income | 534 | $ 531 | ||
Purchases | 5,079 | 16,299 | ||
Distributions | 0 | $ 0 | 0 | $ 0 |
Ending balance | 16,860 | 16,860 | ||
Amortization of Bond Premium and Discount, Net | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Investment Income | $ 27 | $ 30 |
Fair Value and Future Funding C
Fair Value and Future Funding Commitments Related to These Investments (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | $ 32,635 | $ 32,592 | |
Future Funding Commitments | 43,072 | 20,014 | |
European Non-Performing Loan Fund, LP | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | [1] | 29,073 | 32,592 |
Future Funding Commitments | [1] | 22,014 | $ 20,014 |
Private Middle Market Loans, LLC | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | [2] | 3,562 | |
Future Funding Commitments | [2] | $ 21,058 | |
[1] | 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 ability to sell or transfer its limited partnership interest without consent from the general partner. 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. Based on the terms of the partnership agreement, the Company anticipates its interest in this partnership to be redeemed in 2020. | ||
[2] | This interest consists of three separate equity investments in limited liability companies whereby the Company is also a lender via separate loan agreements. Typical financing is used for growth, acquisitions, or buyouts. The Company classifies their portion of the middle market corporate debt as fixed maturities. The Company has committed $40 million to this investment strategy, including both the equity and financing provisions. While the Company is not able to estimate the proportion of future funding commitments between equity and financing, the total remaining commitment is $21.1 million. Based on the terms of the investment management agreement, the Company anticipates its interest to be redeemed no later than 2024. |
Fair Value and Future Funding59
Fair Value and Future Funding Commitments Related to These Investments (Parenthetical) (Detail) | 9 Months Ended | ||||
Sep. 30, 2016USD ($)Investment | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value written down | $ 0 | ||||
Commitment to purchase alternative investment | 40,000,000 | $ 40,000,000 | $ 50,000,000 | ||
Future Funding Commitments | $ 43,072,000 | $ 20,014,000 | |||
Private Middle Market Loans, LLC | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Number of investments | Investment | 3 | ||||
Future Funding Commitments | [1] | $ 21,058,000 | |||
[1] | This interest consists of three separate equity investments in limited liability companies whereby the Company is also a lender via separate loan agreements. Typical financing is used for growth, acquisitions, or buyouts. The Company classifies their portion of the middle market corporate debt as fixed maturities. The Company has committed $40 million to this investment strategy, including both the equity and financing provisions. While the Company is not able to estimate the proportion of future funding commitments between equity and financing, the total remaining commitment is $21.1 million. Based on the terms of the investment management agreement, the Company anticipates its interest to be redeemed no later than 2024. |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Income Tax [Line Items] | |||||
Effective income tax benefit rate | 10.00% | (61.50%) | (961.40%) | (331.50%) | |
Alternative minimum tax credit carry forward | $ 11 | $ 11 | $ 10.9 | ||
Net operating loss carryforwards | 10.1 | 10.1 | 1.9 | ||
Section 163(j) carryforward | $ 3.9 | $ 3.9 | $ 3.1 | ||
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 from
Income Before Income Taxes from its Non-U.S. Subsidiaries and U.S. Subsidiaries (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues: | ||||
Gross premiums written | $ 133,569 | $ 150,148 | $ 429,254 | $ 459,532 |
Net premiums written | 115,051 | 122,497 | 357,233 | 394,606 |
Net premiums earned | 119,553 | 124,707 | 358,993 | 380,921 |
Net investment income | 8,795 | 8,852 | 25,103 | 26,234 |
Net realized investment gains (losses) | 1,928 | (10,778) | (9,057) | (7,216) |
Other income (loss) | 7,852 | 1,279 | 9,603 | 2,408 |
Total revenues | 138,128 | 124,060 | 384,642 | 402,347 |
Losses and Expenses: | ||||
Net losses and loss adjustment expenses | 72,162 | 77,691 | 215,057 | 226,870 |
Acquisition costs and other underwriting expenses | 48,129 | 50,934 | 148,761 | 150,118 |
Corporate and other operating expenses | 5,006 | 3,567 | 13,064 | 19,441 |
Interest expense | 2,233 | 1,595 | 6,677 | 2,635 |
Income (loss) before income taxes | 10,598 | (9,727) | 1,083 | 3,283 |
Non-U.S. Subsidiaries | ||||
Revenues: | ||||
Gross premiums written | 51,900 | 67,543 | 141,297 | 289,940 |
Net premiums written | 51,900 | 67,534 | 141,283 | 289,892 |
Net premiums earned | 54,155 | 70,532 | 162,594 | 214,667 |
Net investment income | 11,556 | 10,644 | 36,791 | 32,146 |
Net realized investment gains (losses) | 58 | (1,256) | 128 | (1,643) |
Other income (loss) | (10) | (11) | 17 | (77) |
Total revenues | 65,759 | 79,909 | 199,530 | 245,093 |
Losses and Expenses: | ||||
Net losses and loss adjustment expenses | 27,932 | 39,849 | 84,154 | 115,654 |
Acquisition costs and other underwriting expenses | 24,651 | 30,504 | 71,758 | 92,368 |
Corporate and other operating expenses | 2,906 | 1,648 | 7,181 | 3,395 |
Interest expense | 2,081 | 1,501 | 6,233 | 2,325 |
Income (loss) before income taxes | 8,189 | 6,407 | 30,204 | 31,351 |
U.S. Subsidiaries | ||||
Revenues: | ||||
Gross premiums written | 123,770 | 140,268 | 394,312 | 411,310 |
Net premiums written | 63,151 | 54,963 | 215,950 | 104,714 |
Net premiums earned | 65,398 | 54,175 | 196,399 | 166,254 |
Net investment income | 5,828 | 4,783 | 13,888 | 13,594 |
Net realized investment gains (losses) | 1,870 | (9,522) | (9,185) | (5,573) |
Other income (loss) | 7,862 | 1,290 | 9,586 | 2,485 |
Total revenues | 80,958 | 50,726 | 210,688 | 176,760 |
Losses and Expenses: | ||||
Net losses and loss adjustment expenses | 44,230 | 37,842 | 130,903 | 111,216 |
Acquisition costs and other underwriting expenses | 23,478 | 20,430 | 77,003 | 57,750 |
Corporate and other operating expenses | 2,100 | 1,919 | 5,883 | 16,046 |
Interest expense | 8,741 | 6,669 | 26,020 | 19,816 |
Income (loss) before income taxes | 2,409 | (16,134) | (29,121) | (28,068) |
Eliminations | ||||
Revenues: | ||||
Gross premiums written | (42,101) | (57,663) | (106,355) | (241,718) |
Net investment income | (8,589) | (6,575) | (25,576) | (19,506) |
Total revenues | (8,589) | (6,575) | (25,576) | (19,506) |
Losses and Expenses: | ||||
Interest expense | $ (8,589) | $ (6,575) | $ (25,576) | $ (19,506) |
Components of Income Tax Expens
Components of Income Tax Expense (Benefit) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Current income tax expense (benefit): | ||||
Foreign | $ 84 | $ 67 | $ 289 | $ 228 |
U.S. Federal | 146 | (579) | 146 | (2,126) |
Total current income tax expense (benefit) | 230 | (512) | 435 | (1,898) |
Deferred income tax expense (benefit): | ||||
U.S. Federal | 833 | (5,469) | (10,847) | (8,984) |
Total deferred income tax expense (benefit) | 833 | (5,469) | (10,847) | (8,984) |
Actual tax on continuing operations | $ 1,063 | $ (5,981) | $ (10,412) | $ (10,882) |
Differences in Tax Provision fo
Differences in Tax Provision for Financial Statement Purposes and Expected Tax Provision at Weighted Average Tax Rate (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Tax [Line Items] | ||||
Expected tax provision at weighted average rate | $ 933 | $ (5,580) | $ (9,896) | $ (9,595) |
Adjustments: | ||||
Tax exempt interest | (101) | (107) | (304) | (326) |
Dividend exclusion | (3) | (175) | (480) | (588) |
Other | 234 | (119) | 268 | (373) |
Actual tax on continuing operations | $ 1,063 | $ (5,981) | $ (10,412) | $ (10,882) |
Expected tax provision at weighted average rate | 8.80% | (57.40%) | (913.80%) | (292.30%) |
Adjustments: | ||||
Tax exempt interest, % of Pre-Tax Income | (1.00%) | (1.10%) | (28.10%) | (9.90%) |
Dividend exclusion, % of Pre-Tax Income | (0.00%) | (1.80%) | (44.30%) | (17.90%) |
Other, % of Pre-Tax Income | 2.20% | (1.20%) | 24.80% | (11.40%) |
Actual tax on continuing operations, % of Pre-Tax Income | 10.00% | (61.50%) | (961.40%) | (331.50%) |
Summarized Activity in Liabilit
Summarized Activity in Liability for Unpaid Losses and Loss Adjustment Expenses (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Balance at beginning of period | $ 683,850 | $ 769,299 | $ 680,047 | $ 675,472 |
Less:Ceded reinsurance receivables | 111,579 | 138,497 | 108,130 | 123,201 |
Net balance at beginning of period | 572,271 | 630,802 | 571,917 | 552,271 |
Purchased reserves, gross | 1,410 | 1,119 | 1,410 | 89,489 |
Less: Purchased reserves ceded | (641) | 1,119 | (641) | 12,800 |
Purchased reserves, net | 2,051 | 2,051 | 76,689 | |
Incurred losses and loss adjustment expenses related to: | ||||
Current year | 81,579 | 86,203 | 239,991 | 244,041 |
Prior years | (9,417) | (8,512) | (24,934) | (17,171) |
Total incurred losses and loss adjustment expenses | 72,162 | 77,691 | 215,057 | 226,870 |
Paid losses and loss adjustment expenses related to: | ||||
Current year | 49,704 | 53,512 | 113,090 | 113,573 |
Prior years | 35,147 | 56,385 | 114,302 | 143,661 |
Total paid losses and loss adjustment expenses | 84,851 | 109,897 | 227,392 | 257,234 |
Net balance at end of period | 561,633 | 598,596 | 561,633 | 598,596 |
Plus:Ceded reinsurance receivables | 102,749 | 130,913 | 102,749 | 130,913 |
Balance at end of period | $ 664,382 | $ 729,509 | $ 664,382 | $ 729,509 |
Liability for Unpaid Losses a65
Liability for Unpaid Losses and Loss Adjustment Expenses - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | $ (9,417) | $ (8,512) | $ (24,934) | $ (17,171) |
Commercial Lines Segment | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (6,500) | (7,300) | (18,800) | (12,900) |
Commercial Lines Segment | Umbrella Lines | Accident Years 2003 through 2005 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (300) | |||
Commercial Lines Segment | Property Lines | Accident years 2011 through 2014 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (800) | |||
Commercial Lines Segment | Property Lines | Accident years 2011 through 2015 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | 2,100 | |||
Commercial Lines Segment | Property Lines | Accident years 2012 through 2015 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | 800 | |||
Commercial Lines Segment | Property Lines | Accident years 2012 through 2015 | Non-catastrophe [Member] | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | 500 | |||
Commercial Lines Segment | Property Lines | Accident years 2012 through 2015 | Catastrophe | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | 300 | |||
Commercial Lines Segment | General Liability | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (9,000) | (21,100) | ||
Commercial Lines Segment | General Liability | Accident years 2005 through 2015 | Construction Defect | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (3,200) | (4,800) | ||
Commercial Lines Segment | General Liability | Accident years 2004 through 2012 | Other General Liability | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (6,000) | (16,300) | ||
Commercial Lines Segment | General Liability | Accident Years 1999 through 2013 | Construction Defect | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (3,800) | |||
Commercial Lines Segment | General Liability | Accident Years Prior to 2013 | Construction Defect | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (5,700) | |||
Commercial Lines Segment | Professional | Accident Years 2006 through 2012 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (3,500) | (6,400) | ||
Reinsurance Operations | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (2,900) | (1,200) | (6,100) | (4,300) |
Reinsurance Operations | Property Lines | Accident Years 2009 to 2013 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | $ (1,200) | |||
Reinsurance Operations | Property Lines | Accident years 2014 and 2015 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | $ (2,900) | |||
Reinsurance Operations | Property Lines | Accident years 2013 through 2015 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | $ (6,100) | |||
Reinsurance Operations | Property Lines | Accident Years 2009 to 2014 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | $ (4,300) |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Equity, Class of Treasury Stock [Line Items] | ||||
Shares repurchased | 0 | 0 | ||
Ordinary Shares A | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Shares repurchased | 28,099 | 11,895 | ||
Average price paid per share | $ 28.64 | $ 28.03 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) | Jan. 01, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 |
Related Party Transaction [Line Items] | ||||||
Distribution received from the limited partnership | $ 6,350,000 | $ 4,287,000 | ||||
Fox Paine and Company | ||||||
Related Party Transaction [Line Items] | ||||||
Company's total outstanding voting power | 84.00% | 84.00% | ||||
Minimum voting power required to nominate Directors | 25.00% | 25.00% | ||||
Management fees | $ 500,000 | $ 400,000 | $ 1,500,000 | 1,400,000 | ||
Unpaid management fees | 4,100,000 | 4,100,000 | $ 2,600,000 | |||
Fox Paine and Company | Global Indemnity Group Inc | American Reliable Insurance Company | ||||||
Related Party Transaction [Line Items] | ||||||
Investment bank fee as a percentage of the amount paid plus required capital to operate American Reliable on a standalone basis | 3.00% | |||||
Investment advisory fee | $ 1,500,000 | |||||
Aggregate investment advisory fee | $ 6,500,000 | |||||
Ordinary shares of Global Indemnity issued to pay fees | 267,702 | |||||
Fox Paine Capital Fund II Limited Partner | Global Indemnity Reinsurance | ||||||
Related Party Transaction [Line Items] | ||||||
Distribution received from the limited partnership | 0 | 0 | 0 | 800,000 | ||
Cozen O'Connor | ||||||
Related Party Transaction [Line Items] | ||||||
Cost incurred for legal services rendered | 200,000 | 600,000 | ||||
Crystal & Company | ||||||
Related Party Transaction [Line Items] | ||||||
Brokerage fee incurred | $ 100,000 | $ 100,000 | $ 200,000 | $ 200,000 |
Estimated Earned Premium and In
Estimated Earned Premium and Incurred Losses (Detail) - Hiscox Bermuda - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Related Party Transaction [Line Items] | ||||
Assumed earned premium | $ (2) | $ 47 | $ 51 | $ 2,294 |
Assumed losses and loss adjustment expenses | $ (209) | $ (167) | $ (419) | $ 476 |
Net Balances due to Global Inde
Net Balances due to Global Indemnity Reinsurance (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Hiscox Bermuda | ||
Related Party Transaction [Line Items] | ||
Net payable balance | $ (114) | $ (110) |
Commitments And Contingencies -
Commitments And Contingencies - Additional Information (Detail) | 1 Months Ended | ||||
Jun. 30, 2016USD ($) | Sep. 30, 2016USD ($)Investment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | ||
Commitments and Contingencies [Line Items] | |||||
Commitment to purchase alternative investment | $ 40,000,000 | $ 40,000,000 | $ 50,000,000 | ||
Future Funding Commitments | 43,072,000 | $ 20,014,000 | |||
European Non-Performing Loan Fund, LP | |||||
Commitments and Contingencies [Line Items] | |||||
Funded commitment amount | 28,000,000 | ||||
Future Funding Commitments | [1] | 22,014,000 | $ 20,014,000 | ||
Private Middle Market Loans, LLC | |||||
Commitments and Contingencies [Line Items] | |||||
Funded commitment amount | 18,900,000 | ||||
Future Funding Commitments | [2] | $ 21,058,000 | |||
Target earnings before interest taxes depreciation and amortization, minimum | 10,000,000 | ||||
Target earnings before interest taxes depreciation and amortization, maximum | $ 50,000,000 | ||||
Number of equity investments | Investment | 3 | ||||
Private Middle Market Loans, LLC | Middle Market Corporate Debt | |||||
Commitments and Contingencies [Line Items] | |||||
Funded commitment amount | $ 16,300,000 | ||||
Private Middle Market Loans, LLC | Equity Investments | |||||
Commitments and Contingencies [Line Items] | |||||
Funded commitment amount | $ 2,600,000 | ||||
Number of equity investments | Investment | 3 | ||||
Unfunded Commitments | European Non-Performing Loan Fund, LP | |||||
Commitments and Contingencies [Line Items] | |||||
Future Funding Commitments | $ 22,000,000 | ||||
Unfunded Commitments | Private Middle Market Loans, LLC | |||||
Commitments and Contingencies [Line Items] | |||||
Future Funding Commitments | $ 21,100,000 | ||||
[1] | 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 ability to sell or transfer its limited partnership interest without consent from the general partner. 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. Based on the terms of the partnership agreement, the Company anticipates its interest in this partnership to be redeemed in 2020. | ||||
[2] | This interest consists of three separate equity investments in limited liability companies whereby the Company is also a lender via separate loan agreements. Typical financing is used for growth, acquisitions, or buyouts. The Company classifies their portion of the middle market corporate debt as fixed maturities. The Company has committed $40 million to this investment strategy, including both the equity and financing provisions. While the Company is not able to estimate the proportion of future funding commitments between equity and financing, the total remaining commitment is $21.1 million. Based on the terms of the investment management agreement, the Company anticipates its interest to be redeemed no later than 2024. |
Share-Based Compensation Plans
Share-Based Compensation Plans - Additional Information (Detail) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options awarded | 0 | 0 | ||
Unvested stock options forfeited | 0 | 0 | 200,000 | 0 |
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares issued | 0 | 0 | ||
Restricted Stock | Key Employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares issued | 121,346 | 138,507 | ||
Weighted average fair value per share | $ 28.97 | $ 28.37 | ||
Restricted Stock | Key Employees | Time Based Vesting | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares issued | 96,585 | 83,875 | ||
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 | 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 | Chief Executive Officer | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares issued | 11,199 | 10,574 | ||
Percentage of shares vested on each anniversary of the grant date | 33.33% | 33.33% | ||
Vesting period | 3 years | 3 years | ||
Restricted Stock | Chief Executive Officer And Other Key Employee | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares issued | 44,058 | |||
Vesting date | Jan. 1, 2018 | |||
Restricted Stock | Chief Executive Officer And Other Key Employee | January 1, 2018 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of shares vested on each anniversary of the grant date | 100.00% | |||
Restricted Stock | Non Employee Director | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares issued | 8,802 | 9,392 | 28,416 | 27,437 |
Weighted average fair value per share | $ 29.70 | $ 26.17 | $ 29.40 | $ 27.31 |
Restricted Stock | Another Key Employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares issued | 5,309 | |||
Vesting date | Feb. 7, 2019 | |||
Restricted Stock | Another Key Employees | February 7, 2019 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of shares vested on each anniversary of the grant date | 100.00% | |||
Restricted Stock | Other Key Employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares issued | 8,253 | |||
Restricted Stock | Other 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 | 33.00% | |||
Restricted Stock | Other 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 | 33.00% | |||
Restricted Stock | Other 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 | 34.00% | |||
Performance Based Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options awarded | 0 | 200,000 | ||
Strike price per share | $ 28.37 |
Computation of Basic and Dilute
Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | |||||
Net income (loss) | $ 9,535 | $ (3,746) | $ 11,495 | $ 14,165 | |
Weighted average shares outstanding - basic | 17,254,843 | 25,463,994 | 17,241,040 | 25,452,991 | |
Net income (loss) per share | [1] | $ 0.55 | $ (0.15) | $ 0.67 | $ 0.56 |
Weighted average shares outstanding - diluted | [2] | 17,540,060 | 25,463,994 | 17,515,854 | 25,684,931 |
Net income (loss) per share | [1] | $ 0.54 | $ (0.15) | $ 0.66 | $ 0.55 |
[1] | For the quarter ended September 30, 2015, "diluted" loss per share is the same as "basic" loss per share due to a net loss for the period. | ||||
[2] | For the quarter ended September 30, 2015, "weighted average shares outstanding - basic" was used to calculate "diluted earnings per share" due to a net loss for the period. |
Reconciliation of Weighted Aver
Reconciliation of Weighted Average Shares for Basic and Diluted Earnings Per Share (Detail) - shares | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Reconciliation Of Basic Weighted Average Shares To Diluted Weighted Average Shares [Line Items] | |||||
Weighted average shares for basic earnings per share | 17,254,843 | 25,463,994 | 17,241,040 | 25,452,991 | |
Weighted average shares for diluted earnings per share | [1] | 17,540,060 | 25,463,994 | 17,515,854 | 25,684,931 |
Restricted Stock | |||||
Reconciliation Of Basic Weighted Average Shares To Diluted Weighted Average Shares [Line Items] | |||||
Non-vested restricted stock and options | 176,087 | 165,011 | 128,942 | ||
Stock Options | |||||
Reconciliation Of Basic Weighted Average Shares To Diluted Weighted Average Shares [Line Items] | |||||
Non-vested restricted stock and options | 109,130 | 109,803 | 102,998 | ||
[1] | For the quarter ended September 30, 2015, "weighted average shares outstanding - basic" was used to calculate "diluted earnings per share" due to a net loss for the period. |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share [Line Items] | ||||
Weighted average shares for diluted earnings per share | 25,704,931 | |||
Shares excluded from calculation of diluted earnings per share | 300,000 | 512,500 | 300,000 | 512,500 |
Restricted Stock Diluted | ||||
Earnings Per Share [Line Items] | ||||
Non-vested restricted stock and options | 138,261 | |||
Stock Options Diluted | ||||
Earnings Per Share [Line Items] | ||||
Non-vested restricted stock and options | 102,676 |
Summarizes Options which Deemed
Summarizes Options which Deemed to be Anti-dilutive (Detail) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Potentially Dilutive Securities Outstanding [Line Items] | ||||
Shares excluded from calculation of diluted earnings per share | 300,000 | 512,500 | 300,000 | 512,500 |
February 9, 2014 | ||||
Potentially Dilutive Securities Outstanding [Line Items] | ||||
Expiration Date | Feb. 10, 2024 | |||
Shares excluded from calculation of diluted earnings per share | 300,000 | |||
Strike price per share | $ 32.38 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($)Segment | |
Segment Reporting Information [Line Items] | |
Number of reportable business segments managed | Segment | 3 |
Proceeds from sale of capital stock | $ 18,700 |
Pretax gain on sale of capital stock | $ 6,872 |
Summary of Business Segment Inf
Summary of Business Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | ||||||
Revenues: | ||||||||||
Gross premiums written | $ 133,569 | $ 150,148 | $ 429,254 | $ 459,532 | ||||||
Net premiums written | 115,051 | 122,497 | 357,233 | 394,606 | ||||||
Net premiums earned | 119,553 | 124,707 | 358,993 | 380,921 | ||||||
Other income (loss) | 7,852 | 1,279 | 9,603 | 2,408 | ||||||
Total revenues | 127,405 | 125,986 | 368,596 | 383,329 | ||||||
Losses and Expenses: | ||||||||||
Net losses and loss adjustment expenses | 72,162 | 77,691 | 215,057 | 226,870 | ||||||
Acquisition costs and other underwriting expenses | 48,129 | 50,934 | 148,761 | 150,118 | ||||||
Income (loss) from segments | 7,114 | (2,639) | 4,778 | 6,341 | ||||||
Unallocated Items: | ||||||||||
Net investment income | 8,795 | 8,852 | 25,103 | 26,234 | ||||||
Net realized investment gains (losses) | 1,928 | (10,778) | (9,057) | (7,216) | ||||||
Corporate and other operating expenses | (5,006) | (3,567) | (13,064) | (19,441) | ||||||
Interest expense | (2,233) | (1,595) | (6,677) | (2,635) | ||||||
Income (loss) before income taxes | 10,598 | (9,727) | 1,083 | 3,283 | ||||||
Income tax expense (benefit) | (1,063) | 5,981 | 10,412 | 10,882 | ||||||
Net income (loss) | 9,535 | (3,746) | 11,495 | 14,165 | ||||||
Total assets | 1,981,815 | 2,318,619 | 1,981,815 | 2,318,619 | $ 1,957,294 | |||||
Reinsurance Operations | ||||||||||
Revenues: | ||||||||||
Gross premiums written | [1] | 9,798 | 9,879 | 34,941 | 48,222 | |||||
Net premiums written | [1] | 9,798 | 9,870 | 34,927 | 48,174 | |||||
Net premiums earned | [1] | 10,558 | 13,659 | 31,663 | 40,205 | |||||
Other income (loss) | [1] | (11) | (11) | 17 | (77) | |||||
Total revenues | [1] | 10,547 | 13,648 | 31,680 | 40,128 | |||||
Losses and Expenses: | ||||||||||
Net losses and loss adjustment expenses | [1] | 5,387 | 5,960 | 13,704 | 14,399 | |||||
Acquisition costs and other underwriting expenses | [1] | 3,670 | 4,469 | 11,628 | 14,211 | |||||
Income (loss) from segments | [1] | 1,490 | 3,219 | 6,348 | 11,518 | |||||
Unallocated Items: | ||||||||||
Total assets | [1] | 712,358 | [2] | 740,377 | [3] | 712,358 | [2] | 740,377 | [3] | |
Commercial Lines | ||||||||||
Revenues: | ||||||||||
Gross premiums written | [4] | 50,214 | 52,920 | 157,335 | 161,746 | |||||
Net premiums written | [4] | 45,754 | 49,325 | 141,764 | 149,647 | |||||
Net premiums earned | [4] | 48,179 | 48,916 | 143,699 | 149,244 | |||||
Other income (loss) | [4] | 7,031 | 102 | 7,354 | 420 | |||||
Total revenues | [4] | 55,210 | 49,018 | 151,053 | 149,664 | |||||
Losses and Expenses: | ||||||||||
Net losses and loss adjustment expenses | [4] | 23,887 | 22,832 | 78,605 | 82,474 | |||||
Acquisition costs and other underwriting expenses | [4] | 19,362 | [5] | 20,686 | [6] | 58,752 | [7] | 61,317 | [8] | |
Income (loss) from segments | [4] | 11,961 | 5,500 | 13,696 | 5,873 | |||||
Unallocated Items: | ||||||||||
Total assets | [4] | 757,267 | 1,005,435 | 757,267 | 1,005,435 | |||||
Personal Lines | ||||||||||
Revenues: | ||||||||||
Gross premiums written | [4],[9] | 73,557 | 87,349 | 236,978 | 249,564 | |||||
Net premiums written | [4] | 59,499 | 63,302 | 180,542 | 196,785 | |||||
Net premiums earned | [4] | 60,816 | 62,132 | 183,631 | 191,472 | |||||
Other income (loss) | [4] | 832 | 1,188 | 2,232 | 2,065 | |||||
Total revenues | [4] | 61,648 | 63,320 | 185,863 | 193,537 | |||||
Losses and Expenses: | ||||||||||
Net losses and loss adjustment expenses | [4] | 42,888 | 48,899 | 122,748 | 129,997 | |||||
Acquisition costs and other underwriting expenses | [4] | 25,097 | [10] | 25,779 | [11] | 78,381 | [12] | 74,590 | [13] | |
Income (loss) from segments | [4] | (6,337) | (11,358) | (15,266) | (11,050) | |||||
Unallocated Items: | ||||||||||
Total assets | [4] | $ 512,190 | $ 572,807 | $ 512,190 | $ 572,807 | |||||
[1] | External business only, excluding business assumed from affiliates. | |||||||||
[2] | Comprised of Global Indemnity Reinsurance's total assets less its investment in subsidiaries. | |||||||||
[3] | Comprised of Global Indemnity Reinsurance's total assets less its investment in subsidiaries | |||||||||
[4] | Includes business ceded to the Company's Reinsurance Operations. | |||||||||
[5] | Includes federal excise tax of $132 relating to cessions from Commercial Lines to Reinsurance Operations. | |||||||||
[6] | Includes federal excise tax of $258 relating to cessions from Commercial Lines to Reinsurance Operations. | |||||||||
[7] | Includes federal excise tax of $391 relating to cessions from Commercial Lines to Reinsurance Operations. | |||||||||
[8] | Includes federal excise tax of $787 relating to cessions from Commercial Lines to Reinsurance Operations. | |||||||||
[9] | Includes $7,328 of business written by American Reliable that is ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement. | |||||||||
[10] | Includes federal excise tax of $304 relating to cessions from Personal Lines to Reinsurance Operations. | |||||||||
[11] | Includes federal excise tax of $310 relating to cessions from Personal Lines to Reinsurance Operations. | |||||||||
[12] | Includes federal excise tax of $918 relating to cessions from Personal Lines to Reinsurance Operations. | |||||||||
[13] | Includes federal excise tax of $957 relating to cessions from Personal Lines to Reinsurance Operations. |
Summary of Business Segment I78
Summary of Business Segment Information (Parenthetical) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Commercial Lines | ||||
Segment Reporting Information [Line Items] | ||||
Federal excise tax relating to cessions from Insurance Operations to Reinsurance Operations | $ 132 | $ 258 | $ 391 | $ 787 |
Personal Lines | ||||
Segment Reporting Information [Line Items] | ||||
Federal excise tax relating to cessions from Insurance Operations to Reinsurance Operations | 304 | 310 | 918 | 957 |
Personal Lines | American Reliable Insurance Company | ||||
Segment Reporting Information [Line Items] | ||||
Ceded premiums written | $ 7,328 | $ 18,749 | $ 30,910 | $ 41,749 |
Quota share agreement percentage | 100.00% | 100.00% | 100.00% | 100.00% |