Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 02, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | GBLI | |
Entity Registrant Name | Global Indemnity Ltd | |
Entity Central Index Key | 1,494,904 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Ordinary Shares A | ||
Document Information [Line Items] | ||
Entity Ordinary Shares, Shares Outstanding | 10,089,507 | |
Ordinary Shares B | ||
Document Information [Line Items] | ||
Entity Ordinary Shares, Shares Outstanding | 4,133,366 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fixed maturities: | ||
Available for sale, at fair value (amortized cost: $1,299,656 and $1,243,144) | $ 1,273,681 | $ 1,241,437 |
Equity securities: | ||
At fair value (cost: $137,554 and $124,915) | 137,554 | 140,229 |
Other invested assets | 85,268 | 77,820 |
Total investments | 1,496,503 | 1,459,486 |
Cash and cash equivalents | 40,646 | 74,414 |
Premiums receivable, net | 84,641 | 84,386 |
Reinsurance receivables, net | 96,534 | 105,060 |
Funds held by ceding insurers | 50,805 | 45,300 |
Federal income taxes receivable | 10,758 | 10,332 |
Deferred federal income taxes | 35,675 | 26,196 |
Deferred acquisition costs | 64,538 | 61,647 |
Intangible assets | 22,152 | 22,549 |
Goodwill | 6,521 | 6,521 |
Prepaid reinsurance premiums | 22,976 | 28,851 |
Receivable for securities sold | 0 | 1,543 |
Other assets | 26,297 | 75,384 |
Total assets | 1,958,046 | 2,001,669 |
Liabilities: | ||
Unpaid losses and loss adjustment expenses | 608,607 | 634,664 |
Unearned premiums | 297,630 | 285,397 |
Ceded balances payable | 16,612 | 10,851 |
Payable for securities purchased | 4,942 | |
Contingent commissions | 8,076 | 7,984 |
Debt | 282,086 | 294,713 |
Other liabilities | 37,767 | 49,666 |
Total liabilities | 1,255,720 | 1,283,275 |
Commitments and contingencies (Note 10) | ||
Shareholders’ equity: | ||
Ordinary shares, $0.0001 par value, 900,000,000 ordinary shares authorized; A ordinary shares issued: 10,164,291 and 10,102,927 respectively; A ordinary shares outstanding: 10,089,507 and 10,073,376, respectively; B ordinary shares issued and outstanding: 4,133,366 and 4,133,366, respectively | 2 | 2 |
Additional paid-in capital | 437,124 | 434,730 |
Accumulated other comprehensive income (loss), net of taxes | (23,829) | 8,983 |
Retained earnings | 292,001 | 275,838 |
Total shareholders’ equity | 702,326 | 718,394 |
Total liabilities and shareholders’ equity | 1,958,046 | 2,001,669 |
Ordinary Shares A | ||
Shareholders’ equity: | ||
A ordinary shares in treasury, at cost: 74,784 and 29,551 shares, respectively | (2,972) | (1,159) |
Total shareholders’ equity | $ 0 | $ 1 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Available for sale, amortized cost | $ 1,299,656 | $ 1,243,144 |
Available for sale, at cost | $ 137,554 | $ 124,915 |
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 | 10,164,291 | 10,102,927 |
Ordinary shares, shares outstanding | 10,089,507 | 10,073,376 |
Treasury shares, shares | 74,784 | 29,551 |
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, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Revenues: | |||||
Gross premiums written | $ 135,606 | $ 126,054 | $ 418,670 | $ 393,699 | |
Net premiums written | 116,233 | 109,045 | 360,557 | 344,348 | |
Net premiums earned | 120,528 | 108,619 | 342,447 | 328,818 | |
Net investment income | 11,750 | 10,134 | 34,108 | 27,618 | |
Net realized investment gains (losses): | |||||
Other than temporary impairment losses on investments | (24) | (1,020) | (395) | (1,708) | |
Other net realized investment gains | 5,343 | 57 | 8,228 | 858 | |
Total net realized investment gains (losses) | 5,319 | (963) | 7,833 | (850) | |
Other income | 411 | 2,294 | 1,289 | 5,444 | |
Total revenues | 138,008 | 120,084 | 385,677 | 361,030 | |
Losses and Expenses: | |||||
Net losses and loss adjustment expenses | 80,493 | 82,395 | 195,426 | 202,656 | |
Acquisition costs and other underwriting expenses | 48,680 | 45,002 | 141,196 | 135,010 | |
Corporate and other operating expenses | 3,475 | 4,630 | 23,653 | 11,045 | |
Interest expense | 4,924 | 4,836 | 14,725 | 12,065 | |
Income (loss) before income taxes | 436 | (16,779) | 10,677 | 254 | |
Income tax benefit | (3,292) | (7,855) | (5,944) | (13,193) | |
Net income (loss) | $ 3,728 | $ (8,924) | $ 16,621 | $ 13,447 | |
Net income (loss) | |||||
Basic | [1] | $ 0.26 | $ (0.51) | $ 1.18 | $ 0.78 |
Diluted | [1] | $ 0.26 | $ (0.51) | $ 1.16 | $ 0.76 |
Weighted-average number of shares outstanding | |||||
Basic | 14,100,180 | 17,343,292 | 14,082,698 | 17,331,840 | |
Diluted | [2] | 14,346,585 | 17,343,292 | 14,321,113 | 17,684,519 |
Cash dividends declared per share | $ 0.25 | $ 0.75 | |||
[1] | For the quarter ended September 30, 2017, “diluted” loss per share is the same as “basic” loss per share since there was a net loss for the period. | ||||
[2] | For the quarter ended September 30, 2017, “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, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 3,728 | $ (8,924) | $ 16,621 | $ 13,447 |
Other comprehensive income (loss), net of tax: | ||||
Unrealized holding gains (losses) | (1,624) | 3,386 | (22,632) | 10,719 |
Portion of other-than-temporary impairment losses recognized in other comprehensive income (losses) | 7 | (1) | (1) | (2) |
Reclassification adjustment for gains (losses) included in net income | 717 | 441 | 1,403 | (788) |
Unrealized foreign currency translation gains (losses) | (454) | 273 | (1,554) | 774 |
Other comprehensive income (loss), net of tax | (1,354) | 4,099 | (22,784) | 10,703 |
Comprehensive income (loss), net of tax | $ 2,374 | $ (4,825) | $ (6,163) | $ 24,150 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Additional Paid-in Capital | Accumulated other comprehensive income (loss), net of deferred income tax | Retained Earnings | Treasury Shares | Ordinary Shares A | Ordinary Shares ATreasury Shares | Ordinary Shares B |
Number at Dec. 31, 2016 | 13,436,548 | 4,133,366 | ||||||
A ordinary shares purchased | 29,551 | |||||||
Ordinary shares issued under share incentive plans | 2,204 | |||||||
Ordinary shares issued to directors | 27,121 | |||||||
Ordinary shares redeemed | (3,397,031) | |||||||
Adjustment for shares redeemed indirectly owned by subsidiary | 34,085 | |||||||
Number at Dec. 31, 2017 | 29,551 | 10,102,927 | 4,133,366 | |||||
Balance at Dec. 31, 2016 | $ 430,283 | $ (618) | $ 368,284 | $ 1 | $ 1 | |||
A ordinary shares purchased, at cost | $ (1,159) | |||||||
Other comprehensive income (loss), net of tax: | ||||||||
Change in unrealized holding gains (losses) | 8,829 | |||||||
Change in other than temporary impairment losses recognized in other comprehensive income | (3) | |||||||
Unrealized foreign currency translation gains (losses) | 775 | |||||||
Other comprehensive income (loss), net of tax | 9,601 | |||||||
Ordinary shares redeemed | (83,015) | |||||||
Adjustment for gain on shares redeemed indirectly owned by subsidiary | 706 | 120 | ||||||
Net income (loss) | (9,551) | |||||||
Share compensation plans | 3,741 | |||||||
Balance at Dec. 31, 2017 | $ 718,394 | 434,730 | 8,983 | 275,838 | $ (1,159) | $ 1 | $ 1 | |
A ordinary shares purchased | 45,233 | |||||||
Ordinary shares issued under share incentive plans | 37,381 | |||||||
Ordinary shares issued to directors | 23,983 | |||||||
Ordinary shares redeemed | 0 | |||||||
Adjustment for shares redeemed indirectly owned by subsidiary | 0 | |||||||
Number at Sep. 30, 2018 | 74,784 | 10,164,291 | 0 | |||||
A ordinary shares purchased, at cost | $ (1,813) | |||||||
Other comprehensive income (loss), net of tax: | ||||||||
Change in unrealized holding gains (losses) | (21,229) | |||||||
Change in other than temporary impairment losses recognized in other comprehensive income | (1) | |||||||
Unrealized foreign currency translation gains (losses) | (1,554) | (1,554) | ||||||
Other comprehensive income (loss), net of tax | (22,784) | (22,784) | ||||||
Ordinary shares redeemed | 0 | |||||||
Adjustment for gain on shares redeemed indirectly owned by subsidiary | 0 | 0 | ||||||
Net income (loss) | 16,621 | 16,621 | ||||||
Dividends to shareholders | (10,656) | |||||||
Share compensation plans | 2,394 | |||||||
Balance at Sep. 30, 2018 | $ 702,326 | $ 437,124 | (23,829) | 292,001 | $ (2,972) | $ 0 | $ 0 | |
Other comprehensive income (loss), net of tax: | ||||||||
Cumulative effect adjustment resulting from adoption of new accounting guidance | $ (10,028) | $ 10,198 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 16,621 | $ 13,447 |
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||
Amortization and depreciation | 5,272 | 4,813 |
Amortization of debt issuance costs | 198 | 166 |
Restricted stock and stock option expense | 2,394 | 2,971 |
Deferred federal income taxes | (6,270) | (13,611) |
Amortization of bond premium and discount, net | 4,650 | 6,137 |
Net realized investment (gains) losses | (7,833) | 850 |
Changes in: | ||
Premiums receivable, net | (255) | 7,632 |
Reinsurance receivables, net | 8,526 | 20,005 |
Funds held by ceding insurers | (7,059) | (26,576) |
Unpaid losses and loss adjustment expenses | (26,057) | (1,316) |
Unearned premiums | 12,233 | 3,776 |
Ceded balances payable | 5,761 | (1,808) |
Other assets and liabilities, net | 35,040 | (31,442) |
Contingent commissions | 92 | (3,902) |
Federal income tax receivable/payable | (426) | 314 |
Deferred acquisition costs, net | (2,891) | (4,396) |
Prepaid reinsurance premiums | 5,875 | 11,756 |
Net cash provided by (used for) operating activities | 45,871 | (11,184) |
Cash flows from investing activities: | ||
Proceeds from sale of fixed maturities | 229,362 | 742,229 |
Proceeds from sale of equity securities | 28,141 | 24,483 |
Proceeds from maturity of fixed maturities | 43,303 | 112,620 |
Proceeds from limited partnerships | 8,352 | 10,567 |
Amounts received (paid) in connection with derivatives | 7,599 | (2,500) |
Purchases of fixed maturities | (329,002) | (979,074) |
Purchases of equity securities | (22,931) | (28,631) |
Purchases of other invested assets | (15,800) | (18,000) |
Acquisition of business | (3,515) | |
Net cash used for investing activities | (54,491) | (138,306) |
Cash flows from financing activities: | ||
Net borrowings (repayments) under margin borrowing facility | (12,825) | 9,872 |
Proceeds from issuance of subordinated notes | 0 | 130,000 |
Debt issuance cost | 0 | (4,246) |
Dividends paid to shareholders | (10,510) | |
Purchase of A ordinary shares | (1,813) | (1,159) |
Net cash provided by (used for) financing activities | (25,148) | 134,467 |
Net change in cash and cash equivalents | (33,768) | (15,023) |
Cash and cash equivalents at beginning of period | 74,414 | 75,110 |
Cash and cash equivalents at end of period | $ 40,646 | $ 60,087 |
Principles of Consolidation and
Principles of Consolidation and Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Principles of Consolidation and Basis of Presentation | 1. Principles of Consolidation and Basis of Presentation Global Indemnity Limited (“Global Indemnity” or “the Company”) was incorporated on February 9, 2016 and is domiciled in the Cayman Islands. On November 7, 2016, Global Indemnity replaced Global Indemnity plc as the ultimate parent company as a result of a redomestication transaction. The Company’s A ordinary shares are publicly traded on the NASDAQ Global Select Market under the ticker symbol GBLI. Please see Note 2 of the notes to the consolidated financial statements in Item 8 Part II of the Company’s 2017 Annual Report on Form 10-K for more information on the Company’s redomestication. The Company manages its business through three business segments: Commercial Lines, Personal Lines, and Reinsurance Operations. The Company’s Commercial Lines offers specialty property and casualty insurance products in the excess and surplus lines marketplace. The Company manages its Commercial Lines by differentiating them into four 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; 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; and Vacant Express, which insures dwellings which are currently vacant, undergoing renovation, or are under construction and is distributed through aggregators, brokers, and retail agents. 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 offers specialty personal lines and agricultural coverage through general and specialty agents with specific binding authority on an admitted basis. Collectively, the Company’s U.S. insurance subsidiaries are licensed in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. The Commercial Lines and Personal Lines segments comprise the Company’s U.S. Insurance Operations (‘Insurance Operations”). 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 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, 2018 and 2017 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 2017 Annual Report on Form 10-K. On January 1, 2018, the Company adopted new accounting guidance which 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. Upon adoption, the Company recorded a cumulative effect adjustment, net of tax, of $10.0 million which reduced accumulated other comprehensive income and increased retained earnings. During the quarter and nine months ended September 30, 2018, net realized investment gains (losses) included a gain of $2.7 million and a loss of $1.4 million, respectively, related to the change in the fair value of equity investments in accordance with this new accounting guidance. In addition, under the new guidance, equity investments, are no longer classified into different categories as either trading or available for sale. Prior to the adoption of this new guidance, equity securities were previously classified as available for sale. On January 1, 2018, the Company adopted new accounting guidance regarding the classification of certain cash receipts and cash payments within the statement of cash flows. Upon adoption, the Company made a policy election to use the cumulative earnings approach for presenting distributions received from equity method investees. Under this approach, distributions up to the amount of cumulative equity in earnings recognized will be treated as returns on investment and presented in operating activities and those in excess of that amount will be treated as returns of investment and presented in the investing section. Prior to adoption, all distributions received from equity method investees were presented in the investing section of the consolidated statements of cash flows. The provisions of this accounting guidance were adopted on a retrospective basis. As a result, the consolidated statement of cash flows for the nine months ended September 30, 2017 that was included in the Form 10-Q for the nine months ended September 30, 2017 was restated. For the nine months ended September 30, 2017, net cash flows from operating activities was increased by $2.4 million and net cash flows from investing activities was reduced by $2.4 million. 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, 2018 | |
Investments Schedule [Abstract] | |
Investments | 2. Investments The amortized cost and estimated fair value of investments were as follows as of September 30, 2018 and December 31, 2017: (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Other than temporary impairments recognized in AOCI (1) As of September 30, 2018 Fixed maturities: U.S. treasury and agency obligations $ 81,565 $ 156 $ (2,051 ) $ 79,670 $ - Obligations of states and political subdivisions 100,494 131 (998 ) 99,627 - Mortgage-backed securities 138,442 280 (3,878 ) 134,844 - Asset-backed securities 201,317 46 (1,641 ) 199,722 (1 ) Commercial mortgage-backed securities 186,081 3 (5,876 ) 180,208 - Corporate bonds 466,198 235 (9,601 ) 456,832 - Foreign corporate bonds 125,559 33 (2,814 ) 122,778 - Total fixed maturities 1,299,656 884 (26,859 ) 1,273,681 (1 ) Common stock 137,554 - - 137,554 - Other invested assets 85,268 - - 85,268 - Total $ 1,522,478 $ 884 $ (26,859 ) $ 1,496,503 $ (1 ) (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 Unrealized Gains Gross Unrealized Losses Estimated Fair Value Other than temporary impairments recognized in AOCI (1) As of December 31, 2017 Fixed maturities: U.S. treasury and agency obligations $ 105,311 $ 562 $ (1,193 ) $ 104,680 $ - Obligations of states and political subdivisions 94,947 441 (274 ) 95,114 - Mortgage-backed securities 150,237 404 (1,291 ) 149,350 - Asset-backed securities 203,827 267 (393 ) 203,701 (1 ) Commercial mortgage-backed securities 140,761 101 (1,067 ) 139,795 - Corporate bonds 422,486 2,295 (1,391 ) 423,390 - Foreign corporate bonds 125,575 377 (545 ) 125,407 - Total fixed maturities 1,243,144 4,447 (6,154 ) 1,241,437 (1 ) Common stock 124,915 18,574 (3,260 ) 140,229 - Other invested assets 77,820 - - 77,820 - Total $ 1,445,879 $ 23,021 $ (9,414 ) $ 1,459,486 $ (1 ) (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 5% of shareholders' equity at both September 30, 2018 and December 31, 2017. The amortized cost and estimated fair value of the Company’s fixed maturities portfolio classified as available for sale at September 30, 2018, 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 Fair Value Due in one year or less $ 84,071 $ 83,626 Due in one year through five years 440,787 433,350 Due in five years through ten years 238,245 231,360 Due in ten years through fifteen years 6,501 6,331 Due after fifteen years 4,212 4,240 Mortgage-backed securities 138,442 134,844 Asset-backed securities 201,317 199,722 Commercial mortgage-backed securities 186,081 180,208 Total $ 1,299,656 $ 1,273,681 The following table contains an analysis of the Company’s fixed income securities with gross unrealized losses, categorized by the period that the securities were in a continuous loss position as of September 30, 2018. Due to new accounting guidance implemented in 2018 regarding the treatment of gains and losses on equity securities, common stock is no longer included in the table: Less than 12 months 12 months or longer (1) Total (Dollars in thousands) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fixed maturities: U.S. treasury and agency obligations $ 16,462 $ (279 ) $ 61,137 $ (1,772 ) $ 77,599 $ (2,051 ) Obligations of states and political subdivisions 62,981 (778 ) 8,849 (220 ) 71,830 (998 ) Mortgage-backed securities 90,574 (2,563 ) 35,442 (1,315 ) 126,016 (3,878 ) Asset-backed securities 138,627 (1,247 ) 23,861 (394 ) 162,488 (1,641 ) Commercial mortgage-backed securities 97,440 (3,249 ) 77,775 (2,627 ) 175,215 (5,876 ) Corporate bonds 385,878 (8,625 ) 34,749 (976 ) 420,627 (9,601 ) Foreign corporate bonds 83,304 (2,224 ) 28,124 (590 ) 111,428 (2,814 ) Total fixed maturities $ 875,266 $ (18,965 ) $ 269,937 $ (7,894 ) $ 1,145,203 $ (26,859 ) (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, 2017: Less than 12 months 12 months or longer (1) Total (Dollars in thousands) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fixed maturities: U.S. treasury and agency obligations $ 79,403 $ (962 ) $ 17,469 $ (231 ) $ 96,872 $ (1,193 ) Obligations of states and political subdivisions 34,537 (149 ) 12,060 (125 ) 46,597 (274 ) Mortgage-backed securities 127,991 (1,247 ) 1,866 (44 ) 129,857 (1,291 ) Asset-backed securities 97,817 (371 ) 6,423 (22 ) 104,240 (393 ) Commercial mortgage-backed securities 83,051 (523 ) 27,976 (544 ) 111,027 (1,067 ) Corporate bonds 147,064 (754 ) 53,024 (637 ) 200,088 (1,391 ) Foreign corporate bonds 53,320 (305 ) 20,582 (240 ) 73,902 (545 ) Total fixed maturities 623,183 (4,311 ) 139,400 (1,843 ) 762,583 (6,154 ) Common stock 32,759 (3,260 ) - - 32,759 (3,260 ) Total $ 655,942 $ (7,571 ) $ 139,400 $ (1,843 ) $ 795,342 $ (9,414 ) (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. The following is a description, by asset type, of the methodology and significant inputs that the Company used to measure the amount of credit loss recognized in earnings, if any: U.S. treasury and agency obligations – As of September 30, 2018, gross unrealized losses related to U.S. treasury and agency obligations were $2.051 million. Of this amount, $1.772 million have been in an unrealized loss position for twelve months or greater and are rated AA+. Macroeconomic and market analysis is conducted in evaluating these securities. Consideration is given to the interest rate environment, duration and yield curve management of the portfolio, sector allocation and security selection. Obligations of states and political subdivisions – As of September 30, 2018, gross unrealized losses related to obligations of states and political subdivisions were $0.998 million. Of this amount, $0.220 million have been in an unrealized loss position for twelve months or greater and are rated A- or better. All factors that influence performance of the municipal bond market are considered in evaluating these securities. The aforementioned factors include investor expectations, supply and demand patterns, and current versus historical yield and spread relationships. The analysis relies on the output of fixed income credit analysts, as well as dedicated municipal bond analysts who perform extensive in-house fundamental analysis on each issuer, regardless of their rating by the major agencies. Mortgage-backed securities (“MBS”) – As of September 30, 2018, gross unrealized losses related to mortgage-backed securities were $3.878 million. Of this amount, $1.315 million have been in an unrealized loss position for twelve months or greater. 99.3% of the unrealized losses for twelve months or greater are related to securities rated AA+ or better. Mortgage-backed securities are modeled to project principal losses under downside, base, and upside scenarios for the economy and home prices. The primary assumption that drives the security and loan level modeling is the Home Price Index (“HPI”) projection. These forecasts incorporate not just national macro-economic trends, but also regional impacts to arrive at the most granular and accurate projections. These assumptions are incorporated into the model as a basis to generate delinquency probabilities, default curves, loss severity curves, and voluntary prepayment curves at the loan level within each deal. The model utilizes HPI-adjusted current LTV, payment history, loan terms, loan modification history, and borrower characteristics as inputs to generate expected cash flows and principal loss for each bond under various scenarios. Asset backed securities (“ABS”) - As of September 30, 2018, gross unrealized losses related to asset backed securities were $1.641 million. Of this amount, $0.394 million have been in an unrealized loss position for twelve months or greater. 78.2% of the unrealized losses for twelve months or greater are related to securities rated A or better. The weighted average credit enhancement for the Company’s asset backed portfolio is 23.2. This represents the percentage of pool losses that can occur before an asset backed security will incur its first dollar of principal losses. Every ABS transaction is analyzed on a stand-alone basis. This analysis involves a thorough review of the collateral, prepayment, and structural risk in each transaction. Additionally, the analysis includes an in-depth credit analysis of the originator and servicer of the collateral. The analysis projects an expected loss for a deal given a set of assumptions specific to the asset type. These assumptions are used to calculate at what level of losses the deal will incur its first dollar of principal loss. The major assumptions used to calculate this ratio are loss severities, recovery lags, and no advances on principal and interest. Commercial mortgage-backed securities (“CMBS”) - As of September 30, 2018, gross unrealized losses related to the CMBS portfolio were $5.876 million. Of this amount, $2.627 million have been in an unrealized loss position for twelve months or greater and are rated A- or better. The weighted average credit enhancement for the Company’s CMBS portfolio is 49.1. This represents the percentage of pool losses that can occur before a mortgage-backed security will incur its first dollar of principal loss. For the Company’s CMBS portfolio, a loan level analysis is utilized where every underlying CMBS loan is re-underwritten based on a set of assumptions reflecting expectations for the future path of the economy. Each loan is analyzed over time using a series of tests to determine if a credit event will occur during the life of the loan. Inherent in this process are several economic scenarios and their corresponding rent/vacancy and capital market states. The five primary credit events that frame the analysis include loan modifications, term default, balloon default, extension, and ability to pay off at balloon. The resulting output is the expected loss adjusted cash flows for each bond under the base case and distressed scenarios. Corporate bonds - As of September 30, 2018, gross unrealized losses related to corporate bonds were $9.601 million. Of this amount, $0.976 million have been in an unrealized loss position for twelve months or greater. 89.0% of the unrealized losses for twelve months or greater are related to securities rated investment grade or better. The analysis for this asset class includes maintaining detailed financial models that include a projection of each issuer’s future financial performance, including prospective debt servicing capabilities, capital structure composition, and the value of the collateral. The analysis incorporates the macroeconomic environment, industry conditions in which the issuer operates, the issuer’s current competitive position, its vulnerability to changes in the competitive and regulatory environment, issuer liquidity, issuer commitment to bondholders, issuer creditworthiness, and asset protection. Part of the process also includes running downside scenarios to evaluate the expected likelihood of default as well as potential losses in the event of default. Foreign bonds – As of September 30, 2018, gross unrealized losses related to foreign bonds were $2.814 million. Of this amount, $0.590 million have been in an unrealized loss position for twelve months or greater. 95.5% of the unrealized losses for twelve months or greater are related to securities rated investment grade or better. For this asset class, detailed financial models are maintained that include a projection of each issuer’s future financial performance, including prospective debt servicing capabilities, capital structure composition, and the value of the collateral. The analysis incorporates the macroeconomic environment, industry conditions in which the issuer operates, the issuer’s current competitive position, its vulnerability to changes in the competitive and regulatory environment, issuer liquidity, issuer commitment to bondholders, issuer creditworthiness, and asset protection. Part of the process also includes running downside scenarios to evaluate the expected likelihood of default as well as potential losses in the event of default. The Company recorded the following other than temporary impairments (“OTTI”) on its investment portfolio for the quarters and nine months ended September 30, 2018 and 2017: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2018 2017 2018 2017 Fixed maturities: OTTI losses, gross $ (24 ) $ - $ (395 ) $ (31 ) Portion of loss recognized in other comprehensive income (pre-tax) - - - - Net impairment losses on fixed maturities recognized in earnings (24 ) - (395 ) (31 ) Equity securities - (1,020 ) - (1,677 ) Total $ (24 ) $ (1,020 ) $ (395 ) $ (1,708 ) 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, 2018 and 2017 for which a portion of the OTTI loss was recognized in other comprehensive income. Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2018 2017 2018 2017 Balance at beginning of period $ 13 $ 16 $ 13 $ 31 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 - (3 ) - (18 ) Balance at end of period $ 13 $ 13 $ 13 $ 13 Accumulated Other Comprehensive Income, Net of Tax Accumulated other comprehensive income, net of tax, as of September 30, 2018 and December 31, 2017 was as follows: (Dollars in thousands) September 30, 2018 December 31, 2017 Net unrealized gains (losses)from: Fixed maturities $ (25,975 ) $ (1,707 ) Common stock - 15,314 Foreign currency fluctuations (1,003 ) 551 Deferred taxes 3,149 (5,175 ) Accumulated other comprehensive income, net of tax $ (23,829 ) $ 8,983 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, 2018 and 2017: Quarter Ended September 30, 2018 (Dollars In Thousands) Unrealized Gains and Losses on Available for Sale Securities Foreign Currency Items Accumulated Other Comprehensive Income Beginning balance, net of tax $ (21,926 ) $ (549 ) $ (22,475 ) Other comprehensive loss before reclassification, before tax (1,945 ) (454 ) (2,399 ) Amounts reclassified from accumulated other comprehensive income (loss), before tax 835 - 835 Other comprehensive loss, before tax (1,110 ) (454 ) (1,564 ) Income tax benefit related to items of OCI 210 - 210 Cumulative effect adjustment, net of tax - - - Ending balance, net of tax $ (22,826 ) $ (1,003 ) $ (23,829 ) Quarter Ended September 30, 2017 (Dollars In Thousands) Unrealized Gains and Losses on Available for Sale Securities Foreign Currency Items Accumulated Other Comprehensive Income Beginning balance, net of tax $ 5,549 $ 437 $ 5,986 Other comprehensive income before reclassification, before tax 4,486 548 5,034 Amounts reclassified from accumulated other comprehensive income (loss), before tax 923 (326 ) 597 Other comprehensive income, before tax 5,409 222 5,631 Income Tax (expense) benefit related to items of OCI (1,583 ) 51 (1,532 ) Cumulative effect adjustment, net of tax Ending balance, net of tax $ 9,375 $ 710 $ 10,085 Nine Months Ended September 30, 2018 (Dollars In Thousands) Unrealized Gains and Losses on Available for Sale Securities Foreign Currency Items Accumulated Other Comprehensive Income Beginning balance, net of tax $ 8,272 $ 711 $ 8,983 Other comprehensive loss before reclassification, before tax (25,928 ) (1,554 ) (27,482 ) Amounts reclassified from accumulated other comprehensive income (loss), before tax 1,660 - 1,660 Other comprehensive loss, before tax (24,268 ) (1,554 ) (25,822 ) Income Tax benefit related to items of OCI 3,038 - 3,038 Cumulative effect adjustment, net of tax (9,868 ) (160 ) (10,028 ) Ending balance, net of tax $ (22,826 ) $ (1,003 ) $ (23,829 ) Nine Months Ended September 30, 2017 (Dollars In Thousands) Unrealized Gains and Losses on Available for Sale Securities Foreign Currency Items Accumulated Other Comprehensive Income Beginning balance, net of tax $ (554 ) $ (64 ) $ (618 ) Other comprehensive income before reclassification, before tax 14,675 1,212 15,887 Amounts reclassified from accumulated other comprehensive income (loss), before tax (830 ) (336 ) (1,166 ) Other comprehensive income, before tax 13,845 876 14,721 Income Tax (expense) related to items of OCI (3,916 ) (102 ) (4,018 ) Cumulative effect adjustment, net of tax - - - Ending balance, net of tax $ 9,375 $ 710 $ 10,085 The reclassifications out of accumulated other comprehensive income for the quarters and nine months ended September 30, 2018 and 2017 were as follows: Amounts Reclassified from Accumulated Other Comprehensive Income (Dollars in thousands) Quarters Ended September 30, Details about Accumulated Other Comprehensive Income Components Affected Line Item in the Consolidated Statements of Operations 2018 2017 Unrealized gains and losses on available for sale securities Other net realized investment (gains) losses $ 811 $ (97 ) Other than temporary impairment losses on investments 24 1,020 Total before tax 835 923 Income tax (benefit) (118 ) (270 ) Unrealized gains and losses on available for sale securities, net of tax 717 653 Foreign currency items Other net realized investment (gains) - $ (326 ) Income tax expense - 114 Foreign currency items, net of tax - (212 ) Total reclassifications Total reclassifications, net of tax $ 717 $ 441 Amounts Reclassified from Accumulated Other Comprehensive Income (Dollars in thousands) Nine Months Ended September 30, Details about Accumulated Other Comprehensive Income Components Affected Line Item in the Consolidated Statements of Operations 2018 2017 Unrealized gains and losses on available for sale securities Other net realized investment (gains) losses $ 1,265 $ (2,538 ) Other than temporary impairment losses on investments 395 1,708 Total before tax 1,660 (830 ) Income tax expense (benefit) (257 ) 261 Unrealized gains and losses on available for sale securities, net of tax 1,403 (569 ) Foreign currency items Other net realized investment (gains) - (336 ) Income tax expense - 117 Foreign currency items, net of tax - (219 ) Total reclassifications Total reclassifications, net of tax $ 1,403 $ (788 ) Net Realized Investment Gains (Losses) The components of net realized investment gains (losses) for the quarters and nine months ended September 30, 2018 and 2017 were as follows: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2018 2017 2018 2017 Fixed maturities: Gross realized gains $ 329 $ 434 $ 373 $ 3,122 Gross realized losses (1,164 ) (300 ) (2,033 ) (2,358 ) Net realized gains (losses) (835 ) 134 (1,660 ) 764 Common stock: Gross realized gains 5,789 917 12,116 2,711 Gross realized losses (946 ) (1,648 ) (9,582 ) (2,309 ) Net realized gains (losses) 4,843 (731 ) 2,534 402 Derivatives: Gross realized gains 1,690 486 8,457 822 Gross realized losses (379 ) (852 ) (1,498 ) (2,838 ) Net realized gains (losses) (1) 1,311 (366 ) 6,959 (2,016 ) Total net realized investment gains (losses) $ 5,319 $ (963 ) $ 7,833 $ (850 ) (1) Includes periodic net interest settlements related to the derivatives of $0.4 million and $0.9 million for the quarters ended September 30, 2018 and 2017, respectively, and $1.5 million and $2.8 million for the nine months ended September 30, 2018 and 2017, respectively. New accounting guidance regarding equity securities was implemented on January 1, 2018 which requires companies to disclose realized gains and losses for equity securities still held at period end and gains and losses from securities sold during the period. See Note 15 for additional information regarding new accounting pronouncements. The following table shows the calculation of the portion of realized gains and losses related to common stock held as of September 30, 2018: Quarter Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2018 2018 Net gains and losses recognized during the period on equity securities $ 4,843 $ 2,534 Less: Net gains and losses recognized during the period on equity securities sold during the period 2,096 3,958 Unrealized gains and losses recognized during the reporting period on equity securities still held at the reporting date $ 2,747 $ (1,424 ) The proceeds from sales and redemptions of available for sale and equity securities resulting in net realized investment gains (losses) for the nine months ended September 30, 2018 and 2017 were as follows: Nine Months Ended September 30, (Dollars in thousands) 2018 2017 Fixed maturities $ 229,362 $ 742,229 Equity securities 28,141 24,483 Net Investment Income The sources of net investment income for the quarters and nine months ended September 30, 2018 and 2017 were as follows: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2018 2017 2018 2017 Fixed maturities $ 9,520 $ 9,020 $ 27,236 $ 24,032 Equity securities 1,006 906 3,010 2,740 Cash and cash equivalents 285 226 814 621 Other invested assets 1,631 655 5,194 2,423 Total investment income 12,442 10,807 36,254 29,816 Investment expense (692 ) (673 ) (2,146 ) (2,198 ) Net investment income $ 11,750 $ 10,134 $ 34,108 $ 27,618 The Company’s total investment return on a pre-tax basis for the quarters and nine months ended September 30, 2018 and 2017 were as follows: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2018 2017 2018 2017 Net investment income $ 11,750 $ 10,134 $ 34,108 $ 27,618 Net realized investment gains (losses) 5,319 (963 ) 7,833 (850 ) Change in unrealized holding gains and losses (1,564 ) 5,631 (25,822 ) 14,721 Net realized and unrealized investment returns 3,755 4,668 (17,989 ) 13,871 Total investment return $ 15,505 $ 14,802 $ 16,119 $ 41,489 Total investment return % (1) 1.0 % 0.9 % 1.1 % 2.6 % Average investment portfolio $ 1,541,975 $ 1,629,989 $ 1,533,825 $ 1,587,645 (1) Not annualized. Insurance Enhanced Asset-Backed and Credit Securities As of September 30, 2018, the Company held insurance enhanced collateralized mortgage obligations, commercial mortgage-backed and credit securities with a market value of approximately $34.2 rating of “AA.” 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, 2018, is as follows: (Dollars in thousands) Financial Guarantor Total Pre- refunded Securities Government Guaranteed Securities Exposure Net of Pre- refunded & Government Guaranteed Securities Municipal Bond Insurance Association $ 708 $ - $ - $ 708 Total backed by financial guarantors 708 - - 708 Other credit enhanced municipal bonds - - - - Total $ 708 $ - $ - $ 708 In addition to the tax-free municipal bonds, the Company held $33.5 million of insurance enhanced bonds, which represented approximately 2.2% of the Company’s total invested assets, net of receivable/payable for securities purchased and sold. The insurance enhanced bonds are comprised of $20.5 million of taxable municipal bonds, $12.8 million of commercial mortgage-backed securities, and $0.2 million of collateralized mortgage obligations. The financial guarantors of the Company’s $33.5 million of insurance enhanced commercial-mortgage-backed, taxable municipal securities, and collateralized mortgage obligations include Municipal Bond Insurance Association ($6.0 million), Assured Guaranty Corporation ($14.5 million), Federal Home Loan Mortgage Corporation ($12.8 million), and Federal Deposit Insurance Corporation ($0.2 million). The Company had no direct investments in the entities that have provided financial guarantees or other credit support to any security held by the Company at September 30, 2018. 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, 2018 and December 31, 2017: Estimated Fair Value (Dollars in thousands) September 30, 2018 December 31, 2017 On deposit with governmental authorities $ 25,817 $ 26,852 Intercompany trusts held for the benefit of U.S. policyholders 205,995 328,494 Held in trust pursuant to third party requirements 97,407 94,098 Letter of credit held for third party requirements 2,317 3,944 Securities held as collateral for borrowing arrangements (1) 74,714 88,040 Total $ 406,250 $ 541,428 (1) Amount required to collateralize margin borrowing facility. 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 three 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 VIE’s, which invests in distressed securities and assets, was $19.0 million and $26.3 million as of September 30, 2018 and December 31, 2017, respectively. The Company’s maximum exposure to loss from this VIE, which factors in future funding commitments, was $33.2 million and $40.5 million at September 30, 2018 and December 31, 2017, respectively. The fair value of a second VIE that provides financing for middle market companies, was $34.2 million and $33.8 million at September 30, 2018 and December 31, 2017, respectively. The Company’s maximum exposure to loss from this VIE, which factors in future funding commitments, was $39.4 million and $43.8 million at September 30, 2018 and December 31, 2017, respectively. The fair value of a third VIE that also invests in distressed securities and assets, was $32.1 million and $17.8 million as of September 30, 2018 and December 31, 2017, respectively. The Company’s maximum exposure to loss from this VIE, which factors in future funding commitments, was $52.6 million and $51.3 million at September 30, 2018 and December 31, 2017, respectively. The Company’s investment in VIEs is included in other invested assets on the consolidated balance sheet with changes in fair value recorded in the consolidated statements of operations. |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
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 in the consolidated statements 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, 2018 and December 31, 2017: (Dollars in thousands) September 30, 2018 December 31, 2017 Derivatives Not Designated as Hedging Instruments under ASC 815 Balance Sheet Location Notional Amount Fair Value Notional Amount Fair Value Interest rate swap agreements Other assets/liabilities $ 200,000 $ 489 $ 200,000 $ (7,968 ) The following table summarizes the net gains (losses) included in the consolidated statements 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, 2018 and 2017: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) Consolidated Statements of Operations Line 2018 2017 2018 2017 Interest rate swap agreements Net realized investment gains (losses) $ 1,311 $ (366 ) $ 6,959 $ (2,016 ) As of September 30, 2018 and December 31, 2017, the Company is due $2.7 million and $3.1 million, respectively, for funds it needed to post to execute the swap transaction and $0.7 million and $9.5 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. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
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, 2018 and December 31, 2017 and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value. As of September 30, 2018 Fair Value Measurements (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets: Fixed maturities: U.S. treasury and agency obligations $ 79,670 $ - $ - $ 79,670 Obligations of states and political subdivisions - 99,627 - 99,627 Mortgage-backed securities - 134,844 - 134,844 Commercial mortgage-backed securities - 180,208 - 180,208 Asset-backed securities - 199,722 - 199,722 Corporate bonds - 456,832 - 456,832 Foreign corporate bonds - 122,778 - 122,778 Total fixed maturities 79,670 1,194,011 - 1,273,681 Common stock 137,554 - - 137,554 Derivative instruments - 489 - 489 Total assets measured at fair value (1) $ 217,224 $ 1,194,500 $ - $ 1,411,724 (1) Excluded from the table above are limited partnerships of $85.3 million at September 30, 2018 whose fair value is based on net asset value as a practical expedient. As of December 31, 2017 Fair Value Measurements (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets: Fixed maturities: U.S. treasury and agency obligations $ 104,680 $ - $ - $ 104,680 Obligations of states and political subdivisions - 95,114 - 95,114 Mortgage-backed securities - 149,350 - 149,350 Commercial mortgage-backed securities - 139,795 - 139,795 Asset-backed securities - 203,701 - 203,701 Corporate bonds - 423,390 - 423,390 Foreign corporate bonds - 125,407 - 125,407 Total fixed maturities 104,680 1,136,757 - 1,241,437 Common stock 140,229 - - 140,229 Total assets measured at fair value (1) $ 244,909 $ 1,136,757 $ - $ 1,381,666 Liabilities: Derivative instruments $ - $ 7,968 $ - $ 7,968 Total liabilities measured at fair value $ - $ 7,968 $ - $ 7,968 (1) Excluded from the table above are limited partnerships of $77.8 million at December 31, 2017 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 derivative instruments, consisting of interest rate swaps, is obtained from a third party financial institution that 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, 2018 and December 31, 2017 was as follows: September 30, 2018 December 31, 2017 (Dollars in thousands) Carrying Value Fair Value Carrying Value Fair Value Margin Borrowing Facility $ 59,405 $ 59,405 $ 72,230 $ 72,230 7.75% Subordinated Notes due 2045 (1) 96,711 99,511 96,619 100,059 7.875% Subordinated Notes due 2047 (2) 125,970 129,714 125,864 130,429 Total $ 282,086 $ 288,630 $ 294,713 $ 302,718 (1) As of September 30, 2018 and December 31, 2017, the carrying value and fair value of the 7.75% Subordinated Notes due 2045 are net of unamortized debt issuance cost of $3.3 million and $3.4 million, respectively. (2) As of September 30, 2018 and December 31, 2017, the carrying value and fair value of the 7.875% Subordinated Notes due 2047 are net of unamortized debt issuance cost of $4.0 million and $4.1 million, respectively. The fair value of the margin borrowing facility approximates its carrying value due to the facility being due on demand. The subordinated notes due 2045 and 2047 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, 2018 and 2017. Fair Value of Alternative Investments Other invested assets consist of limited liability partnerships whose fair value is based on 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, 2018 and December 31, 2017. September 30, 2018 December 31, 2017 (Dollars in thousands) Fair Value Future Funding Commitment Fair Value Future Funding Commitment Real Estate Fund, LP (1) $ - $ - $ - $ - European Non-Performing Loan Fund, LP (2) 18,967 14,214 26,262 14,214 Private Middle Market Loan Fund, LP (3) 34,199 5,200 33,760 10,000 Distressed Debt Fund, LP (4) 32,102 20,500 17,798 33,500 Total $ 85,268 $ 39,914 $ 77,820 $ 57,714 (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 by 2020. (3) This limited partnership provides financing for 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 investment management agreement, the Company anticipates its interest to be redeemed no later than 2024. (4) This limited partnership invests in stressed and distressed securities and structured products. 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 to be redeemed no later than 2027. 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 consolidated statements of operations, was $1.6 million and $0.7 million for the quarters ended September 30, 2018 and 2017, respectively, and $5.2 million and $2.4 million during the nine months ended September 30, 2018 and 2017, respectively. Pricing The Company’s pricing vendors provide prices for all investment categories except for investments in limited partnerships whose fair value is based on net asset values as a practical expedient. Two primary vendors are utilized to 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 terms and conditions sourced from commercial vendors. Bonds with similar characteristics are grouped into specific sectors. Both asset classes use standard inputs and utilize bid price or spread, quotes, benchmark yields, discount rates, market data feeds, and financial statements. • 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 benchmark 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, an integrated evaluation system is used. The pricing models incorporate trades, spreads, benchmark curves, market data feeds, new issue data, and trustee reports. • 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, various external analytical products are utilized and purchased from commercial vendors. 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, 2018 and 2017, the Company has not adjusted quotes or prices obtained from the pricing vendors. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 5. Income Taxes As of September 30, 2018, the statutory income tax rates of the countries where the Company conducts business are 21% in the United States, 0% in Bermuda, 0% in the Cayman Islands, 26.01% for companies with a registered office in Luxembourg City, 0.25% to 2.5% in Barbados, 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 limited partnership distributions, and that amount is then added to the actual income taxes on net realized gains and losses, discrete items and limited partnership distributions. 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 for the quarters and nine months ended September 30, 2018 and 2017 were as follows: Quarter Ended September 30, 2018 (Dollars in thousands) Non-U.S. Subsidiaries U.S. Subsidiaries Eliminations Total Revenues: Gross premiums written $ 9,361 $ 126,245 $ - $ 135,606 Net premiums written $ 9,356 $ 106,877 $ - $ 116,233 Net premiums earned $ 30,220 $ 90,308 $ - $ 120,528 Net investment income 12,013 7,204 (7,467 ) 11,750 Net realized investment gains (losses) (273 ) 5,592 - 5,319 Other income (loss) (82 ) 493 - 411 Total revenues 41,878 103,597 (7,467 ) 138,008 Losses and Expenses: Net losses and loss adjustment expenses 14,877 65,616 - 80,493 Acquisition costs and other underwriting expenses 13,188 35,492 - 48,680 Corporate and other operating expenses 1,237 2,238 - 3,475 Interest expense 356 12,035 (7,467 ) 4,924 Income (loss) before income taxes $ 12,220 $ (11,784 ) $ - $ 436 Quarter Ended September 30, 2017 (Dollars in thousands) Non-U.S. Subsidiaries U.S. Subsidiaries Eliminations Total Revenues: Gross premiums written $ 50,812 $ 114,076 $ (38,834 ) $ 126,054 Net premiums written $ 50,800 $ 58,245 $ - $ 109,045 Net premiums earned $ 50,392 $ 58,227 $ - $ 108,619 Net investment income 14,631 6,584 (11,081 ) 10,134 Net realized investment losses (150 ) (813 ) - (963 ) Other income 40 2,254 - 2,294 Total revenues 64,913 66,252 (11,081 ) 120,084 Losses and Expenses: Net losses and loss adjustment expenses 31,044 51,351 - 82,395 Acquisition costs and other underwriting expenses 21,922 23,080 - 45,002 Corporate and other operating expenses 1,807 2,823 - 4,630 Interest expense 4,679 11,238 (11,081 ) 4,836 Income (loss) before income taxes $ 5,461 $ (22,240 ) $ - $ (16,779 ) Nine Months Ended September 30, 2018 (Dollars in thousands) Non-U.S. Subsidiaries U.S. Subsidiaries Eliminations Total Revenues: Gross premiums written $ 39,976 $ 378,694 $ - $ 418,670 Net premiums written $ 39,970 $ 320,587 $ - $ 360,557 Net premiums earned $ 115,353 $ 227,094 $ - $ 342,447 Net investment income 39,527 21,428 (26,847 ) 34,108 Net realized investment gains (losses) (437 ) 8,270 - 7,833 Other income (loss) (179 ) 1,468 - 1,289 Total revenues 154,264 258,260 (26,847 ) 385,677 Losses and Expenses: Net losses and loss adjustment expenses 48,210 147,216 - 195,426 Acquisition costs and other underwriting expenses 50,475 90,721 - 141,196 Corporate and other operating expenses 10,550 13,103 - 23,653 Interest expense 6,749 34,823 (26,847 ) 14,725 Income (loss) before income taxes $ 38,280 $ (27,603 ) $ - $ 10,677 Nine Months Ended September 30, 2017 (Dollars in thousands) Non-U.S. Subsidiaries U.S. Subsidiaries Eliminations Total Revenues: Gross premiums written $ 164,975 $ 348,331 $ (119,607 ) $ 393,699 Net premiums written $ 164,947 $ 179,401 $ - $ 344,348 Net premiums earned $ 150,384 $ 178,434 $ - $ 328,818 Net investment income 41,519 16,786 (30,687 ) 27,618 Net realized investment gains (losses) 87 (937 ) - (850 ) Other income 213 5,231 - 5,444 Total revenues 192,203 199,514 (30,687 ) 361,030 Losses and Expenses: Net losses and loss adjustment expenses 74,780 127,876 - 202,656 Acquisition costs and other underwriting expenses 65,544 69,466 - 135,010 Corporate and other operating expenses 4,137 6,908 - 11,045 Interest expense 11,653 31,099 (30,687 ) 12,065 Income (loss) before income taxes $ 36,089 $ (35,835 ) $ - $ 254 For the quarter and nine months ended September 30, 2017, the Company’s income before income taxes from its non-U.S. subsidiaries and U.S. subsidiaries, as reported in the table above, includes the results of the quota share agreement between Global Indemnity Reinsurance and the Insurance Operations. This quota share agreement was cancelled on a runoff basis effective January 1, 2018. The following table summarizes the components of income tax benefit: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2018 2017 2018 2017 Current income tax expense (benefit): Foreign $ 62 $ 107 $ 326 $ 290 U.S. Federal (732 ) 128 - 128 Total current income tax expense (benefit) (670 ) 235 326 418 Deferred income tax benefit: U.S. Federal (2,622 ) (8,090 ) (6,270 ) (13,611 ) Total deferred income tax benefit (2,622 ) (8,090 ) (6,270 ) (13,611 ) Total income tax benefit $ (3,292 ) $ (7,855 ) $ (5,944 ) $ (13,193 ) The weighted average expected tax provision has been calculated using income 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, 2018 2017 (Dollars in thousands) Amount % of Pre- Tax Income Amount % of Pre- Tax Income Expected tax provision at weighted average rate $ (2,494 ) (571.9 %) $ (7,678 ) (45.8 %) Adjustments: Tax exempt interest - - (40 ) (0.2 ) Dividend exclusion (68 ) (15.6 ) (144 ) (0.9 ) Base Erosion Anti-Abuse Tax (731 ) (167.7 ) - - Other 1 0.2 7 0.1 Actual tax on continuing operations $ (3,292 ) (755.0 %) $ (7,855 ) (46.8 %) The effective income tax benefit for the quarter ended September 30, 2018 was $3,292, compared with an effective income tax benefit of $7,855 for the quarter ended September 30, 2017. The decrease in the effective income tax benefit in the quarter ended September 30, 2018 compared to the quarter ended September 30, 2017 is due to less pretax losses in the U.S. and the change in the U.S. statutory tax rate from 35% to 21% effective January 1, 2018 per the passage of the Tax Cuts and Jobs Act (“TCJA”). . Nine Months Ended September 30, 2018 2017 (Dollars in thousands) Amount % of Pre- Tax Income Amount % of Pre- Tax Income Expected tax provision at weighted average rate $ (5,527 ) (51.8 %) $ (12,252 ) (4,823.6 %) Adjustments: Tax exempt interest (5 ) - (191 ) (75.2 ) Dividend exclusion (203 ) (1.9 ) (410 ) (161.4 ) Other (209 ) (2.0 ) (340 ) (133.9 ) Actual tax on continuing operations $ (5,944 ) (55.7 %) $ (13,193 ) (5,194.1 %) The effective income tax benefit for the nine months ended September 30, 2018 was $5,944, compared with an effective income tax benefit of $13,193 for the nine months ended September 30, 2017. The decrease in the effective income tax benefit in the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017 is due to the change in the U.S. statutory tax rate from 35% to 21% effective January 1, 2018 upon the passage of the TCJA. Taxes were computed using a discrete period computation because a reliable estimate of an effective tax rate could not be made. Financial results for the quarter and nine months ended September 30, 2018 reflect provisional tax estimates related to the TCJA. These provisional estimates are based on the Company’s initial analysis and current interpretation of the legislation. Given the complexity of the legislation, anticipated guidance from the U.S. Treasury, and the potential for additional guidance from the Securities and Exchange Commission (“SEC”) or the Financial Accounting Standards Board (“FASB”), these estimates may be adjusted during 2018. During the quarter and nine months ended September 30, 2018, there were no adjustments to provisional tax estimates recorded in prior periods. The Company had an alternative minimum tax (“AMT”) credit carryforward of $11.0 million as of December 31, 2017. The TCJA repealed the corporate AMT. The AMT credit carryforward of $11.0 million was reclassed to federal income taxes receivable at December 31, 2017 and will be fully refunded by the end of 2021. The Company has a net operating loss (“NOL”) carryforward of $21.9 million as of September 30, 2018, which begins to expire in 2035 based on when the original NOL was generated. The Company’s NOL carryforward as of December 31, 2017 was $16.3 million. The Company has a Section 163(j) (“163(j)”) carryforward of $10.8 million and $7.9 million as of September 30, 2018 and December 31, 2017, respectively, which can be carried forward indefinitely. The 163(j) carryforward is for disqualified interest paid or accrued. |
Liability for Unpaid Losses and
Liability for Unpaid Losses and Loss Adjustment Expenses | 9 Months Ended |
Sep. 30, 2018 | |
Insurance [Abstract] | |
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) 2018 2017 2018 2017 Balance at beginning of period $ 613,670 $ 615,763 $ 634,664 $ 651,042 Less: Ceded reinsurance receivables 91,397 104,245 97,243 130,439 Net balance at beginning of period 522,273 511,518 537,421 520,603 Purchased reserves, gross - 9,063 - 18,024 Purchased reserves ceded - 63 - 573 Purchased reserves, net of third party reinsurance - 9,126 - 18,597 Incurred losses and loss adjustment expenses related to: Current year 92,469 91,766 222,916 237,460 Prior years (11,976 ) (9,371 ) (27,490 ) (34,804 ) Total incurred losses and loss adjustment expenses 80,493 82,395 195,426 202,656 Paid losses and loss adjustment expenses related to: Current year 53,121 45,193 103,695 115,927 Prior years 27,312 25,190 106,819 93,273 Total paid losses and loss adjustment expenses 80,433 70,383 210,514 209,200 Net balance at end of period 522,333 532,656 522,333 532,656 Plus: Ceded reinsurance receivables 86,274 117,070 86,274 117,070 Balance at end of period $ 608,607 $ 649,726 $ 608,607 $ 649,726 When analyzing loss reserves and prior year development, the Company considers many factors, including the frequency and severity of claims, loss trends, case reserve settlements that may have resulted in significant development, and any other additional or pertinent factors that may impact reserve estimates. During the third quarter of 2018, the Company reduced its prior accident year loss reserves by $12.0 million, which consisted of a $1.2 million decrease related to Commercial Lines, $7.5 million decrease related to Personal Lines, and a $3.3 million decrease related to Reinsurance Operations. The $1.2 million reduction of prior accident year loss reserves related to Commercial Lines primarily consisted of the following: • Commercial Auto Liability: A $1.1 million decrease primarily due to a $1.5 million reduction in the 2013 accident year resulting from lower than anticipated claims severity, partially offset by a $0.4 million increase in the 2015 accident year reflecting higher than expected case incurred emergence. The $7.5 million reduction of prior accident year loss reserves related to Personal Lines primarily consisted of the following: • Property: A $4.1 million reduction primarily in the 2014 through 2017 accident years. The reductions mainly reflect lower than anticipated claims severity. • General Liability: A $3.3 million decrease primarily in the 2011 through 2014 and 2016 through 2017 accident years. The decrease recognizes lower than expected claims severity. The $3.3 million reduction of prior accident year loss reserves related to Reinsurance Operations was from the property lines for accident years 2007, 2009 through 2012 and 2014 through 2016, partially offset by an increase in the 2017 accident year. The accident year changes were based on a review of the experience reported from cedants. In the third quarter of 2017, the Company reduced its prior accident year loss reserves by $9.4 million, which consisted of a $7.3 million decrease related to Commercial Lines, a $1.3 million decrease related to Personal Lines, and a $0.8 million decrease related to Reinsurance Operations. The $7.3 million reduction of prior accident year loss reserves related to Commercial Lines primarily consisted of the following: • General Liability: A $6.9 million reduction in aggregate with $1.0 million of favorable development in the construction defect reserve category and $5.9 million of favorable development in the other general liability reserve categories. The favorable development in the construction defect reserve category recognizes lower than anticipated claims frequency and severity which led to reductions primarily in the 2005 through 2009 accident years. For the other general liability reserve categories, lower than expected claims severity was the primary driver of the favorable development mainly in accident years 2008 through 2016. • Professional Liability: A $0.2 million decrease in aggregate primarily reflects lower than expected claims severity in the 2010 through 2012 accident years which was partially offset by unfavorable development in the 2013 accident year. The $1.3 million reduction of prior accident year loss reserves related to Personal Lines reflects $1.3 million in subrogation recoveries involving the 2015 wildfire. The $0.8 million reduction related to Reinsurance Operations was from the property lines. Ultimate losses were lowered primarily in the 2015 accident year and partially offset by an increase in the 2016 accident year based on a review of the experience reported from cedants. During the first nine months of 2018, the Company reduced its prior accident year loss reserves by $27.5 million, which consisted of a $9.1 million decrease related to Commercial Lines, $10.6 million decrease related to Personal Lines, and a $7.8 million decrease related to Reinsurance Operations. The $9.1 million reduction of prior accident year loss reserves related to Commercial Lines primarily consisted of the following: • General Liability: A $3.1 million reduction in reserve categories excluding construction defect. Lower than expected claims severity was the primary driver of the favorable development, mainly in the 2002 through 2004, 2006 through 2010, 2012 through 2014, and 2016 accident years which was partially offset by increases in the 2011, 2015 and 2017 accident years. • Commercial Auto Liability: A $3.3 million decrease in the 2010, 2012 and 2013 accident years recognizes lower than anticipated claims severity, partially offset by an increase in the 2015 accident year. • Professional Liability: A $0.8 million decrease reflects lower than expected claims severity mainly in the 2010 through 2011 and 2014 accident years. • Property: A $1.9 million decrease in aggregate recognizes lower than anticipated claims severity primarily in the 2014 through 2015 and 2017 accident years, partially offset by an increase in the 2016 accident year. The $10.6 million reduction of prior accident year loss reserves related to Personal Lines primarily consisted of the following: • Property: A $6.9 million reduction primarily in the 2014 through 2017 accident years mainly reflects lower than anticipated claims severity. • General Liability: A $3.7 million decrease primarily in the 2011 through 2014 and 2016 through 2017 accident years, partially offset by an increase in the 2007 and 2015 accident years. The decreases recognize lower than expected claims severity. The $7.8 million reduction of prior accident year loss reserves related to Reinsurance Operations was from the property lines for accident years 2007, 2009 through 2012 and 2015 through 2016, partially offset by an increases in the 2013 through 2014 and 2017 accident years. The accident year changes were based on a review of the experience reported from cedants. During the first nine months of 2017, the Company reduced its prior accident year loss reserves by $34.8 million, which consisted of a $26.2 million decrease related to Commercial Lines, a $4.5 million decrease related to Personal Lines, and a $4.1 million decrease related to Reinsurance Operations. The $26.2 million reduction of prior accident year loss reserves related to Commercial Lines primarily consisted of the following: • General Liability: A $17.1 million reduction in aggregate with $6.0 million of favorable development in the construction defect reserve category and $11.1 million of favorable development in the other general liability reserve categories. The favorable development in the construction defect reserve category recognizes lower than anticipated claims frequency and severity which led to reductions primarily in the 2005 through 2010 and 2012 through 2016 accident years. For the other general liability reserve categories, lower than expected claims severity was the primary driver of the favorable development mainly in the 2005 through 2014 accident years. • Professional Liability: A $3.7 million decrease in aggregate primarily reflects lower than expected claims severity in the 2006 through 2008 and 2011 through 2012 accident years. • Property: A $5.4 million reduction in aggregate with $3.2 million of favorable development in the property excluding catastrophe reserve categories and $2.2 million of favorable development in the property catastrophe reserve categories. The favorable development in the reserve categories excluding catastrophe experience reflects lower than expected claims frequency and severity in the 2011 through 2015 accident years. For the property catastrophe reserve categories, lower than anticipated claims severity was the driver of the favorable development in the 2011 through 2016 accident years. The $4.5 million reduction of prior accident year loss reserves related to Personal Lines primarily consisted of the following: • Property: A $3.9 million reduction in the property reserve categories, both including and excluding catastrophes. The decrease reflects lower than expected case incurred emergence, primarily in the 2016 accident year and the aforementioned $1.3 million favorable development from the 2015 wildfire. • General Liability: A $0.6 million reduction in the agriculture reserve categories. The favorable development was primarily due to lower than expected case incurred emergence in the 2016 accident year partially offset by higher than expected development in the dwelling liability reserve category for the 2015 accident year. The $4.1 million reduction of prior accident year loss reserve related to Reinsurance Operations was from the property lines. Ultimate losses were lowered in the 2013 through 2015 accident years and partially offset by an increase in the 2016 accident year based on a review of the experience reported from cedants. Loss indemnification related to Purchase of American Reliable On March 8, 2018, the Company settled its final reserve calculation which resulted in $41.5 million being due to Global Indemnity Group, Inc. in accordance with the Stock Purchase Agreement between Global Indemnity Group, Inc. and American Bankers Insurance Group, Inc. for the purchase of American Reliable. The settlement is comprised of (i) receipt of $38.8 million for loss and loss adjustment expenses paid on or after January 1, 2015 or payable as of December 31, 2017 with respect to losses incurred prior to January 1, 2015, (ii) receipt of $6.2 million for accrued interest and (iii) payment of $3.5 million for the difference between the agreed upon purchase price and actual settlement on January 1, 2015. These amounts, which were included in other assets on the consolidated balance sheets as of December 31, 2017, were received on March 9, 2018. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | 7. Debt The Company’s outstanding debt consisted of the following at September 30, 2018 and December 31, 2017: (Dollars in thousands) September 30, 2018 December 31, 2017 Margin Borrowing Facility $ 59,405 $ 72,230 7.75% Subordinated Notes due 2045 96,711 96,619 7.875% Subordinated Notes due 2047 125,970 125,864 Total $ 282,086 $ 294,713 On April 25, 2018, Global Indemnity Group, Inc. ("GIGI"), an indirect wholly owned subsidiary of the Company, became a subordinated co-obligor with respect to the 7.75% Subordinated Notes due in 2045 and the 7.875% Subordinated Notes due in 2047 with the same obligations and duties as the Company under the Indenture (including the due and punctual performance and observance of all of the covenants and conditions to be performed by the Company, including, without limitation, the obligation to pay the principal of, and interest on, the Notes of either series when due whether at maturity, by acceleration, redemption or otherwise), and with the same rights, benefits and privileges of the Company thereunder. Notwithstanding the foregoing, GIGI's obligations (including the obligation to pay the principal of and interest in respect of the Notes of any series) are subject to subordination to all monetary obligations or liabilities of GIGI owing to Global Indemnity Reinsurance, Ltd., a wholly owned subsidiary of the Company, and/or any other regulated reinsurance or insurance company that is a direct or indirect subsidiary of the Company, in addition to indebtedness of GIGI for borrowed money. If the Company pays any amount with respect to the subordinated note obligations, the Company is entitled to be reimbursed by GIGI within 10 business days after a demand is made to GIGI by the Company. In consideration for becoming a subordinated co-obligor on the subordinated notes, GIGI received a promissory note from the Company with a principal amount of $230 million due April 15, 2047 that has since been assigned to an affiliate. This promissory note is eliminated in consolidation. Please see Note 12 of the notes to the consolidated financial statements in Item 8 Part II of the Company’s 2017 Annual Report on Form 10-K for more information on the Company’s 7.75% Subordinated Notes due in 2045 and the 7.875% Subordinated Notes due in 2047 as well as the Margin Borrowing Facility. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Shareholders' Equity | 8. Shareholders’ Equity There were no A ordinary shares that were surrendered or repurchased during the quarter ended September 30, 2018 or 2017. The following table provides information with respect to the A ordinary shares that were surrendered or repurchased during the nine months ended September 30, 2018: Period (1) Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plan or Program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs January 1-31, 2018 26,639 (2) $ 42.02 - - March 1-31, 2018 18,594 (2) $ 37.27 - - Total 45,233 $ 40.07 - (1) Based on settlement date. (2) Surrendered by employees as payment of taxes withheld on the vesting of restricted stock. The following table provides information with respect to the A ordinary shares that were surrendered or repurchased during the nine months ended September 30, 2017: Period (1) Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plan or Program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs January 1-31, 2017 13,656 (2) $ 38.21 - - February 1-28, 2017 15,309 (2) $ 40.18 - - May 1 - 31, 2017 586 (2) $ 38.49 - - Total 29,551 $ 39.24 - (1) Based on settlement date. (2) Surrendered by employees as payment of taxes withheld on the vesting of restricted stock. There were no B ordinary shares that were surrendered or repurchased during the quarters or nine months ended September 30, 2018 or 2017. Please see Note 13 of the notes to the consolidated financial statements in Item 8 Part II of the Company’s 2017 Annual Report on Form 10-K for more information on the Company’s repurchase program. Dividends On March 4, 2018, the Company’s Board of Directors approved a dividend payment of $0.25 per ordinary share to all shareholders of record on the close of business on March 21, 2018. On March 29, 2018, dividends totaling $3.5 million were paid to shareholders. On June 3, 2018, the Company’s Board of Directors approved a dividend payment of $0.25 per ordinary share to all shareholders of record on the close of business on June 22, 2018. On June 29, 2018, dividends totaling $3.5 million were paid to shareholders. On September 16, 2018, the Company’s Board of Directors approved a dividend payment of $0.25 per ordinary share to all shareholders of record on the close of business on September 27, 2018. On October 1, 2018, dividends totaling $3.5 million were paid to shareholders. As of September 30, 2018, accrued dividends on unvested shares, which were included in other liabilities on the consolidated balance sheets, were $0.1 million. Please see Note 13 of the notes to the consolidated financial statements in Item 8 Part II of the Company’s 2017 Annual Report on Form 10-K for more information on the Company’s dividend program. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 9. Related Party Transactions Fox Paine & Company (“Fox Paine”) As of September 30, 2018, Fox Paine beneficially owned shares having approximately 82% 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, and Fox Paine may propose and negotiate transaction fees with the Company, subject to the provisions of the Company’s related party transaction policies including approval of the Company’s Audit Committee of the Board of Directors, for those services from time to time. The Company incurred management fees of $0.6 million during each of the quarters ended September 30, 2018 and 2017, and $1.6 million in each of the nine months ended September 30, 2018 and 2017 as part of the annual management fee paid to Fox Paine. As of September 30, 2018 and December 31, 2017, unpaid management fees, which were included in other liabilities on the consolidated balance sheets, were $0.2 million and $6.8 million, respectively. Fox Paine also performed advisory services for the Company in relation to a transaction whereby one of the Company’s indirect wholly owned subsidiaries became a co-obligor on the Company’s subordinated notes. The advisory services were performed during the first and second quarter of 2018. The total fee for these services was $12.5 million which was paid during June, 2018. Advisory fees were $12.5 million during the nine months ended September 30, 2018. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. 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 In 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, 2018, the Company has funded $35.8 million of this commitment leaving $14.2 million as unfunded. In 2016, the Company entered into a $40 million commitment with an investment manager that provides financing for middle market companies. As of September 30, 2018, the Company has completely funded the $40.0 million commitment. Of this amount, $5.2 million is still recallable. In 2017, the Company entered into a $50 million commitment to purchase an alternative investment vehicle comprised of stressed and distressed securities and structured products. As of September 30, 2018, the Company has funded $29.5 million of this commitment leaving $20.5 million as unfunded. |
Share-Based Compensation Plans
Share-Based Compensation Plans | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Compensation Plans | 11. Share-Based Compensation Plans On June 13, 2018, the Company’s Shareholders approved the Global Indemnity Limited 2018 Share Incentive Plan (“the 2018 Plan”). The purpose of the 2018 Plan is to provide the Company a competitive advantage in attracting, retaining, and motivating officers, employees, consultants and non-employee directors, and to provide the Company with a share plan providing incentives linked to the financial results of the Company’s business and increases in shareholder value. Under the 2018 Plan, the Company may issue up to 2.5 million A ordinary shares pursuant to awards granted under the Plan. The 2018 Plan replaced the Global Indemnity Limited Share Incentive Plan, effective since February 2014, which was set to expire pursuant to its terms on February 9, 2019. Options No stock options were awarded during the quarters ended September 30, 2018 or 2017. No unvested stock options were forfeited during the quarters ended September 30, 2018 or 2017. On March 6, 2018, the Company entered into a Chief Executive Agreement (the “Employment Agreement”) with Cynthia Y. Valko, the Company’s Chief Executive Officer. In accordance with the Employment Agreement, the vesting schedule on the 300,000 stock options issued in 2014 (“Tranche 2 Options”) was modified. The Tranche 2 Options will now vest on each December 31 of 2018, 2019 and 2020 in an amount based on Ms. Valko’s attainment of Return on Equity criteria specified in the Employment Agreement. As a result Under the terms of the Employment Agreement, Ms. Valko was also granted an additional 300,000 Time-Based Options (“Tranche 3 Options”) with an exercise price of $50 per share. Tranche 3 Options vest 1/3 on December 31 of 2018, 2019 and 2020, if Ms. Valko remains employed and in good standing as of such date. Tranche 3 Options expire on the earlier of December 31, 2027 and 90 calendar days after Ms. Valko is neither employed by Global Indemnity nor a member of the Board of Directors. Other than the Tranche 3 Options granted to Ms. Valko, no additional stock options were awarded during the nine months ended September 30, 2018. No stock options were awarded during the nine months ended September 30, 2017. No unvested stock options were forfeited during the nine months ended September 30, 2018 or 2017. Restricted Shares No restricted shares were issued to employees during the quarters ended September 30, 2018 and 2017. During the nine months ended September 30, 2018, the Company granted 38,778 A ordinary shares, with a weighted average grant date value of $40.57 per share, to key employees under the Plan. 11,843 of these shares vested immediately. The remainder will vest as follows: • 16.5%, 16.5%, and 17.0% of the granted stock vest on January 1, 2019, January 1, 2020, and January 1, 2021, respectively. • Subject to Board approval, 50% of granted stock vests 100%, no later than March 15, 2021, following a re-measurement of 2017 results as of December 31, 2020. During the nine months ended September 30, 2017, the Company granted 22,503 A ordinary shares, with a weighted average grant date value of $38.21 per share, to key employees under the Plan. These shares will vest as follows: • 16.5%, 16.5%, and 17.0% of the granted stock vest on January 1, 2018, January 1, 2019, and January 1, 2020, respectively. • Subject to Board approval, 50% of granted stock vests 100%, no later than March 15, 2020, following a re-measurement of 2016 results as of December 31, 2019. During the quarters ended September 30, 2018 and 2017, the Company granted 7,049 and 6,245 A ordinary shares, respectively, at a weighted average grant date value of $37.70 and $42.40 per share, respectively, to non-employee directors of the Company under the Plan. During the nine months ended September 30, 2018 and 2017, the Company granted 23,983 and 19,713 A ordinary shares, respectively, at a weighted average grant date value of $36.90 and $39.82 per share, respectively, to non-employee directors of the Company under the Plan. All of the shares granted to non-employee directors of the Company in 2018 and 2017 were fully vested but are subject to certain restrictions. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 12. 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: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands, except share and per share data) 2018 2017 2018 2017 Net income (loss) $ 3,728 $ (8,924 ) $ 16,621 $ 13,447 Basic earnings per share: Weighted average shares outstanding – basic 14,100,180 17,343,292 14,082,698 17,331,840 Net income (loss) per share $ 0.26 $ (0.51 ) $ 1.18 $ 0.78 Diluted earnings per share: Weighted average shares outstanding – diluted (1) 14,346,585 17,343,292 14,321,113 17,684,519 Net income (loss) per share $ 0.26 $ (0.51 ) $ 1.16 $ 0.76 (1) For the quarter ended September 30, 2017, “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, 2018 2017 2018 2017 Weighted average shares for basic earnings per share 14,100,180 17,343,292 14,082,698 17,331,840 Non-vested restricted stock 83,882 - 74,768 149,490 Options 162,523 - 163,647 203,189 Weighted average shares for diluted earnings per share 14,346,585 17,343,292 14,321,113 17,684,519 If the Company had not incurred a loss in the quarter ended September 30, 2017, 17,721,954 weighted average shares would have been used to compute the diluted loss per share calculation which would have included 164,693 shares of non-vested restricted stock and 213,969 share equivalents for options. The weighted average shares outstanding used to determine dilutive earnings per share for the quarter and nine months ended September 30, 2018 does not include 600,000 shares which were deemed to be anti-dilutive. There were no anti-dilutive shares for the quarter or nine months ended September 30, 2017. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 13. Segment Information The Company manages its business through three business segments. Commercial Lines offers specialty property and casualty products designed for product lines such as Small Business Binding Authority, Property Brokerage, and Programs. Personal Lines offers specialty personal lines and agricultural coverage. Reinsurance Operations provides reinsurance solutions through brokers and primary writers including insurance and reinsurance companies. The following are tabulations of business segment information for the quarters and nine months ended September 30, 2018 and 2017. Quarter Ended September 30, 2018 (Dollars in thousands) Commercial Lines (1) Personal Lines (1) Reinsurance Operations (2) Total Revenues: Gross premiums written $ 63,177 $ 63,072 (6) $ 9,357 $ 135,606 Net premiums written $ 56,161 $ 50,719 $ 9,353 $ 116,233 Net premiums earned $ 56,352 $ 50,841 $ 13,335 $ 120,528 Other income (loss) — 493 (82 ) 411 Total revenues 56,352 51,334 13,253 120,939 Losses and Expenses: Net losses and loss adjustment expenses 31,899 41,316 7,278 80,493 Acquisition costs and other underwriting expenses 22,533 (3) 21,040 (4) 5,107 48,680 Income (loss) from segments $ 1,920 $ (11,022 ) $ 868 $ (8,234 ) Unallocated Items: Net investment income 11,750 Net realized investment gain 5,319 Corporate and other operating expenses (3,475 ) Interest expense (4,924 ) Income before income taxes 436 Income tax benefit 3,292 Net income 3,728 Total assets $ 874,059 $ 526,127 $ 557,860 (5) $ 1,958,046 (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 $77 relating to cessions from Commercial Lines to Reinsurance Operations. (4) Includes federal excise tax of $92 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 ($3) of business written by American Reliable that was ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement. Quarter Ended September 30, 2017 (Dollars in thousands) Commercial Lines (1) Personal Lines (1) Reinsurance Operations (2) Total Revenues: Gross premiums written $ 53,113 $ 60,962 (6) $ 11,979 $ 126,054 Net premiums written $ 46,471 $ 50,607 $ 11,967 $ 109,045 Net premiums earned $ 44,778 $ 52,268 $ 11,573 $ 108,619 Other income — 2,254 40 2,294 Total revenues 44,778 54,522 11,613 110,913 Losses and Expenses: Net losses and loss adjustment expenses 19,095 42,534 20,766 82,395 Acquisition costs and other underwriting expenses 18,237 (3) 22,689 (4) 4,076 45,002 Income (loss) from segments $ 7,446 $ (10,701 ) $ (13,229 ) $ (16,484 ) Unallocated Items: Net investment income 10,134 Net realized investment losses (963 ) Corporate and other operating expenses (4,630 ) Interest expense (4,836 ) Loss before income taxes benefit (16,779 ) Income tax benefit 7,855 Net loss (8,924 ) Total assets $ 911,412 $ 481,357 $ 737,921 (5) $ 2,130,690 (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 $127 relating to cessions from Commercial Lines to Reinsurance Operations. (4) Includes federal excise tax of $262 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 ($1,427) of business written by American Reliable that was ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement. Nine Months Ended September 30, 2018 (Dollars in thousands) Commercial Lines (1) Personal Lines (1) Reinsurance Operations (2) Total Revenues: Gross premiums written $ 186,923 $ 191,782 (6) $ 39,965 $ 418,670 Net premiums written $ 165,817 $ 154,781 $ 39,959 $ 360,557 Net premiums earned $ 155,966 $ 151,333 $ 35,148 $ 342,447 Other income (loss) — 1,468 (179 ) 1,289 Total revenues 155,966 152,801 34,969 343,736 Losses and Expenses: Net losses and loss adjustment expenses 82,023 98,946 14,457 195,426 Acquisition costs and other underwriting expenses 62,789 (3) 65,446 (4) 12,961 141,196 Income (loss) from segments $ 11,154 $ (11,591 ) $ 7,551 $ 7,114 Unallocated Items: Net investment income 34,108 Net realized investment gain 7,833 Corporate and other operating expenses (23,653 ) Interest expense (14,725 ) Income before income taxes 10,677 Income tax benefit 5,944 Net income 16,621 Total assets $ 874,059 $ 526,127 $ 557,860 (5) $ 1,958,046 (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 $367 relating to cessions from Commercial Lines to Reinsurance Operations. (4) Includes federal excise tax of $435 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 ($1,859) of business written by American Reliable that was ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement. Nine Months Ended September 30, 2017 (Dollars in thousands) Commercial Lines (1) Personal Lines (1) Reinsurance Operations (2) Total Revenues: Gross premiums written $ 155,776 $ 192,551 (6) $ 45,372 $ 393,699 Net premiums written $ 137,025 $ 161,979 $ 45,344 $ 344,348 Net premiums earned $ 133,289 $ 164,102 $ 31,427 $ 328,818 Other income 78 5,153 213 5,444 Total revenues 133,367 169,255 31,640 334,262 Losses and Expenses: Net losses and loss adjustment expenses 53,688 120,410 28,558 202,656 Acquisition costs and other underwriting expenses 55,398 (3) 69,281 (4) 10,331 135,010 Income (loss) from segments $ 24,281 $ (20,436 ) $ (7,249 ) $ (3,404 ) Unallocated Items: Net investment income 27,618 Net realized investment losses (850 ) Corporate and other operating expenses (11,045 ) Interest expense (12,065 ) Income before income taxes 254 Income tax benefit 13,193 Net income 13,447 Total assets $ 911,412 $ 481,357 $ 737,921 (5) $ 2,130,690 (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 $366 relating to cessions from Commercial Lines to Reinsurance Operations. (4) Includes federal excise tax of $821 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 ($185) of business written by American Reliable that was ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement. |
Condensed Consolidating Financi
Condensed Consolidating Financial Information Provided in Connection with Outstanding Debt of Subsidiaries | 9 Months Ended |
Sep. 30, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Condensed Consolidating Financial Information Provided in Connection with Outstanding Debt of Subsidiaries | 14. Condensed Consolidating Financial Information Provided in Connection with Outstanding Debt of Subsidiaries The following tables present condensed consolidating balance sheets at September 30, 2018 and December 31, 2017, condensed consolidating statements of operations and condensed consolidating statements of comprehensive income for the quarters and nine months ended September 30, 2018 and 2017, and condensed consolidating statements of cash flows for the nine months ended September 30, 2018 and 2017. GIGI is a 100% owned subsidiary of the Company. See Note 7 for information on the Company’s debt obligations. Condensed Consolidating Balance Sheets at September 30, 2018 (Dollars in thousands) Global Indemnity Limited (Parent co- obligor) Global Indemnity Group, Inc. (Subsidiary co-obligor) Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries (1) Consolidating Adjustments (2) Global Indemnity Limited Consolidated ASSETS Total investments $ 12,251 $ 303,299 $ 1,180,953 $ - $ 1,496,503 Cash and cash equivalents 102 1,904 38,640 - 40,646 Investments in subsidiaries 1,223,997 318,419 30,358 (1,572,774 ) - Due from subsidiaries and affiliates 459 (2,929 ) 2,470 - - Notes receivable – affiliate - 80,049 845,498 (925,547 ) - Interest receivable – affiliate - 3,576 38,029 (41,605 ) - Premiums receivable, net - - 84,641 - 84,641 Reinsurance receivables, net - - 96,534 - 96,534 Funds held by ceding insurers - - 50,805 - 50,805 Federal income taxes receivable - 7,734 3,024 - 10,758 Deferred federal income taxes - 31,201 4,474 - 35,675 Deferred acquisition costs - - 64,538 - 64,538 Intangible assets - - 22,152 - 22,152 Goodwill - - 6,521 - 6,521 Prepaid reinsurance premiums - - 22,976 - 22,976 Receivable for securities sold - - - - - Other assets 7,714 6,171 19,731 (7,319 ) 26,297 Total assets $ 1,244,523 $ 749,424 $ 2,511,344 $ (2,547,245 ) $ 1,958,046 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities: Unpaid losses and loss adjustment expenses $ - $ - $ 608,607 $ - $ 608,607 Unearned premiums - - 297,630 - 297,630 Ceded balances payable - - 16,612 - 16,612 Payable for securities purchased - (2,110 ) 7,052 - 4,942 Contingent commissions - - 8,076 - 8,076 Debt - 289,405 - (7,319 ) 282,086 Notes payable – affiliates 520,498 400,000 5,049 (925,547 ) - Accrued interest payable – affiliates 19,286 20,771 1,548 (41,605 ) - Other liabilities 2,413 11,000 24,354 - 37,767 Total liabilities 542,197 719,066 968,928 (974,471 ) 1,255,720 Shareholders’ equity Total shareholders’ equity 702,326 30,358 1,542,416 (1,572,774 ) 702,326 Total liabilities and shareholders’ equity $ 1,244,523 $ 749,424 $ 2,511,344 $ (2,547,245 ) $ 1,958,046 (1) Includes all other subsidiaries of Global Indemnity Limited and eliminations (2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments Condensed Consolidating Balance Sheets at December 31, 2017 (Dollars in thousands) Global Indemnity Limited (Parent co-obligor) Global Indemnity Group, Inc. (Subsidiary co-obligor) Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries (1) Consolidating Adjustments (2) Global Indemnity Limited Consolidated ASSETS Total investments $ 13,118 $ 309,891 $ 1,136,477 $ - $ 1,459,486 Cash and cash equivalents 11,089 7,749 55,576 - 74,414 Investments in subsidiaries 1,207,590 321,194 62,950 (1,591,734 ) - Due from subsidiaries and affiliates 4,618 (6,513 ) 1,895 - - Notes receivable – affiliate - 80,049 845,498 (925,547 ) - Interest receivable – affiliate - 2,721 30,642 (33,363 ) - Premiums receivable, net - - 84,386 - 84,386 Reinsurance receivables, net - - 105,060 - 105,060 Funds held by ceding insurers - - 45,300 - 45,300 Federal income taxes receivable - 7,560 2,489 283 10,332 Deferred federal income taxes - 21,533 4,833 (170 ) 26,196 Deferred acquisition costs - - 61,647 - 61,647 Intangible assets - - 22,549 - 22,549 Goodwill - - 6,521 - 6,521 Prepaid reinsurance premiums - - 28,851 - 28,851 Receivable for securities sold - (403 ) 1,946 - 1,543 Other assets 20,681 52,806 21,897 (20,000 ) 75,384 Total assets $ 1,257,096 $ 796,587 $ 2,518,517 $ (2,570,531 ) $ 2,001,669 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities: Unpaid losses and loss adjustment expenses $ - $ - $ 634,664 $ - $ 634,664 Unearned premiums - - 285,397 - 285,397 Ceded balances payable - - 10,851 - 10,851 Payable for securities purchased - - - - - Contingent commissions - - 7,984 - 7,984 Debt 222,483 72,230 - - 294,713 Notes payable – affiliates 290,498 630,000 5,049 (925,547 ) - Accrued interest payable – affiliates 12,465 19,574 1,324 (33,363 ) - Other liabilities 13,256 11,832 44,578 (20,000 ) 49,666 Total liabilities 538,702 733,636 989,847 (978,910 ) 1,283,275 Shareholders’ equity Total shareholders’ equity 718,394 62,951 1,528,670 (1,591,621 ) 718,394 Total liabilities and shareholders’ equity $ 1,257,096 $ 796,587 $ 2,518,517 $ (2,570,531 ) $ 2,001,669 (1) Includes all other subsidiaries of Global Indemnity Limited and eliminations (2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments Condensed Consolidating Statements of Operations for the Quarter Ended September 30, 2018 (Dollars in thousands) Global Indemnity Limited (Parent co-obligor) Global Indemnity Group, Inc. (Subsidiary co-obligor) Other Global Indemnity Limited Subsidiaries and Eliminations (non-co- obligor subsidiaries (1) Consolidating Adjustments (2) Global Indemnity Limited Consolidated Revenues: Net premiums earned $ - $ - $ 120,528 $ - $ 120,528 Net investment income 146 2,492 18,318 (9,206 ) 11,750 Net realized investment gains (losses) (101 ) 5,321 99 - 5,319 Other income (loss) - (12 ) 423 - 411 Total revenues 45 7,801 139,368 (9,206 ) 138,008 Losses and Expenses: Net losses and loss adjustment expenses - - 80,493 - 80,493 Acquisition costs and other underwriting expenses - - 48,680 - 48,680 Corporate and other operating expenses 982 2,089 404 - 3,475 Interest expense 2,017 12,035 78 (9,206 ) 4,924 Income (loss) before equity in net income (loss) of subsidiaries and income taxes (2,954 ) (6,323 ) 9,713 - 436 Equity in net income (loss) of subsidiaries 6,682 (3,995 ) (8,434 ) 5,747 - Income (loss) before income taxes 3,728 (10,318 ) 1,279 5,747 436 Income tax benefit - (1,884 ) (1,408 ) - (3,292 ) Net income (loss) $ 3,728 $ (8,434 ) $ 2,687 $ 5,747 $ 3,728 (1) Includes all other subsidiaries of Global Indemnity Limited and eliminations (2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments Condensed Consolidating Statements of Operations for the Quarter Ended September 30, 2017 (Dollars in thousands) Global Indemnity Limited (Parent co-obligor) Global Indemnity Group, Inc. (Subsidiary co-obligor) Other Global Indemnity Limited Subsidiaries and Eliminations (non-co- obligor subsidiaries (1) Consolidating Adjustments (2) Global Indemnity Limited Consolidated Revenues: Net premiums earned $ - $ - $ 108,619 $ - $ 108,619 Net investment income 104 2,321 19,351 (11,642 ) 10,134 Net realized investment gains (losses) 23 (1,229 ) 243 - (963 ) Other income - 1,738 556 - 2,294 Total revenues 127 2,830 128,769 (11,642 ) 120,084 Losses and Expenses: Net losses and loss adjustment expenses - - 82,395 - 82,395 Acquisition costs and other underwriting expenses - - 45,002 - 45,002 Corporate and other operating expenses 2,209 (6,441 ) 8,862 - 4,630 Interest expense 5,176 11,237 65 (11,642 ) 4,836 Loss before equity in net loss of subsidiaries and income taxes (7,258 ) (1,966 ) (7,555 ) - (16,779 ) Equity in net loss of subsidiaries (1,666 ) (12,523 ) (14,822 ) 29,011 - Loss before income taxes (8,924 ) (14,489 ) (22,377 ) 29,011 (16,779 ) Income tax benefit - (211 ) (7,644 ) - (7,855 ) Net loss $ (8,924 ) $ (14,278 ) $ (14,733 ) $ 29,011 $ (8,924 ) (1) Includes all other subsidiaries of Global Indemnity Limited and eliminations (2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments Condensed Consolidating Statements of Operations for the Nine Months Ended September 30, 2018 (Dollars in thousands) Global Indemnity Limited (Parent co-obligor) Global Indemnity Group, Inc. (Subsidiary co-obligor) Other Global Indemnity Limited Subsidiaries and Eliminations (non-co- obligor subsidiaries (1) Consolidating Adjustments (2) Global Indemnity Limited Consolidated Revenues: Net premiums earned $ - $ - $ 342,447 $ - $ 342,447 Net investment income 483 8,404 58,258 (33,037 ) 34,108 Net realized investment gains (losses) (121 ) 8,167 (213 ) - 7,833 Other income - - 1,289 - 1,289 Total revenues 362 16,571 401,781 (33,037 ) 385,677 Losses and Expenses: Net losses and loss adjustment expenses - - 195,426 - 195,426 Acquisition costs and other underwriting expenses - - 141,196 - 141,196 Corporate and other operating expenses 9,959 12,734 960 - 23,653 Interest expense 12,715 34,773 274 (33,037 ) 14,725 Income (loss) before equity in net income (loss) of subsidiaries and income taxes (22,312 ) (30,936 ) 63,925 - 10,677 Equity in net income (loss) of subsidiaries 38,933 6,770 (21,335 ) (24,368 ) - Income (loss) before income taxes 16,621 (24,166 ) 42,590 (24,368 ) 10,677 Income tax expense (benefit) - (2,831 ) (3,226 ) 113 (5,944 ) Net income (loss) $ 16,621 $ (21,335 ) $ 45,816 $ (24,481 ) $ 16,621 (1) Includes all other subsidiaries of Global Indemnity Limited and eliminations (2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments Condensed Consolidating Statements of Operations for the Nine Months Ended September 30, 2017 (Dollars in thousands) Global Indemnity Limited (Parent co-obligor) Global Indemnity Group, Inc. (Subsidiary co-obligor) Other Global Indemnity Limited Subsidiaries and Eliminations (non-co- obligor subsidiaries (1) Consolidating Adjustments (2) Global Indemnity Limited Consolidated Revenues: Net premiums earned $ - $ - $ 328,818 $ - $ 328,818 Net investment income 256 5,105 54,316 (32,059 ) 27,618 Net realized investment gains (losses) (226 ) (1,830 ) 1,206 - (850 ) Other income - 3,514 1,930 - 5,444 Total revenues 30 6,789 386,270 (32,059 ) 361,030 Losses and Expenses: Net losses and loss adjustment expenses - - 202,656 - 202,656 Acquisition costs and other underwriting expenses - - 135,010 - 135,010 Corporate and other operating expenses 3,709 (12,104 ) 19,440 - 11,045 Interest expense 12,769 31,087 268 (32,059 ) 12,065 Income (loss) before equity in net income (loss) of subsidiaries and income taxes (16,448 ) (12,194 ) 28,896 - 254 Equity in net income (loss) of subsidiaries 29,895 (14,211 ) (22,781 ) 7,097 - Income (loss) before income taxes 13,447 (26,405 ) 6,115 7,097 254 Income tax benefit - (4,057 ) (9,136 ) - (13,193 ) Net income (loss) $ 13,447 $ (22,348 ) $ 15,251 $ 7,097 $ 13,447 (1) Includes all other subsidiaries of Global Indemnity Limited and eliminations (2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments Condensed Consolidating Statements of Comprehensive Income for the Quarter Ended September 30, 2018 (Dollars in thousands) Global Indemnity Limited (Parent co-obligor) Global Indemnity Group, Inc. (Subsidiary co-obligor) Other Global Indemnity Limited Subsidiaries and Eliminations (non-co- obligor subsidiaries (1) Consolidating Adjustments (2) Global Indemnity Limited Consolidated Net income (loss) $ 3,728 $ (8,434 ) $ 2,687 $ 5,747 $ 3,728 Other comprehensive income (loss), net of tax: Unrealized holding (losses) (63 ) (845 ) (716 ) - (1,624 ) Equity in other comprehensive income (loss) of unconsolidated subsidiaries (1,392 ) (603 ) (789 ) 2,784 - Portion of other-than-temporary impairment losses recognized in other comprehensive income (losses) - - 7 - 7 Reclassification adjustment for (gains) losses included in net income (loss) 101 659 (43 ) - 717 Unrealized foreign currency translation (losses) - - (454 ) - (454 ) Other comprehensive income (loss), net of tax (1,354 ) (789 ) (1,995 ) 2,784 (1,354 ) Comprehensive income (loss), net of tax $ 2,374 $ (9,223 ) $ 692 $ 8,531 $ 2,374 (1) Includes all other subsidiaries of Global Indemnity Limited and eliminations (2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments Condensed Consolidating Statements of Comprehensive Income for the Quarter Ended September 30, 2017 (Dollars in thousands) Global Indemnity Limited (Parent co-obligor) Global Indemnity Group, Inc. (Subsidiary co-obligor) Other Global Indemnity Limited Subsidiaries and Eliminations (non-co- obligor subsidiaries (1) Consolidating Adjustments (2) Global Indemnity Limited Consolidated Net income (loss) $ (8,924 ) $ (14,278 ) $ (14,733 ) $ 29,011 $ (8,924 ) Other comprehensive income (loss), net of tax: Unrealized holding gains 51 1,983 1,345 7 3,386 Equity in other comprehensive income (loss) of unconsolidated subsidiaries 4,071 397 2,846 (7,314 ) - Portion of other-than-temporary impairment losses recognized in other comprehensive income (losses) - - (1 ) - (1 ) Reclassification adjustment for (gains) losses included in net income (loss) (23 ) 561 (97 ) - 441 Unrealized foreign currency translation gains (losses) - (95 ) 368 - 273 Other comprehensive income (loss), net of tax 4,099 2,846 4,461 (7,307 ) 4,099 Comprehensive income (loss), net of tax $ (4,825 ) $ (11,432 ) $ (10,272 ) $ 21,704 $ (4,825 ) (1) Includes all other subsidiaries of Global Indemnity Limited and eliminations (2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments Condensed Consolidating Statements of Comprehensive Income for the Nine Months Ended September 30, 2018 (Dollars in thousands) Global Indemnity Limited (Parent co-obligor) Global Indemnity Group, Inc. (Subsidiary co-obligor) Other Global Indemnity Limited Subsidiaries and Eliminations (non-co- obligor subsidiaries (1) Consolidating Adjustments (2) Global Indemnity Limited Consolidated Net income (loss) $ 16,621 $ (21,335 ) $ 45,816 $ (24,481 ) $ 16,621 Other comprehensive income (loss), net of tax: Unrealized holding (losses) (210 ) (2,930 ) (19,492 ) - (22,632 ) Equity in other comprehensive income (loss) of unconsolidated subsidiaries (22,695 ) (9,633 ) (11,515 ) 43,843 - Portion of other-than-temporary impairment losses recognized in other comprehensive income (losses) - - (1 ) - (1 ) Reclassification adjustment for (gains) losses included in net income 121 1,048 234 - 1,403 Unrealized foreign currency translation (losses) - - (1,554 ) - (1,554 ) Other comprehensive income (loss), net of tax (22,784 ) (11,515 ) (32,328 ) 43,843 (22,784 ) Comprehensive income (loss), net of tax $ (6,163 ) $ (32,850 ) $ 13,488 $ 19,362 $ (6,163 ) (1) Includes all other subsidiaries of Global Indemnity Limited and eliminations (2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments Condensed Consolidating Statements of Comprehensive Income for the Nine Months Ended September 30, 2017 (Dollars in thousands) Global Indemnity Limited (Parent co-obligor) Global Indemnity Group, Inc. (Subsidiary co-obligor) Other Global Indemnity Limited Subsidiaries and Eliminations (non-co- obligor subsidiaries (1) Consolidating Adjustments (2) Global Indemnity Limited Consolidated Net income (loss) $ 13,447 $ (22,348 ) $ 15,251 $ 7,097 $ 13,447 Other comprehensive income (loss), net of tax: Unrealized holding gains (losses) (193 ) 5,806 5,084 22 10,719 Equity in other comprehensive income (loss) of unconsolidated subsidiaries 10,670 1,586 7,461 (19,717 ) - Portion of other-than-temporary impairment losses recognized in other comprehensive income (losses) - - (2 ) - (2 ) Reclassification adjustment for (gains) losses included in net income (loss) 226 (121 ) (893 ) - (788 ) Unrealized foreign currency translation gains - 190 584 - 774 Other comprehensive income (loss), net of tax 10,703 7,461 12,234 (19,695 ) 10,703 Comprehensive income (loss), net of tax $ 24,150 $ (14,887 ) $ 27,485 $ (12,598 ) $ 24,150 (1) Includes all other subsidiaries of Global Indemnity Limited and eliminations (2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments Condensed Consolidating Statements of Cash Flows at September 30, 2018 (Dollars in thousands) Global Indemnity Limited (Parent co-obligor) Global Indemnity Group, Inc. (Subsidiary co-obligor) Other Global Indemnity Limited Subsidiaries and Eliminations (non-co- obligor subsidiaries (1) Global Indemnity Limited Consolidated Cash flows from operating activities: Net cash provided by (used for) operating activities $ (19,280 ) $ (618 ) $ 65,769 $ 45,871 Cash flows from investing activities: Proceeds from sale of fixed maturities 28,118 44,760 156,484 229,362 Proceeds from sale of equity securities - 28,141 - 28,141 Proceeds from maturity of fixed maturities 5,431 7,600 30,272 43,303 Proceeds from limited partnerships - 1,058 7,294 8,352 Amounts received in connection with derivatives - 7,599 - 7,599 Purchases of fixed maturities (32,933 ) (39,314 ) (256,755 ) (329,002 ) Purchases of equity securities - (22,931 ) - (22,931 ) Purchases of other invested assets - (15,800 ) - (15,800 ) Acquisition of business - (3,515 ) - (3,515 ) Net cash used for investing activities 616 7,598 (62,705 ) (54,491 ) Cash flows from financing activities: Net borrowings (repayments) under margin borrowing facility - (12,825 ) - (12,825 ) Proceeds / (issuance) of notes to affiliates 230,000 (230,000 ) - - Debt restructuring (230,000 ) 230,000 - - Dividends paid to shareholders (10,510 ) - - (10,510 ) Dividends from subsidiaries 20,000 - (20,000 ) - Capital contribution to a subsidiary - - - - Purchase of A ordinary shares (1,813 ) - - (1,813 ) Net cash provided by (used for) financing activities 7,677 (12,825 ) (20,000 ) (25,148 ) Net change in cash and cash equivalents (10,987 ) (5,845 ) (16,936 ) (33,768 ) Cash and cash equivalents at beginning of period 11,089 7,749 55,576 74,414 Cash and cash equivalents at end of period $ 102 $ 1,904 $ 38,640 $ 40,646 (1) Includes all other subsidiaries of Global Indemnity Limited and eliminations (2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments Condensed Consolidating Statements of Cash Flows at September 30, 2017 (Dollars in thousands) Global Indemnity Limited (Parent co-obligor) Global Indemnity Group, Inc. (Subsidiary co-obligor) Other Global Indemnity Limited Subsidiaries and Eliminations (non-co- obligor subsidiaries (1) Global Indemnity Limited Consolidated Cash flows from operating activities: Net cash provided by (used for) operating activities $ (10,359 ) $ (19,634 ) $ 18,809 $ (11,184 ) Cash flows from investing activities: Proceeds from sale of fixed maturities 12,389 61,296 668,544 742,229 Proceeds from sale of equity securities - 24,483 - 24,483 Proceeds from maturity of fixed maturities 4,750 42,928 64,942 112,620 Proceeds from limited partnerships - 5,941 4,626 10,567 Amounts paid in connection with derivatives - (2,500 ) - (2,500 ) Purchases of fixed maturities (32,044 ) (248,518 ) (698,512 ) (979,074 ) Purchases of equity securities - (28,631 ) - (28,631 ) Purchases of other invested assets - (16,500 ) (1,500 ) (18,000 ) Net cash provided by (used for) investing activities (14,905 ) (161,501 ) 38,100 (138,306 ) Cash flows from financing activities: Net borrowings (repayments) under margin borrowing facility - 9,872 - 9,872 Proceeds from issuance of subordinated notes 130,000 - - 130,000 Debt issuance cost (4,246 ) - - (4,246 ) Proceeds / (issuance) of notes to affiliates - 120,000 (120,000 ) - Dividends from subsidiaries - 56,265 (56,265 ) - Capital contribution (96,000 ) - 96,000 - Purchase of A ordinary shares (1,159 ) - - (1,159 ) Net cash provided by (used for) financing activities 28,595 186,137 (80,265 ) 134,467 Net change in cash and cash equivalents 3,331 5,002 (23,356 ) (15,023 ) Cash and cash equivalents at beginning of period 91 5,536 69,483 75,110 Cash and cash equivalents at end of period $ 3,422 $ 10,538 $ 46,127 $ 60,087 (1) Includes all other subsidiaries of Global Indemnity Limited and eliminations (2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Changes And Error Corrections [Abstract] | |
New Accounting Pronouncements | 15. New Accounting Pronouncements Accounting Standards Adopted in 2018 In July, 2018, the FASB issued new accounting guidance that affected a wide variety of topics in the Codification. The amendments in this update represent changes to clarify, correct errors in, or make minor improvements to the Codification. This amendment is meant to make the Codification easier to understand and easier to apply by eliminating inconsistencies and providing clarification. Some of the amendments in this guidance are effective immediately with the remainder effective for annual periods beginning after December 31, 2018. The adoption of this new accounting guidance did not have a material impact to the Company’s financial condition, results of operation, or cash flows. In March, 2018, the FASB issued new accounting guidance whereby the SEC provided clarification to address any uncertainty or diversity of views in practice related to the application of ASC Topic 740, Income Taxes, in situations where a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting under ASC Topic 740 for certain income tax effects of the TCJA for the reporting period in which the Act was enacted. This guidance is effective immediately. Accordingly, provisional estimates were recorded based on the Company’s initial analysis and current interpretation of the legislation and disclosed in the notes above. The adoption of this new accounting guidance did not have a material impact to the Company’s financial condition, results of operation, or cash flows. In February, 2018, the FASB issued new accounting guidance which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the TCJA. The amendments in this Update also require certain disclosures related to stranded tax effects. The guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. The Company early adopted the provisions of this new guidance on a retrospective basis as of January 1, 2018 and made an election to reclassify, in its entirety, all stranded tax effects related to TCJA. As a result, the Company recorded a cumulative effect adjustment of $0.1 million which was reclassified from accumulated other comprehensive income to retained earnings. The adoption of this new accounting guidance did not have a material impact to the Company’s financial condition, results of operation, or cash flows. In May, 2017, the FASB issued updated accounting guidance which clarified whether changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. This guidance is effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company adopted this guidance during the first quarter of 2018. The provisions of this guidance were adopted on a prospective basis. As a result of adopting this guidance, stock based compensation was increased by $0.2 million and $0.3 million during the quarter and nine months ended September 30, 2018, respectively. The adjustment was due to the Company entering into an Employment Agreement with its Chief Executive Officer which modified the vesting schedule on 300,000 options issued in 2014. The Company did not record a cumulative effect adjustment to shareholders’ equity as a result of adopting this guidance and the adoption of this new accounting guidance did not have a material impact to the Company’s financial condition, results of operation, or cash flows. In October, 2016, the FASB issued new accounting guidance regarding intra-entity transfers of assets other than inventory. Prior to adoption, the tax effects of intra-entity asset transfers (intercompany sales) were deferred until the transferred asset was sold to a third party or otherwise recovered through use. This is an exception to the principle in ASC 740, Income Taxes, that generally requires comprehensive recognition of current and deferred income taxes. The new guidance eliminates the exception for all intra-entity sales of assets other than inventory. As a result, a reporting entity would recognize the tax expense from the sale of the asset in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. Upon adoption on January 1, 2018, the Company applied the provisions of this guidance on a modified retrospective basis resulting in a cumulative-effect adjustment which increased retained earnings by $0.2 million. The adoption of this new accounting guidance did not have a material impact to the Company’s financial condition, results of operation, or cash flows. In August, 2016, the FASB issued new accounting guidance regarding the classification of certain cash receipts and cash payments within the statements 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. Upon adoption on January 1, 2018, the Company made an accounting policy election to use the cumulative earnings approach for presenting distributions received from equity method investees. Under this approach, distributions up to the amount of cumulative equity in earnings recognized will be treated as returns on investment and presented in operating activities and those in excess of that amount will be treated as returns of investment and presented in the investing section. Prior to adoption, all distributions received from equity method investees were presented in the investing section of the consolidated statements of cash flows. The other cash flow issues addressed by the new guidance did not impact the Company. The provisions of this accounting guidance were adopted on a retrospective basis. The adoption of this new accounting guidance did not have a material impact to the Company’s financial condition, results of operation, 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. Upon adoption on January 1, 2018, the Company recorded a cumulative effect adjustment, net of tax, of $10.0 million which reduced accumulated other comprehensive income and increased retained earnings. During the quarter and nine months ended September 30, 2018, net realized investment gains (losses) included a gain of $2.7 million and loss of $1.4 million, respectively, related to the change in the fair value of equity investments in accordance with this new accounting guidance. In May, 2014, the FASB issued new accounting guidance regarding the recognition of revenue from customers arising from the transfer of goods and services. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance is effective for public business entities for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The Company adopted the standard and all related amendments using the modified retrospective method. Long and short duration insurance contracts, which comprise the majority of the Company’s revenues, are excluded from this accounting guidance. As such, revenue within the scope of the new guidance primarily includes fee income. The adoption of this new accounting guidance did not have a material impact to the Company’s financial condition, results of operation, or cash flows. There were no material changes in the timing or measurement of revenues based upon the guidance. As a result, there is no cumulative effect on retained earnings. Recently Issued Accounting Guidance Not Yet Adopted In August, 2018, the FASB issued new accounting guidance which removed, modified, and added certain disclosures related to Topic 820, Fair Value. This guidance is effective for all fiscal years beginning after December 15, 2019 including interim periods within those fiscal years. The Company does not expect the new guidance to have a material impact on its financial condition, results of operations, or cash flows. In July, 2018, the FASB issued new accounting guidance related to Update 2016-02 Leases (Topic 842) which clarified or corrected unintended application of the new guidance in Update 2016-02. It also provided entities with an additional and optional transition method to adopt the new lease standard. Under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative effect adjustment to the opening balance sheet of retained earnings. In addition, the amendments in this update also provide lessors with a practical expedient to not separate non-lease components from the associated lease components, and instead, to account for those components as a single component if the non-lease component otherwise would be accounted for under the new revenue guidance, Topic 606. The guidance is effective for 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 the balance sheet and opening retained earnings. The Company expects the new guidance to have minimal impact on the Consolidated Statement of Operations or Consolidated Statement of Cash Flows. In June, 2018, the FASB issued new accounting guidance which expanded the scope of Accounting Standards Codification (“ASC”) Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. This guidance is effective for fiscal years beginning after December 15, 2018 including interim periods. The Company does not anticipate the new guidance having a material impact on its financial condition, results of operations, or cash flows. Please see Note 22 of the notes to the consolidated financial statements in Item 8 Part II of the Company’s 2017 Annual Report on Form 10-K for more information on accounting pronouncements issued in 2017 which have not been implemented in 2018. |
Principles of Consolidation a_2
Principles of Consolidation and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Business Segments | The Company manages its business through three business segments: Commercial Lines, Personal Lines, and Reinsurance Operations. The Company’s Commercial Lines offers specialty property and casualty insurance products in the excess and surplus lines marketplace. The Company manages its Commercial Lines by differentiating them into four 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; 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; and Vacant Express, which insures dwellings which are currently vacant, undergoing renovation, or are under construction and is distributed through aggregators, brokers, and retail agents. 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 offers specialty personal lines and agricultural coverage through general and specialty agents with specific binding authority on an admitted basis. Collectively, the Company’s U.S. insurance subsidiaries are licensed in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. The Commercial Lines and Personal Lines segments comprise the Company’s U.S. Insurance Operations (‘Insurance Operations”). 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 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. |
Intercompany Balances and Transactions | 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, 2018 and 2017 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 2017 Annual Report on Form 10-K. On January 1, 2018, the Company adopted new accounting guidance which 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. Upon adoption, the Company recorded a cumulative effect adjustment, net of tax, of $10.0 million which reduced accumulated other comprehensive income and increased retained earnings. During the quarter and nine months ended September 30, 2018, net realized investment gains (losses) included a gain of $2.7 million and a loss of $1.4 million, respectively, related to the change in the fair value of equity investments in accordance with this new accounting guidance. In addition, under the new guidance, equity investments, are no longer classified into different categories as either trading or available for sale. Prior to the adoption of this new guidance, equity securities were previously classified as available for sale. On January 1, 2018, the Company adopted new accounting guidance regarding the classification of certain cash receipts and cash payments within the statement of cash flows. Upon adoption, the Company made a policy election to use the cumulative earnings approach for presenting distributions received from equity method investees. Under this approach, distributions up to the amount of cumulative equity in earnings recognized will be treated as returns on investment and presented in operating activities and those in excess of that amount will be treated as returns of investment and presented in the investing section. Prior to adoption, all distributions received from equity method investees were presented in the investing section of the consolidated statements of cash flows. The provisions of this accounting guidance were adopted on a retrospective basis. As a result, the consolidated statement of cash flows for the nine months ended September 30, 2017 that was included in the Form 10-Q for the nine months ended September 30, 2017 was restated. For the nine months ended September 30, 2017, net cash flows from operating activities was increased by $2.4 million and net cash flows from investing activities was reduced by $2.4 million. 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. |
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 in the consolidated statements 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 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 terms and conditions sourced from commercial vendors. Bonds with similar characteristics are grouped into specific sectors. Both asset classes use standard inputs and utilize bid price or spread, quotes, benchmark yields, discount rates, market data feeds, and financial statements. • 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 benchmark 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, an integrated evaluation system is used. The pricing models incorporate trades, spreads, benchmark curves, market data feeds, new issue data, and trustee reports. • 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, various external analytical products are utilized and purchased from commercial vendors. |
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. 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 limited partnership distributions, and that amount is then added to the actual income taxes on net realized gains and losses, discrete items and limited partnership distributions. 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. |
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, 2018 | |
Investments Schedule [Abstract] | |
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, 2018 and December 31, 2017: (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Other than temporary impairments recognized in AOCI (1) As of September 30, 2018 Fixed maturities: U.S. treasury and agency obligations $ 81,565 $ 156 $ (2,051 ) $ 79,670 $ - Obligations of states and political subdivisions 100,494 131 (998 ) 99,627 - Mortgage-backed securities 138,442 280 (3,878 ) 134,844 - Asset-backed securities 201,317 46 (1,641 ) 199,722 (1 ) Commercial mortgage-backed securities 186,081 3 (5,876 ) 180,208 - Corporate bonds 466,198 235 (9,601 ) 456,832 - Foreign corporate bonds 125,559 33 (2,814 ) 122,778 - Total fixed maturities 1,299,656 884 (26,859 ) 1,273,681 (1 ) Common stock 137,554 - - 137,554 - Other invested assets 85,268 - - 85,268 - Total $ 1,522,478 $ 884 $ (26,859 ) $ 1,496,503 $ (1 ) (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 Unrealized Gains Gross Unrealized Losses Estimated Fair Value Other than temporary impairments recognized in AOCI (1) As of December 31, 2017 Fixed maturities: U.S. treasury and agency obligations $ 105,311 $ 562 $ (1,193 ) $ 104,680 $ - Obligations of states and political subdivisions 94,947 441 (274 ) 95,114 - Mortgage-backed securities 150,237 404 (1,291 ) 149,350 - Asset-backed securities 203,827 267 (393 ) 203,701 (1 ) Commercial mortgage-backed securities 140,761 101 (1,067 ) 139,795 - Corporate bonds 422,486 2,295 (1,391 ) 423,390 - Foreign corporate bonds 125,575 377 (545 ) 125,407 - Total fixed maturities 1,243,144 4,447 (6,154 ) 1,241,437 (1 ) Common stock 124,915 18,574 (3,260 ) 140,229 - Other invested assets 77,820 - - 77,820 - Total $ 1,445,879 $ 23,021 $ (9,414 ) $ 1,459,486 $ (1 ) (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, 2018, 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 Fair Value Due in one year or less $ 84,071 $ 83,626 Due in one year through five years 440,787 433,350 Due in five years through ten years 238,245 231,360 Due in ten years through fifteen years 6,501 6,331 Due after fifteen years 4,212 4,240 Mortgage-backed securities 138,442 134,844 Asset-backed securities 201,317 199,722 Commercial mortgage-backed securities 186,081 180,208 Total $ 1,299,656 $ 1,273,681 |
Summary of Securities With Gross Unrealized Losses | The following table contains an analysis of the Company’s fixed income securities with gross unrealized losses, categorized by the period that the securities were in a continuous loss position as of September 30, 2018. Due to new accounting guidance implemented in 2018 regarding the treatment of gains and losses on equity securities, common stock is no longer included in the table: Less than 12 months 12 months or longer (1) Total (Dollars in thousands) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fixed maturities: U.S. treasury and agency obligations $ 16,462 $ (279 ) $ 61,137 $ (1,772 ) $ 77,599 $ (2,051 ) Obligations of states and political subdivisions 62,981 (778 ) 8,849 (220 ) 71,830 (998 ) Mortgage-backed securities 90,574 (2,563 ) 35,442 (1,315 ) 126,016 (3,878 ) Asset-backed securities 138,627 (1,247 ) 23,861 (394 ) 162,488 (1,641 ) Commercial mortgage-backed securities 97,440 (3,249 ) 77,775 (2,627 ) 175,215 (5,876 ) Corporate bonds 385,878 (8,625 ) 34,749 (976 ) 420,627 (9,601 ) Foreign corporate bonds 83,304 (2,224 ) 28,124 (590 ) 111,428 (2,814 ) Total fixed maturities $ 875,266 $ (18,965 ) $ 269,937 $ (7,894 ) $ 1,145,203 $ (26,859 ) (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, 2017: Less than 12 months 12 months or longer (1) Total (Dollars in thousands) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fixed maturities: U.S. treasury and agency obligations $ 79,403 $ (962 ) $ 17,469 $ (231 ) $ 96,872 $ (1,193 ) Obligations of states and political subdivisions 34,537 (149 ) 12,060 (125 ) 46,597 (274 ) Mortgage-backed securities 127,991 (1,247 ) 1,866 (44 ) 129,857 (1,291 ) Asset-backed securities 97,817 (371 ) 6,423 (22 ) 104,240 (393 ) Commercial mortgage-backed securities 83,051 (523 ) 27,976 (544 ) 111,027 (1,067 ) Corporate bonds 147,064 (754 ) 53,024 (637 ) 200,088 (1,391 ) Foreign corporate bonds 53,320 (305 ) 20,582 (240 ) 73,902 (545 ) Total fixed maturities 623,183 (4,311 ) 139,400 (1,843 ) 762,583 (6,154 ) Common stock 32,759 (3,260 ) - - 32,759 (3,260 ) Total $ 655,942 $ (7,571 ) $ 139,400 $ (1,843 ) $ 795,342 $ (9,414 ) (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, 2018 and 2017: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2018 2017 2018 2017 Fixed maturities: OTTI losses, gross $ (24 ) $ - $ (395 ) $ (31 ) Portion of loss recognized in other comprehensive income (pre-tax) - - - - Net impairment losses on fixed maturities recognized in earnings (24 ) - (395 ) (31 ) Equity securities - (1,020 ) - (1,677 ) Total $ (24 ) $ (1,020 ) $ (395 ) $ (1,708 ) |
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, 2018 and 2017 for which a portion of the OTTI loss was recognized in other comprehensive income. Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2018 2017 2018 2017 Balance at beginning of period $ 13 $ 16 $ 13 $ 31 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 - (3 ) - (18 ) Balance at end of period $ 13 $ 13 $ 13 $ 13 |
Schedule of Accumulated Other Comprehensive Income, Net of Tax | Accumulated other comprehensive income, net of tax, as of September 30, 2018 and December 31, 2017 was as follows: (Dollars in thousands) September 30, 2018 December 31, 2017 Net unrealized gains (losses)from: Fixed maturities $ (25,975 ) $ (1,707 ) Common stock - 15,314 Foreign currency fluctuations (1,003 ) 551 Deferred taxes 3,149 (5,175 ) Accumulated other comprehensive income, net of tax $ (23,829 ) $ 8,983 |
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, 2018 and 2017: Quarter Ended September 30, 2018 (Dollars In Thousands) Unrealized Gains and Losses on Available for Sale Securities Foreign Currency Items Accumulated Other Comprehensive Income Beginning balance, net of tax $ (21,926 ) $ (549 ) $ (22,475 ) Other comprehensive loss before reclassification, before tax (1,945 ) (454 ) (2,399 ) Amounts reclassified from accumulated other comprehensive income (loss), before tax 835 - 835 Other comprehensive loss, before tax (1,110 ) (454 ) (1,564 ) Income tax benefit related to items of OCI 210 - 210 Cumulative effect adjustment, net of tax - - - Ending balance, net of tax $ (22,826 ) $ (1,003 ) $ (23,829 ) Quarter Ended September 30, 2017 (Dollars In Thousands) Unrealized Gains and Losses on Available for Sale Securities Foreign Currency Items Accumulated Other Comprehensive Income Beginning balance, net of tax $ 5,549 $ 437 $ 5,986 Other comprehensive income before reclassification, before tax 4,486 548 5,034 Amounts reclassified from accumulated other comprehensive income (loss), before tax 923 (326 ) 597 Other comprehensive income, before tax 5,409 222 5,631 Income Tax (expense) benefit related to items of OCI (1,583 ) 51 (1,532 ) Cumulative effect adjustment, net of tax Ending balance, net of tax $ 9,375 $ 710 $ 10,085 Nine Months Ended September 30, 2018 (Dollars In Thousands) Unrealized Gains and Losses on Available for Sale Securities Foreign Currency Items Accumulated Other Comprehensive Income Beginning balance, net of tax $ 8,272 $ 711 $ 8,983 Other comprehensive loss before reclassification, before tax (25,928 ) (1,554 ) (27,482 ) Amounts reclassified from accumulated other comprehensive income (loss), before tax 1,660 - 1,660 Other comprehensive loss, before tax (24,268 ) (1,554 ) (25,822 ) Income Tax benefit related to items of OCI 3,038 - 3,038 Cumulative effect adjustment, net of tax (9,868 ) (160 ) (10,028 ) Ending balance, net of tax $ (22,826 ) $ (1,003 ) $ (23,829 ) Nine Months Ended September 30, 2017 (Dollars In Thousands) Unrealized Gains and Losses on Available for Sale Securities Foreign Currency Items Accumulated Other Comprehensive Income Beginning balance, net of tax $ (554 ) $ (64 ) $ (618 ) Other comprehensive income before reclassification, before tax 14,675 1,212 15,887 Amounts reclassified from accumulated other comprehensive income (loss), before tax (830 ) (336 ) (1,166 ) Other comprehensive income, before tax 13,845 876 14,721 Income Tax (expense) related to items of OCI (3,916 ) (102 ) (4,018 ) Cumulative effect adjustment, net of tax - - - Ending balance, net of tax $ 9,375 $ 710 $ 10,085 |
Reclassifications Out of Accumulated Other Comprehensive Income | The reclassifications out of accumulated other comprehensive income for the quarters and nine months ended September 30, 2018 and 2017 were as follows: Amounts Reclassified from Accumulated Other Comprehensive Income (Dollars in thousands) Quarters Ended September 30, Details about Accumulated Other Comprehensive Income Components Affected Line Item in the Consolidated Statements of Operations 2018 2017 Unrealized gains and losses on available for sale securities Other net realized investment (gains) losses $ 811 $ (97 ) Other than temporary impairment losses on investments 24 1,020 Total before tax 835 923 Income tax (benefit) (118 ) (270 ) Unrealized gains and losses on available for sale securities, net of tax 717 653 Foreign currency items Other net realized investment (gains) - $ (326 ) Income tax expense - 114 Foreign currency items, net of tax - (212 ) Total reclassifications Total reclassifications, net of tax $ 717 $ 441 Amounts Reclassified from Accumulated Other Comprehensive Income (Dollars in thousands) Nine Months Ended September 30, Details about Accumulated Other Comprehensive Income Components Affected Line Item in the Consolidated Statements of Operations 2018 2017 Unrealized gains and losses on available for sale securities Other net realized investment (gains) losses $ 1,265 $ (2,538 ) Other than temporary impairment losses on investments 395 1,708 Total before tax 1,660 (830 ) Income tax expense (benefit) (257 ) 261 Unrealized gains and losses on available for sale securities, net of tax 1,403 (569 ) Foreign currency items Other net realized investment (gains) - (336 ) Income tax expense - 117 Foreign currency items, net of tax - (219 ) Total reclassifications Total reclassifications, net of tax $ 1,403 $ (788 ) |
Components of Net Realized Investment Gains (Losses) | The components of net realized investment gains (losses) for the quarters and nine months ended September 30, 2018 and 2017 were as follows: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2018 2017 2018 2017 Fixed maturities: Gross realized gains $ 329 $ 434 $ 373 $ 3,122 Gross realized losses (1,164 ) (300 ) (2,033 ) (2,358 ) Net realized gains (losses) (835 ) 134 (1,660 ) 764 Common stock: Gross realized gains 5,789 917 12,116 2,711 Gross realized losses (946 ) (1,648 ) (9,582 ) (2,309 ) Net realized gains (losses) 4,843 (731 ) 2,534 402 Derivatives: Gross realized gains 1,690 486 8,457 822 Gross realized losses (379 ) (852 ) (1,498 ) (2,838 ) Net realized gains (losses) (1) 1,311 (366 ) 6,959 (2,016 ) Total net realized investment gains (losses) $ 5,319 $ (963 ) $ 7,833 $ (850 ) (1) Includes periodic net interest settlements related to the derivatives of $0.4 million and $0.9 million for the quarters ended September 30, 2018 and 2017, respectively, and $1.5 million and $2.8 million for the nine months ended September 30, 2018 and 2017, respectively. |
Summary of Calculation of Realized Gains and Losses | The following table shows the calculation of the portion of realized gains and losses related to common stock held as of September 30, 2018: Quarter Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2018 2018 Net gains and losses recognized during the period on equity securities $ 4,843 $ 2,534 Less: Net gains and losses recognized during the period on equity securities sold during the period 2,096 3,958 Unrealized gains and losses recognized during the reporting period on equity securities still held at the reporting date $ 2,747 $ (1,424 ) |
Proceeds from Sales and Redemptions of Available-for-Sale Securities | The proceeds from sales and redemptions of available for sale and equity securities resulting in net realized investment gains (losses) for the nine months ended September 30, 2018 and 2017 were as follows: Nine Months Ended September 30, (Dollars in thousands) 2018 2017 Fixed maturities $ 229,362 $ 742,229 Equity securities 28,141 24,483 |
Schedule of Investment Income | The sources of net investment income for the quarters and nine months ended September 30, 2018 and 2017 were as follows: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2018 2017 2018 2017 Fixed maturities $ 9,520 $ 9,020 $ 27,236 $ 24,032 Equity securities 1,006 906 3,010 2,740 Cash and cash equivalents 285 226 814 621 Other invested assets 1,631 655 5,194 2,423 Total investment income 12,442 10,807 36,254 29,816 Investment expense (692 ) (673 ) (2,146 ) (2,198 ) Net investment income $ 11,750 $ 10,134 $ 34,108 $ 27,618 |
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, 2018 and 2017 were as follows: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2018 2017 2018 2017 Net investment income $ 11,750 $ 10,134 $ 34,108 $ 27,618 Net realized investment gains (losses) 5,319 (963 ) 7,833 (850 ) Change in unrealized holding gains and losses (1,564 ) 5,631 (25,822 ) 14,721 Net realized and unrealized investment returns 3,755 4,668 (17,989 ) 13,871 Total investment return $ 15,505 $ 14,802 $ 16,119 $ 41,489 Total investment return % (1) 1.0 % 0.9 % 1.1 % 2.6 % Average investment portfolio $ 1,541,975 $ 1,629,989 $ 1,533,825 $ 1,587,645 (1) Not annualized. |
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, 2018, is as follows: (Dollars in thousands) Financial Guarantor Total Pre- refunded Securities Government Guaranteed Securities Exposure Net of Pre- refunded & Government Guaranteed Securities Municipal Bond Insurance Association $ 708 $ - $ - $ 708 Total backed by financial guarantors 708 - - 708 Other credit enhanced municipal bonds - - - - Total $ 708 $ - $ - $ 708 |
Summary of Estimated Fair Values of Bonds Held on Deposit | The fair values were as follows as of September 30, 2018 and December 31, 2017: Estimated Fair Value (Dollars in thousands) September 30, 2018 December 31, 2017 On deposit with governmental authorities $ 25,817 $ 26,852 Intercompany trusts held for the benefit of U.S. policyholders 205,995 328,494 Held in trust pursuant to third party requirements 97,407 94,098 Letter of credit held for third party requirements 2,317 3,944 Securities held as collateral for borrowing arrangements (1) 74,714 88,040 Total $ 406,250 $ 541,428 (1) Amount required to collateralize margin borrowing facility. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
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, 2018 and December 31, 2017: (Dollars in thousands) September 30, 2018 December 31, 2017 Derivatives Not Designated as Hedging Instruments under ASC 815 Balance Sheet Location Notional Amount Fair Value Notional Amount Fair Value Interest rate swap agreements Other assets/liabilities $ 200,000 $ 489 $ 200,000 $ (7,968 ) |
Summary of Net Gain (Loss) Included in Consolidated Statements 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 statements 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, 2018 and 2017: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) Consolidated Statements of Operations Line 2018 2017 2018 2017 Interest rate swap agreements Net realized investment gains (losses) $ 1,311 $ (366 ) $ 6,959 $ (2,016 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
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, 2018 and December 31, 2017 and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value. As of September 30, 2018 Fair Value Measurements (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets: Fixed maturities: U.S. treasury and agency obligations $ 79,670 $ - $ - $ 79,670 Obligations of states and political subdivisions - 99,627 - 99,627 Mortgage-backed securities - 134,844 - 134,844 Commercial mortgage-backed securities - 180,208 - 180,208 Asset-backed securities - 199,722 - 199,722 Corporate bonds - 456,832 - 456,832 Foreign corporate bonds - 122,778 - 122,778 Total fixed maturities 79,670 1,194,011 - 1,273,681 Common stock 137,554 - - 137,554 Derivative instruments - 489 - 489 Total assets measured at fair value (1) $ 217,224 $ 1,194,500 $ - $ 1,411,724 (1) Excluded from the table above are limited partnerships of $85.3 million at September 30, 2018 whose fair value is based on net asset value as a practical expedient. As of December 31, 2017 Fair Value Measurements (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets: Fixed maturities: U.S. treasury and agency obligations $ 104,680 $ - $ - $ 104,680 Obligations of states and political subdivisions - 95,114 - 95,114 Mortgage-backed securities - 149,350 - 149,350 Commercial mortgage-backed securities - 139,795 - 139,795 Asset-backed securities - 203,701 - 203,701 Corporate bonds - 423,390 - 423,390 Foreign corporate bonds - 125,407 - 125,407 Total fixed maturities 104,680 1,136,757 - 1,241,437 Common stock 140,229 - - 140,229 Total assets measured at fair value (1) $ 244,909 $ 1,136,757 $ - $ 1,381,666 Liabilities: Derivative instruments $ - $ 7,968 $ - $ 7,968 Total liabilities measured at fair value $ - $ 7,968 $ - $ 7,968 (1) Excluded from the table above are limited partnerships of $77.8 million at December 31, 2017 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, 2018 and December 31, 2017 was as follows: September 30, 2018 December 31, 2017 (Dollars in thousands) Carrying Value Fair Value Carrying Value Fair Value Margin Borrowing Facility $ 59,405 $ 59,405 $ 72,230 $ 72,230 7.75% Subordinated Notes due 2045 (1) 96,711 99,511 96,619 100,059 7.875% Subordinated Notes due 2047 (2) 125,970 129,714 125,864 130,429 Total $ 282,086 $ 288,630 $ 294,713 $ 302,718 (1) As of September 30, 2018 and December 31, 2017, the carrying value and fair value of the 7.75% Subordinated Notes due 2045 are net of unamortized debt issuance cost of $3.3 million and $3.4 million, respectively. (2) As of September 30, 2018 and December 31, 2017, the carrying value and fair value of the 7.875% Subordinated Notes due 2047 are net of unamortized debt issuance cost of $4.0 million and $4.1 million, respectively. |
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, 2018 and December 31, 2017. September 30, 2018 December 31, 2017 (Dollars in thousands) Fair Value Future Funding Commitment Fair Value Future Funding Commitment Real Estate Fund, LP (1) $ - $ - $ - $ - European Non-Performing Loan Fund, LP (2) 18,967 14,214 26,262 14,214 Private Middle Market Loan Fund, LP (3) 34,199 5,200 33,760 10,000 Distressed Debt Fund, LP (4) 32,102 20,500 17,798 33,500 Total $ 85,268 $ 39,914 $ 77,820 $ 57,714 (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 by 2020. (3) This limited partnership provides financing for 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 investment management agreement, the Company anticipates its interest to be redeemed no later than 2024. (4) This limited partnership invests in stressed and distressed securities and structured products. 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 to be redeemed no later than 2027. |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
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 for the quarters and nine months ended September 30, 2018 and 2017 were as follows: Quarter Ended September 30, 2018 (Dollars in thousands) Non-U.S. Subsidiaries U.S. Subsidiaries Eliminations Total Revenues: Gross premiums written $ 9,361 $ 126,245 $ - $ 135,606 Net premiums written $ 9,356 $ 106,877 $ - $ 116,233 Net premiums earned $ 30,220 $ 90,308 $ - $ 120,528 Net investment income 12,013 7,204 (7,467 ) 11,750 Net realized investment gains (losses) (273 ) 5,592 - 5,319 Other income (loss) (82 ) 493 - 411 Total revenues 41,878 103,597 (7,467 ) 138,008 Losses and Expenses: Net losses and loss adjustment expenses 14,877 65,616 - 80,493 Acquisition costs and other underwriting expenses 13,188 35,492 - 48,680 Corporate and other operating expenses 1,237 2,238 - 3,475 Interest expense 356 12,035 (7,467 ) 4,924 Income (loss) before income taxes $ 12,220 $ (11,784 ) $ - $ 436 Quarter Ended September 30, 2017 (Dollars in thousands) Non-U.S. Subsidiaries U.S. Subsidiaries Eliminations Total Revenues: Gross premiums written $ 50,812 $ 114,076 $ (38,834 ) $ 126,054 Net premiums written $ 50,800 $ 58,245 $ - $ 109,045 Net premiums earned $ 50,392 $ 58,227 $ - $ 108,619 Net investment income 14,631 6,584 (11,081 ) 10,134 Net realized investment losses (150 ) (813 ) - (963 ) Other income 40 2,254 - 2,294 Total revenues 64,913 66,252 (11,081 ) 120,084 Losses and Expenses: Net losses and loss adjustment expenses 31,044 51,351 - 82,395 Acquisition costs and other underwriting expenses 21,922 23,080 - 45,002 Corporate and other operating expenses 1,807 2,823 - 4,630 Interest expense 4,679 11,238 (11,081 ) 4,836 Income (loss) before income taxes $ 5,461 $ (22,240 ) $ - $ (16,779 ) Nine Months Ended September 30, 2018 (Dollars in thousands) Non-U.S. Subsidiaries U.S. Subsidiaries Eliminations Total Revenues: Gross premiums written $ 39,976 $ 378,694 $ - $ 418,670 Net premiums written $ 39,970 $ 320,587 $ - $ 360,557 Net premiums earned $ 115,353 $ 227,094 $ - $ 342,447 Net investment income 39,527 21,428 (26,847 ) 34,108 Net realized investment gains (losses) (437 ) 8,270 - 7,833 Other income (loss) (179 ) 1,468 - 1,289 Total revenues 154,264 258,260 (26,847 ) 385,677 Losses and Expenses: Net losses and loss adjustment expenses 48,210 147,216 - 195,426 Acquisition costs and other underwriting expenses 50,475 90,721 - 141,196 Corporate and other operating expenses 10,550 13,103 - 23,653 Interest expense 6,749 34,823 (26,847 ) 14,725 Income (loss) before income taxes $ 38,280 $ (27,603 ) $ - $ 10,677 Nine Months Ended September 30, 2017 (Dollars in thousands) Non-U.S. Subsidiaries U.S. Subsidiaries Eliminations Total Revenues: Gross premiums written $ 164,975 $ 348,331 $ (119,607 ) $ 393,699 Net premiums written $ 164,947 $ 179,401 $ - $ 344,348 Net premiums earned $ 150,384 $ 178,434 $ - $ 328,818 Net investment income 41,519 16,786 (30,687 ) 27,618 Net realized investment gains (losses) 87 (937 ) - (850 ) Other income 213 5,231 - 5,444 Total revenues 192,203 199,514 (30,687 ) 361,030 Losses and Expenses: Net losses and loss adjustment expenses 74,780 127,876 - 202,656 Acquisition costs and other underwriting expenses 65,544 69,466 - 135,010 Corporate and other operating expenses 4,137 6,908 - 11,045 Interest expense 11,653 31,099 (30,687 ) 12,065 Income (loss) before income taxes $ 36,089 $ (35,835 ) $ - $ 254 |
Components of Income Tax Benefit | The following table summarizes the components of income tax benefit: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2018 2017 2018 2017 Current income tax expense (benefit): Foreign $ 62 $ 107 $ 326 $ 290 U.S. Federal (732 ) 128 - 128 Total current income tax expense (benefit) (670 ) 235 326 418 Deferred income tax benefit: U.S. Federal (2,622 ) (8,090 ) (6,270 ) (13,611 ) Total deferred income tax benefit (2,622 ) (8,090 ) (6,270 ) (13,611 ) Total income tax benefit $ (3,292 ) $ (7,855 ) $ (5,944 ) $ (13,193 ) |
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, 2018 2017 (Dollars in thousands) Amount % of Pre- Tax Income Amount % of Pre- Tax Income Expected tax provision at weighted average rate $ (2,494 ) (571.9 %) $ (7,678 ) (45.8 %) Adjustments: Tax exempt interest - - (40 ) (0.2 ) Dividend exclusion (68 ) (15.6 ) (144 ) (0.9 ) Base Erosion Anti-Abuse Tax (731 ) (167.7 ) - - Other 1 0.2 7 0.1 Actual tax on continuing operations $ (3,292 ) (755.0 %) $ (7,855 ) (46.8 %) Nine Months Ended September 30, 2018 2017 (Dollars in thousands) Amount % of Pre- Tax Income Amount % of Pre- Tax Income Expected tax provision at weighted average rate $ (5,527 ) (51.8 %) $ (12,252 ) (4,823.6 %) Adjustments: Tax exempt interest (5 ) - (191 ) (75.2 ) Dividend exclusion (203 ) (1.9 ) (410 ) (161.4 ) Other (209 ) (2.0 ) (340 ) (133.9 ) Actual tax on continuing operations $ (5,944 ) (55.7 %) $ (13,193 ) (5,194.1 %) |
Liability for Unpaid Losses a_2
Liability for Unpaid Losses and Loss Adjustment Expenses (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Insurance [Abstract] | |
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) 2018 2017 2018 2017 Balance at beginning of period $ 613,670 $ 615,763 $ 634,664 $ 651,042 Less: Ceded reinsurance receivables 91,397 104,245 97,243 130,439 Net balance at beginning of period 522,273 511,518 537,421 520,603 Purchased reserves, gross - 9,063 - 18,024 Purchased reserves ceded - 63 - 573 Purchased reserves, net of third party reinsurance - 9,126 - 18,597 Incurred losses and loss adjustment expenses related to: Current year 92,469 91,766 222,916 237,460 Prior years (11,976 ) (9,371 ) (27,490 ) (34,804 ) Total incurred losses and loss adjustment expenses 80,493 82,395 195,426 202,656 Paid losses and loss adjustment expenses related to: Current year 53,121 45,193 103,695 115,927 Prior years 27,312 25,190 106,819 93,273 Total paid losses and loss adjustment expenses 80,433 70,383 210,514 209,200 Net balance at end of period 522,333 532,656 522,333 532,656 Plus: Ceded reinsurance receivables 86,274 117,070 86,274 117,070 Balance at end of period $ 608,607 $ 649,726 $ 608,607 $ 649,726 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Outstanding Debt | The Company’s outstanding debt consisted of the following at September 30, 2018 and December 31, 2017: (Dollars in thousands) September 30, 2018 December 31, 2017 Margin Borrowing Facility $ 59,405 $ 72,230 7.75% Subordinated Notes due 2045 96,711 96,619 7.875% Subordinated Notes due 2047 125,970 125,864 Total $ 282,086 $ 294,713 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Information with Respect to Ordinary Shares that were Surrendered, Repurchased or Redeemed | The following table provides information with respect to the A ordinary shares that were surrendered or repurchased during the nine months ended September 30, 2018: Period (1) Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plan or Program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs January 1-31, 2018 26,639 (2) $ 42.02 - - March 1-31, 2018 18,594 (2) $ 37.27 - - Total 45,233 $ 40.07 - (1) Based on settlement date. (2) Surrendered by employees as payment of taxes withheld on the vesting of restricted stock. The following table provides information with respect to the A ordinary shares that were surrendered or repurchased during the nine months ended September 30, 2017: Period (1) Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plan or Program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs January 1-31, 2017 13,656 (2) $ 38.21 - - February 1-28, 2017 15,309 (2) $ 40.18 - - May 1 - 31, 2017 586 (2) $ 38.49 - - Total 29,551 $ 39.24 - (1) Based on settlement date. (2) Surrendered by employees as payment of taxes withheld on the vesting of restricted stock. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share: Quarters Ended September 30, Nine Months Ended September 30, (Dollars in thousands, except share and per share data) 2018 2017 2018 2017 Net income (loss) $ 3,728 $ (8,924 ) $ 16,621 $ 13,447 Basic earnings per share: Weighted average shares outstanding – basic 14,100,180 17,343,292 14,082,698 17,331,840 Net income (loss) per share $ 0.26 $ (0.51 ) $ 1.18 $ 0.78 Diluted earnings per share: Weighted average shares outstanding – diluted (1) 14,346,585 17,343,292 14,321,113 17,684,519 Net income (loss) per share $ 0.26 $ (0.51 ) $ 1.16 $ 0.76 (1) For the quarter ended September 30, 2017, “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, 2018 2017 2018 2017 Weighted average shares for basic earnings per share 14,100,180 17,343,292 14,082,698 17,331,840 Non-vested restricted stock 83,882 - 74,768 149,490 Options 162,523 - 163,647 203,189 Weighted average shares for diluted earnings per share 14,346,585 17,343,292 14,321,113 17,684,519 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Summary of Business Segment Information | The following are tabulations of business segment information for the quarters and nine months ended September 30, 2018 and 2017. Quarter Ended September 30, 2018 (Dollars in thousands) Commercial Lines (1) Personal Lines (1) Reinsurance Operations (2) Total Revenues: Gross premiums written $ 63,177 $ 63,072 (6) $ 9,357 $ 135,606 Net premiums written $ 56,161 $ 50,719 $ 9,353 $ 116,233 Net premiums earned $ 56,352 $ 50,841 $ 13,335 $ 120,528 Other income (loss) — 493 (82 ) 411 Total revenues 56,352 51,334 13,253 120,939 Losses and Expenses: Net losses and loss adjustment expenses 31,899 41,316 7,278 80,493 Acquisition costs and other underwriting expenses 22,533 (3) 21,040 (4) 5,107 48,680 Income (loss) from segments $ 1,920 $ (11,022 ) $ 868 $ (8,234 ) Unallocated Items: Net investment income 11,750 Net realized investment gain 5,319 Corporate and other operating expenses (3,475 ) Interest expense (4,924 ) Income before income taxes 436 Income tax benefit 3,292 Net income 3,728 Total assets $ 874,059 $ 526,127 $ 557,860 (5) $ 1,958,046 (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 $77 relating to cessions from Commercial Lines to Reinsurance Operations. (4) Includes federal excise tax of $92 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 ($3) of business written by American Reliable that was ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement. Quarter Ended September 30, 2017 (Dollars in thousands) Commercial Lines (1) Personal Lines (1) Reinsurance Operations (2) Total Revenues: Gross premiums written $ 53,113 $ 60,962 (6) $ 11,979 $ 126,054 Net premiums written $ 46,471 $ 50,607 $ 11,967 $ 109,045 Net premiums earned $ 44,778 $ 52,268 $ 11,573 $ 108,619 Other income — 2,254 40 2,294 Total revenues 44,778 54,522 11,613 110,913 Losses and Expenses: Net losses and loss adjustment expenses 19,095 42,534 20,766 82,395 Acquisition costs and other underwriting expenses 18,237 (3) 22,689 (4) 4,076 45,002 Income (loss) from segments $ 7,446 $ (10,701 ) $ (13,229 ) $ (16,484 ) Unallocated Items: Net investment income 10,134 Net realized investment losses (963 ) Corporate and other operating expenses (4,630 ) Interest expense (4,836 ) Loss before income taxes benefit (16,779 ) Income tax benefit 7,855 Net loss (8,924 ) Total assets $ 911,412 $ 481,357 $ 737,921 (5) $ 2,130,690 (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 $127 relating to cessions from Commercial Lines to Reinsurance Operations. (4) Includes federal excise tax of $262 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 ($1,427) of business written by American Reliable that was ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement. Nine Months Ended September 30, 2018 (Dollars in thousands) Commercial Lines (1) Personal Lines (1) Reinsurance Operations (2) Total Revenues: Gross premiums written $ 186,923 $ 191,782 (6) $ 39,965 $ 418,670 Net premiums written $ 165,817 $ 154,781 $ 39,959 $ 360,557 Net premiums earned $ 155,966 $ 151,333 $ 35,148 $ 342,447 Other income (loss) — 1,468 (179 ) 1,289 Total revenues 155,966 152,801 34,969 343,736 Losses and Expenses: Net losses and loss adjustment expenses 82,023 98,946 14,457 195,426 Acquisition costs and other underwriting expenses 62,789 (3) 65,446 (4) 12,961 141,196 Income (loss) from segments $ 11,154 $ (11,591 ) $ 7,551 $ 7,114 Unallocated Items: Net investment income 34,108 Net realized investment gain 7,833 Corporate and other operating expenses (23,653 ) Interest expense (14,725 ) Income before income taxes 10,677 Income tax benefit 5,944 Net income 16,621 Total assets $ 874,059 $ 526,127 $ 557,860 (5) $ 1,958,046 (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 $367 relating to cessions from Commercial Lines to Reinsurance Operations. (4) Includes federal excise tax of $435 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 ($1,859) of business written by American Reliable that was ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement. Nine Months Ended September 30, 2017 (Dollars in thousands) Commercial Lines (1) Personal Lines (1) Reinsurance Operations (2) Total Revenues: Gross premiums written $ 155,776 $ 192,551 (6) $ 45,372 $ 393,699 Net premiums written $ 137,025 $ 161,979 $ 45,344 $ 344,348 Net premiums earned $ 133,289 $ 164,102 $ 31,427 $ 328,818 Other income 78 5,153 213 5,444 Total revenues 133,367 169,255 31,640 334,262 Losses and Expenses: Net losses and loss adjustment expenses 53,688 120,410 28,558 202,656 Acquisition costs and other underwriting expenses 55,398 (3) 69,281 (4) 10,331 135,010 Income (loss) from segments $ 24,281 $ (20,436 ) $ (7,249 ) $ (3,404 ) Unallocated Items: Net investment income 27,618 Net realized investment losses (850 ) Corporate and other operating expenses (11,045 ) Interest expense (12,065 ) Income before income taxes 254 Income tax benefit 13,193 Net income 13,447 Total assets $ 911,412 $ 481,357 $ 737,921 (5) $ 2,130,690 (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 $366 relating to cessions from Commercial Lines to Reinsurance Operations. (4) Includes federal excise tax of $821 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 ($185) of business written by American Reliable that was ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement. |
Condensed Consolidating Finan_2
Condensed Consolidating Financial Information Provided in Connection with Outstanding Debt of Subsidiaries (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of Condensed Consolidating Balance Sheets | Condensed Consolidating Balance Sheets at September 30, 2018 (Dollars in thousands) Global Indemnity Limited (Parent co- obligor) Global Indemnity Group, Inc. (Subsidiary co-obligor) Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries (1) Consolidating Adjustments (2) Global Indemnity Limited Consolidated ASSETS Total investments $ 12,251 $ 303,299 $ 1,180,953 $ - $ 1,496,503 Cash and cash equivalents 102 1,904 38,640 - 40,646 Investments in subsidiaries 1,223,997 318,419 30,358 (1,572,774 ) - Due from subsidiaries and affiliates 459 (2,929 ) 2,470 - - Notes receivable – affiliate - 80,049 845,498 (925,547 ) - Interest receivable – affiliate - 3,576 38,029 (41,605 ) - Premiums receivable, net - - 84,641 - 84,641 Reinsurance receivables, net - - 96,534 - 96,534 Funds held by ceding insurers - - 50,805 - 50,805 Federal income taxes receivable - 7,734 3,024 - 10,758 Deferred federal income taxes - 31,201 4,474 - 35,675 Deferred acquisition costs - - 64,538 - 64,538 Intangible assets - - 22,152 - 22,152 Goodwill - - 6,521 - 6,521 Prepaid reinsurance premiums - - 22,976 - 22,976 Receivable for securities sold - - - - - Other assets 7,714 6,171 19,731 (7,319 ) 26,297 Total assets $ 1,244,523 $ 749,424 $ 2,511,344 $ (2,547,245 ) $ 1,958,046 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities: Unpaid losses and loss adjustment expenses $ - $ - $ 608,607 $ - $ 608,607 Unearned premiums - - 297,630 - 297,630 Ceded balances payable - - 16,612 - 16,612 Payable for securities purchased - (2,110 ) 7,052 - 4,942 Contingent commissions - - 8,076 - 8,076 Debt - 289,405 - (7,319 ) 282,086 Notes payable – affiliates 520,498 400,000 5,049 (925,547 ) - Accrued interest payable – affiliates 19,286 20,771 1,548 (41,605 ) - Other liabilities 2,413 11,000 24,354 - 37,767 Total liabilities 542,197 719,066 968,928 (974,471 ) 1,255,720 Shareholders’ equity Total shareholders’ equity 702,326 30,358 1,542,416 (1,572,774 ) 702,326 Total liabilities and shareholders’ equity $ 1,244,523 $ 749,424 $ 2,511,344 $ (2,547,245 ) $ 1,958,046 (1) Includes all other subsidiaries of Global Indemnity Limited and eliminations (2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments Condensed Consolidating Balance Sheets at December 31, 2017 (Dollars in thousands) Global Indemnity Limited (Parent co-obligor) Global Indemnity Group, Inc. (Subsidiary co-obligor) Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries (1) Consolidating Adjustments (2) Global Indemnity Limited Consolidated ASSETS Total investments $ 13,118 $ 309,891 $ 1,136,477 $ - $ 1,459,486 Cash and cash equivalents 11,089 7,749 55,576 - 74,414 Investments in subsidiaries 1,207,590 321,194 62,950 (1,591,734 ) - Due from subsidiaries and affiliates 4,618 (6,513 ) 1,895 - - Notes receivable – affiliate - 80,049 845,498 (925,547 ) - Interest receivable – affiliate - 2,721 30,642 (33,363 ) - Premiums receivable, net - - 84,386 - 84,386 Reinsurance receivables, net - - 105,060 - 105,060 Funds held by ceding insurers - - 45,300 - 45,300 Federal income taxes receivable - 7,560 2,489 283 10,332 Deferred federal income taxes - 21,533 4,833 (170 ) 26,196 Deferred acquisition costs - - 61,647 - 61,647 Intangible assets - - 22,549 - 22,549 Goodwill - - 6,521 - 6,521 Prepaid reinsurance premiums - - 28,851 - 28,851 Receivable for securities sold - (403 ) 1,946 - 1,543 Other assets 20,681 52,806 21,897 (20,000 ) 75,384 Total assets $ 1,257,096 $ 796,587 $ 2,518,517 $ (2,570,531 ) $ 2,001,669 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities: Unpaid losses and loss adjustment expenses $ - $ - $ 634,664 $ - $ 634,664 Unearned premiums - - 285,397 - 285,397 Ceded balances payable - - 10,851 - 10,851 Payable for securities purchased - - - - - Contingent commissions - - 7,984 - 7,984 Debt 222,483 72,230 - - 294,713 Notes payable – affiliates 290,498 630,000 5,049 (925,547 ) - Accrued interest payable – affiliates 12,465 19,574 1,324 (33,363 ) - Other liabilities 13,256 11,832 44,578 (20,000 ) 49,666 Total liabilities 538,702 733,636 989,847 (978,910 ) 1,283,275 Shareholders’ equity Total shareholders’ equity 718,394 62,951 1,528,670 (1,591,621 ) 718,394 Total liabilities and shareholders’ equity $ 1,257,096 $ 796,587 $ 2,518,517 $ (2,570,531 ) $ 2,001,669 (1) Includes all other subsidiaries of Global Indemnity Limited and eliminations (2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments |
Schedule of Condensed Consolidating Statements of Operations | Condensed Consolidating Statements of Operations for the Quarter Ended September 30, 2018 (Dollars in thousands) Global Indemnity Limited (Parent co-obligor) Global Indemnity Group, Inc. (Subsidiary co-obligor) Other Global Indemnity Limited Subsidiaries and Eliminations (non-co- obligor subsidiaries (1) Consolidating Adjustments (2) Global Indemnity Limited Consolidated Revenues: Net premiums earned $ - $ - $ 120,528 $ - $ 120,528 Net investment income 146 2,492 18,318 (9,206 ) 11,750 Net realized investment gains (losses) (101 ) 5,321 99 - 5,319 Other income (loss) - (12 ) 423 - 411 Total revenues 45 7,801 139,368 (9,206 ) 138,008 Losses and Expenses: Net losses and loss adjustment expenses - - 80,493 - 80,493 Acquisition costs and other underwriting expenses - - 48,680 - 48,680 Corporate and other operating expenses 982 2,089 404 - 3,475 Interest expense 2,017 12,035 78 (9,206 ) 4,924 Income (loss) before equity in net income (loss) of subsidiaries and income taxes (2,954 ) (6,323 ) 9,713 - 436 Equity in net income (loss) of subsidiaries 6,682 (3,995 ) (8,434 ) 5,747 - Income (loss) before income taxes 3,728 (10,318 ) 1,279 5,747 436 Income tax benefit - (1,884 ) (1,408 ) - (3,292 ) Net income (loss) $ 3,728 $ (8,434 ) $ 2,687 $ 5,747 $ 3,728 (1) Includes all other subsidiaries of Global Indemnity Limited and eliminations (2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments Condensed Consolidating Statements of Operations for the Quarter Ended September 30, 2017 (Dollars in thousands) Global Indemnity Limited (Parent co-obligor) Global Indemnity Group, Inc. (Subsidiary co-obligor) Other Global Indemnity Limited Subsidiaries and Eliminations (non-co- obligor subsidiaries (1) Consolidating Adjustments (2) Global Indemnity Limited Consolidated Revenues: Net premiums earned $ - $ - $ 108,619 $ - $ 108,619 Net investment income 104 2,321 19,351 (11,642 ) 10,134 Net realized investment gains (losses) 23 (1,229 ) 243 - (963 ) Other income - 1,738 556 - 2,294 Total revenues 127 2,830 128,769 (11,642 ) 120,084 Losses and Expenses: Net losses and loss adjustment expenses - - 82,395 - 82,395 Acquisition costs and other underwriting expenses - - 45,002 - 45,002 Corporate and other operating expenses 2,209 (6,441 ) 8,862 - 4,630 Interest expense 5,176 11,237 65 (11,642 ) 4,836 Loss before equity in net loss of subsidiaries and income taxes (7,258 ) (1,966 ) (7,555 ) - (16,779 ) Equity in net loss of subsidiaries (1,666 ) (12,523 ) (14,822 ) 29,011 - Loss before income taxes (8,924 ) (14,489 ) (22,377 ) 29,011 (16,779 ) Income tax benefit - (211 ) (7,644 ) - (7,855 ) Net loss $ (8,924 ) $ (14,278 ) $ (14,733 ) $ 29,011 $ (8,924 ) (1) Includes all other subsidiaries of Global Indemnity Limited and eliminations (2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments Condensed Consolidating Statements of Operations for the Nine Months Ended September 30, 2018 (Dollars in thousands) Global Indemnity Limited (Parent co-obligor) Global Indemnity Group, Inc. (Subsidiary co-obligor) Other Global Indemnity Limited Subsidiaries and Eliminations (non-co- obligor subsidiaries (1) Consolidating Adjustments (2) Global Indemnity Limited Consolidated Revenues: Net premiums earned $ - $ - $ 342,447 $ - $ 342,447 Net investment income 483 8,404 58,258 (33,037 ) 34,108 Net realized investment gains (losses) (121 ) 8,167 (213 ) - 7,833 Other income - - 1,289 - 1,289 Total revenues 362 16,571 401,781 (33,037 ) 385,677 Losses and Expenses: Net losses and loss adjustment expenses - - 195,426 - 195,426 Acquisition costs and other underwriting expenses - - 141,196 - 141,196 Corporate and other operating expenses 9,959 12,734 960 - 23,653 Interest expense 12,715 34,773 274 (33,037 ) 14,725 Income (loss) before equity in net income (loss) of subsidiaries and income taxes (22,312 ) (30,936 ) 63,925 - 10,677 Equity in net income (loss) of subsidiaries 38,933 6,770 (21,335 ) (24,368 ) - Income (loss) before income taxes 16,621 (24,166 ) 42,590 (24,368 ) 10,677 Income tax expense (benefit) - (2,831 ) (3,226 ) 113 (5,944 ) Net income (loss) $ 16,621 $ (21,335 ) $ 45,816 $ (24,481 ) $ 16,621 (1) Includes all other subsidiaries of Global Indemnity Limited and eliminations (2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments Condensed Consolidating Statements of Operations for the Nine Months Ended September 30, 2017 (Dollars in thousands) Global Indemnity Limited (Parent co-obligor) Global Indemnity Group, Inc. (Subsidiary co-obligor) Other Global Indemnity Limited Subsidiaries and Eliminations (non-co- obligor subsidiaries (1) Consolidating Adjustments (2) Global Indemnity Limited Consolidated Revenues: Net premiums earned $ - $ - $ 328,818 $ - $ 328,818 Net investment income 256 5,105 54,316 (32,059 ) 27,618 Net realized investment gains (losses) (226 ) (1,830 ) 1,206 - (850 ) Other income - 3,514 1,930 - 5,444 Total revenues 30 6,789 386,270 (32,059 ) 361,030 Losses and Expenses: Net losses and loss adjustment expenses - - 202,656 - 202,656 Acquisition costs and other underwriting expenses - - 135,010 - 135,010 Corporate and other operating expenses 3,709 (12,104 ) 19,440 - 11,045 Interest expense 12,769 31,087 268 (32,059 ) 12,065 Income (loss) before equity in net income (loss) of subsidiaries and income taxes (16,448 ) (12,194 ) 28,896 - 254 Equity in net income (loss) of subsidiaries 29,895 (14,211 ) (22,781 ) 7,097 - Income (loss) before income taxes 13,447 (26,405 ) 6,115 7,097 254 Income tax benefit - (4,057 ) (9,136 ) - (13,193 ) Net income (loss) $ 13,447 $ (22,348 ) $ 15,251 $ 7,097 $ 13,447 (1) Includes all other subsidiaries of Global Indemnity Limited and eliminations (2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments |
Schedule of Condensed Consolidating Statements of Comprehensive Income | Condensed Consolidating Statements of Comprehensive Income for the Quarter Ended September 30, 2018 (Dollars in thousands) Global Indemnity Limited (Parent co-obligor) Global Indemnity Group, Inc. (Subsidiary co-obligor) Other Global Indemnity Limited Subsidiaries and Eliminations (non-co- obligor subsidiaries (1) Consolidating Adjustments (2) Global Indemnity Limited Consolidated Net income (loss) $ 3,728 $ (8,434 ) $ 2,687 $ 5,747 $ 3,728 Other comprehensive income (loss), net of tax: Unrealized holding (losses) (63 ) (845 ) (716 ) - (1,624 ) Equity in other comprehensive income (loss) of unconsolidated subsidiaries (1,392 ) (603 ) (789 ) 2,784 - Portion of other-than-temporary impairment losses recognized in other comprehensive income (losses) - - 7 - 7 Reclassification adjustment for (gains) losses included in net income (loss) 101 659 (43 ) - 717 Unrealized foreign currency translation (losses) - - (454 ) - (454 ) Other comprehensive income (loss), net of tax (1,354 ) (789 ) (1,995 ) 2,784 (1,354 ) Comprehensive income (loss), net of tax $ 2,374 $ (9,223 ) $ 692 $ 8,531 $ 2,374 (1) Includes all other subsidiaries of Global Indemnity Limited and eliminations (2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments Condensed Consolidating Statements of Comprehensive Income for the Quarter Ended September 30, 2017 (Dollars in thousands) Global Indemnity Limited (Parent co-obligor) Global Indemnity Group, Inc. (Subsidiary co-obligor) Other Global Indemnity Limited Subsidiaries and Eliminations (non-co- obligor subsidiaries (1) Consolidating Adjustments (2) Global Indemnity Limited Consolidated Net income (loss) $ (8,924 ) $ (14,278 ) $ (14,733 ) $ 29,011 $ (8,924 ) Other comprehensive income (loss), net of tax: Unrealized holding gains 51 1,983 1,345 7 3,386 Equity in other comprehensive income (loss) of unconsolidated subsidiaries 4,071 397 2,846 (7,314 ) - Portion of other-than-temporary impairment losses recognized in other comprehensive income (losses) - - (1 ) - (1 ) Reclassification adjustment for (gains) losses included in net income (loss) (23 ) 561 (97 ) - 441 Unrealized foreign currency translation gains (losses) - (95 ) 368 - 273 Other comprehensive income (loss), net of tax 4,099 2,846 4,461 (7,307 ) 4,099 Comprehensive income (loss), net of tax $ (4,825 ) $ (11,432 ) $ (10,272 ) $ 21,704 $ (4,825 ) (1) Includes all other subsidiaries of Global Indemnity Limited and eliminations (2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments Condensed Consolidating Statements of Comprehensive Income for the Nine Months Ended September 30, 2018 (Dollars in thousands) Global Indemnity Limited (Parent co-obligor) Global Indemnity Group, Inc. (Subsidiary co-obligor) Other Global Indemnity Limited Subsidiaries and Eliminations (non-co- obligor subsidiaries (1) Consolidating Adjustments (2) Global Indemnity Limited Consolidated Net income (loss) $ 16,621 $ (21,335 ) $ 45,816 $ (24,481 ) $ 16,621 Other comprehensive income (loss), net of tax: Unrealized holding (losses) (210 ) (2,930 ) (19,492 ) - (22,632 ) Equity in other comprehensive income (loss) of unconsolidated subsidiaries (22,695 ) (9,633 ) (11,515 ) 43,843 - Portion of other-than-temporary impairment losses recognized in other comprehensive income (losses) - - (1 ) - (1 ) Reclassification adjustment for (gains) losses included in net income 121 1,048 234 - 1,403 Unrealized foreign currency translation (losses) - - (1,554 ) - (1,554 ) Other comprehensive income (loss), net of tax (22,784 ) (11,515 ) (32,328 ) 43,843 (22,784 ) Comprehensive income (loss), net of tax $ (6,163 ) $ (32,850 ) $ 13,488 $ 19,362 $ (6,163 ) (1) Includes all other subsidiaries of Global Indemnity Limited and eliminations (2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments Condensed Consolidating Statements of Comprehensive Income for the Nine Months Ended September 30, 2017 (Dollars in thousands) Global Indemnity Limited (Parent co-obligor) Global Indemnity Group, Inc. (Subsidiary co-obligor) Other Global Indemnity Limited Subsidiaries and Eliminations (non-co- obligor subsidiaries (1) Consolidating Adjustments (2) Global Indemnity Limited Consolidated Net income (loss) $ 13,447 $ (22,348 ) $ 15,251 $ 7,097 $ 13,447 Other comprehensive income (loss), net of tax: Unrealized holding gains (losses) (193 ) 5,806 5,084 22 10,719 Equity in other comprehensive income (loss) of unconsolidated subsidiaries 10,670 1,586 7,461 (19,717 ) - Portion of other-than-temporary impairment losses recognized in other comprehensive income (losses) - - (2 ) - (2 ) Reclassification adjustment for (gains) losses included in net income (loss) 226 (121 ) (893 ) - (788 ) Unrealized foreign currency translation gains - 190 584 - 774 Other comprehensive income (loss), net of tax 10,703 7,461 12,234 (19,695 ) 10,703 Comprehensive income (loss), net of tax $ 24,150 $ (14,887 ) $ 27,485 $ (12,598 ) $ 24,150 (1) Includes all other subsidiaries of Global Indemnity Limited and eliminations (2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments |
Schedule of Condensed Consolidating Statements of Cash Flows | Condensed Consolidating Statements of Cash Flows at September 30, 2018 (Dollars in thousands) Global Indemnity Limited (Parent co-obligor) Global Indemnity Group, Inc. (Subsidiary co-obligor) Other Global Indemnity Limited Subsidiaries and Eliminations (non-co- obligor subsidiaries (1) Global Indemnity Limited Consolidated Cash flows from operating activities: Net cash provided by (used for) operating activities $ (19,280 ) $ (618 ) $ 65,769 $ 45,871 Cash flows from investing activities: Proceeds from sale of fixed maturities 28,118 44,760 156,484 229,362 Proceeds from sale of equity securities - 28,141 - 28,141 Proceeds from maturity of fixed maturities 5,431 7,600 30,272 43,303 Proceeds from limited partnerships - 1,058 7,294 8,352 Amounts received in connection with derivatives - 7,599 - 7,599 Purchases of fixed maturities (32,933 ) (39,314 ) (256,755 ) (329,002 ) Purchases of equity securities - (22,931 ) - (22,931 ) Purchases of other invested assets - (15,800 ) - (15,800 ) Acquisition of business - (3,515 ) - (3,515 ) Net cash used for investing activities 616 7,598 (62,705 ) (54,491 ) Cash flows from financing activities: Net borrowings (repayments) under margin borrowing facility - (12,825 ) - (12,825 ) Proceeds / (issuance) of notes to affiliates 230,000 (230,000 ) - - Debt restructuring (230,000 ) 230,000 - - Dividends paid to shareholders (10,510 ) - - (10,510 ) Dividends from subsidiaries 20,000 - (20,000 ) - Capital contribution to a subsidiary - - - - Purchase of A ordinary shares (1,813 ) - - (1,813 ) Net cash provided by (used for) financing activities 7,677 (12,825 ) (20,000 ) (25,148 ) Net change in cash and cash equivalents (10,987 ) (5,845 ) (16,936 ) (33,768 ) Cash and cash equivalents at beginning of period 11,089 7,749 55,576 74,414 Cash and cash equivalents at end of period $ 102 $ 1,904 $ 38,640 $ 40,646 (1) Includes all other subsidiaries of Global Indemnity Limited and eliminations (2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments Condensed Consolidating Statements of Cash Flows at September 30, 2017 (Dollars in thousands) Global Indemnity Limited (Parent co-obligor) Global Indemnity Group, Inc. (Subsidiary co-obligor) Other Global Indemnity Limited Subsidiaries and Eliminations (non-co- obligor subsidiaries (1) Global Indemnity Limited Consolidated Cash flows from operating activities: Net cash provided by (used for) operating activities $ (10,359 ) $ (19,634 ) $ 18,809 $ (11,184 ) Cash flows from investing activities: Proceeds from sale of fixed maturities 12,389 61,296 668,544 742,229 Proceeds from sale of equity securities - 24,483 - 24,483 Proceeds from maturity of fixed maturities 4,750 42,928 64,942 112,620 Proceeds from limited partnerships - 5,941 4,626 10,567 Amounts paid in connection with derivatives - (2,500 ) - (2,500 ) Purchases of fixed maturities (32,044 ) (248,518 ) (698,512 ) (979,074 ) Purchases of equity securities - (28,631 ) - (28,631 ) Purchases of other invested assets - (16,500 ) (1,500 ) (18,000 ) Net cash provided by (used for) investing activities (14,905 ) (161,501 ) 38,100 (138,306 ) Cash flows from financing activities: Net borrowings (repayments) under margin borrowing facility - 9,872 - 9,872 Proceeds from issuance of subordinated notes 130,000 - - 130,000 Debt issuance cost (4,246 ) - - (4,246 ) Proceeds / (issuance) of notes to affiliates - 120,000 (120,000 ) - Dividends from subsidiaries - 56,265 (56,265 ) - Capital contribution (96,000 ) - 96,000 - Purchase of A ordinary shares (1,159 ) - - (1,159 ) Net cash provided by (used for) financing activities 28,595 186,137 (80,265 ) 134,467 Net change in cash and cash equivalents 3,331 5,002 (23,356 ) (15,023 ) Cash and cash equivalents at beginning of period 91 5,536 69,483 75,110 Cash and cash equivalents at end of period $ 3,422 $ 10,538 $ 46,127 $ 60,087 (1) Includes all other subsidiaries of Global Indemnity Limited and eliminations (2) Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments |
Principles of Consolidation a_3
Principles of Consolidation and Basis of Presentation - Additional Information (Detail) $ in Thousands | Jan. 01, 2018USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($)SegmentProduct | Sep. 30, 2017USD ($) |
Organization And Basis Of Presentation [Line Items] | ||||
Date of incorporation | Feb. 9, 2016 | |||
State of incorporation | Cayman Islands | |||
Kind of listing | A ordinary shares | |||
Number of business segments | Segment | 3 | |||
Unrealized gains and losses recognized during the reporting period on equity securities | $ 2,747 | $ (1,424) | ||
Net cash flows from operating activities increase (decrease) | 45,871 | $ (11,184) | ||
Net cash flows from investing activities increase (decrease) | (54,491) | (138,306) | ||
Restatement Adjustment | ||||
Organization And Basis Of Presentation [Line Items] | ||||
Net cash flows from operating activities increase (decrease) | 2,400 | |||
Net cash flows from investing activities increase (decrease) | $ 2,400 | |||
Accounting Standards Update 2016-01 | ||||
Organization And Basis Of Presentation [Line Items] | ||||
Cumulative effect adjustment, net of tax | $ (10,000) | |||
Unrealized gains and losses recognized during the reporting period on equity securities | $ 2,700 | $ (1,400) | ||
Commercial Lines Segment | ||||
Organization And Basis Of Presentation [Line Items] | ||||
Number of product classifications | Product | 4 |
Schedule of Amortized Cost and
Schedule of Amortized Cost and Estimated Fair Value of Investments (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | |
Debt Securities, Available-for-sale [Line Items] | |||
Fixed maturities, Amortized Cost | $ 1,299,656 | $ 1,243,144 | |
Fixed maturities, Gross Unrealized Gains | 884 | 4,447 | |
Fixed maturities, Gross Unrealized losses | (26,859) | (6,154) | |
Fixed maturities, Estimated Fair Value | 1,273,681 | 1,241,437 | |
Other than temporary impairments recognized in AOCI | [1] | (1) | (1) |
Common stock, Amortized Cost | 137,554 | 124,915 | |
Common stock, Gross Unrealized Gains | 0 | 18,574 | |
Common stock, Gross Unrealized losses | 0 | (3,260) | |
Common stock, Estimated Fair Value | 137,554 | 140,229 | |
Other invested assets, Amortized Cost | 85,268 | 77,820 | |
Other invested assets, Gross Unrealized Gains | 0 | 0 | |
Other invested assets, Gross Unrealized losses | 0 | 0 | |
Other invested assets, Estimated Fair Value | 85,268 | 77,820 | |
Total, Amortized Cost | 1,522,478 | 1,445,879 | |
Total, Gross Unrealized Gains | 884 | 23,021 | |
Total, Gross Unrealized Losses | (26,859) | (9,414) | |
Total, Estimated Fair Value | 1,496,503 | 1,459,486 | |
U.S. Treasury and Agency Obligations | |||
Debt Securities, Available-for-sale [Line Items] | |||
Fixed maturities, Amortized Cost | 81,565 | 105,311 | |
Fixed maturities, Gross Unrealized Gains | 156 | 562 | |
Fixed maturities, Gross Unrealized losses | (2,051) | (1,193) | |
Fixed maturities, Estimated Fair Value | 79,670 | 104,680 | |
Other than temporary impairments recognized in AOCI | [1] | 0 | |
Obligations of States and Political Subdivisions | |||
Debt Securities, Available-for-sale [Line Items] | |||
Fixed maturities, Amortized Cost | 100,494 | 94,947 | |
Fixed maturities, Gross Unrealized Gains | 131 | 441 | |
Fixed maturities, Gross Unrealized losses | (998) | (274) | |
Fixed maturities, Estimated Fair Value | 99,627 | 95,114 | |
Other than temporary impairments recognized in AOCI | [1] | 0 | |
Mortgage Backed Securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Fixed maturities, Amortized Cost | 138,442 | 150,237 | |
Fixed maturities, Gross Unrealized Gains | 280 | 404 | |
Fixed maturities, Gross Unrealized losses | (3,878) | (1,291) | |
Fixed maturities, Estimated Fair Value | 134,844 | 149,350 | |
Other than temporary impairments recognized in AOCI | [1] | 0 | |
Asset-backed Securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Fixed maturities, Amortized Cost | 201,317 | 203,827 | |
Fixed maturities, Gross Unrealized Gains | 46 | 267 | |
Fixed maturities, Gross Unrealized losses | (1,641) | (393) | |
Fixed maturities, Estimated Fair Value | 199,722 | 203,701 | |
Other than temporary impairments recognized in AOCI | [1] | (1) | (1) |
Commercial Mortgage-Backed Securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Fixed maturities, Amortized Cost | 186,081 | 140,761 | |
Fixed maturities, Gross Unrealized Gains | 3 | 101 | |
Fixed maturities, Gross Unrealized losses | (5,876) | (1,067) | |
Fixed maturities, Estimated Fair Value | 180,208 | 139,795 | |
Other than temporary impairments recognized in AOCI | [1] | 0 | |
Corporate Bonds | |||
Debt Securities, Available-for-sale [Line Items] | |||
Fixed maturities, Amortized Cost | 466,198 | 422,486 | |
Fixed maturities, Gross Unrealized Gains | 235 | 2,295 | |
Fixed maturities, Gross Unrealized losses | (9,601) | (1,391) | |
Fixed maturities, Estimated Fair Value | 456,832 | 423,390 | |
Other than temporary impairments recognized in AOCI | [1] | 0 | |
Foreign Corporate Bonds | |||
Debt Securities, Available-for-sale [Line Items] | |||
Fixed maturities, Amortized Cost | 125,559 | 125,575 | |
Fixed maturities, Gross Unrealized Gains | 33 | 377 | |
Fixed maturities, Gross Unrealized losses | (2,814) | (545) | |
Fixed maturities, Estimated Fair Value | 122,778 | $ 125,407 | |
Other than temporary impairments recognized in AOCI | [1] | $ 0 | |
[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) | 9 Months Ended | ||
Sep. 30, 2018USD ($)Entity | Dec. 31, 2017USD ($) | ||
Debt Securities, Available-for-sale [Line Items] | |||
Investments in a single issuer as a percentage of shareholders' equity | 5.00% | 5.00% | |
Gross unrealized losses | $ 9,414,000 | ||
Gross unrealized losses for 12 months or greater | [1] | 1,843,000 | |
Insurance enhanced collateralized mortgage obligations, commercial mortgage-backed, and credit securities | $ 34,200,000 | ||
Investments in insurance enhanced municipal bonds | 708,000 | ||
Ratings without insurance | 0 | ||
Investments in collateralized mortgage obligations, commercial mortgage-backed securities and taxable municipal bonds | $ 33,500,000 | ||
Asset backed and taxable municipal bonds as a percentage of total cash and invested assets | 2.20% | ||
Variable Interest Entity, Not Primary Beneficiary | |||
Debt Securities, Available-for-sale [Line Items] | |||
Number of VIE’s | Entity | 3 | ||
Ownership interest exceeds respective investments | 3.00% | ||
New limited partnership that invests in distressed securities and assets and considered a VIE | |||
Debt Securities, Available-for-sale [Line Items] | |||
Significant variable interest in fair value of the non-consolidated VIE | $ 32,100,000 | 17,800,000 | |
Variable interest entities, maximum exposure to loss | 52,600,000 | 51,300,000 | |
One of the Company's variable interest VIE's, invests in distressed securities and assets | |||
Debt Securities, Available-for-sale [Line Items] | |||
Significant variable interest in fair value of the non-consolidated VIE | 19,000,000 | 26,300,000 | |
Variable interest entities, maximum exposure to loss | 33,200,000 | 40,500,000 | |
Second VIE that provides financing for middle market companies | |||
Debt Securities, Available-for-sale [Line Items] | |||
Significant variable interest in fair value of the non-consolidated VIE | 34,200,000 | 33,800,000 | |
Variable interest entities, maximum exposure to loss | 39,400,000 | $ 43,800,000 | |
Municipal Bond Insurance Association | |||
Debt Securities, Available-for-sale [Line Items] | |||
Investments in collateralized mortgage obligations, commercial mortgage-backed securities and taxable municipal bonds | 6,000,000 | ||
Assured Guaranty Corporation | |||
Debt Securities, Available-for-sale [Line Items] | |||
Investments in collateralized mortgage obligations, commercial mortgage-backed securities and taxable municipal bonds | 14,500,000 | ||
Taxable Municipal Bonds | |||
Debt Securities, Available-for-sale [Line Items] | |||
Investments in collateralized mortgage obligations, commercial mortgage-backed securities and taxable municipal bonds | 20,500,000 | ||
Federal Home Loan Mortgage Corporation | |||
Debt Securities, Available-for-sale [Line Items] | |||
Investments in collateralized mortgage obligations, commercial mortgage-backed securities and taxable municipal bonds | 12,800,000 | ||
Federal Deposit Insurance Corporation | |||
Debt Securities, Available-for-sale [Line Items] | |||
Investments in collateralized mortgage obligations, commercial mortgage-backed securities and taxable municipal bonds | 200,000 | ||
Pre-Refunded Securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Investments in insurance enhanced municipal bonds | 0 | ||
AA Rating | |||
Debt Securities, Available-for-sale [Line Items] | |||
Investments in insurance enhanced municipal bonds | $ 710,000 | ||
AA Rating | Maximum | |||
Debt Securities, Available-for-sale [Line Items] | |||
Insurance enhanced municipal bonds as a percentage of total cash and invested assets | 0.10% | ||
U.S. Treasury and Agency Obligations | |||
Debt Securities, Available-for-sale [Line Items] | |||
Gross unrealized losses | $ 2,051,000 | ||
U.S. Treasury and Agency Obligations | AA+ Rating | |||
Debt Securities, Available-for-sale [Line Items] | |||
Gross unrealized losses for 12 months or greater | 1,772,000 | ||
Obligations of States and Political Subdivisions | |||
Debt Securities, Available-for-sale [Line Items] | |||
Gross unrealized losses | 998,000 | ||
Obligations of States and Political Subdivisions | A- Rating | |||
Debt Securities, Available-for-sale [Line Items] | |||
Gross unrealized losses for 12 months or greater | 220,000 | ||
Mortgage Backed Securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Gross unrealized losses | 3,878,000 | ||
Mortgage Backed Securities | AA+ Rating | |||
Debt Securities, Available-for-sale [Line Items] | |||
Gross unrealized losses for 12 months or greater | $ 1,315,000 | ||
Percentage of unrealized losses for 12 months or greater | 99.30% | ||
Asset-backed Securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Gross unrealized losses | $ 1,641,000 | ||
Weighted average credit enhancement | 23.20% | ||
Asset-backed Securities | A Rating | |||
Debt Securities, Available-for-sale [Line Items] | |||
Gross unrealized losses for 12 months or greater | $ 394,000 | ||
Percentage of unrealized losses for 12 months or greater | 78.20% | ||
Commercial Mortgage-Backed Securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Gross unrealized losses | $ 5,876,000 | ||
Weighted average credit enhancement | 49.10% | ||
Investments in collateralized mortgage obligations, commercial mortgage-backed securities and taxable municipal bonds | $ 12,800,000 | ||
Commercial Mortgage-Backed Securities | A- Rating | |||
Debt Securities, Available-for-sale [Line Items] | |||
Gross unrealized losses for 12 months or greater | 2,627,000 | ||
Foreign Corporate Bonds | |||
Debt Securities, Available-for-sale [Line Items] | |||
Gross unrealized losses | 2,814,000 | ||
Foreign Corporate Bonds | Investment Grade Rating | |||
Debt Securities, Available-for-sale [Line Items] | |||
Gross unrealized losses for 12 months or greater | $ 590,000 | ||
Percentage of unrealized losses for 12 months or greater | 95.50% | ||
Corporate Bonds | |||
Debt Securities, Available-for-sale [Line Items] | |||
Gross unrealized losses | $ 9,601,000 | ||
Corporate Bonds | Investment Grade Rating | |||
Debt Securities, Available-for-sale [Line Items] | |||
Gross unrealized losses for 12 months or greater | $ 976,000 | ||
Percentage of unrealized losses for 12 months or greater | 89.00% | ||
Collateralized Mortgage Obligations | |||
Debt Securities, Available-for-sale [Line Items] | |||
Investments in collateralized mortgage obligations, commercial mortgage-backed securities and taxable municipal bonds | $ 200,000 | ||
[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, 2018 | Dec. 31, 2017 |
Debt Securities, Available-for-sale [Line Items] | ||
Due in one year or less, Amortized Cost | $ 84,071 | |
Due in one year through five years, Amortized Cost | 440,787 | |
Due in five years through ten years, Amortized Cost | 238,245 | |
Due in ten years through fifteen years, Amortized Cost | 6,501 | |
Due after fifteen years, Amortized Cost | 4,212 | |
Fixed maturities, Amortized Cost | 1,299,656 | $ 1,243,144 |
Due in one year or less, Estimated Fair value | 83,626 | |
Due in one year through five years, Estimated Fair value | 433,350 | |
Due in five years through ten years, Estimated Fair value | 231,360 | |
Due in ten years through fifteen years, Estimated Fair value | 6,331 | |
Due after fifteen years, Estimated Fair value | 4,240 | |
Fixed Maturities, estimated fair value | 1,273,681 | 1,241,437 |
Mortgage Backed Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 138,442 | |
Fixed maturities, Amortized Cost | 138,442 | 150,237 |
Estimated Fair value | 134,844 | |
Fixed Maturities, estimated fair value | 134,844 | 149,350 |
Asset-backed Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 201,317 | |
Fixed maturities, Amortized Cost | 201,317 | 203,827 |
Estimated Fair value | 199,722 | |
Fixed Maturities, estimated fair value | 199,722 | 203,701 |
Commercial Mortgage-Backed Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 186,081 | |
Fixed maturities, Amortized Cost | 186,081 | 140,761 |
Estimated Fair value | 180,208 | |
Fixed Maturities, estimated fair value | $ 180,208 | $ 139,795 |
Summary of Securities with Gros
Summary of Securities with Gross Unrealized Losses (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | |
Debt Securities, Available-for-sale [Line Items] | |||
Less than 12 months, Fair Value | $ 655,942 | ||
Less than 12 months, Gross Unrealized Losses | (7,571) | ||
12 months or longer, Fair Value | [1] | 139,400 | |
12 months or longer, Gross Unrealized Losses | [1] | (1,843) | |
Total, Fair Value | 795,342 | ||
Total, Gross Unrealized Losses | (9,414) | ||
U.S. Treasury and Agency Obligations | |||
Debt Securities, Available-for-sale [Line Items] | |||
Total, Gross Unrealized Losses | $ (2,051) | ||
Obligations of States and Political Subdivisions | |||
Debt Securities, Available-for-sale [Line Items] | |||
Total, Gross Unrealized Losses | (998) | ||
Mortgage Backed Securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Total, Gross Unrealized Losses | (3,878) | ||
Asset-backed Securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Total, Gross Unrealized Losses | (1,641) | ||
Commercial Mortgage-Backed Securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Total, Gross Unrealized Losses | (5,876) | ||
Corporate Bonds | |||
Debt Securities, Available-for-sale [Line Items] | |||
Total, Gross Unrealized Losses | (9,601) | ||
Foreign Corporate Bonds | |||
Debt Securities, Available-for-sale [Line Items] | |||
Total, Gross Unrealized Losses | (2,814) | ||
Common Shares | |||
Debt Securities, Available-for-sale [Line Items] | |||
Less than 12 months, Fair Value | 32,759 | ||
Less than 12 months, Gross Unrealized Losses | (3,260) | ||
Total, Fair Value | 32,759 | ||
Total, Gross Unrealized Losses | (3,260) | ||
Fixed Maturities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Less than 12 months, Fair Value | 875,266 | 623,183 | |
Less than 12 months, Gross Unrealized Losses | (18,965) | (4,311) | |
12 months or longer, Fair Value | [1] | 269,937 | 139,400 |
12 months or longer, Gross Unrealized Losses | [1] | (7,894) | (1,843) |
Total, Fair Value | 1,145,203 | 762,583 | |
Total, Gross Unrealized Losses | (26,859) | (6,154) | |
Fixed Maturities | U.S. Treasury and Agency Obligations | |||
Debt Securities, Available-for-sale [Line Items] | |||
Less than 12 months, Fair Value | 16,462 | 79,403 | |
Less than 12 months, Gross Unrealized Losses | (279) | (962) | |
12 months or longer, Fair Value | [1] | 61,137 | 17,469 |
12 months or longer, Gross Unrealized Losses | [1] | (1,772) | (231) |
Total, Fair Value | 77,599 | 96,872 | |
Total, Gross Unrealized Losses | (2,051) | (1,193) | |
Fixed Maturities | Obligations of States and Political Subdivisions | |||
Debt Securities, Available-for-sale [Line Items] | |||
Less than 12 months, Fair Value | 62,981 | 34,537 | |
Less than 12 months, Gross Unrealized Losses | (778) | (149) | |
12 months or longer, Fair Value | [1] | 8,849 | 12,060 |
12 months or longer, Gross Unrealized Losses | [1] | (220) | (125) |
Total, Fair Value | 71,830 | 46,597 | |
Total, Gross Unrealized Losses | (998) | (274) | |
Fixed Maturities | Mortgage Backed Securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Less than 12 months, Fair Value | 90,574 | 127,991 | |
Less than 12 months, Gross Unrealized Losses | (2,563) | (1,247) | |
12 months or longer, Fair Value | [1] | 35,442 | 1,866 |
12 months or longer, Gross Unrealized Losses | [1] | (1,315) | (44) |
Total, Fair Value | 126,016 | 129,857 | |
Total, Gross Unrealized Losses | (3,878) | (1,291) | |
Fixed Maturities | Asset-backed Securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Less than 12 months, Fair Value | 138,627 | 97,817 | |
Less than 12 months, Gross Unrealized Losses | (1,247) | (371) | |
12 months or longer, Fair Value | [1] | 23,861 | 6,423 |
12 months or longer, Gross Unrealized Losses | [1] | (394) | (22) |
Total, Fair Value | 162,488 | 104,240 | |
Total, Gross Unrealized Losses | (1,641) | (393) | |
Fixed Maturities | Commercial Mortgage-Backed Securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Less than 12 months, Fair Value | 97,440 | 83,051 | |
Less than 12 months, Gross Unrealized Losses | (3,249) | (523) | |
12 months or longer, Fair Value | [1] | 77,775 | 27,976 |
12 months or longer, Gross Unrealized Losses | [1] | (2,627) | (544) |
Total, Fair Value | 175,215 | 111,027 | |
Total, Gross Unrealized Losses | (5,876) | (1,067) | |
Fixed Maturities | Corporate Bonds | |||
Debt Securities, Available-for-sale [Line Items] | |||
Less than 12 months, Fair Value | 385,878 | 147,064 | |
Less than 12 months, Gross Unrealized Losses | (8,625) | (754) | |
12 months or longer, Fair Value | [1] | 34,749 | 53,024 |
12 months or longer, Gross Unrealized Losses | [1] | (976) | (637) |
Total, Fair Value | 420,627 | 200,088 | |
Total, Gross Unrealized Losses | (9,601) | (1,391) | |
Fixed Maturities | Foreign Corporate Bonds | |||
Debt Securities, Available-for-sale [Line Items] | |||
Less than 12 months, Fair Value | 83,304 | 53,320 | |
Less than 12 months, Gross Unrealized Losses | (2,224) | (305) | |
12 months or longer, Fair Value | [1] | 28,124 | 20,582 |
12 months or longer, Gross Unrealized Losses | [1] | (590) | (240) |
Total, Fair Value | 111,428 | 73,902 | |
Total, Gross Unrealized Losses | $ (2,814) | $ (545) | |
[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, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Investments Debt And Equity Securities [Abstract] | ||||
OTTI losses, gross | $ (24) | $ (395) | $ (31) | |
Portion of loss recognized in other comprehensive income (pre-tax) | 0 | 0 | ||
Net impairment losses on fixed maturities recognized in earnings | (24) | (395) | (31) | |
Equity securities | 0 | $ (1,020) | 0 | (1,677) |
Total | $ (24) | $ (1,020) | $ (395) | $ (1,708) |
Schedule of Credit Losses Recog
Schedule of Credit Losses Recognized in Earnings (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Investments Debt And Equity Securities [Abstract] | ||||
Balance at beginning of period | $ 13 | $ 16 | $ 13 | $ 31 |
Additions where no OTTI was previously recorded | 0 | 0 | ||
Additions where an OTTI was previously recorded | 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 | ||
Reductions reflecting increases in expected cash flows to be collected | 0 | 0 | ||
Reductions for securities sold during the period | 0 | (3) | 0 | (18) |
Balance at end of period | $ 13 | $ 13 | $ 13 | $ 13 |
Schedule of Accumulated Other C
Schedule of Accumulated Other Comprehensive Income, Net of Tax (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Investments Debt And Equity Securities [Abstract] | ||||||
Fixed maturities | $ (25,975) | $ (1,707) | ||||
Common stock | 0 | 15,314 | ||||
Foreign currency fluctuations | (1,003) | 551 | ||||
Deferred taxes | 3,149 | (5,175) | ||||
Accumulated other comprehensive income, net of tax | $ (23,829) | $ (22,475) | $ 8,983 | $ 10,085 | $ 5,986 | $ (618) |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance, net of tax | $ (22,475) | $ 5,986 | $ 8,983 | $ (618) |
Other comprehensive income (loss) before reclassification, before tax | (2,399) | 5,034 | (27,482) | 15,887 |
Amounts reclassified from accumulated other comprehensive income (loss), before tax | 835 | 597 | 1,660 | (1,166) |
Other comprehensive income (loss), before tax | (1,564) | 5,631 | (25,822) | 14,721 |
Income Tax (expense) benefit related to items of OCI | 210 | (1,532) | 3,038 | (4,018) |
Cumulative effect adjustment, net of tax | 0 | (10,028) | ||
Ending balance, net of tax | (23,829) | 10,085 | (23,829) | 10,085 |
Unrealized Gains and Losses on Available for Sale Securities | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance, net of tax | (21,926) | 5,549 | 8,272 | (554) |
Other comprehensive income (loss) before reclassification, before tax | (1,945) | 4,486 | (25,928) | 14,675 |
Amounts reclassified from accumulated other comprehensive income (loss), before tax | 835 | 923 | 1,660 | (830) |
Other comprehensive income (loss), before tax | (1,110) | 5,409 | (24,268) | 13,845 |
Income Tax (expense) benefit related to items of OCI | 210 | (1,583) | 3,038 | (3,916) |
Cumulative effect adjustment, net of tax | 0 | (9,868) | ||
Ending balance, net of tax | (22,826) | 9,375 | (22,826) | 9,375 |
Foreign Currency Items | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance, net of tax | (549) | 437 | 711 | (64) |
Other comprehensive income (loss) before reclassification, before tax | (454) | 548 | (1,554) | 1,212 |
Amounts reclassified from accumulated other comprehensive income (loss), before tax | 0 | (326) | 0 | (336) |
Other comprehensive income (loss), before tax | (454) | 222 | (1,554) | 876 |
Income Tax (expense) benefit related to items of OCI | 0 | 51 | 0 | (102) |
Cumulative effect adjustment, net of tax | 0 | (160) | ||
Ending balance, net of tax | $ (1,003) | $ 710 | $ (1,003) | $ 710 |
Reclassifications Out of Accumu
Reclassifications Out of Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other net realized investment (gains) losses | $ 5,343 | $ 57 | $ 8,228 | $ 858 |
Income (loss) before income taxes | 436 | (16,779) | 10,677 | 254 |
Income tax expense (benefit) | 3,292 | 7,855 | 5,944 | 13,193 |
Net income (loss) | 3,728 | (8,924) | 16,621 | 13,447 |
Total reclassifications, net of tax | 717 | 441 | 1,403 | (788) |
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 | 811 | (97) | 1,265 | (2,538) |
Other than temporary impairment losses on investments | 24 | 1,020 | 395 | 1,708 |
Income (loss) before income taxes | 835 | 923 | 1,660 | (830) |
Income tax expense (benefit) | (118) | (270) | (257) | 261 |
Net income (loss) | 717 | 653 | 1,403 | (569) |
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 | 0 | (326) | 0 | (336) |
Income tax expense (benefit) | 0 | 114 | 0 | 117 |
Net income (loss) | $ 0 | $ (212) | $ 0 | $ (219) |
Components of Net Realized Inve
Components of Net Realized Investment Gains (Losses) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Debt Securities, Available-for-sale [Line Items] | |||||
Total net realized investment gains (losses) | $ 5,319 | $ (963) | $ 7,833 | $ (850) | |
Not Designated as Hedging Instrument | Interest Rate Swap | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Gross realized gains | 1,690 | 486 | 8,457 | 822 | |
Gross realized losses | (379) | (852) | (1,498) | (2,838) | |
Total net realized investment gains (losses) | [1] | 1,311 | (366) | 6,959 | (2,016) |
Common Shares | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Gross realized gains | 5,789 | 917 | 12,116 | 2,711 | |
Gross realized losses | (946) | (1,648) | (9,582) | (2,309) | |
Total net realized investment gains (losses) | 4,843 | (731) | 2,534 | 402 | |
Fixed Maturities | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Gross realized gains | 329 | 434 | 373 | 3,122 | |
Gross realized losses | (1,164) | (300) | (2,033) | (2,358) | |
Total net realized investment gains (losses) | $ (835) | $ 134 | $ (1,660) | $ 764 | |
[1] | Includes periodic net interest settlements related to the derivatives of $0.4 million and $0.9 million for the quarters ended September 30, 2018 and 2017, respectively, and $1.5 million and $2.8 million for the nine months ended September 30, 2018 and 2017, respectively. |
Components of Net Realized In_2
Components of Net Realized Investment Gains (Losses) (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Interest Rate Swap | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Net interest settlements | $ 0.4 | $ 0.9 | $ 1.5 | $ 2.8 |
Summary of Calculation of Reali
Summary of Calculation of Realized Gains and Losses (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Investments Debt And Equity Securities [Abstract] | ||
Net gains and losses recognized during the period on equity securities | $ 4,843 | $ 2,534 |
Less: Net gains and losses recognized during the period on equity securities sold during the period | 2,096 | 3,958 |
Unrealized gains and losses recognized during the reporting period on equity securities still held at the reporting date | $ 2,747 | $ (1,424) |
Schedule of Proceeds From Sales
Schedule of Proceeds From Sales and Redemptions of Available for Sale Securities (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Investments Debt And Equity Securities [Abstract] | ||
Fixed maturities | $ 229,362 | $ 742,229 |
Equity securities | $ 28,141 | $ 24,483 |
Schedule of Investment Income (
Schedule of Investment Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Debt Securities, Available-for-sale [Line Items] | ||||
Investment income | $ 12,442 | $ 10,807 | $ 36,254 | $ 29,816 |
Investment expense | (692) | (673) | (2,146) | (2,198) |
Net investment income | 11,750 | 10,134 | 34,108 | 27,618 |
Fixed Maturities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Investment income | 9,520 | 9,020 | 27,236 | 24,032 |
Equity Securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Investment income | 1,006 | 906 | 3,010 | 2,740 |
Cash and Cash Equivalents | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Investment income | 285 | 226 | 814 | 621 |
Other Invested Assets | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Investment income | $ 1,631 | $ 655 | $ 5,194 | $ 2,423 |
Schedule of Total Investment Re
Schedule of Total Investment Return (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Investments Debt And Equity Securities [Abstract] | |||||
Net investment income | $ 11,750 | $ 10,134 | $ 34,108 | $ 27,618 | |
Net realized investment gains (losses) | 5,319 | (963) | 7,833 | (850) | |
Change in unrealized holding gains and losses | (1,564) | 5,631 | (25,822) | 14,721 | |
Net realized and unrealized investment returns | 3,755 | 4,668 | (17,989) | 13,871 | |
Total investment return | $ 15,505 | $ 14,802 | $ 16,119 | $ 41,489 | |
Total investment return % | [1] | 1.00% | 0.90% | 1.10% | 2.60% |
Average investment portfolio | $ 1,541,975 | $ 1,629,989 | $ 1,533,825 | $ 1,587,645 | |
[1] | Not annualized. |
Summary of Insurance Enhanced M
Summary of Insurance Enhanced Municipal Bonds Backed by Financial Guarantors (Detail) $ in Thousands | Sep. 30, 2018USD ($) |
Debt Securities, Available-for-sale [Line Items] | |
Investments in insurance enhanced municipal bonds | $ 708 |
Pre-Refunded Securities | |
Debt Securities, Available-for-sale [Line Items] | |
Investments in insurance enhanced municipal bonds | 0 |
Government Guaranteed Securities | |
Debt Securities, Available-for-sale [Line Items] | |
Investments in insurance enhanced municipal bonds | 0 |
Exposure Net Of Pre-refunded & Government Guaranteed Securities | |
Debt Securities, Available-for-sale [Line Items] | |
Investments in insurance enhanced municipal bonds | 708 |
Municipal Bond Insurance Association | |
Debt Securities, Available-for-sale [Line Items] | |
Investments in insurance enhanced municipal bonds | 708 |
Municipal Bond Insurance Association | Pre-Refunded Securities | |
Debt Securities, Available-for-sale [Line Items] | |
Investments in insurance enhanced municipal bonds | 0 |
Municipal Bond Insurance Association | Government Guaranteed Securities | |
Debt Securities, Available-for-sale [Line Items] | |
Investments in insurance enhanced municipal bonds | 0 |
Municipal Bond Insurance Association | Exposure Net Of Pre-refunded & Government Guaranteed Securities | |
Debt Securities, Available-for-sale [Line Items] | |
Investments in insurance enhanced municipal bonds | 708 |
Financial Guarantors | |
Debt Securities, Available-for-sale [Line Items] | |
Investments in insurance enhanced municipal bonds | 708 |
Financial Guarantors | Pre-Refunded Securities | |
Debt Securities, Available-for-sale [Line Items] | |
Investments in insurance enhanced municipal bonds | 0 |
Financial Guarantors | Government Guaranteed Securities | |
Debt Securities, Available-for-sale [Line Items] | |
Investments in insurance enhanced municipal bonds | 0 |
Financial Guarantors | Exposure Net Of Pre-refunded & Government Guaranteed Securities | |
Debt Securities, Available-for-sale [Line Items] | |
Investments in insurance enhanced municipal bonds | 708 |
Other Credit Enhanced Municipal Bonds | |
Debt Securities, Available-for-sale [Line Items] | |
Investments in insurance enhanced municipal bonds | 0 |
Other Credit Enhanced Municipal Bonds | Pre-Refunded Securities | |
Debt Securities, Available-for-sale [Line Items] | |
Investments in insurance enhanced municipal bonds | 0 |
Other Credit Enhanced Municipal Bonds | Government Guaranteed Securities | |
Debt Securities, Available-for-sale [Line Items] | |
Investments in insurance enhanced municipal bonds | 0 |
Other Credit Enhanced Municipal Bonds | Exposure Net Of Pre-refunded & Government Guaranteed Securities | |
Debt Securities, Available-for-sale [Line Items] | |
Investments in insurance enhanced municipal bonds | $ 0 |
Summary of Estimated Fair Value
Summary of Estimated Fair Values of Bonds Held on Deposit (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | |
Debt Securities, Available-for-sale [Line Items] | |||
Estimated Fair Value | $ 406,250 | $ 541,428 | |
On Deposit With Governmental Authorities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Estimated Fair Value | 25,817 | 26,852 | |
Intercompany Trusts Held For Benefit Of U.S. Policyholders | |||
Debt Securities, Available-for-sale [Line Items] | |||
Estimated Fair Value | 205,995 | 328,494 | |
Held In Trust Pursuant To Third Party Requirements | |||
Debt Securities, Available-for-sale [Line Items] | |||
Estimated Fair Value | 97,407 | 94,098 | |
Letter Of Credit Held For Third Party Requirements | |||
Debt Securities, Available-for-sale [Line Items] | |||
Estimated Fair Value | 2,317 | 3,944 | |
Securities held as collateral for borrowing arrangements | |||
Debt Securities, Available-for-sale [Line Items] | |||
Estimated Fair Value | [1] | $ 74,714 | $ 88,040 |
[1] | Amount required to collateralize margin borrowing facility. |
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 Assets Liabilities - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 200,000 | $ 200,000 |
Fair Value | $ 489 | |
Fair Value | $ (7,968) |
Summary of Net Gain (Loss) Incl
Summary of Net Gain (Loss) Included in Consolidated Statements of Operations for Changes in Fair Value of Derivatives and Periodic Net Interest Settlements Under Derivatives (Detail) - Interest Rate Swap - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net gain (loss) for changes in fair value and net settlements of derivatives | $ 400 | $ 900 | $ 1,500 | $ 2,800 |
Net Realized Investment Gains (Losses) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net gain (loss) for changes in fair value and net settlements of derivatives | $ 1,311 | $ (366) | $ 6,959 | $ (2,016) |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Detail) - Other Assets - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Funds needed to post execute swap transaction | $ 2.7 | $ 3.1 |
Interest Rate Swap | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Margin calls made in connection with interest rate swaps | $ 0.7 | $ 9.5 |
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, 2018 | Dec. 31, 2017 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total invested assets | $ 1,273,681 | $ 1,241,437 | ||
Common stock, Estimated Fair Value | 137,554 | 140,229 | ||
U.S. Treasury and Agency Obligations | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total invested assets | 79,670 | 104,680 | ||
Obligations of States and Political Subdivisions | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total invested assets | 99,627 | 95,114 | ||
Mortgage Backed Securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total invested assets | 134,844 | 149,350 | ||
Commercial Mortgage-Backed Securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total invested assets | 180,208 | 139,795 | ||
Asset-backed Securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total invested assets | 199,722 | 203,701 | ||
Corporate Bonds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total invested assets | 456,832 | 423,390 | ||
Foreign Corporate Bonds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total invested assets | 122,778 | 125,407 | ||
Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total invested assets | 1,273,681 | 1,241,437 | ||
Total invested assets | 1,411,724 | [1] | 1,381,666 | [2] |
Total invested liabilities | 7,968 | |||
Fair Value, Measurements, Recurring | Derivative instruments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair Value | 489 | |||
Total invested liabilities | 7,968 | |||
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 | 79,670 | 104,680 | ||
Total invested assets | 217,224 | [1] | 244,909 | [2] |
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 | 1,194,011 | 1,136,757 | ||
Total invested assets | 1,194,500 | [1] | 1,136,757 | [2] |
Total invested liabilities | 7,968 | |||
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Derivative instruments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair Value | 489 | |||
Total invested liabilities | 7,968 | |||
Fair Value, Measurements, Recurring | U.S. Treasury and Agency Obligations | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total invested assets | 79,670 | 104,680 | ||
Fair Value, Measurements, Recurring | U.S. Treasury and Agency Obligations | Fair Value, Inputs, Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total invested assets | 79,670 | 104,680 | ||
Fair Value, Measurements, Recurring | Obligations of States and Political Subdivisions | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total invested assets | 99,627 | 95,114 | ||
Fair Value, Measurements, Recurring | Obligations of States and Political Subdivisions | Fair Value, Inputs, Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total invested assets | 99,627 | 95,114 | ||
Fair Value, Measurements, Recurring | Mortgage Backed Securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total invested assets | 134,844 | 149,350 | ||
Fair Value, Measurements, Recurring | Mortgage Backed Securities | Fair Value, Inputs, Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total invested assets | 134,844 | 149,350 | ||
Fair Value, Measurements, Recurring | Commercial Mortgage-Backed Securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total invested assets | 180,208 | 139,795 | ||
Fair Value, Measurements, Recurring | Commercial Mortgage-Backed Securities | Fair Value, Inputs, Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total invested assets | 180,208 | 139,795 | ||
Fair Value, Measurements, Recurring | Asset-backed Securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total invested assets | 199,722 | 203,701 | ||
Fair Value, Measurements, Recurring | Asset-backed Securities | Fair Value, Inputs, Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total invested assets | 199,722 | 203,701 | ||
Fair Value, Measurements, Recurring | Corporate Bonds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total invested assets | 456,832 | 423,390 | ||
Fair Value, Measurements, Recurring | Corporate Bonds | Fair Value, Inputs, Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total invested assets | 456,832 | 423,390 | ||
Fair Value, Measurements, Recurring | Foreign Corporate Bonds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total invested assets | 122,778 | 125,407 | ||
Fair Value, Measurements, Recurring | Foreign Corporate Bonds | Fair Value, Inputs, Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total invested assets | 122,778 | 125,407 | ||
Fair Value, Measurements, Recurring | Common Shares | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Common stock, Estimated Fair Value | 137,554 | 140,229 | ||
Fair Value, Measurements, Recurring | Common Shares | Fair Value, Inputs, Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Common stock, Estimated Fair Value | $ 137,554 | $ 140,229 | ||
[1] | Excluded from the table above are limited partnerships of $85.3 million at September 30, 2018 whose fair value is based on net asset value as a practical expedient. | |||
[2] | Excluded from the table above are limited partnerships of $77.8 million at December 31, 2017 whose fair value is based on net asset value as a practical expedient. |
Company's Invested Assets and_2
Company's Invested Assets and Derivative Instruments Measured at Fair Value on Recurring Basis (Parenthetical) (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value Disclosures [Abstract] | ||
Other investment in limited partnership | $ 85,268 | $ 77,820 |
Current Fair Value of Debt (Det
Current Fair Value of Debt (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt | $ 282,086 | $ 294,713 | |
Debt, fair value | 288,630 | 302,718 | |
7.75% Subordinated Notes due 2045 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt | [1] | 96,711 | 96,619 |
Debt, fair value | [1] | 99,511 | 100,059 |
7.875% Subordinated Notes due 2047 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt | [2] | 125,970 | 125,864 |
Debt, fair value | [2] | 129,714 | 130,429 |
Margin borrowing facilities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt | 59,405 | 72,230 | |
Debt, fair value | $ 59,405 | $ 72,230 | |
[1] | As of September 30, 2018 and December 31, 2017, the carrying value and fair value of the 7.75% Subordinated Notes due 2045 are net of unamortized debt issuance cost of $3.3 million and $3.4 million, respectively | ||
[2] | As of September 30, 2018 and December 31, 2017, the carrying value and fair value of the 7.875% Subordinated Notes due 2047 are net of unamortized debt issuance cost of $4.0 million and $4.1 million, respectively |
Current Fair Value of Debt (Par
Current Fair Value of Debt (Parenthetical) (Detail) - USD ($) $ in Millions | Apr. 25, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Subordinated Notes due date | 2,047 | ||
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% | 7.75% |
Subordinated Notes due date | 2,045 | 2,045 | 2,045 |
Unamortized Debt Issuance Costs | $ 3.3 | $ 3.4 | |
7.875% Subordinated Notes due 2047 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Subordinated Notes percentage | 7.875% | 7.875% | 7.875% |
Subordinated Notes due date | 2,047 | 2,047 | 2,047 |
Unamortized Debt Issuance Costs | $ 4 | $ 4.1 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | Apr. 25, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Subordinated Notes due date | 2,047 | |||||
Fair value assets, Transfers between level 1 and level 2 | $ 0 | $ 0 | $ 0 | |||
Fair value liability, Transfers between level 1 and level 2 | 0 | 0 | $ 0 | |||
Equity Method Investments | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Equity in the earnings of liability companies or partnerships | $ 1,600,000 | $ 700,000 | $ 5,200,000 | $ 2,400,000 | ||
Variable Interest Entity, Not Primary Beneficiary | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Ownership interest exceeds respective investments | 3.00% | 3.00% | ||||
7.75% Subordinated Notes due 2045 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Subordinated Notes due date | 2,045 | 2,045 | 2,045 | |||
7.875% Subordinated Notes due 2047 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Subordinated Notes due date | 2,047 | 2,047 | 2,047 | |||
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 due date | 2,045 | |||||
Fair Value, Inputs, Level 1 | 7.875% Subordinated Notes due 2047 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Subordinated Notes due date | 2,047 |
Fair Value and Future Funding C
Fair Value and Future Funding Commitments Related to These Investments (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | $ 85,268 | $ 77,820 | |
Future Funding Commitments | 39,914 | 57,714 | |
Real Estate Fund, LP | Fair Value, Inputs, Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | [1] | 0 | |
Future Funding Commitments | [1] | 0 | |
European Non-Performing Loan Fund, LP | Fair Value, Inputs, Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | [2] | 18,967 | 26,262 |
Future Funding Commitments | [2] | 14,214 | 14,214 |
Private Middle Market Loans, LLC | Fair Value, Inputs, Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | [3] | 34,199 | 33,760 |
Future Funding Commitments | [3] | 5,200 | 10,000 |
Distressed Debt Fund, LP | Fair Value, Inputs, Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | [4] | 32,102 | 17,798 |
Future Funding Commitments | [4] | $ 20,500 | $ 33,500 |
[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 by 2020. | ||
[3] | This limited partnership provides financing for 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 investment management agreement, the Company anticipates its interest to be redeemed no later than 2024. | ||
[4] | This limited partnership invests in stressed and distressed securities and structured products. 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 to be redeemed no later than 2027 |
Fair Value and Future Funding_2
Fair Value and Future Funding Commitments Related to These Investments (Parenthetical) (Detail) | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Fair Value Disclosures [Abstract] | |
Fair value written down | $ 0 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Tax [Line Items] | |||||
Statutory income tax rates | 21.00% | 35.00% | 21.00% | 35.00% | |
Income tax expense (benefit) | $ 3,292 | $ 7,855 | $ 5,944 | $ 13,193 | |
Adjustments to provisional tax estimates | 0 | 0 | |||
Alternative minimum tax credit carry forward | $ 11,000 | ||||
AMT credit carryforward reclassed to federal income tax receivable | 10,758 | 10,758 | 10,332 | ||
Net operating loss carryforwards | 21,900 | 21,900 | 16,300 | ||
Section 163(j) carryforward | $ 10,800 | $ 10,800 | 7,900 | ||
Alternative Minimum Tax Credits | |||||
Income Tax [Line Items] | |||||
AMT credit carryforward reclassed to federal income tax receivable | $ 11,000 | ||||
UNITED STATES | |||||
Income Tax [Line Items] | |||||
Statutory income tax rates | 21.00% | ||||
BERMUDA | |||||
Income Tax [Line Items] | |||||
Statutory income tax rates | 0.00% | ||||
CAYMAN ISLANDS | |||||
Income Tax [Line Items] | |||||
Statutory income tax rates | 0.00% | ||||
LUXEMBOURG | |||||
Income Tax [Line Items] | |||||
Statutory income tax rates | 26.01% | ||||
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% | ||||
BARBADOS | Minimum [Member] | |||||
Income Tax [Line Items] | |||||
Statutory income tax rates | 0.25% | ||||
BARBADOS | Maximum | |||||
Income Tax [Line Items] | |||||
Statutory income tax rates | 2.50% |
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, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues: | ||||
Gross premiums written | $ 135,606 | $ 126,054 | $ 418,670 | $ 393,699 |
Net premiums written | 116,233 | 109,045 | 360,557 | 344,348 |
Net premiums earned | 120,528 | 108,619 | 342,447 | 328,818 |
Net investment income | 11,750 | 10,134 | 34,108 | 27,618 |
Net realized investment gains (losses) | 5,319 | (963) | 7,833 | (850) |
Other income | 411 | 2,294 | 1,289 | 5,444 |
Total revenues | 138,008 | 120,084 | 385,677 | 361,030 |
Losses and Expenses: | ||||
Net losses and loss adjustment expenses | 80,493 | 82,395 | 195,426 | 202,656 |
Acquisition costs and other underwriting expenses | 48,680 | 45,002 | 141,196 | 135,010 |
Corporate and other operating expenses | 3,475 | 4,630 | 23,653 | 11,045 |
Interest expense | 4,924 | 4,836 | 14,725 | 12,065 |
Income (loss) before income taxes | 436 | (16,779) | 10,677 | 254 |
Non-U.S. Subsidiaries | ||||
Revenues: | ||||
Gross premiums written | 9,361 | 50,812 | 39,976 | 164,975 |
Net premiums written | 9,356 | 50,800 | 39,970 | 164,947 |
Net premiums earned | 30,220 | 50,392 | 115,353 | 150,384 |
Net investment income | 12,013 | 14,631 | 39,527 | 41,519 |
Net realized investment gains (losses) | (273) | (150) | (437) | 87 |
Other income | (82) | 40 | (179) | 213 |
Total revenues | 41,878 | 64,913 | 154,264 | 192,203 |
Losses and Expenses: | ||||
Net losses and loss adjustment expenses | 14,877 | 31,044 | 48,210 | 74,780 |
Acquisition costs and other underwriting expenses | 13,188 | 21,922 | 50,475 | 65,544 |
Corporate and other operating expenses | 1,237 | 1,807 | 10,550 | 4,137 |
Interest expense | 356 | 4,679 | 6,749 | 11,653 |
Income (loss) before income taxes | 12,220 | 5,461 | 38,280 | 36,089 |
U.S. Subsidiaries | ||||
Revenues: | ||||
Gross premiums written | 126,245 | 114,076 | 378,694 | 348,331 |
Net premiums written | 106,877 | 58,245 | 320,587 | 179,401 |
Net premiums earned | 90,308 | 58,227 | 227,094 | 178,434 |
Net investment income | 7,204 | 6,584 | 21,428 | 16,786 |
Net realized investment gains (losses) | 5,592 | (813) | 8,270 | (937) |
Other income | 493 | 2,254 | 1,468 | 5,231 |
Total revenues | 103,597 | 66,252 | 258,260 | 199,514 |
Losses and Expenses: | ||||
Net losses and loss adjustment expenses | 65,616 | 51,351 | 147,216 | 127,876 |
Acquisition costs and other underwriting expenses | 35,492 | 23,080 | 90,721 | 69,466 |
Corporate and other operating expenses | 2,238 | 2,823 | 13,103 | 6,908 |
Interest expense | 12,035 | 11,238 | 34,823 | 31,099 |
Income (loss) before income taxes | (11,784) | (22,240) | (27,603) | (35,835) |
Eliminations | ||||
Revenues: | ||||
Gross premiums written | (38,834) | (119,607) | ||
Net investment income | (7,467) | (11,081) | (26,847) | (30,687) |
Total revenues | (7,467) | (11,081) | (26,847) | (30,687) |
Losses and Expenses: | ||||
Interest expense | $ (7,467) | $ (11,081) | $ (26,847) | $ (30,687) |
Components of Income Tax Benefi
Components of Income Tax Benefit (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Current income tax expense (benefit): | ||||
Foreign | $ 62 | $ 107 | $ 326 | $ 290 |
U.S. Federal | (732) | 128 | 0 | 128 |
Total current income tax expense (benefit) | (670) | 235 | 326 | 418 |
Deferred income tax benefit: | ||||
U.S. Federal | (2,622) | (8,090) | (6,270) | (13,611) |
Total deferred income tax benefit | (2,622) | (8,090) | (6,270) | (13,611) |
Total income tax benefit | $ (3,292) | $ (7,855) | $ (5,944) | $ (13,193) |
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, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Expected tax provision at weighted average rate | $ (2,494) | $ (7,678) | $ (5,527) | $ (12,252) |
Adjustments: | ||||
Tax exempt interest | 0 | (40) | (5) | (191) |
Dividend exclusion | (68) | (144) | (203) | (410) |
Base Erosion Anti-Abuse Tax | (731) | |||
Other | 1 | 7 | (209) | (340) |
Total income tax benefit | $ (3,292) | $ (7,855) | $ (5,944) | $ (13,193) |
Expected tax provision at weighted average rate | (571.90%) | (45.80%) | (51.80%) | (4823.60%) |
Adjustments: | ||||
Tax exempt interest, % of Pre-Tax Income | (0.00%) | (0.20%) | (0.00%) | (75.20%) |
Dividend exclusion, % of Pre-Tax Income | (15.60%) | (0.90%) | (1.90%) | (161.40%) |
Base Erosion Anti-Abuse Tax, % of Pre-Tax Income | (167.70%) | |||
Other, % of Pre-Tax Income | 0.20% | 0.10% | (2.00%) | (133.90%) |
Actual tax on continuing operations, % of Pre-Tax Income | (755.00%) | (46.80%) | (55.70%) | (5194.10%) |
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, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Insurance [Abstract] | ||||
Balance at beginning of period | $ 613,670 | $ 615,763 | $ 634,664 | $ 651,042 |
Less: Ceded reinsurance receivables | 91,397 | 104,245 | 97,243 | 130,439 |
Net balance at beginning of period | 522,273 | 511,518 | 537,421 | 520,603 |
Purchased reserves, gross | 0 | 9,063 | 0 | 18,024 |
Purchased reserves ceded | 0 | 63 | 0 | 573 |
Purchased reserves, net of third party reinsurance | 0 | 9,126 | 0 | 18,597 |
Incurred losses and loss adjustment expenses related to: | ||||
Current year | 92,469 | 91,766 | 222,916 | 237,460 |
Prior years | (11,976) | (9,371) | (27,490) | (34,804) |
Total incurred losses and loss adjustment expenses | 80,493 | 82,395 | 195,426 | 202,656 |
Paid losses and loss adjustment expenses related to: | ||||
Current year | 53,121 | 45,193 | 103,695 | 115,927 |
Prior years | 27,312 | 25,190 | 106,819 | 93,273 |
Total paid losses and loss adjustment expenses | 80,433 | 70,383 | 210,514 | 209,200 |
Net balance at end of period | 522,333 | 532,656 | 522,333 | 532,656 |
Plus: Ceded reinsurance receivables | 86,274 | 117,070 | 86,274 | 117,070 |
Balance at end of period | $ 608,607 | $ 649,726 | $ 608,607 | $ 649,726 |
Liability for Unpaid Losses a_3
Liability for Unpaid Losses and Loss Adjustment Expenses - Additional Information (Detail) - USD ($) $ in Thousands | Mar. 08, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | $ (11,976) | $ (9,371) | $ (27,490) | $ (34,804) | |
Global Indemnity Group Inc | American Reliable Insurance Company | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Reserve Settlement | $ 41,500 | ||||
Proceeds for loss and loss adjustment expenses paid | 38,800 | ||||
Proceeds for accrued interest | 6,200 | ||||
Payment for the difference between the agreed upon purchase price and actual settlement | $ 3,500 | ||||
Commercial Lines Segment | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | (1,200) | (7,300) | (9,100) | (26,200) | |
Commercial Lines Segment | Commercial Auto Liability | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | (1,100) | ||||
Commercial Lines Segment | Commercial Auto Liability | Accident Year 2013 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | (1,500) | ||||
Commercial Lines Segment | Commercial Auto Liability | Accident Year 2015 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | 400 | ||||
Commercial Lines Segment | Commercial Auto Liability | Accident Years 2010, 2012, 2013 and 2015 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | (3,300) | ||||
Commercial Lines Segment | Property Lines | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | (5,400) | ||||
Commercial Lines Segment | Property Lines | Accident Years 2014 through 2017 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | (1,900) | ||||
Commercial Lines Segment | Property Lines | Accident Years 2011 through 2015 | Noncatastrophe | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | (3,200) | ||||
Commercial Lines Segment | Property Lines | Accident Years 2011 through 2016 | Catastrophe Segment | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | (2,200) | ||||
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 | (6,900) | (17,100) | |||
Commercial Lines Segment | General Liability | Accident Years 2005 through 2009 | Construction Defect | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | (1,000) | ||||
Commercial Lines Segment | General Liability | Accident Years 2008 through 2016 | Other General Liability | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | (5,900) | ||||
Commercial Lines Segment | General Liability | Accident Years 2002 through 2004, 2006 through 2017 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | (3,100) | ||||
Commercial Lines Segment | General Liability | Accident Years 2005 through 2010 and 2012 through 2016 | Construction Defect | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | (6,000) | ||||
Commercial Lines Segment | General Liability | Accident Years 2005 through 2014 | Other General Liability | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | (11,100) | ||||
Commercial Lines Segment | Professional | Accident Years 2010 through 2012 and 2013 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | (200) | ||||
Commercial Lines Segment | Professional | Accident Years 2010 through 2011 and 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 | Professional | Accident Years 2006 through 2008 and 2011 through 2012 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | (3,700) | ||||
Personal Lines | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | (7,500) | (1,300) | (10,600) | (4,500) | |
Personal Lines | Accident Year 2015 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | (1,300) | ||||
Personal Lines | Property Lines | Accident Year 2015 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | (1,300) | ||||
Personal Lines | Property Lines | Accident Years 2014 through 2017 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | (4,100) | (6,900) | |||
Personal Lines | Property Lines | Accident Years 2015 and 2016 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | (3,900) | ||||
Personal Lines | General Liability | Accident Years 2011 through 2014 and 2016 through 2017 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | (3,300) | ||||
Personal Lines | General Liability | Accident Years 2007 and 2011 through 2017 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | (3,700) | ||||
Personal Lines | General Liability | Accident Years 2015 and 2016 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | (600) | ||||
Reinsurance Operations | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | (3,300) | (800) | (7,800) | (4,100) | |
Reinsurance Operations | Property Lines | Accident Years 2007, 2009 through 2012 and 2014 through 2017 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | $ (3,300) | ||||
Reinsurance Operations | Property Lines | Accident Years 2015 and 2016 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | $ (800) | ||||
Reinsurance Operations | Property Lines | Accident Years 2007 and 2009 through 2017 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | $ (7,800) | ||||
Reinsurance Operations | Property Lines | Accident Years 2013 through 2015 and 2016 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Changes in prior year reserve | $ (4,100) |
Outstanding Debt (Detail)
Outstanding Debt (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | |||
Debt | $ 282,086 | $ 294,713 | |
7.75% Subordinated Notes due 2045 | |||
Debt Instrument [Line Items] | |||
Debt | [1] | 96,711 | 96,619 |
7.875% Subordinated Notes due 2047 | |||
Debt Instrument [Line Items] | |||
Debt | [2] | 125,970 | 125,864 |
Margin borrowing facilities | |||
Debt Instrument [Line Items] | |||
Debt | $ 59,405 | $ 72,230 | |
[1] | As of September 30, 2018 and December 31, 2017, the carrying value and fair value of the 7.75% Subordinated Notes due 2045 are net of unamortized debt issuance cost of $3.3 million and $3.4 million, respectively | ||
[2] | As of September 30, 2018 and December 31, 2017, the carrying value and fair value of the 7.875% Subordinated Notes due 2047 are net of unamortized debt issuance cost of $4.0 million and $4.1 million, respectively |
Outstanding Debt (Parenthetical
Outstanding Debt (Parenthetical) (Detail) | Apr. 25, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||
Subordinated Notes due date | 2,047 | ||
7.75% Subordinated Notes due 2045 | |||
Debt Instrument [Line Items] | |||
Subordinated Notes percentage | 7.75% | 7.75% | 7.75% |
Subordinated Notes due date | 2,045 | 2,045 | 2,045 |
7.875% Subordinated Notes due 2047 | |||
Debt Instrument [Line Items] | |||
Subordinated Notes percentage | 7.875% | 7.875% | 7.875% |
Subordinated Notes due date | 2,047 | 2,047 | 2,047 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) $ in Millions | Apr. 25, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||
Subordinated Notes due date | 2,047 | ||
Promissory note | $ 230 | ||
7.75% Subordinated Notes due 2045 | |||
Debt Instrument [Line Items] | |||
Subordinated Notes percentage | 7.75% | 7.75% | 7.75% |
Subordinated Notes due date | 2,045 | 2,045 | 2,045 |
7.875% Subordinated Notes due 2047 | |||
Debt Instrument [Line Items] | |||
Subordinated Notes percentage | 7.875% | 7.875% | 7.875% |
Subordinated Notes due date | 2,047 | 2,047 | 2,047 |
Debt instrument, maturity date | Apr. 15, 2047 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Oct. 01, 2018 | Sep. 16, 2018 | Jun. 29, 2018 | Jun. 03, 2018 | Mar. 29, 2018 | Mar. 04, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Equity [Line Items] | ||||||||||
Dividend declared date | Sep. 16, 2018 | Jun. 3, 2018 | Mar. 4, 2018 | |||||||
Dividend payable, per share | $ 0.25 | $ 0.25 | $ 0.25 | |||||||
Dividend payable, date of record | Sep. 27, 2018 | Jun. 22, 2018 | Mar. 21, 2018 | |||||||
Dividend payable date | Oct. 1, 2018 | Jun. 29, 2018 | Mar. 29, 2018 | |||||||
Dividends paid to shareholders | $ 3,500 | $ 3,500 | $ 10,510 | |||||||
Accrued dividends | $ 100 | $ 100 | ||||||||
Subsequent Event | ||||||||||
Equity [Line Items] | ||||||||||
Dividends paid to shareholders | $ 3,500 | |||||||||
Ordinary Shares A | ||||||||||
Equity [Line Items] | ||||||||||
Shares repurchased | 0 | 0 | 45,233 | 29,551 | ||||||
Ordinary Shares B | ||||||||||
Equity [Line Items] | ||||||||||
Shares repurchased | 0 | 0 | 0 | 0 |
Information with Respect to Ord
Information with Respect to Ordinary Shares that were Surrendered, Repurchased or Redeemed (Detail) - Ordinary Shares A - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Equity, Class of Treasury Stock [Line Items] | |||||
Total Number of Shares Purchased | 0 | 0 | 45,233 | 29,551 | |
Average Price Paid Per Share | $ 40.07 | $ 39.24 | |||
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program | 0 | 0 | |||
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | $ 0 | $ 0 | $ 0 | $ 0 | |
January 1-31, 2018 | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Total Number of Shares Purchased | [1],[2] | 26,639 | |||
Average Price Paid Per Share | [1] | $ 42.02 | |||
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program | [1] | 0 | |||
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | [1] | 0 | $ 0 | ||
March 1-31, 2018 | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Total Number of Shares Purchased | [1],[2] | 18,594 | |||
Average Price Paid Per Share | [1] | $ 37.27 | |||
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program | [1] | 0 | |||
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | [1] | $ 0 | $ 0 | ||
January 1-31, 2017 | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Total Number of Shares Purchased | [1],[2] | 13,656 | |||
Average Price Paid Per Share | [1] | $ 38.21 | |||
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program | [1] | 0 | |||
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | [1] | 0 | $ 0 | ||
February 1-28, 2017 | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Total Number of Shares Purchased | [1],[2] | 15,309 | |||
Average Price Paid Per Share | [1] | $ 40.18 | |||
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program | [1] | 0 | |||
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | [1] | 0 | $ 0 | ||
May 1 - 31, 2017 | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Total Number of Shares Purchased | [1],[2] | 586 | |||
Average Price Paid Per Share | [1] | $ 38.49 | |||
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program | [1] | 0 | |||
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | [1] | $ 0 | $ 0 | ||
[1] | Based on settlement date. | ||||
[2] | Surrendered by employees as payment of taxes withheld on the vesting of restricted stock. |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | ||||||
Payments for advisory services fees | $ 12.5 | |||||
Fox Paine and Company | ||||||
Related Party Transaction [Line Items] | ||||||
Company's total outstanding voting power | 82.00% | 82.00% | ||||
Minimum voting power required to nominate Directors | 25.00% | 25.00% | ||||
Management fees | $ 0.6 | $ 0.6 | $ 1.6 | $ 1.6 | ||
Unpaid management fees | $ 0.2 | 0.2 | $ 6.8 | |||
Fox Paine and Company | Investment Advice [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Advisory services fees estimated | $ 12.5 | $ 12.5 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2014 |
Commitments and Contingencies [Line Items] | ||||
Commitment to purchase alternative investment | $ 50,000 | $ 40,000 | $ 50,000 | |
Future Funding Commitments | $ 39,914 | $ 57,714 | ||
European Non-Performing Loan Fund, LP | ||||
Commitments and Contingencies [Line Items] | ||||
Funded commitment amount | 35,800 | |||
Private Middle Market Loans, LLC | ||||
Commitments and Contingencies [Line Items] | ||||
Funded commitment amount | 40,000 | |||
Distressed Debt Fund, LP | ||||
Commitments and Contingencies [Line Items] | ||||
Funded commitment amount | 29,500 | |||
Unfunded Commitments | European Non-Performing Loan Fund, LP | ||||
Commitments and Contingencies [Line Items] | ||||
Future Funding Commitments | 14,200 | |||
Unfunded Commitments | Private Middle Market Loans, LLC | ||||
Commitments and Contingencies [Line Items] | ||||
Future Funding Commitments | 5,200 | |||
Unfunded Commitments | Distressed Debt Fund, LP | ||||
Commitments and Contingencies [Line Items] | ||||
Future Funding Commitments | $ 20,500 |
Share-Based Compensation Plans
Share-Based Compensation Plans - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options awarded | 0 | 0 | 0 | ||
Unvested stock options forfeited | 0 | 0 | 0 | 0 | |
Accounting Standards Update 2016-09 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock based compensation expense | $ 0.2 | $ 0.3 | |||
Stock Options | Chief Executive Officer | Employment Agreement | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options awarded | 0 | ||||
Stock Options | Chief Executive Officer | Share-based Compensation Award, Tranche 2 | Employment Agreement | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options awarded | 300,000 | ||||
Stock Options | Chief Executive Officer | Vesting Schedule One | Employment Agreement | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting date | Dec. 31, 2018 | ||||
Stock Options | Chief Executive Officer | Vesting Schedule Two | Employment Agreement | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting date | Dec. 31, 2019 | ||||
Stock Options | Chief Executive Officer | Vesting Schedule Three | Employment Agreement | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting date | Dec. 31, 2020 | ||||
Time Based Option Award | Chief Executive Officer | Vesting Schedule One | Employment Agreement | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting date | Dec. 31, 2018 | ||||
Time Based Option Award | Chief Executive Officer | Vesting Schedule Two | Employment Agreement | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting date | Dec. 31, 2019 | ||||
Time Based Option Award | Chief Executive Officer | Vesting Schedule Three | Employment Agreement | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting date | Dec. 31, 2020 | ||||
Expiration date | Dec. 31, 2027 | ||||
Time Based Option Award | Chief Executive Officer | Share-based Compensation Award, Tranche 3 | Employment Agreement | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares granted | 300,000 | ||||
Strike price per share | $ 50 | ||||
Percentage of shares vested on each anniversary of the grant date | 33.33% | ||||
Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares granted | 0 | 0 | |||
Restricted Stock | Key Employees | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares granted | 38,778 | 22,503 | |||
Weighted average fair value per share | $ 40.57 | $ 38.21 | |||
Shares vested | 11,843 | ||||
Restricted Stock | Key Employees | Share-based Compensation Award, Tranche 2 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting date | Jan. 1, 2020 | Jan. 1, 2019 | |||
Percentage of shares vested on each anniversary of the grant date | 16.50% | 16.50% | |||
Restricted Stock | Key Employees | Vesting Schedule Two | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting date | Mar. 15, 2021 | Mar. 15, 2020 | |||
Percentage of shares vested on each anniversary of the grant date | 100.00% | 100.00% | |||
Percentage of stock award subject to vesting | 50.00% | 50.00% | |||
Restricted Stock | Key Employees | Share-based Compensation Award, Tranche 3 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting date | Jan. 1, 2021 | Jan. 1, 2020 | |||
Percentage of shares vested on each anniversary of the grant date | 17.00% | 17.00% | |||
Restricted Stock | Key Employees | Share-based Compensation Award, Tranche One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting date | Jan. 1, 2019 | Jan. 1, 2018 | |||
Percentage of shares vested on each anniversary of the grant date | 16.50% | 16.50% | |||
Restricted Stock | Non Employee Director | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares granted | 7,049 | 6,245 | 23,983 | 19,713 | |
Weighted average fair value per share | $ 37.70 | $ 42.40 | $ 36.90 | $ 39.82 | |
2018 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Maximum number of shares authorized | 2,500,000 | 2,500,000 |
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, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Earnings Per Share [Abstract] | |||||
Net income (loss) | $ 3,728 | $ (8,924) | $ 16,621 | $ 13,447 | |
Weighted average shares outstanding – basic | 14,100,180 | 17,343,292 | 14,082,698 | 17,331,840 | |
Net income (loss) per share | [1] | $ 0.26 | $ (0.51) | $ 1.18 | $ 0.78 |
Weighted average shares outstanding – diluted | [2] | 14,346,585 | 17,343,292 | 14,321,113 | 17,684,519 |
Net income (loss) per share | [1] | $ 0.26 | $ (0.51) | $ 1.16 | $ 0.76 |
[1] | For the quarter ended September 30, 2017, “diluted” loss per share is the same as “basic” loss per share since there was a net loss for the period. | ||||
[2] | For the quarter ended September 30, 2017, “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, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Reconciliation Of Basic Weighted Average Shares To Diluted Weighted Average Shares [Line Items] | |||||
Weighted average shares for basic earnings per share | 14,100,180 | 17,343,292 | 14,082,698 | 17,331,840 | |
Weighted average shares for diluted earnings per share | [1] | 14,346,585 | 17,343,292 | 14,321,113 | 17,684,519 |
Restricted Stock | |||||
Reconciliation Of Basic Weighted Average Shares To Diluted Weighted Average Shares [Line Items] | |||||
Non-vested restricted stock and options | 83,882 | 74,768 | 149,490 | ||
Stock Options | |||||
Reconciliation Of Basic Weighted Average Shares To Diluted Weighted Average Shares [Line Items] | |||||
Non-vested restricted stock and options | 162,523 | 163,647 | 203,189 | ||
[1] | For the quarter ended September 30, 2017, “weighted average shares outstanding – basic” was used to calculate “diluted earnings per share” due to a net loss for the period. |
Earning Per Share - Additional
Earning Per Share - Additional Information (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Line Items] | ||||
Incremental shares included in calculation of diluted EPS | 17,721,954 | |||
Shares excluded from calculation of diluted earnings per share | 600,000 | 0 | 600,000 | 0 |
Restricted Stock Diluted | ||||
Earnings Per Share [Line Items] | ||||
Non-vested restricted stock and options | 164,693 | |||
Stock Options Diluted | ||||
Earnings Per Share [Line Items] | ||||
Non-vested restricted stock and options | 213,969 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2018Segment | |
Segment Reporting [Abstract] | |
Number of reportable business segments managed | 3 |
Summary of Business Segment Inf
Summary of Business Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | ||||||
Revenues: | ||||||||||
Gross premiums written | $ 135,606 | $ 126,054 | $ 418,670 | $ 393,699 | ||||||
Net premiums written | 116,233 | 109,045 | 360,557 | 344,348 | ||||||
Net premiums earned | 120,528 | 108,619 | 342,447 | 328,818 | ||||||
Other income (loss) | 411 | 2,294 | 1,289 | 5,444 | ||||||
Total revenues | 120,939 | 110,913 | 343,736 | 334,262 | ||||||
Losses and Expenses: | ||||||||||
Net losses and loss adjustment expenses | 80,493 | 82,395 | 195,426 | 202,656 | ||||||
Acquisition costs and other underwriting expenses | 48,680 | 45,002 | 141,196 | 135,010 | ||||||
Income (loss) from segments | (8,234) | (16,484) | 7,114 | (3,404) | ||||||
Unallocated Items: | ||||||||||
Net investment income | 11,750 | 10,134 | 34,108 | 27,618 | ||||||
Net realized investment gains (losses) | 5,319 | (963) | 7,833 | (850) | ||||||
Corporate and other operating expenses | (3,475) | (4,630) | (23,653) | (11,045) | ||||||
Interest expense | (4,924) | (4,836) | (14,725) | (12,065) | ||||||
Income (loss) before income taxes | 436 | (16,779) | 10,677 | 254 | ||||||
Income tax benefit | 3,292 | 7,855 | 5,944 | 13,193 | ||||||
Net income (loss) | 3,728 | (8,924) | 16,621 | 13,447 | ||||||
Total assets | 1,958,046 | 2,130,690 | 1,958,046 | 2,130,690 | $ 2,001,669 | |||||
Commercial Lines Segment | ||||||||||
Revenues: | ||||||||||
Gross premiums written | [1] | 63,177 | 53,113 | 186,923 | 155,776 | |||||
Net premiums written | [1] | 56,161 | 46,471 | 165,817 | 137,025 | |||||
Net premiums earned | [1] | 56,352 | 44,778 | 155,966 | 133,289 | |||||
Other income (loss) | [1] | 0 | 0 | 78 | ||||||
Total revenues | [1] | 56,352 | 44,778 | 155,966 | 133,367 | |||||
Losses and Expenses: | ||||||||||
Net losses and loss adjustment expenses | [1] | 31,899 | 19,095 | 82,023 | 53,688 | |||||
Acquisition costs and other underwriting expenses | [1] | 22,533 | [2] | 18,237 | [3] | 62,789 | [4] | 55,398 | [5] | |
Income (loss) from segments | [1] | 1,920 | 7,446 | 11,154 | 24,281 | |||||
Unallocated Items: | ||||||||||
Total assets | [1] | 874,059 | 911,412 | 874,059 | 911,412 | |||||
Personal Lines | ||||||||||
Revenues: | ||||||||||
Gross premiums written | [1] | 63,072 | [6] | 60,962 | [7] | 191,782 | [8] | 192,551 | [9] | |
Net premiums written | [1] | 50,719 | 50,607 | 154,781 | 161,979 | |||||
Net premiums earned | [1] | 50,841 | 52,268 | 151,333 | 164,102 | |||||
Other income (loss) | [1] | 493 | 2,254 | 1,468 | 5,153 | |||||
Total revenues | [1] | 51,334 | 54,522 | 152,801 | 169,255 | |||||
Losses and Expenses: | ||||||||||
Net losses and loss adjustment expenses | [1] | 41,316 | 42,534 | 98,946 | 120,410 | |||||
Acquisition costs and other underwriting expenses | [1] | 21,040 | [10] | 22,689 | [11] | 65,446 | [12] | 69,281 | [13] | |
Income (loss) from segments | [1] | (11,022) | (10,701) | (11,591) | (20,436) | |||||
Unallocated Items: | ||||||||||
Total assets | [1] | 526,127 | 481,357 | 526,127 | 481,357 | |||||
Reinsurance Operations | ||||||||||
Revenues: | ||||||||||
Gross premiums written | [14] | 9,357 | 11,979 | 39,965 | 45,372 | |||||
Net premiums written | [14] | 9,353 | 11,967 | 39,959 | 45,344 | |||||
Net premiums earned | [14] | 13,335 | 11,573 | 35,148 | 31,427 | |||||
Other income (loss) | [14] | (82) | 40 | (179) | 213 | |||||
Total revenues | [14] | 13,253 | 11,613 | 34,969 | 31,640 | |||||
Losses and Expenses: | ||||||||||
Net losses and loss adjustment expenses | [14] | 7,278 | 20,766 | 14,457 | 28,558 | |||||
Acquisition costs and other underwriting expenses | [14] | 5,107 | 4,076 | 12,961 | 10,331 | |||||
Income (loss) from segments | [14] | 868 | (13,229) | 7,551 | (7,249) | |||||
Unallocated Items: | ||||||||||
Total assets | [14],[15] | $ 557,860 | $ 737,921 | $ 557,860 | $ 737,921 | |||||
[1] | Includes business ceded to the Company’s Reinsurance Operations. | |||||||||
[2] | Includes federal excise tax of $77 relating to cessions from Commercial Lines to Reinsurance Operations. | |||||||||
[3] | Includes federal excise tax of $127 relating to cessions from Commercial Lines to Reinsurance Operations. | |||||||||
[4] | Includes federal excise tax of $367 relating to cessions from Commercial Lines to Reinsurance Operations. | |||||||||
[5] | Includes federal excise tax of $366 relating to cessions from Commercial Lines to Reinsurance Operations. | |||||||||
[6] | Includes ($3) of business written by American Reliable that was ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement. | |||||||||
[7] | Includes ($1,427) of business written by American Reliable that was ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement. | |||||||||
[8] | Includes ($1,859) of business written by American Reliable that was ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement. | |||||||||
[9] | Includes ($185) of business written by American Reliable that was ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement. | |||||||||
[10] | Includes federal excise tax of $92 relating to cessions from Personal Lines to Reinsurance Operations. | |||||||||
[11] | Includes federal excise tax of $262 relating to cessions from Personal Lines to Reinsurance Operations. | |||||||||
[12] | Includes federal excise tax of $435 relating to cessions from Personal Lines to Reinsurance Operations. | |||||||||
[13] | Includes federal excise tax of $821 relating to cessions from Personal Lines to Reinsurance Operations. | |||||||||
[14] | External business only, excluding business assumed from affiliates. | |||||||||
[15] | Comprised of Global Indemnity Reinsurance’s total assets less its investment in subsidiaries. |
Summary of Business Segment I_2
Summary of Business Segment Information (Parenthetical) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Commercial Lines Segment | ||||
Segment Reporting Information [Line Items] | ||||
Federal excise tax relating to cessions from Insurance Operations to Reinsurance Operations | $ 77 | $ 127 | $ 367 | $ 366 |
Personal Lines | ||||
Segment Reporting Information [Line Items] | ||||
Federal excise tax relating to cessions from Insurance Operations to Reinsurance Operations | 92 | 262 | 435 | 821 |
American Reliable Insurance Company | Personal Lines | ||||
Segment Reporting Information [Line Items] | ||||
Ceded premiums written | $ (3) | $ (1,427) | $ (1,859) | $ (185) |
Quota share agreement percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Condensed Consolidating Finan_3
Condensed Consolidating Financial Information Provided in Connection with Outstanding Debt of Subsidiaries - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2018 | |
Global Indemnity Group Inc | |
Condensed Financial Statements, Captions [Line Items] | |
Ownership percentage in subsidiary | 100.00% |
Schedule of Condensed Consolida
Schedule of Condensed Consolidating Balance Sheets (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | |
ASSETS | |||||||
Total investments | $ 1,496,503 | $ 1,459,486 | |||||
Cash and cash equivalents | 40,646 | 74,414 | $ 60,087 | $ 75,110 | |||
Premiums receivable, net | 84,641 | 84,386 | |||||
Reinsurance receivables, net | 96,534 | 105,060 | |||||
Funds held by ceding insurers | 50,805 | 45,300 | |||||
Federal income taxes receivable | 10,758 | 10,332 | |||||
Deferred federal income taxes | 35,675 | 26,196 | |||||
Deferred acquisition costs | 64,538 | 61,647 | |||||
Intangible assets | 22,152 | 22,549 | |||||
Goodwill | 6,521 | 6,521 | |||||
Prepaid reinsurance premiums | 22,976 | 28,851 | |||||
Receivable for securities sold | 0 | 1,543 | |||||
Other assets | 26,297 | 75,384 | |||||
Total assets | 1,958,046 | 2,001,669 | 2,130,690 | ||||
Liabilities: | |||||||
Unpaid losses and loss adjustment expenses | 608,607 | $ 613,670 | 634,664 | 649,726 | $ 615,763 | 651,042 | |
Unearned premiums | 297,630 | 285,397 | |||||
Ceded balances payable | 16,612 | 10,851 | |||||
Payable for securities purchased | 4,942 | ||||||
Contingent commissions | 8,076 | 7,984 | |||||
Debt | 282,086 | 294,713 | |||||
Other liabilities | 37,767 | 49,666 | |||||
Total liabilities | 1,255,720 | 1,283,275 | |||||
Shareholders’ equity | |||||||
Total shareholders’ equity | 702,326 | 718,394 | |||||
Total liabilities and shareholders’ equity | 1,958,046 | 2,001,669 | |||||
Global Indemnity Limited (Parent co-obligor) | |||||||
ASSETS | |||||||
Total investments | 12,251 | 13,118 | |||||
Cash and cash equivalents | 102 | 11,089 | 3,422 | 91 | |||
Investments in subsidiaries | 1,223,997 | 1,207,590 | |||||
Due from subsidiaries and affiliates | 459 | 4,618 | |||||
Other assets | 7,714 | 20,681 | |||||
Total assets | 1,244,523 | 1,257,096 | |||||
Liabilities: | |||||||
Debt | 222,483 | ||||||
Notes payable – affiliates | 520,498 | 290,498 | |||||
Accrued interest payable – affiliates | 19,286 | 12,465 | |||||
Other liabilities | 2,413 | 13,256 | |||||
Total liabilities | 542,197 | 538,702 | |||||
Shareholders’ equity | |||||||
Total shareholders’ equity | 702,326 | 718,394 | |||||
Total liabilities and shareholders’ equity | 1,244,523 | 1,257,096 | |||||
Global Indemnity Group, Inc.(Subsidiary co-obligor) | |||||||
ASSETS | |||||||
Total investments | 303,299 | 309,891 | |||||
Cash and cash equivalents | 1,904 | 7,749 | 10,538 | 5,536 | |||
Investments in subsidiaries | 318,419 | 321,194 | |||||
Due from subsidiaries and affiliates | (2,929) | (6,513) | |||||
Notes receivable – affiliate | 80,049 | 80,049 | |||||
Interest receivable – affiliate | 3,576 | 2,721 | |||||
Federal income taxes receivable | 7,734 | 7,560 | |||||
Deferred federal income taxes | 31,201 | 21,533 | |||||
Receivable for securities sold | (403) | ||||||
Other assets | 6,171 | 52,806 | |||||
Total assets | 749,424 | 796,587 | |||||
Liabilities: | |||||||
Payable for securities purchased | (2,110) | ||||||
Debt | 289,405 | 72,230 | |||||
Notes payable – affiliates | 400,000 | 630,000 | |||||
Accrued interest payable – affiliates | 20,771 | 19,574 | |||||
Other liabilities | 11,000 | 11,832 | |||||
Total liabilities | 719,066 | 733,636 | |||||
Shareholders’ equity | |||||||
Total shareholders’ equity | 30,358 | 62,951 | |||||
Total liabilities and shareholders’ equity | 749,424 | 796,587 | |||||
Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) | |||||||
ASSETS | |||||||
Total investments | [1] | 1,180,953 | 1,136,477 | ||||
Cash and cash equivalents | [1] | 38,640 | 55,576 | $ 46,127 | $ 69,483 | ||
Investments in subsidiaries | [1] | 30,358 | 62,950 | ||||
Due from subsidiaries and affiliates | [1] | 2,470 | 1,895 | ||||
Notes receivable – affiliate | [1] | 845,498 | 845,498 | ||||
Interest receivable – affiliate | [1] | 38,029 | 30,642 | ||||
Premiums receivable, net | [1] | 84,641 | 84,386 | ||||
Reinsurance receivables, net | [1] | 96,534 | 105,060 | ||||
Funds held by ceding insurers | [1] | 50,805 | 45,300 | ||||
Federal income taxes receivable | [1] | 3,024 | 2,489 | ||||
Deferred federal income taxes | [1] | 4,474 | 4,833 | ||||
Deferred acquisition costs | [1] | 64,538 | 61,647 | ||||
Intangible assets | [1] | 22,152 | 22,549 | ||||
Goodwill | [1] | 6,521 | 6,521 | ||||
Prepaid reinsurance premiums | [1] | 22,976 | 28,851 | ||||
Receivable for securities sold | [1] | 1,946 | |||||
Other assets | [1] | 19,731 | 21,897 | ||||
Total assets | [1] | 2,511,344 | 2,518,517 | ||||
Liabilities: | |||||||
Unpaid losses and loss adjustment expenses | [1] | 608,607 | 634,664 | ||||
Unearned premiums | [1] | 297,630 | 285,397 | ||||
Ceded balances payable | [1] | 16,612 | 10,851 | ||||
Payable for securities purchased | [1] | 7,052 | |||||
Contingent commissions | [1] | 8,076 | 7,984 | ||||
Notes payable – affiliates | [1] | 5,049 | 5,049 | ||||
Accrued interest payable – affiliates | [1] | 1,548 | 1,324 | ||||
Other liabilities | [1] | 24,354 | 44,578 | ||||
Total liabilities | [1] | 968,928 | 989,847 | ||||
Shareholders’ equity | |||||||
Total shareholders’ equity | [1] | 1,542,416 | 1,528,670 | ||||
Total liabilities and shareholders’ equity | [1] | 2,511,344 | 2,518,517 | ||||
Consolidation Adjustments | |||||||
ASSETS | |||||||
Investments in subsidiaries | [2] | (1,572,774) | (1,591,734) | ||||
Notes receivable – affiliate | [2] | (925,547) | (925,547) | ||||
Interest receivable – affiliate | [2] | (41,605) | (33,363) | ||||
Federal income taxes receivable | [2] | 283 | |||||
Deferred federal income taxes | [2] | (170) | |||||
Other assets | [2] | (7,319) | (20,000) | ||||
Total assets | [2] | (2,547,245) | (2,570,531) | ||||
Liabilities: | |||||||
Debt | [2] | (7,319) | |||||
Notes payable – affiliates | [2] | (925,547) | (925,547) | ||||
Accrued interest payable – affiliates | [2] | (41,605) | (33,363) | ||||
Other liabilities | [2] | (20,000) | |||||
Total liabilities | [2] | (974,471) | (978,910) | ||||
Shareholders’ equity | |||||||
Total shareholders’ equity | [2] | (1,572,774) | (1,591,621) | ||||
Total liabilities and shareholders’ equity | [2] | $ (2,547,245) | $ (2,570,531) | ||||
[1] | Includes all other subsidiaries of Global Indemnity Limited and eliminations | ||||||
[2] | Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments |
Schedule of Condensed Consoli_2
Schedule of Condensed Consolidating Statements of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Revenues: | |||||
Net premiums earned | $ 120,528 | $ 108,619 | $ 342,447 | $ 328,818 | |
Net investment income | 11,750 | 10,134 | 34,108 | 27,618 | |
Net realized investment gains (losses) | 5,319 | (963) | 7,833 | (850) | |
Other income (loss) | 411 | 2,294 | 1,289 | 5,444 | |
Total revenues | 138,008 | 120,084 | 385,677 | 361,030 | |
Losses and Expenses: | |||||
Net losses and loss adjustment expenses | 80,493 | 82,395 | 195,426 | 202,656 | |
Acquisition costs and other underwriting expenses | 48,680 | 45,002 | 141,196 | 135,010 | |
Corporate and other operating expenses | 3,475 | 4,630 | 23,653 | 11,045 | |
Interest expense | 4,924 | 4,836 | 14,725 | 12,065 | |
Income (loss) before income taxes | 436 | (16,779) | 10,677 | 254 | |
Income (loss) before income taxes | 436 | (16,779) | 10,677 | 254 | |
Income tax benefit | (3,292) | (7,855) | (5,944) | (13,193) | |
Net income (loss) | 3,728 | (8,924) | 16,621 | 13,447 | |
Global Indemnity Limited (Parent co-obligor) | |||||
Revenues: | |||||
Net investment income | 146 | 104 | 483 | 256 | |
Net realized investment gains (losses) | (101) | 23 | (121) | (226) | |
Total revenues | 45 | 127 | 362 | 30 | |
Losses and Expenses: | |||||
Corporate and other operating expenses | 982 | 2,209 | 9,959 | 3,709 | |
Interest expense | 2,017 | 5,176 | 12,715 | 12,769 | |
Income (loss) before income taxes | (2,954) | (7,258) | (22,312) | (16,448) | |
Equity in net income (loss) of subsidiaries | 6,682 | (1,666) | 38,933 | 29,895 | |
Income (loss) before income taxes | 3,728 | (8,924) | 16,621 | 13,447 | |
Net income (loss) | 3,728 | (8,924) | 16,621 | 13,447 | |
Global Indemnity Group, Inc.(Subsidiary co-obligor) | |||||
Revenues: | |||||
Net investment income | 2,492 | 2,321 | 8,404 | 5,105 | |
Net realized investment gains (losses) | 5,321 | (1,229) | 8,167 | (1,830) | |
Other income (loss) | (12) | 1,738 | 3,514 | ||
Total revenues | 7,801 | 2,830 | 16,571 | 6,789 | |
Losses and Expenses: | |||||
Corporate and other operating expenses | 2,089 | (6,441) | 12,734 | (12,104) | |
Interest expense | 12,035 | 11,237 | 34,773 | 31,087 | |
Income (loss) before income taxes | (6,323) | (1,966) | (30,936) | (12,194) | |
Equity in net income (loss) of subsidiaries | (3,995) | (12,523) | 6,770 | (14,211) | |
Income (loss) before income taxes | (10,318) | (14,489) | (24,166) | (26,405) | |
Income tax benefit | (1,884) | (211) | (2,831) | (4,057) | |
Net income (loss) | (8,434) | (14,278) | (21,335) | (22,348) | |
Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) | |||||
Revenues: | |||||
Net premiums earned | [1] | 120,528 | 108,619 | 342,447 | 328,818 |
Net investment income | [1] | 18,318 | 19,351 | 58,258 | 54,316 |
Net realized investment gains (losses) | [1] | 99 | 243 | (213) | 1,206 |
Other income (loss) | [1] | 423 | 556 | 1,289 | 1,930 |
Total revenues | [1] | 139,368 | 128,769 | 401,781 | 386,270 |
Losses and Expenses: | |||||
Net losses and loss adjustment expenses | [1] | 80,493 | 82,395 | 195,426 | 202,656 |
Acquisition costs and other underwriting expenses | [1] | 48,680 | 45,002 | 141,196 | 135,010 |
Corporate and other operating expenses | [1] | 404 | 8,862 | 960 | 19,440 |
Interest expense | [1] | 78 | 65 | 274 | 268 |
Income (loss) before income taxes | [1] | 9,713 | (7,555) | 63,925 | 28,896 |
Equity in net income (loss) of subsidiaries | [1] | (8,434) | (14,822) | (21,335) | (22,781) |
Income (loss) before income taxes | [1] | 1,279 | (22,377) | 42,590 | 6,115 |
Income tax benefit | [1] | (1,408) | (7,644) | (3,226) | (9,136) |
Net income (loss) | [1] | 2,687 | (14,733) | 45,816 | 15,251 |
Consolidation Adjustments | |||||
Revenues: | |||||
Net investment income | [2] | (9,206) | (11,642) | (33,037) | (32,059) |
Total revenues | [2] | (9,206) | (11,642) | (33,037) | (32,059) |
Losses and Expenses: | |||||
Interest expense | [2] | (9,206) | (11,642) | (33,037) | (32,059) |
Equity in net income (loss) of subsidiaries | [2] | 5,747 | 29,011 | (24,368) | 7,097 |
Income (loss) before income taxes | [2] | 5,747 | 29,011 | (24,368) | 7,097 |
Income tax benefit | [2] | 113 | |||
Net income (loss) | [2] | $ 5,747 | $ 29,011 | $ (24,481) | $ 7,097 |
[1] | Includes all other subsidiaries of Global Indemnity Limited and eliminations | ||||
[2] | Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments |
Schedule of Condensed Consoli_3
Schedule of Condensed Consolidating Statements of Comprehensive Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Condensed Financial Statements, Captions [Line Items] | |||||
Net income (loss) | $ 3,728 | $ (8,924) | $ 16,621 | $ 13,447 | |
Other comprehensive income (loss), net of tax: | |||||
Unrealized holding gains (losses) | (1,624) | 3,386 | (22,632) | 10,719 | |
Portion of other-than-temporary impairment losses recognized in other comprehensive income (losses) | 7 | (1) | (1) | (2) | |
Reclassification adjustment for (gains) losses included in net income (loss) | 717 | 441 | 1,403 | (788) | |
Unrealized foreign currency translation gains (losses) | (454) | 273 | (1,554) | 774 | |
Other comprehensive income (loss), net of tax | (1,354) | 4,099 | (22,784) | 10,703 | |
Comprehensive income (loss), net of tax | 2,374 | (4,825) | (6,163) | 24,150 | |
Global Indemnity Limited (Parent co-obligor) | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Net income (loss) | 3,728 | (8,924) | 16,621 | 13,447 | |
Other comprehensive income (loss), net of tax: | |||||
Unrealized holding gains (losses) | (63) | 51 | (210) | (193) | |
Equity in other comprehensive income (loss) of unconsolidated subsidiaries | (1,392) | 4,071 | (22,695) | 10,670 | |
Reclassification adjustment for (gains) losses included in net income (loss) | 101 | (23) | 121 | 226 | |
Other comprehensive income (loss), net of tax | (1,354) | 4,099 | (22,784) | 10,703 | |
Comprehensive income (loss), net of tax | 2,374 | (4,825) | (6,163) | 24,150 | |
Global Indemnity Group, Inc.(Subsidiary co-obligor) | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Net income (loss) | (8,434) | (14,278) | (21,335) | (22,348) | |
Other comprehensive income (loss), net of tax: | |||||
Unrealized holding gains (losses) | (845) | 1,983 | (2,930) | 5,806 | |
Equity in other comprehensive income (loss) of unconsolidated subsidiaries | (603) | 397 | (9,633) | 1,586 | |
Reclassification adjustment for (gains) losses included in net income (loss) | 659 | 561 | 1,048 | (121) | |
Unrealized foreign currency translation gains (losses) | (95) | 190 | |||
Other comprehensive income (loss), net of tax | (789) | 2,846 | (11,515) | 7,461 | |
Comprehensive income (loss), net of tax | (9,223) | (11,432) | (32,850) | (14,887) | |
Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Net income (loss) | [1] | 2,687 | (14,733) | 45,816 | 15,251 |
Other comprehensive income (loss), net of tax: | |||||
Unrealized holding gains (losses) | [1] | (716) | 1,345 | (19,492) | 5,084 |
Equity in other comprehensive income (loss) of unconsolidated subsidiaries | [1] | (789) | 2,846 | (11,515) | 7,461 |
Portion of other-than-temporary impairment losses recognized in other comprehensive income (losses) | [1] | 7 | (1) | (1) | (2) |
Reclassification adjustment for (gains) losses included in net income (loss) | [1] | (43) | (97) | 234 | (893) |
Unrealized foreign currency translation gains (losses) | [1] | (454) | 368 | (1,554) | 584 |
Other comprehensive income (loss), net of tax | [1] | (1,995) | 4,461 | (32,328) | 12,234 |
Comprehensive income (loss), net of tax | [1] | 692 | (10,272) | 13,488 | 27,485 |
Consolidation Adjustments | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Net income (loss) | [2] | 5,747 | 29,011 | (24,481) | 7,097 |
Other comprehensive income (loss), net of tax: | |||||
Unrealized holding gains (losses) | [2] | 7 | 22 | ||
Equity in other comprehensive income (loss) of unconsolidated subsidiaries | [2] | 2,784 | (7,314) | 43,843 | (19,717) |
Other comprehensive income (loss), net of tax | [2] | 2,784 | (7,307) | 43,843 | (19,695) |
Comprehensive income (loss), net of tax | [2] | $ 8,531 | $ 21,704 | $ 19,362 | $ (12,598) |
[1] | Includes all other subsidiaries of Global Indemnity Limited and eliminations | ||||
[2] | Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments |
Schedule of Condensed Consoli_4
Schedule of Condensed Consolidating Statements of Cash Flows (Detail) - USD ($) $ in Thousands | Jun. 29, 2018 | Mar. 29, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Cash flows from operating activities: | ||||||
Net cash provided by (used for) operating activities | $ 45,871 | $ (11,184) | ||||
Cash flows from investing activities: | ||||||
Proceeds from sale of fixed maturities | 229,362 | 742,229 | ||||
Proceeds from sale of equity securities | 28,141 | 24,483 | ||||
Proceeds from maturity of fixed maturities | 43,303 | 112,620 | ||||
Proceeds from limited partnerships | 8,352 | 10,567 | ||||
Amounts paid in connection with derivatives | (2,500) | |||||
Amounts received in connection with derivatives | 7,599 | |||||
Purchases of fixed maturities | (329,002) | (979,074) | ||||
Purchases of equity securities | (22,931) | (28,631) | ||||
Purchases of other invested assets | (15,800) | (18,000) | ||||
Acquisition of business | (3,515) | |||||
Net cash used for investing activities | (54,491) | (138,306) | ||||
Cash flows from financing activities: | ||||||
Net borrowings (repayments) under margin borrowing facility | (12,825) | 9,872 | ||||
Proceeds from issuance of subordinated notes | 0 | 130,000 | ||||
Debt issuance cost | 0 | (4,246) | ||||
Dividends paid to shareholders | $ (3,500) | $ (3,500) | (10,510) | |||
Purchase of A ordinary shares | (1,813) | (1,159) | ||||
Net cash provided by (used for) financing activities | (25,148) | 134,467 | ||||
Net change in cash and cash equivalents | (33,768) | (15,023) | ||||
Cash and cash equivalents at beginning of period | 74,414 | 75,110 | ||||
Cash and cash equivalents at end of period | 40,646 | 60,087 | ||||
Global Indemnity Limited (Parent co-obligor) | ||||||
Cash flows from operating activities: | ||||||
Net cash provided by (used for) operating activities | (19,280) | (10,359) | ||||
Cash flows from investing activities: | ||||||
Proceeds from sale of fixed maturities | 28,118 | 12,389 | ||||
Proceeds from maturity of fixed maturities | 5,431 | 4,750 | ||||
Purchases of fixed maturities | (32,933) | (32,044) | ||||
Net cash used for investing activities | 616 | (14,905) | ||||
Cash flows from financing activities: | ||||||
Proceeds from issuance of subordinated notes | 130,000 | |||||
Debt issuance cost | (4,246) | |||||
Proceeds / (issuance) of notes to affiliates | 230,000 | |||||
Debt restructuring | (230,000) | |||||
Dividends paid to shareholders | (10,510) | |||||
Dividends from subsidiaries | 20,000 | |||||
Capital contribution | (96,000) | |||||
Purchase of A ordinary shares | (1,813) | (1,159) | ||||
Net cash provided by (used for) financing activities | 7,677 | 28,595 | ||||
Net change in cash and cash equivalents | (10,987) | 3,331 | ||||
Cash and cash equivalents at beginning of period | 11,089 | 91 | ||||
Cash and cash equivalents at end of period | 102 | 3,422 | ||||
Global Indemnity Group, Inc.(Subsidiary co-obligor) | ||||||
Cash flows from operating activities: | ||||||
Net cash provided by (used for) operating activities | (618) | (19,634) | ||||
Cash flows from investing activities: | ||||||
Proceeds from sale of fixed maturities | 44,760 | 61,296 | ||||
Proceeds from sale of equity securities | 28,141 | 24,483 | ||||
Proceeds from maturity of fixed maturities | 7,600 | 42,928 | ||||
Proceeds from limited partnerships | 1,058 | 5,941 | ||||
Amounts paid in connection with derivatives | (2,500) | |||||
Amounts received in connection with derivatives | 7,599 | |||||
Purchases of fixed maturities | (39,314) | (248,518) | ||||
Purchases of equity securities | (22,931) | (28,631) | ||||
Purchases of other invested assets | (15,800) | (16,500) | ||||
Acquisition of business | (3,515) | |||||
Net cash used for investing activities | 7,598 | (161,501) | ||||
Cash flows from financing activities: | ||||||
Net borrowings (repayments) under margin borrowing facility | (12,825) | 9,872 | ||||
Proceeds / (issuance) of notes to affiliates | (230,000) | 120,000 | ||||
Debt restructuring | 230,000 | |||||
Dividends from subsidiaries | 56,265 | |||||
Net cash provided by (used for) financing activities | (12,825) | 186,137 | ||||
Net change in cash and cash equivalents | (5,845) | 5,002 | ||||
Cash and cash equivalents at beginning of period | 7,749 | 5,536 | ||||
Cash and cash equivalents at end of period | 1,904 | 10,538 | ||||
Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) | ||||||
Cash flows from operating activities: | ||||||
Net cash provided by (used for) operating activities | 65,769 | 18,809 | [1] | |||
Cash flows from investing activities: | ||||||
Proceeds from sale of fixed maturities | 156,484 | 668,544 | [1] | |||
Proceeds from maturity of fixed maturities | 30,272 | 64,942 | [1] | |||
Proceeds from limited partnerships | 7,294 | 4,626 | [1] | |||
Purchases of fixed maturities | (256,755) | (698,512) | [1] | |||
Purchases of other invested assets | [1] | (1,500) | ||||
Net cash used for investing activities | (62,705) | 38,100 | [1] | |||
Cash flows from financing activities: | ||||||
Proceeds / (issuance) of notes to affiliates | [1] | (120,000) | ||||
Dividends from subsidiaries | (20,000) | (56,265) | [1] | |||
Capital contribution | [1] | 96,000 | ||||
Net cash provided by (used for) financing activities | (20,000) | (80,265) | [1] | |||
Net change in cash and cash equivalents | (16,936) | (23,356) | [1] | |||
Cash and cash equivalents at beginning of period | [1] | 55,576 | 69,483 | |||
Cash and cash equivalents at end of period | [1] | $ 38,640 | $ 46,127 | |||
[1] | Includes all other subsidiaries of Global Indemnity Limited and eliminations |
New Accounting Pronouncements -
New Accounting Pronouncements - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2014 | Jan. 01, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Stock options awarded | 0 | 0 | 0 | |||
Unrealized gains and losses recognized during the reporting period on equity securities | $ 2,747,000 | $ (1,424,000) | ||||
Stock Options | Chief Executive Officer | Employment Agreement | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Stock options awarded | 0 | |||||
Stock Options | Chief Executive Officer | Share-based Compensation Award, Tranche 2 | Employment Agreement | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Stock options awarded | 300,000 | |||||
Accounting Standard Update 2018-02 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Cumulative-effect adjustment | $ 100,000 | |||||
Accounting Standard Update 2017-09 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Cumulative-effect adjustment | 0 | $ 0 | ||||
Stock based compensation expense | 200,000 | 300,000 | ||||
Accounting Standards Update 2016-16 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Cumulative-effect adjustment | 200,000 | |||||
Accounting Standards Update 2016-01 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Cumulative-effect adjustment | $ (10,000,000) | |||||
Unrealized gains and losses recognized during the reporting period on equity securities | 2,700,000 | (1,400,000) | ||||
Accounting Standards Update 2014-09 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Cumulative-effect adjustment | $ 0 | $ 0 |