Cover Page
Cover Page - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Jun. 30, 2020 | |
Document Information | ||
Document Type | 10-K | |
Document Annual Report | true | |
Document Period End Date | Dec. 31, 2020 | |
Current Fiscal Year End Date | --12-31 | |
Document Transition Report | false | |
Entity File Number | 001-36311 | |
Entity Registrant Name | NATIONAL GENERAL HOLDINGS CORP. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-1046208 | |
Entity Address, Address Line One | 59 Maiden Lane | |
Entity Address, Address Line Two | 38th Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10038 | |
City Area Code | 212 | |
Local Phone Number | 380-9500 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
ICFR Auditor Attestation Flag | true | |
Entity Shell Company | false | |
Entity Public Float | $ 1,425,196,853 | |
Entity Common Stock, Shares Outstanding | 113,585,043 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | FY | |
Entity Central Index Key | 0001578735 | |
Common Stock, par value $0.01 per share | ||
Document Information | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
7.50% Non-Cumulative Preferred Stock, Series A | ||
Document Information | ||
Title of 12(b) Security | 7.50% Non-Cumulative Preferred Stock, Series A | |
Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series B | ||
Document Information | ||
Title of 12(b) Security | Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series B | |
Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series C | ||
Document Information | ||
Title of 12(b) Security | Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series C | |
7.625% Subordinated Notes due 2055 | ||
Document Information | ||
Title of 12(b) Security | 7.625% Subordinated Notes due 2055 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Investments: | ||
Debt securities, available-for-sale, at fair value (allowance for expected credit losses $0 - 2020) (Exchanges - $310,215 and $324,249; allowance for expected credit losses $0 - 2020) | $ 4,497,130 | $ 4,476,358 |
Short-term investments (Exchanges - $26,887 and $5,245) | 191,086 | 67,353 |
Other investments (related parties - $231,927 and $238,841) | 281,055 | 311,287 |
Total investments | 4,969,271 | 4,854,998 |
Cash and cash equivalents (Exchanges - $3,782 and $959) | 662,772 | 135,942 |
Restricted cash and cash equivalents (Exchanges - $331 and $24) | 36,995 | 28,521 |
Accrued investment income (related parties - $2,420 and $2,391) (Exchanges - $1,628 and $2,001) | 27,803 | 30,927 |
Premiums and other receivables (net of allowance for expected credit losses $22,781 - 2020; net of bad debt allowance $24,067 - 2019) (Exchanges - $49,315 and $55,859; net of allowance for expected credit losses $1,165 - 2020; net of bad debt allowance $541 - 2019) | 1,545,380 | 1,428,948 |
Deferred acquisition costs (Exchanges - $19,200 and $23,307) | 285,905 | 263,523 |
Reinsurance recoverable (net of allowance for expected credit losses $810 - 2020) (Exchanges - $125,515 and $119,125; net of allowance for expected credit losses $174 - 2020) | 1,218,930 | 1,394,308 |
Prepaid reinsurance premiums (Exchanges - $89,850 and $$105,894) | 414,010 | 575,747 |
Property and equipment, net (Exchanges - $0 and $241) | 377,683 | 403,827 |
Intangible assets, net (Exchanges - $3,045 and $3,225) | 340,725 | 365,823 |
Goodwill | 179,328 | 179,328 |
Prepaid and other assets (Exchanges - $3,564 and $3,521) | 69,092 | 94,642 |
Total assets | 10,127,894 | 9,756,534 |
Liabilities: | ||
Unpaid loss and loss adjustment expense reserves (Exchanges - $205,972 and $205,786) | 2,889,098 | 2,886,414 |
Unearned premiums and other revenue (Exchanges - $207,088 and $252,553) | 2,244,624 | 2,312,241 |
Reinsurance payable (Exchanges - $59,039 and $35,689) | 363,531 | 562,844 |
Accounts payable and accrued expenses (Exchanges - $10,203 and $8,497) | 377,662 | 315,366 |
Debt | 676,810 | 686,006 |
Other liabilities (Exchanges - $19,639 and $30,803) | 360,171 | 376,169 |
Total liabilities | 6,911,896 | 7,139,040 |
Commitments and contingencies (Note 13) | ||
Stockholders’ equity: | ||
Preferred stock, $0.01 par value - authorized 10,000,000 shares, issued and outstanding 2,565,120 shares - 2020 and 2019; Aggregate liquidation preference $450,000 - 2020 and 2019. | 450,000 | 450,000 |
Common stock, $0.01 par value - authorized 150,000,000 shares, issued 114,044,126 and 113,368,811 shares - 2020 and 2019, outstanding 113,585,043 and 113,368,811 shares - 2020 and 2019. | 1,140 | 1,134 |
Treasury stock, at cost - 459,083 shares - 2020 | (8,482) | 0 |
Additional paid-in capital | 1,077,006 | 1,065,634 |
Accumulated other comprehensive income: | ||
Unrealized foreign currency translation adjustment, net of tax | (443) | (202) |
Unrealized gain on investments, net of tax | 203,646 | 74,750 |
Total accumulated other comprehensive income | 203,203 | 74,548 |
Retained earnings | 1,514,296 | 1,058,138 |
Total National General Holdings Corp. stockholders’ equity | 3,237,163 | 2,649,454 |
Noncontrolling interest | (21,165) | (31,960) |
Total stockholders’ equity | 3,215,998 | 2,617,494 |
Total liabilities and stockholders’ equity | $ 10,127,894 | $ 9,756,534 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Investments: | ||
Debt securities, available-for-sale, allowance for expected credit losses | $ 0 | |
Debt securities, available-for-sale at fair value | 4,497,130,000 | $ 4,476,358,000 |
Short-term investments | 191,086,000 | 67,353,000 |
Other investments | 281,055,000 | 311,287,000 |
Cash and cash equivalents | 662,772,000 | 135,942,000 |
Restricted cash and cash equivalents | 36,995,000 | 28,521,000 |
Accrued investment income | 27,803,000 | 30,927,000 |
Premiums and other receivables, allowance for expected credit Losses | 22,781,000 | 24,067,000 |
Premiums and other receivables, net | 1,545,380,000 | 1,428,948,000 |
Deferred acquisition costs | 285,905,000 | 263,523,000 |
Reinsurance recoverable, allowance for expected credit losses | 810,000 | 0 |
Reinsurance recoverable, net | 1,218,930,000 | 1,394,308,000 |
Prepaid reinsurance premiums | 414,010,000 | 575,747,000 |
Property and equipment, net | 377,683,000 | 403,827,000 |
Total Intangible assets, Net Value | 340,725,000 | 365,823,000 |
Prepaid and other assets | 69,092,000 | 94,642,000 |
Liabilities: | ||
Unpaid loss and loss adjustment expense reserves | 2,889,098,000 | 2,886,414,000 |
Unearned premiums and other revenue | 2,244,624,000 | 2,312,241,000 |
Reinsurance payable | 363,531,000 | 562,844,000 |
Accounts payable and accrued expenses | 377,662,000 | 315,366,000 |
Other liabilities | $ 360,171,000 | $ 376,169,000 |
Stockholders’ equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Shares of preferred stock issued (in shares) | 2,565,120 | 2,565,120 |
Preferred stock, shares outstanding (in shares) | 2,565,120 | 2,565,120 |
Aggregate liquidation preference | $ 450,000,000 | $ 450,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, issued (in shares) | 114,044,126 | 113,368,811 |
Common stock, outstanding (in shares) | 113,585,043 | 113,368,811 |
Treasury stock, at cost (in shares) | 459,083 | 0 |
Reciprocal Exchanges | ||
Investments: | ||
Debt securities, available-for-sale, allowance for expected credit losses | $ 0 | |
Debt securities, available-for-sale at fair value | 310,215,000 | $ 324,249,000 |
Short-term investments | 26,887,000 | 5,245,000 |
Cash and cash equivalents | 3,782,000 | 959,000 |
Restricted cash and cash equivalents | 331,000 | 24,000 |
Accrued investment income | 1,628,000 | 2,001,000 |
Premiums and other receivables, allowance for expected credit Losses | 1,165,000 | 541,000 |
Premiums and other receivables, net | 49,315,000 | 55,859,000 |
Deferred acquisition costs | 19,200,000 | 23,307,000 |
Reinsurance recoverable, allowance for expected credit losses | 174,000 | |
Reinsurance recoverable, net | 125,515,000 | 119,125,000 |
Prepaid reinsurance premiums | 89,850,000 | 105,894,000 |
Property and equipment, net | 0 | 241,000 |
Total Intangible assets, Net Value | 3,045,000 | 3,225,000 |
Prepaid and other assets | 3,564,000 | 3,521,000 |
Liabilities: | ||
Unpaid loss and loss adjustment expense reserves | 205,972,000 | 205,786,000 |
Unearned premiums and other revenue | 207,088,000 | 252,553,000 |
Reinsurance payable | 59,039,000 | 35,689,000 |
Accounts payable and accrued expenses | 10,203,000 | 8,497,000 |
Other liabilities | 19,639,000 | 30,803,000 |
Related parties | ||
Investments: | ||
Other investments | 231,927,000 | 238,841,000 |
Accrued investment income | $ 2,420,000 | $ 2,391,000 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues: | |||
Net earned premium | $ 4,494,620 | $ 4,118,042 | $ 3,732,202 |
Ceding commission income | 152,457 | 238,453 | 224,697 |
Service and fee income | 760,374 | 641,965 | 561,583 |
Net investment income | 118,257 | 141,233 | 119,034 |
Net gain (loss) on investments | 26,577 | 13,473 | (29,545) |
Other income | 0 | 26,428 | 0 |
Total revenues | 5,552,285 | 5,179,594 | 4,607,971 |
Expenses: | |||
Loss and loss adjustment expense | 2,824,082 | 2,854,468 | 2,662,226 |
Acquisition costs and other underwriting expenses | 990,569 | 827,367 | 735,266 |
General and administrative expenses | 1,043,193 | 1,041,772 | 938,046 |
Interest expense | 33,772 | 51,544 | 51,425 |
Total expenses | 4,891,616 | 4,775,151 | 4,386,963 |
Income before provision for income taxes | 660,669 | 404,443 | 221,008 |
Provision for income taxes | 136,461 | 77,013 | 53,484 |
Net income | 524,208 | 327,430 | 167,524 |
Net (income) loss attributable to noncontrolling interest | (10,877) | 20,639 | 39,830 |
Net income attributable to NGHC | 513,331 | 348,069 | 207,354 |
Dividends on preferred stock | (33,600) | (33,600) | (32,492) |
Net income attributable to NGHC common stockholders | $ 479,731 | $ 314,469 | $ 174,862 |
Earnings Per Share (“EPS”) attributable to NGHC common stockholders: | |||
Basic EPS (in dollars per share) | $ 4.23 | $ 2.78 | $ 1.62 |
Diluted EPS (in dollars per share) | $ 4.14 | $ 2.73 | $ 1.59 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 524,208 | $ 327,430 | $ 167,524 |
Other comprehensive income: | |||
Foreign currency translation adjustment | (305) | 18,055 | (8,425) |
Income tax effect | 64 | (3,796) | 1,774 |
Total foreign currency translation adjustment, net of tax | (241) | 14,259 | (6,651) |
Gross unrealized gain (loss) on investments before reclassifications | 191,424 | 172,968 | (71,936) |
Income tax effect | (40,198) | (36,323) | 15,107 |
Total change in net unrealized gain (loss) on investments, net of tax | 151,226 | 136,645 | (56,829) |
Net realized (gain) loss on investments | (28,183) | (19,721) | 18,270 |
Income tax effect | 5,918 | 4,141 | (3,837) |
Total (gain) loss on investments reclassifications to net income, net of tax | (22,265) | (15,580) | 14,433 |
Other comprehensive income (loss) before income tax effect | 162,936 | 171,302 | (62,091) |
Income tax effect | (34,216) | (35,978) | 13,044 |
Other comprehensive income (loss), net of tax | 128,720 | 135,324 | (49,047) |
Comprehensive income | 652,928 | 462,754 | 118,477 |
Comprehensive (income) loss attributable to noncontrolling interest | (10,942) | 11,993 | 44,823 |
Comprehensive income attributable to NGHC | $ 641,986 | $ 474,747 | $ 163,300 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Preferred stock Series D | Preferred Stock | Preferred StockPreferred stock Series D | Common stock | Treasury Stock | Additional Paid-in Capital | Additional Paid-in CapitalPreferred stock Series D | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Noncontrolling Interest |
Increase (Decrease) in Stockholders' Equity | |||||||||||
Cumulative-effect adjustment of change in accounting principles | $ 8,830 | $ 36 | $ 8,794 | ||||||||
Beginning balance at Dec. 31, 2017 | 1,953,425 | $ 420,000 | $ 1,067 | $ 917,751 | (8,112) | 597,863 | $ 24,856 | ||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net income (loss) | 167,524 | 207,354 | (39,830) | ||||||||
Foreign currency translation adjustment, net of tax | (6,651) | (6,651) | |||||||||
Change in unrealized gain (loss) on investments, net of tax | (42,396) | (37,403) | (4,993) | ||||||||
Issuance of stock | 132,230 | $ 29,890 | $ 30,000 | 58 | 132,172 | $ (110) | |||||
Common stock dividends declared | (17,463) | (17,463) | |||||||||
Preferred stock dividends declared | (32,492) | (32,492) | |||||||||
Common stock issued under employee stock plans and exercises of stock options | 1,978 | 4 | 1,974 | ||||||||
Shares withheld related to net share settlement | (3,024) | (3,024) | |||||||||
Stock-based compensation | 9,020 | 9,020 | |||||||||
Ending balance at Dec. 31, 2018 | 2,200,871 | 450,000 | 1,129 | 1,057,783 | (52,130) | 764,056 | (19,967) | ||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net income (loss) | 327,430 | 348,069 | (20,639) | ||||||||
Foreign currency translation adjustment, net of tax | 14,259 | 14,259 | |||||||||
Change in unrealized gain (loss) on investments, net of tax | 121,065 | 112,419 | 8,646 | ||||||||
Common stock dividends declared | (20,387) | (20,387) | |||||||||
Preferred stock dividends declared | (33,600) | (33,600) | |||||||||
Common stock issued under employee stock plans and exercises of stock options | 594 | 5 | 589 | ||||||||
Shares withheld related to net share settlement | (3,734) | (3,734) | |||||||||
Stock-based compensation | 10,996 | 10,996 | |||||||||
Ending balance at Dec. 31, 2019 | 2,617,494 | 450,000 | 1,134 | $ 0 | 1,065,634 | 74,548 | 1,058,138 | (31,960) | |||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net income (loss) | 524,208 | 513,331 | 10,877 | ||||||||
Foreign currency translation adjustment, net of tax | (241) | (241) | |||||||||
Change in unrealized gain (loss) on investments, net of tax | 128,961 | 128,896 | 65 | ||||||||
Common stock repurchased | (8,482) | (8,482) | |||||||||
Common stock dividends declared | (22,710) | (22,710) | |||||||||
Preferred stock dividends declared | (33,600) | (33,600) | |||||||||
Common stock issued under employee stock plans and exercises of stock options | 2,635 | 6 | 2,629 | ||||||||
Shares withheld related to net share settlement | (3,678) | (3,678) | |||||||||
Stock-based compensation | 12,421 | 12,421 | |||||||||
Ending balance at Dec. 31, 2020 | $ 3,215,998 | $ 450,000 | $ 1,140 | $ (8,482) | $ 1,077,006 | $ 203,203 | $ 1,514,296 | $ (21,165) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Cash flows from operating activities: | |||
Net income | $ 524,208 | $ 327,430 | $ 167,524 |
Adjustments to reconcile net income to cash provided by operating activities: | |||
Net (gain) loss on investments and gain on sale of a business | (26,577) | (39,901) | 29,545 |
Credit loss expense | 94,667 | 88,247 | 74,214 |
Depreciation and amortization | 80,694 | 96,279 | 86,346 |
Stock-based compensation expense | 12,421 | 10,996 | 9,020 |
Other, net | 22,517 | 3,644 | 11,685 |
Changes in assets and liabilities: | |||
Accrued investment income | 3,123 | (5,553) | (7,568) |
Premiums and other receivables | (212,556) | (112,627) | (168,445) |
Deferred acquisition costs | (22,382) | (15,055) | (38,713) |
Reinsurance recoverable | 174,569 | 194,648 | (318,344) |
Prepaid reinsurance premiums | 161,737 | 93,257 | (148,552) |
Prepaid expenses and other assets | 25,818 | 58,086 | (17,785) |
Unpaid loss and loss adjustment expense reserves | 2,685 | (62,965) | 302,730 |
Unearned premiums and other revenue | (67,617) | (21,474) | 265,102 |
Reinsurance payable | (199,314) | (42,355) | 259,699 |
Accounts payable and accrued expenses | 69,649 | (7,983) | 98,276 |
Other liabilities | (43,572) | (43,063) | (6,601) |
Net cash provided by operating activities | 600,070 | 521,611 | 598,133 |
Cash flows from investing activities: | |||
Debt securities, available-for-sale | (1,002,485) | (2,140,359) | (1,802,668) |
Short-term investments | (1,959,084) | (2,773,361) | (2,919,422) |
Other investments | (2,579) | (5,848) | (39,019) |
Property and equipment | (39,974) | (91,664) | (102,390) |
Sale of debt securities, available-for-sale | 509,902 | 974,474 | 1,010,339 |
Maturity of debt securities, available-for-sale | 645,401 | 347,948 | 314,685 |
Sale of short-term investments | 1,838,450 | 3,066,577 | 2,610,788 |
Sale and return of other investments | 25,257 | 16,733 | 150,366 |
Sale of a business, net of cash and cash equivalents sold | 0 | 92,290 | 0 |
Other investing activities | (700) | 14,959 | (13,453) |
Net cash provided by (used in) investing activities | 14,188 | (498,251) | (790,774) |
Cash flows from financing activities: | |||
Common stock repurchased | (8,482) | 0 | 0 |
Payments of debt issuance costs | 0 | (1,134) | 0 |
Repayments of debt and principal payments under capital leases obligations | (13,130) | (32,306) | (39,000) |
Issuance of common stock, net (fees $0 - 2020, $0 - 2019, and $5,770 - 2018) | 0 | 0 | 132,230 |
Issuance of preferred stock, net (fees $0 - 2020, $0 - 2019, and $110 - 2018) | 0 | 0 | 29,890 |
Issuance of common stock — employee share options | 2,635 | 594 | 1,978 |
Taxes paid related to net share settlement of equity awards | (3,678) | (3,734) | (3,024) |
Dividends paid to common shareholders | (22,699) | (19,239) | (17,111) |
Dividends paid to preferred shareholders | (33,600) | (33,542) | (31,500) |
Net cash (used in) provided by financing activities | (78,954) | (89,361) | 73,463 |
Effect of exchange rate changes on cash and cash equivalents | 0 | (3,119) | (4,723) |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 535,304 | (69,120) | (123,901) |
Cash, cash equivalents, and restricted cash at beginning of the year | 164,463 | 233,583 | 357,484 |
Cash, cash equivalents, and restricted cash at end of the year | 699,767 | 164,463 | 233,583 |
Supplemental disclosures of cash flow information: | |||
Cash paid for income taxes | 109,936 | 38,723 | 26,763 |
Cash paid for interest | 38,208 | 42,159 | 44,884 |
Common stock | |||
Dividends Payable | |||
Dividends Payable | 5,679 | 5,669 | 4,518 |
Preferred Stock | |||
Dividends Payable | |||
Dividends Payable | $ 8,925 | $ 8,925 | $ 8,867 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Common stock | |||
Cost of issuance of stock | $ 0 | $ 0 | $ 5,770 |
Preferred Stock | |||
Cost of issuance of stock | $ 0 | $ 0 | $ 110 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization National General Holdings Corp. (the “Company” or “NGHC”) is an insurance holding company formed under the laws of the state of Delaware. The Company provides, through its wholly-owned subsidiaries, a variety of insurance products, including personal and small business automobile, homeowners, umbrella, recreational vehicle, motorcycle, lender-placed, supplemental health and other niche insurance products. The insurance is sold through a network of independent agents, relationships with affinity partners, direct-response marketing programs and retail storefronts. The Company is licensed to operate throughout the fifty states and the District of Columbia. Effective January 4, 2021, the Company was acquired by The Allstate Corporation (“Allstate”) pursuant to the Agreement and Plan of Merger (“Merger”), dated as of July 7, 2020, by and among the Company, Allstate, and Bluebird Acquisition Corp., an indirect wholly owned subsidiary of Allstate. See Note 22, “Subsequent Events” for additional information. In March 2020, the outbreak of COVID-19 caused by a novel strain of the coronavirus was recognized as a pandemic by the World Health Organization. The pandemic outbreak has caused an economic downturn on a global scale. As of December 31, 2020, the Company did not experience a material adverse impact due to COVID-19. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and variable interest entities (“VIE”) of which the Company is the primary beneficiary. All significant intercompany transactions and accounts have been eliminated in consolidation. Use of Estimates and Assumptions The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s principal estimates include unpaid losses and loss adjustment expense reserves; deferred acquisition costs; reinsurance recoverable, including the provision for uncollectible amounts; determining the fair value of investments; determining the fair value of stock-based awards for stock compensation; the valuation of intangibles and the determination of goodwill and goodwill impairment; and income taxes. In developing the estimates and assumptions, management uses all available evidence. Because of uncertainties associated with estimating the amounts, timing and likelihood of possible outcomes, actual results could differ from estimates. Other Significant Accounting Policies Premiums and Other Receivables The Company recognizes earned premium on a pro rata basis over the terms of the policies, generally periods of six Premiums and other receivables are reported net of an allowance for expected credit losses. The allowance is based upon the Company’s ongoing review of amounts outstanding, historical loss data, including delinquencies and write-offs, current and forecasted economic conditions, and other relevant factors. The Company uses a loss-rate method to estimate the expected credit losses. Credit risk is partially mitigated by the Company’s ability to cancel the policy if the policyholder does not pay the premium. Cash and Cash Equivalents The Company’s cash and cash equivalents include cash on hand, money market instruments and other debt instruments with a maturity of 90 days or less when purchased. Certain securities with original maturities of 90 days or less that are held as a portion of fixed maturity portfolios are classified as short-term investments. Restricted Cash and Cash Equivalents Restricted cash and cash equivalents balances relate primarily to deposits in certain states in order to conduct business and certain third-party agreements. The Company also utilizes trust accounts to collateralize business with its reinsurance counterparties. Amounts described as restricted cash and restricted cash equivalents are included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Short-term Investments Short-term investments include commercial paper, U.S. Treasury bills and money market funds with maturities between 91 days and less than one year at the date of acquisition. Deferred Acquisition Costs Deferred acquisition costs include commissions, premium taxes, payments to affinity partners, and other direct sales costs that are directly related to successful acquisition of insurance policies. These costs, net of ceding allowances, are deferred and amortized to the extent recoverable, over the policy period in which the related premiums are earned and/or over the expected life of the policy as applicable to A&H. Anticipated investment income is considered in determining the recoverability of these costs. Management believes that these costs are recoverable. Ceding Commission Revenue Commissions on reinsurance premiums ceded are earned in a manner consistent with the recognition of the costs to acquire the underlying policies on a pro-rata basis over the terms of the policies reinsured. The portion of ceding commission which represents reimbursement of acquisition costs related to the underlying policies is recorded as an offset to acquisition costs and other underwriting expenses. Commission in excess of acquisition costs is recorded as ceding commission income over the terms of the policies. Certain reinsurance agreements contain provisions whereby the ceding commission rates vary based on the loss experience of the policies covered by the agreements. The Company records ceding commission revenue based on its current estimate of losses on the reinsured policies subject to variable commission rates. The Company records adjustments to the ceding commission revenue in the period that changes in the estimated losses are determined. Loss and Loss Adjustment Expense Loss and loss adjustment expense (“LAE”) represent the estimated ultimate net costs of all reported and unreported losses incurred through the period end. The reserves for unpaid losses and LAE represent the accumulation of estimates for both reported losses and those incurred but not reported relating to direct insurance and assumed reinsurance agreements. Estimates for salvage and subrogation recoverables are recognized at the time losses are incurred and netted against the provision for losses. Insurance liabilities are based on estimates, and the ultimate liability may vary from such estimates. These estimates are regularly reviewed and adjustments are included in the period in which adjustments are determined. Business Combinations The Company accounts for business combinations under the acquisition method of accounting, which requires the Company to record assets acquired, liabilities assumed and any noncontrolling interest in the acquiree at their respective fair values as of the acquisition date. The Company accounts for the insurance and reinsurance contracts under the acquisition method as new contracts, which requires the Company to record assets and liabilities at fair value. The Company adjusts the fair value of loss and LAE reserves starting with the acquired loss reserves based on the Company’s existing accounting policies and then discounting them based on expected reserve payout patterns using a current risk-free rate of interest. This risk-free interest rate is then adjusted based on different cash flow scenarios that use different payout and ultimate reserve assumptions deemed to be reasonably possible based upon the inherent uncertainties present in determining the amount and timing of payment of such reserves. The difference between the acquired loss and LAE reserves and the Company’s best estimate of the fair value of such reserves at the acquisition date is recorded as either an intangible asset (net loss reserve discount) or another liability (net loss reserve plus a risk premium), as applicable and is amortized proportionately to the reduction in the related loss reserves (e.g., over the estimated payout period of the acquired loss and LAE reserves). The Company assigns fair values to intangible assets acquired based on valuation techniques including the income and market approaches. The Company records contingent consideration at fair value based on the terms of the purchase agreement with subsequent changes in fair value recorded through earnings. The purchase price is the fair value of the total consideration conveyed to the seller and we record the excess (deficiency) of the purchase price over the fair value of the acquired net assets, where applicable, as goodwill or bargain purchase gain. The Company expenses costs associated with the acquisition of a business in the period incurred. Goodwill and Intangible Assets A purchase price paid that is in excess of net assets, i.e., goodwill, arising from a business combination is recorded as an asset and is not amortized. Intangible assets with an indefinite useful life are not amortized. Goodwill and intangible assets are tested for impairment on an annual basis or more frequently if changes in circumstances indicate that the carrying amount may not be recoverable. If the goodwill or intangible asset is impaired, it is written down to its realizable value with a corresponding expense reflected in general and administrative expenses in the consolidated statements of income. Intangible assets that have finite lives, including but not limited to, agent and customer relationships and trademarks, are amortized over the estimated useful life of the asset. For intangible assets with finite lives, impairment is recognized if the carrying amount is not recoverable and exceeds the fair value of the intangible asset. Generally intangible assets with finite lives are only tested for impairment if indicators of impairment, i.e, triggers, are identified. Triggers include, but are not limited to, a significant adverse change in the extent, manner or length of time in which the intangible asset is being used or a significant adverse change in legal factors or in the business climate that could affect the value of the other intangible asset. Investments The Company has classified its debt securities as available for sale measured at fair value with unrealized gains and losses reported as a separate component of comprehensive income. Equity investments (except those accounted for under the equity method, and those that result in consolidation of the investee and certain other investments) are measured at fair value with all gains and losses reported in net income. The Company may sell its available-for-sale and equity securities in response to changes in interest rates, risk/reward characteristics, liquidity needs or other factors. Available-for-sale and equity securities are reported at their estimated fair values based on quoted market prices or recognized pricing services. Purchases and sales of investments are recorded on a trade date basis. Realized gains and losses are determined based on the specific identification method. Net investment income is recognized when earned and includes interest and dividend income together with amortization of market premiums and discounts using the effective yield method and is net of investment management fees and other expenses. For mortgage-backed securities and any other holdings for which there is a prepayment risk, prepayment assumptions are evaluated and revised as necessary. Any adjustments required due to the change in effective yields and maturities are recognized on a prospective basis through yield adjustments. As of December 31, 2020, and 2019, the Company had the following major types of investments: (i) Debt securities are classified as available-for-sale and are carried at fair value. Unrealized gains or losses on available-for-sale debt securities are reported as a component of accumulated other comprehensive income. (ii) Mortgage and structured securities are carried at fair value. The Company recognizes income using the retrospective adjustment method based on prepayments and the estimated economic lives of the securities. The effective yield reflects actual payments to date plus anticipated future payments. These investments are recorded as debt securities, available-for-sale in the consolidated balance sheets. (iii) Short-term investments are carried at amortized cost, which approximates fair value, and includes investments with maturities between 91 days and less than one year at the date of acquisition. Income from short-term investments is reported within net investment income. (iv) Other investments consisted of equity method investments, in which the company has the power to influence the operating or financial decisions but does not require consolidation; common stock carried at fair value (equity securities); notes receivable; long-term certificates of deposits; and other instruments carried at fair value and at cost or amortized cost. Income from other investments is reported within net investment income. Gains or losses on equity securities are reported within net gain (loss) on investments. Beginning on January 1, 2020, credit losses on available-for-sale debt securities are recognized through an allowance account. The Company reports accrued investment income separately from debt securities in the Consolidated Balance Sheets, and has elected not to measure an allowance for credit losses. Accrued investment income is written-off by reversing interest income through net investment income at the time the issuer of the bond defaults or is expected to default on payments. Uncollectible debt securities are written-off to net gain (loss) on investments when the Company determines that no additional payments of principal or interest will be received. Fair Value of Financial Instruments The Company’s estimates of fair value for financial assets and financial liabilities are based on the inputs used in valuation and gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the hierarchy is based on whether the significant inputs into the valuation are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company’s significant market assumptions. Additionally, valuation of debt securities investments is more subjective when markets are less liquid due to lack of market-based inputs, which may increase the potential that the estimated fair value of an investment is not reflective of the price at which an actual transaction could occur. Fair values of other financial instruments which are short-term in nature approximate their carrying values. Equity Method Investments The Company uses the equity method of accounting for investments in which its ownership interest enables the Company to influence operating or financial decisions of the investee, but the Company’s interest does not require consolidation. In applying the equity method, the Company records its investment at cost, and subsequently increases or decreases the carrying amount of the investment by its proportionate share of the net earnings or losses and other comprehensive income of the investee. Any dividends or distributions received are recorded as a decrease in the carrying value of the investment. The Company’s proportionate share of net income is reported in net investment income. Stock Compensation Expense The Company recognizes stock-based compensation expense including stock options and Restricted Stock Units (“RSUs”), to be measured based on the grant date fair value of the awards, with the resulting expense recognized on a straight-line basis over the period during which the employee is required to perform service in exchange for the award. The majority of the Company’s awards are earned over a service period of three Earnings Per Share Basic earnings per share are computed by dividing income available to common stockholders by the number of weighted average common shares outstanding. Dilutive earnings per share are computed by dividing income available to common stockholders, adjusted for the effects of the presumed issuance of potential common shares, by the number of weighted average common shares outstanding, plus potentially issuable shares, such as options, unvested stock-based payment awards and convertible securities. Impairment of Long-lived Assets The carrying value of long-lived assets is evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable from the estimated undiscounted future cash flows expected to result from its use and eventual disposition. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment is measured as the amount by which the carrying amount of the assets exceeds the fair value as estimated by discounted cash flows. Income Taxes The Company joins its subsidiaries in the filing of a consolidated Federal income tax return and is party to a Federal income tax allocation agreement. Under the tax allocation agreement, the Company pays to or receives from its subsidiaries the amount, if any, by which the group’s Federal income tax liability was affected by virtue of inclusion of the subsidiary in the consolidated Federal return. The Reciprocal Exchanges are not party to the tax allocation agreement and file separate tax returns. Deferred income taxes reflect the impact of temporary differences between the amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws and regulations. The deferred tax asset and liability primarily consists of book versus tax differences for earned premiums, loss and LAE reserve discounting, deferred acquisition costs, earned but unbilled premiums, and unrealized holding gains and losses on debt securities. Changes in deferred income tax assets and liabilities that are associated with components of other comprehensive income, primarily unrealized investment gains and losses, are recorded directly to other comprehensive income. Otherwise, changes in deferred income tax assets and liabilities are included as a component of income tax expense. In assessing the recoverability of deferred tax assets, management considers whether it is more likely than not that the Company will generate future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, tax planning strategies and projected future taxable income in making this assessment. If necessary, the Company establishes a valuation allowance to reduce the deferred tax assets to the amounts more likely than not to be realized. The Company recognizes tax benefits for tax positions that are more likely than not to be sustained upon examination by taxing authorities. The Company’s policy is to prospectively classify accrued interest and penalties related to any unrecognized tax benefits in its income tax provision. Reinsurance The Company cedes insurance risk under various reinsurance agreements. The Company seeks to reduce the loss that may arise from catastrophes or other events that cause unfavorable underwriting results by reinsuring certain levels of risk with other insurance enterprises. The Company remains liable with respect to any insurance ceded if the assuming companies are unable to meet their obligations under these reinsurance agreements. Reinsurance premiums, losses and LAE ceded to other companies are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. Earned premiums and losses and LAE incurred ceded to other companies have been recorded as a reduction of premium revenue and losses and LAE. Commissions allowed by reinsurers on business ceded have been recorded as ceding commission revenue to the extent the ceding commission exceeds acquisition costs. Reinsurance recoverable is reported based on the portion of reserves and paid losses and LAE that are ceded to other companies. If the Company determines that a reinsurance contract does not transfer sufficient risk, it accounts for the contract under deposit accounting. Amounts recoverable from reinsurers are estimated in a manner consistent with the associated claim liability. The Company reports its reinsurance recoverable net of an allowance for estimated uncollectible reinsurance. The allowance is based upon the Company’s ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, applicable coverage defenses, and other relevant factors. The Company evaluates and monitors the financial condition of its reinsurers under voluntary reinsurance arrangements to minimize its exposure to significant losses from reinsurer insolvencies. Property and Equipment Property and equipment are recorded at cost. Maintenance and repairs are charged to operations as incurred. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, as follows: Buildings and improvements 30 years Leasehold improvements Remaining lease term Other equipment 3 to 20 years Hardware and software 3 to 5 years The Company capitalizes costs of computer software developed or obtained for internal use that is specifically identifiable, has determinable lives and relates to future use. Variable Interest Entities A VIE is a legal entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured such that equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights or do not substantively participate in the gains and losses of the entity. The Company’s consolidation principles require the inclusion of VIEs in which the Company is deemed the primary beneficiary. The primary beneficiary is the entity that has both (1) the power to direct the activities of the VIE that most significantly affect that entity’s economic performance and (2) the obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE. The consolidated financial statements also include the accounts and operations of Adirondack Insurance Exchange, a New York reciprocal insurer, and New Jersey Skylands Insurance Association, a New Jersey reciprocal insurer (together, the “Reciprocal Exchanges” or “Exchanges”), VIEs of which the Company is the primary beneficiary. The Company does not own the Reciprocal Exchanges but is paid a fee to manage them. The Company consolidates the Reciprocal Exchanges as it has determined that these are VIEs of which the Company is the primary beneficiary. The Company manages the business operations of the Reciprocal Exchanges and has the ability to direct their activities. The Company receives a management fee for the services provided to the Reciprocal Exchanges. The Reciprocal Exchanges are insurance carriers organized as unincorporated associations. In the event of dissolution, policyholders would share any residual unassigned surplus in the same proportion as the amount of insurance purchased but are not subject to assessment for any deficit in unassigned surplus of the Reciprocal Exchanges. The assets of the Reciprocal Exchanges can be used only to settle the obligations of the Reciprocal Exchanges and general creditors to their liabilities have no recourse to the Company as primary beneficiary. The results of operations of the Reciprocal Exchanges and the management companies are included in the Company’s P&C segment. Noncontrolling Interest Non-redeemable noncontrolling interest is the portion of equity (net assets) not attributable, directly or indirectly, to a parent. The Company has no ownership interest in the Reciprocal Exchanges. Therefore, the difference between the value of their assets and liabilities represent the value of the noncontrolling interest. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk are primarily cash and cash equivalents, investments and premiums and other receivables. Investments are diversified through many industries and geographic regions through the use of an investment manager who employs different investment strategies. The Company limits the amount of credit exposure with any one financial institution and believes that no significant concentration of credit risk exists with respect to cash and investments. At December 31, 2020 and 2019, the outstanding premiums and other receivables balance was generally diversified due to the Company’s diversified customer base. To reduce credit risk, the Company performs ongoing evaluations for uncollectible amounts. The Company also has receivables from its reinsurers. See Note 10, “Reinsurance” for additional information about concentration of credit risk. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company periodically evaluates the financial condition of its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. It is the policy of management to review all outstanding receivables at period end as well as the bad debt write-offs experienced in the past and establish an allowance for uncollectible accounts, if deemed necessary. Service and Fee Income The Company currently generates policy service and fee income from installment fees, late payment fees, and other finance and processing fees related to policy cancellation, policy reinstatement and insufficient funds check returns. These fees are generally designed to offset expenses incurred in the administration of the Company’s insurance business, and are generated as follows. Installment fees are charged to permit a policyholder to pay premiums in installments rather than in a lump sum. Late payment fees are charged when premiums are remitted after the due date and any applicable grace periods. Policy cancellation fees are charged to policyholders when a policy is terminated by the policyholder prior to the expiration of the policy’s term or renewal term, as applicable. Reinstatement fees are charged to reinstate a policy that has lapsed, generally as a result of non-payment of premiums. Insufficient fund fees are charged when the customer’s payment is returned by the financial institution. All fee income is recognized as follows. An installment fee is recognized at the time each policy installment bill is due. A late payment fee is recognized when the customer’s payment is not received after the listed due date and any applicable grace period. A policy cancellation fee is recognized at the time the customer’s policy is canceled. A policy reinstatement fee is recognized when the customer’s policy is reinstated. An insufficient fund fee is recognized when the customer’s payment is returned by the financial institution. The amounts charged are primarily intended to compensate the Company for the administrative costs associated with processing and administering policies that generate insurance premium; however, the amounts of fees charged are not dependent on the amount or period of insurance coverage provided and do not entail any obligation to return any portion of those funds. The direct and indirect costs associated with generating fee income are not separately tracked. The Company estimates an allowance for doubtful accounts based on a percentage of fee income. The Company also collects service fees in the following forms: (i) Commission and general agent fees by selling policies issued by third-party insurance companies. The Company does not bear insurance underwriting risk with respect to these policies. Commission income and general agent fees are recognized, net of an allowance for estimated policy cancellations, at the time when the policy is sold. The allowance for estimated third-party cancellations is periodically evaluated and adjusted as necessary. (ii) Group health administrative fees by performing enrollment and claims services for self-funded employer plans. The Company does not bear insurance underwriting risk in these administrative activities. Group health administrative fees are recognized pro-rata over the term of the administrative contract with the employer, which generally covers twelve months. Accounting Standards Recent Accounting Standards, Adopted Standard Description Date of Adoption Effect on the Company ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and related amendments. This standard changed the impairment model to a new forward-looking expected loss model for most financial assets and certain other instruments. The standard requires immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, which generally results in earlier recognition of allowances for credit losses on loans and other financial instruments. Many of the loss estimation techniques applied prior the adoption of the standard are still permitted, although the inputs to those techniques changed to reflect the full amount of expected credit losses. The Company continues to use judgement to determine which loss estimation method is appropriate for its circumstances. The standard became effective for interim and annual reporting periods beginning after December 15, 2019 and requires using a modified retrospective approach, recognizing a cumulative-effect adjustment as of the beginning of the first reporting period in which the standard is effective. January 1, 2020 The Company adopted ASU 2016-13 using the modified retrospective approach and recorded a cumulative-effect adjustment, net of tax of $(863) and $(147) to the opening balance of retained earnings and non-controlling interest, respectively. The Company also increased the allowance for premiums receivable, reinsurance recoverable and deferred taxes by the same cumulative amount. ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This standard established a one-step process for testing the value of the goodwill which an entity carries. ASU 2017-04 requires the goodwill impairment to be measured as the excess of the reporting unit’s carrying amount over its fair value. January 1, 2020 The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. Recent Accounting Standards, Not Yet Adopted Standard Description Effective Date Effect on the Company ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This standard simplifies the accounting for income taxes by eliminating some exceptions to the general approach in Accounting Standards Codification (“ASC”) 740, Income Taxes. It also clarifies certain aspects of the existing guidance to promote more consistent application, among other things. January 1, 2021 The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. ASU 2018-12, Financial Services-Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts and related amendments. This standard makes targeted improvements to the existing recognition, measurement, presentation and disclosure requirements for long-duration contracts issued by an insurance entity. The standard is intended to: (i) improve the timeliness of recognizing changes in the liability for future policy benefits and modify the rate used to discount future cash flows, (ii) simplify and improve the accounting for certain market-based options or guarantees associated with deposit or account balance contracts, (iii) simplify the amortization of deferred acquisition costs and (iv) improve the effectiveness of the required disclosures. January 1, 2022 The Company is currently evaluating the impact this guidance will have on its consolidated financial condition, results of operations, cash flows and disclosures. |
Allowance for Expected Credit L
Allowance for Expected Credit Losses | 12 Months Ended |
Dec. 31, 2020 | |
Credit Loss [Abstract] | |
Allowance for Expected Credit Losses | Allowance for Expected Credit Losses Premiums and Other Receivables The following tables present the balances of premiums and other receivables, net of the allowance for expected credit losses, as of January 1, 2020, and December 31, 2020, and changes in the allowance for expected credit losses for the year ended December 31, 2020. Year Ended December 31, 2020 Premiums and Other Receivables, Net Allowance for Expected Credit Losses Balance, beginning of the year $ 1,428,948 $ 24,067 Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2020 762 Current period provision for expected credit losses (1) 94,374 Write-offs of uncollectible premiums and other receivables (96,422) Balance, end of the year $ 1,545,380 $ 22,781 (1) Current period charges for expected losses are recorded in general and administrative expenses. Reinsurance Recoverable The following tables present the balances of reinsurance recoverable, net of the allowance for estimated uncollectible reinsurance, as of January 1, 2020, and December 31, 2020, and changes in the allowance for estimated uncollectible reinsurance for the year ended December 31, 2020. Year Ended December 31, 2020 Reinsurance Recoverable, Net Allowance for Expected Credit Losses Balance, beginning of the year $ 1,394,308 $ — Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2020 517 Current period provision for expected credit losses 293 Balance, end of the year $ 1,218,930 $ 810 Other than the Company’s mandatory pools and associations reinsurance agreements, the Company’s reinsurers generally carry at least an A.M. Best rating of “A-” (Excellent) or the reinsurance recoverable balances are collateralized. The Company also maintains funds held liabilities under the auto quota share reinsurance agreement. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments (a) Debt Securities, Available-For-Sale The following tables summarize the unrealized positions for available-for-sale debt securities, disaggregated by major security type. Amortized Allowance for Gross Unrealized Fair December 31, 2020 Cost Credit Losses (1) Gains Losses Value U.S. Treasury $ 51,749 $ — $ 3,199 $ — $ 54,948 Federal agencies 258 — 3 — 261 States and political subdivision bonds 304,687 — 17,758 (4) 322,441 Foreign government 1,764 — 119 — 1,883 Corporate bonds 1,992,193 — 141,234 (126) 2,133,301 Residential mortgage-backed securities 1,064,041 — 42,597 (222) 1,106,416 Commercial mortgage-backed securities 596,408 — 58,476 (252) 654,632 Asset-backed securities 27,988 — 1,140 (236) 28,892 Structured securities 195,125 — 1,009 (1,778) 194,356 Total $ 4,234,213 $ — $ 265,535 $ (2,618) $ 4,497,130 NGHC $ 3,929,138 $ — $ 260,138 $ (2,361) $ 4,186,915 Reciprocal Exchanges 305,075 — 5,397 (257) 310,215 Total $ 4,234,213 $ — $ 265,535 $ (2,618) $ 4,497,130 (1) Represents the amount of impairment that has resulted from credit-related factors recorded in net gain (loss) on investments. Amortized Gross Unrealized Fair December 31, 2019 Cost Gains Losses Value U.S. Treasury $ 65,037 $ 1,992 $ (23) $ 67,006 Federal agencies 3,907 8 — 3,915 States and political subdivision bonds 298,345 4,778 (1,441) 301,682 Foreign government 1,762 40 — 1,802 Corporate bonds 1,859,736 59,184 (2,357) 1,916,563 Residential mortgage-backed securities 1,265,830 15,747 (4,117) 1,277,460 Commercial mortgage-backed securities 585,044 27,261 (112) 612,193 Asset-backed securities 74,465 1,194 (48) 75,611 Structured securities 222,565 226 (2,665) 220,126 Total $ 4,376,691 $ 110,430 $ (10,763) $ 4,476,358 NGHC $ 4,057,501 $ 104,951 $ (10,343) $ 4,152,109 Reciprocal Exchanges 319,190 5,479 (420) 324,249 Total $ 4,376,691 $ 110,430 $ (10,763) $ 4,476,358 The amortized cost and fair value of available-for-sale debt securities held as of December 31, 2020, by contractual maturity, are shown in the table below. Actual maturities may differ from contractual maturities because some borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. NGHC Reciprocal Exchanges Total December 31, 2020 Amortized Fair Amortized Fair Amortized Fair Due in one year or less $ 61,921 $ 62,731 $ — $ — $ 61,921 $ 62,731 Due after one year through five years 1,006,518 1,075,299 69,060 71,231 1,075,578 1,146,530 Due after five years through ten years 1,050,331 1,127,435 65,495 67,259 1,115,826 1,194,694 Due after ten years 270,237 280,867 22,214 22,368 292,451 303,235 Mortgage-backed securities 1,540,131 1,640,583 148,306 149,357 1,688,437 1,789,940 Total $ 3,929,138 $ 4,186,915 $ 305,075 $ 310,215 $ 4,234,213 $ 4,497,130 (b) Gross Unrealized Losses The tables below summarize the gross unrealized losses on debt securities classified as available-for-sale, by length of time the security has continuously been in an unrealized loss position. Less Than 12 Months 12 Months or More Total December 31, 2020 Fair Unrealized Fair Unrealized Fair Unrealized States and political subdivision bonds $ 1,111 $ (4) $ — $ — $ 1,111 $ (4) Corporate bonds 29,161 (126) — — 29,161 (126) Residential mortgage-backed securities 58,742 (222) — — 58,742 (222) Commercial mortgage-backed securities 40,891 (252) — — 40,891 (252) Asset-backed securities 5,041 (228) 151 (8) 5,192 (236) Structured securities 60,359 (514) 43,906 (1,264) 104,265 (1,778) Total $ 195,305 $ (1,346) $ 44,057 $ (1,272) $ 239,362 $ (2,618) NGHC $ 137,628 $ (1,135) $ 40,103 $ (1,226) $ 177,731 $ (2,361) Reciprocal Exchanges 57,677 (211) 3,954 (46) 61,631 (257) Total $ 195,305 $ (1,346) $ 44,057 $ (1,272) $ 239,362 $ (2,618) Less Than 12 Months 12 Months or More Total December 31, 2019 Fair Unrealized Fair Unrealized Fair Unrealized U.S. Treasury $ 19,903 $ (23) $ 500 $ — $ 20,403 $ (23) States and political subdivision bonds 106,103 (1,415) 2,580 (26) 108,683 (1,441) Corporate bonds 586,817 (2,253) 5,976 (104) 592,793 (2,357) Residential mortgage-backed securities 410,484 (4,074) 3,983 (43) 414,467 (4,117) Commercial mortgage-backed securities 18,250 (105) 748 (7) 18,998 (112) Asset-backed securities 5,406 (29) 920 (19) 6,326 (48) Structured securities 40,979 (94) 109,880 (2,571) 150,859 (2,665) Total $ 1,187,942 $ (7,993) $ 124,587 $ (2,770) $ 1,312,529 $ (10,763) NGHC $ 1,104,244 $ (7,654) $ 117,681 $ (2,689) $ 1,221,925 $ (10,343) Reciprocal Exchanges 83,698 (339) 6,906 (81) 90,604 (420) Total $ 1,187,942 $ (7,993) $ 124,587 $ (2,770) $ 1,312,529 $ (10,763) The Company’s debt securities portfolio is sensitive to interest rate fluctuations, which impact the fair value of individual securities. There were 134 and 1,337 individual security lots at December 31, 2020, and 2019, respectively, that accounted for the gross unrealized loss. As of December 31, 2020, and 2019, the unrealized losses for those securities in unrealized loss positions for a period of twelve or more consecutive months were not greater than or equal to 25% of their amortized cost. The Company did not have a credit allowance as of December 31, 2020, as the previously recorded allowance was reduced to $0 due to a combination of market movements and sales. Some of the factors considered in assessing credit loss and impairment of fixed maturities due to credit-related factors include: (1) the magnitude of the unrealized loss in relation to the amortized cost; (2) the credit rating of the issuing entity and market or issuer events that could impact the issuer’s ability to repay the debt security; (3) the likelihood of the recoverability of principal and interest; and (4) whether it is more likely than not that the Company will be required to sell the investment prior to an anticipated recovery in value. The Company considers different factors to determine the amount of projected future cash flows and discounting methods for corporate bonds and residential and commercial mortgage-backed or structured securities. For corporate bond securities, the split between the credit and non-credit losses is driven by assumptions regarding the amount and timing of projected future cash flows. The net present value is calculated by discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the security at the date of acquisition. For residential and commercial mortgage-backed and structured securities, cash flow estimates, including prepayment assumptions, are based on data from third-party data sources or internal estimates. In addition to prepayment assumptions, cash flow estimates vary based on assumptions regarding the underlying collateral including default rates, recoveries and changes in value. The net present value is calculated by discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the debt security prior to impairment at the balance sheet date. The discounted cash flows become the new amortized cost basis of the debt security. (c) Net Investment Income The components of net investment income consisted of the following: Year Ended December 31, 2020 2019 2018 Cash and short-term investments $ 542 $ 4,075 $ 1,659 Debt securities, available-for-sale 119,873 124,379 107,077 Other, net (related parties - $(2,230), $7,718 and $4,876) 2,728 17,353 14,597 Investment income 123,143 145,807 123,333 Investment expenses (4,886) (4,574) (4,299) Net investment income $ 118,257 $ 141,233 $ 119,034 NGHC $ 111,001 $ 132,595 $ 110,159 Reciprocal Exchanges 7,256 8,638 8,875 Net investment income $ 118,257 $ 141,233 $ 119,034 (d) Net Gain (Loss) on Investments The table below indicates realized gains and losses on investments. Purchases and sales of investments are recorded on a trade date basis. Realized gains and losses are determined based on the specific identification method. Year Ended December 31, 2020 2019 2018 Debt securities, available-for-sale: Gross gains $ 29,666 $ 23,178 $ 4,590 Gross losses (1,483) (3,457) (22,860) Net realized gain (loss) on debt securities, available-for-sale 28,183 19,721 (18,270) Other, net (1) (1,606) (6,248) (11,275) Net realized gain (loss) on investments $ 26,577 $ 13,473 $ (29,545) NGHC $ 14,145 $ 13,603 $ (26,179) Reciprocal Exchanges 12,432 (130) (3,366) Net realized gain (loss) on investments $ 26,577 $ 13,473 $ (29,545) (1) Includes gains and losses on publicly traded equity securities, other investments, and foreign currency. (e) Credit Quality of Investments The tables below summarize the credit quality of debt securities, as rated by Standard & Poor’s (“S&P”). If a security is not rated by S&P, an S&P equivalent is determined based on ratings from similar rating agencies. Securities that are not rated are included in the “BB+ and lower” category. NGHC Reciprocal Exchanges December 31, 2020 Amortized Fair Percentage Amortized Fair Percentage U.S. Treasury $ 37,307 $ 40,213 1.0 % $ 14,441 $ 14,734 4.7 % AAA 523,929 568,028 13.6 % 28,232 28,496 9.2 % AA, AA+, AA- 1,428,942 1,507,760 36.0 % 150,794 152,059 49.0 % A, A+, A- 1,106,964 1,167,933 27.9 % 42,283 43,605 14.1 % BBB, BBB+, BBB- 818,523 888,515 21.2 % 69,325 71,321 23.0 % BB+ and lower 13,473 14,466 0.3 % — — — % Total $ 3,929,138 $ 4,186,915 100.0 % $ 305,075 $ 310,215 100.0 % NGHC Reciprocal Exchanges December 31, 2019 Amortized Fair Percentage Amortized Fair Percentage U.S. Treasury $ 52,108 $ 53,599 1.3 % $ 12,929 $ 13,407 4.1 % AAA 515,869 537,508 12.9 % 20,947 21,555 6.6 % AA, AA+, AA- 1,677,787 1,697,220 40.9 % 120,113 121,720 37.5 % A, A+, A- 954,312 976,468 23.5 % 116,747 119,041 36.7 % BBB, BBB+, BBB- 795,594 823,239 19.8 % 48,021 48,093 14.8 % BB+ and lower 61,831 64,075 1.6 % 433 433 0.3 % Total $ 4,057,501 $ 4,152,109 100.0 % $ 319,190 $ 324,249 100.0 % The tables below summarize the investment quality of the corporate bond holdings and industry concentrations. December 31, 2020 AAA AA+, A+,A,A- BBB+, BB+ or Fair % of Financial Institutions — % 2.3 % 24.1 % 14.1 % — % $ 863,046 40.5 % Industrials 0.3 % 3.2 % 25.5 % 27.6 % 0.1 % 1,208,646 56.7 % Utilities/Other — % — % 1.6 % 1.2 % — % 61,609 2.8 % Total 0.3 % 5.5 % 51.2 % 42.9 % 0.1 % $ 2,133,301 100.0 % NGHC 0.3 % 5.5 % 49.2 % 39.5 % 0.1 % $ 2,018,325 94.6 % Reciprocal Exchanges — % — % 2.0 % 3.4 % — % 114,976 5.4 % Total 0.3 % 5.5 % 51.2 % 42.9 % 0.1 % $ 2,133,301 100.0 % December 31, 2019 AAA AA+, A+,A,A- BBB+, BB+ or Fair % of Financial Institutions — % 3.6 % 25.0 % 12.1 % 0.3 % $ 785,910 41.0 % Industrials 0.7 % 2.7 % 24.1 % 29.0 % 0.1 % 1,083,959 56.6 % Utilities/Other — % — % 1.0 % 1.4 % — % 46,694 2.4 % Total 0.7 % 6.3 % 50.1 % 42.5 % 0.4 % $ 1,916,563 100.0 % NGHC 0.3 % 5.1 % 44.0 % 40.0 % 0.4 % $ 1,720,962 89.8 % Reciprocal Exchanges 0.4 % 1.2 % 6.1 % 2.5 % — % 195,601 10.2 % Total 0.7 % 6.3 % 50.1 % 42.5 % 0.4 % $ 1,916,563 100.0 % (f) Cash and Cash Equivalents, Restricted Cash and Restricted Investments The Company, in order to conduct business in certain states, is required to maintain letters of credit or assets on deposit to support state mandated regulatory requirements and certain third-party agreements. The Company also utilizes trust accounts to collateralize business with its reinsurance counterparties. These assets are held primarily in the form of cash or certain high grade securities. Cash, cash equivalents, and restricted cash are as follows: December 31, 2020 2019 Cash and cash equivalents $ 662,772 $ 135,942 Restricted cash and cash equivalents 36,995 28,521 Total cash, cash equivalents and restricted cash $ 699,767 $ 164,463 Restricted investments are as follows: December 31, 2020 2019 Securities on deposit with state regulatory authorities $ 83,764 $ 74,061 Restricted investments to trusts in certain reinsurance transactions 26,650 49,502 Total restricted investments $ 110,414 $ 123,563 (g) Other Investments The table below summarizes the composition of other investments: December 31, 2020 2019 Equity method investments (related parties - $101,143 and $109,612) $ 136,201 $ 143,511 Notes receivable (related parties - $130,784 and $129,229) (1) 130,824 129,299 Long-term Certificates of Deposit (CDs), at cost 134 20,150 Investments, at fair value 5,936 9,365 Investments, at cost or amortized cost 7,960 8,962 Total $ 281,055 $ 311,287 (1) See Note 16, “Related Party Transactions” for additional information. Equity method investments represent limited liability companies and limited partnership investments in real estate. Investments at fair value include publicly traded equity securities and the Company’s right to receive the excess servicing spread related to servicing rights, for which the Company has elected the fair value option with changes in fair value recorded in net investment income. Investments at cost or amortized cost, represent limited partnerships, loans and trusts. The Company believes its exposure to risk associated with these investments is generally limited to the investment carrying amounts. Equity Method Investments - Related Parties A person, who was a significant shareholder of the Company prior to the Merger, also has an ownership interest in AmTrust Financial Services, Inc. (“AmTrust”) and ACP Re Holdings LLC. (“ACP Re”). Accordingly, as of December 31, 2020, AmTrust and ACP Re were related entities of the Company. Limited Liability Companies and Limited Partnerships The Company holds a variable interest in the following entities but is not the primary beneficiary of such VIE’s. The Company accounts for these entities using the equity method of accounting. The Company believes its exposure to risk associated with these investments is generally limited to the investment carrying amounts. LSC Entity The Company has a 50% ownership interest in an entity (the “LSC Entity”) initially formed to acquire life settlement contracts, with AmTrust owning the remaining 50%. The LSC Entity used the contributed capital to pay premiums and purchase policies. A life settlement contract is a contract between the owner of a life insurance policy and a third party who obtains the ownership and beneficiary rights of the underlying life insurance policy. The LSC Entity has a 30% noncontrolling equity interest in a limited partnership managed by a third party. As of December 31, 2020, the LSC Entity directly held one life settlement contract. The life settlement contract is accounted for using the fair value method. The Company’s equity interest in the LSC Entity as of December 31, 2020, 2019, and 2018, was $44,847, $49,477 and $48,324, respectively. For the years ended December 31, 2020, 2019, and 2018, the Company recorded equity in earnings (losses) from the LSC Entity of $(5,630), $3,395 and $4,276, respectively, made contributions of $1,000, $258 and $2,000, respectively, and received distributions of $0, $2,500 and $118,635, respectively. 800 Superior, LLC The Company holds an investment in 800 Superior, LLC, a limited liability company that owns an office building in Cleveland, Ohio, with AmTrust. AmTrust has been appointed managing member of 800 Superior, LLC. The Company and AmTrust each have a 50% ownership interest in 800 Superior, LLC. The Company’s equity interest in 800 Superior, LLC as of December 31, 2020 and 2019, was $9,559 and $9,365, respectively. For the years ended December 31, 2020, 2019, and 2018, the Company recorded equity in earnings (losses) from 800 Superior, LLC of $194, $1,953 and $(531), respectively, and made contributions of $0, $2,287 and $0, respectively. Additionally, the Company has a lease agreement with 800 Superior, LLC. The Company paid 800 Superior, LLC $3,045, $2,967 and $2,889 in rent for the years ended December 31, 2020, 2019, and 2018, respectively. North Dearborn Building Company, L.P. The Company holds an investment in North Dearborn Building Company, L.P. (“North Dearborn”), a limited partnership that owns an office building in Chicago, Illinois. AmTrust is also a limited partner in North Dearborn, and the general partner is NA Advisors GP LLC (“NA Advisors”), a related party, owned by Karfunkel family members which is managed by an unrelated third party. The Company and AmTrust each hold a 45% limited partnership interest in North Dearborn, while NA Advisors holds a 10% general partnership interest and a 10% profit interest, which NA Advisors pays to the unrelated third-party manager. North Dearborn appointed NA Advisors as the general manager to oversee the day-to-day operations of the office building. The Company’s equity interest in North Dearborn as of December 31, 2020 and 2019, was $5,744 and $5,317, respectively. For the years ended December 31, 2020, 2019, and 2018, the Company recorded equity in earnings (losses) from North Dearborn of $967, $(357) and $(243), respectively, and received distributions of $540, $540 and $1,125, respectively. 4455 LBJ Freeway, LLC The Company holds an investment in 4455 LBJ Freeway, LLC, a limited liability company that owns an office building in Dallas, Texas, with AmTrust. AmTrust has been appointed managing member of 4455 LBJ Freeway, LLC. The Company and AmTrust each have a 50% ownership interest in 4455 LBJ Freeway, LLC. The Company’s equity interest in 4455 LBJ Freeway, LLC as of December 31, 2020, and 2019, was $1,677 and $1,074, respectively. For the years ended December 31, 2020, 2019, and 2018, the Company recorded equity in earnings from 4455 LBJ Freeway, LLC of $603, $281 and $53, respectively. Additionally, the Company has a lease agreement with 4455 LBJ Freeway, LLC. The Company paid 4455 LBJ Freeway, LLC $2,482, $2,422 and $2,225 in rent for the years ended December 31, 2020, 2019, and 2018, respectively. Illinois Center Building, L.P. The Company holds an investment in Illinois Center Building, L.P. (“Illinois Center”), a limited partnership that owns an office building in Chicago, Illinois. AmTrust and ACP Re are also limited partners in Illinois Center and the general partner is NA Advisors. The Company and AmTrust each hold a 37.5% limited partnership interest in Illinois Center, while ACP Re holds a 15.0% limited partnership interest. NA Advisors holds a 10.0% general partnership interest and a 10.0% profit interest, which NA Advisors pays to the unrelated third-party manager. Illinois Center appointed NA Advisors as the general manager to oversee the day-to-day operations of the office building. The Company’s equity interest in Illinois Center as of December 31, 2020, and 2019, was $39,316 and $44,379, respectively. For the years ended December 31, 2020, 2019, and 2018, the Company recorded equity in losses from Illinois Center of $(3,188), $(2,321) and $(3,390), made contributions of $0, $1,125 and $2,250, and received distributions of $1,875, $0 and $0, respectively. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company carries certain financial instruments at fair value. Assets and liabilities recorded at fair value in the Consolidated Balance Sheets are measured and classified in accordance with a fair value hierarchy consisting of three “levels” based on the observability of valuation inputs: Level 1 - Inputs are quoted prices in active markets for identical assets or liabilities as of the measurement date. Additionally, the entity must have the ability to access the active market and the quoted prices cannot be adjusted by the entity. Level 2 - Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices in active markets for similar assets or liabilities; quoted prices in inactive markets for identical or similar assets or liabilities; or inputs that are observable or can be corroborated by observable market data by correlation or other means for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs are supported by little or no market activity. The unobservable inputs represent management’s best assumptions of how market participants would price the assets or liabilities. Generally, Level 3 assets and liabilities are valued using pricing models, discounted cash flow methodologies, or similar techniques that require significant judgment or estimation. The following describes the valuation techniques used by the Company to determine the fair value measurements on a recurring basis of financial instruments held as of December 31, 2020 and 2019. The Company utilizes a pricing service (“pricing service”) to estimate fair value measurements for all its debt and equity securities. Level 1 measurements: • U.S. Treasury and federal agencies. The fair values of U.S. government securities are based on quoted market prices in active markets. The Company believes the market for U.S. government securities is an actively traded market given the high level of daily trading volume. • Short-term investments. Comprised of money market funds that are traded in active markets and fair values are based on quoted market prices. • Other investments, at fair value. Common and preferred equity securities. The pricing service utilizes market quotations for equity securities that have quoted market prices in active markets and their respective quoted prices are provided at fair value. Level 2 measurements: • States and political subdivision bonds, and foreign government. The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active. • Corporate bonds. Comprised of bonds issued by corporations, public and privately placed. The fair values of short-term corporate bonds are priced using the spread above the London Interbank Offering Rate (“LIBOR”) yield curve, and the fair value of long-term corporate bonds are priced using the spread above the risk-free yield curve. The spreads are sourced from broker dealers, trade prices and the new issue market. Where pricing is unavailable from pricing services, the Company obtains non-binding quotes from broker-dealers. The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active. • Residential and commercial mortgage-backed securities, asset-backed securities and structured securities. The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, prepayment speeds, collateral performance and credit spreads. Level 3 measurements: • States and political subdivision bonds. The Company holds certain municipal bonds that finance economic development, infrastructure and environmental projects which do not have an active market. These bonds are valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable. • Corporate bonds. The Company holds certain structured notes and term loans that do not have an active market. These bonds are valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable. • Other investments, at fair value. Comprised of the Company’s right to receive the Excess Servicing Spread (“ESS”) related to servicing rights. The Company uses a discounted cash flow method to estimate the fair value of the ESS. The key inputs used in the estimation of ESS include prepayment speed and discount rate. Changes in the fair value of the ESS are recorded in net investment income. From time to time, the Company also holds certain equity securities that are issued by privately-held entities or direct equity investments that do not have an active market. The Company estimates the fair value of these securities primarily based on inputs such as third-party broker quotes, issuers’ book value, market multiples, and other inputs. These bonds are valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable. Assets measured at fair value on a recurring basis are as follows: December 31, 2020 Level 1 Level 2 Level 3 Total Debt securities, available-for-sale: U.S. Treasury $ 54,948 $ — $ — $ 54,948 Federal agencies 261 — — 261 States and political subdivision bonds — 319,921 2,520 322,441 Foreign government — 1,883 — 1,883 Corporate bonds — 2,130,977 2,324 2,133,301 Residential mortgage-backed securities — 1,106,416 — 1,106,416 Commercial mortgage-backed securities — 654,632 — 654,632 Asset-backed securities — 28,892 — 28,892 Structured securities — 194,356 — 194,356 Total debt securities, available-for-sale 55,209 4,437,077 4,844 4,497,130 Short-term investments 171,086 20,000 — 191,086 Other investments 2,907 — 3,029 5,936 Total $ 229,202 $ 4,457,077 $ 7,873 $ 4,694,152 NGHC $ 187,582 $ 4,161,595 $ 7,873 $ 4,357,050 Reciprocal Exchanges 41,620 295,482 — 337,102 Total $ 229,202 $ 4,457,077 $ 7,873 $ 4,694,152 December 31, 2019 Level 1 Level 2 Level 3 Total Debt securities, available-for-sale: U.S. Treasury $ 67,006 $ — $ — $ 67,006 Federal agencies 3,915 — — 3,915 States and political subdivision bonds — 298,582 3,100 301,682 Foreign government — 1,802 — 1,802 Corporate bonds — 1,908,235 8,328 1,916,563 Residential mortgage-backed securities — 1,277,460 — 1,277,460 Commercial mortgage-backed securities — 612,193 — 612,193 Asset-backed securities — 75,611 — 75,611 Structured securities — 220,126 — 220,126 Total debt securities, available-for-sale: 70,921 4,394,009 11,428 4,476,358 Short-term investments 59,953 7,400 — 67,353 Other investments 4,881 — 4,484 9,365 Total $ 135,755 $ 4,401,409 $ 15,912 $ 4,553,076 NGHC $ 116,602 $ 4,091,068 $ 15,912 $ 4,223,582 Reciprocal Exchanges 19,153 310,341 — 329,494 Total $ 135,755 $ 4,401,409 $ 15,912 $ 4,553,076 During the years ended December 31, 2020, and 2019, there were no transfers between Level 2 and Level 3. The following tables provide a reconciliation of recurring fair value measurements of the Level 3 financial assets: States and political subdivision bonds Corporate Other Total Balance as of January 1, 2020 $ 3,100 $ 8,328 $ 4,484 $ 15,912 Total gains (losses) for the period: Included in net income — — (531) (531) Included in other comprehensive income (580) (6,004) — (6,584) Sales — — (924) (924) Balance as of December 31, 2020 $ 2,520 $ 2,324 $ 3,029 $ 7,873 Change in unrealized gains (losses) for the period included in net income for assets held at the end of the reporting period $ (531) $ (531) Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period $ (580) $ (6,004) $ (6,584) States and political subdivision bonds Corporate Other Total Balance as of January 1, 2019 $ 3,596 $ 11,767 $ 7,593 $ 22,956 Total gains (losses) for the period: Included in net income — — (1,851) (1,851) Included in other comprehensive income (496) (3,439) — (3,935) Sales — — (1,258) (1,258) Balance as of December 31, 2019 $ 3,100 $ 8,328 $ 4,484 $ 15,912 Change in unrealized gains (losses) for the period included in net income for assets held at the end of the reporting period $ (1,851) $ (1,851) Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period $ (496) $ (3,439) $ (3,935) At December 31, 2020, and 2019, the carrying values of the Company’s cash and cash equivalents, premiums and other receivables, and accounts payable approximate the fair value given their short-term nature and were classified as Level 1. Other than goodwill, the Company did not measure any assets or liabilities at fair value on a nonrecurring basis at December 31, 2020, and 2019. Goodwill is classified as Level 3 in the fair value hierarchy. See Note 8, “Goodwill and Intangible Assets” for additional information on how the Company tested goodwill for impairment. Fair Value Information About Financial Liabilities not Measured at Fair Value Debt - The amount reported in the accompanying Consolidated Balance Sheets for these financial instruments represents the carrying value of the debt. See Note 11, “Debt” for additional information. The following table presents the carrying amount and estimated fair value of debt not carried at fair value, excluding finance lease and other liabilities, as well as the input level used to determine the fair value: December 31, 2020 December 31, 2019 Input Level Carrying amount Fair value Carrying amount Fair value 7.625% Notes Level 2 $ 97,015 $ 101,400 $ 96,928 $ 103,560 6.75% Notes Level 3 347,743 386,275 347,091 371,366 Subordinated Debentures Level 3 72,168 72,139 72,168 72,103 2019 Credit Agreement Level 3 140,000 144,063 140,000 148,272 |
Deferred Acquisition Costs
Deferred Acquisition Costs | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |
Deferred Acquisition Costs | Deferred Acquisition Costs The following table reflects the amounts of policy acquisition costs deferred and amortized: Year Ended December 31, 2020 2019 2018 Property Accident Total Property Accident Total Property Accident Total Balance, beginning of the year $ 239,293 $ 24,230 $ 263,523 $ 226,188 $ 25,220 $ 251,408 $ 198,283 $ 18,106 $ 216,389 Additions 633,775 24,420 658,195 552,921 39,491 592,412 522,914 22,898 545,812 Amortization (613,905) (21,908) (635,813) (539,816) (37,541) (577,357) (495,009) (15,784) (510,793) Disposition — — — — (2,940) (2,940) — — — Change in DAC 19,870 2,512 22,382 13,105 (990) 12,115 27,905 7,114 35,019 End of the year $ 259,163 $ 26,742 $ 285,905 $ 239,293 $ 24,230 $ 263,523 $ 226,188 $ 25,220 $ 251,408 NGHC $ 239,963 $ 26,742 $ 266,705 $ 215,986 $ 24,230 $ 240,216 $ 206,181 $ 25,220 $ 231,401 Reciprocal Exchanges 19,200 — 19,200 23,307 — 23,307 20,007 — 20,007 Balance, end of the year $ 259,163 $ 26,742 $ 285,905 $ 239,293 $ 24,230 $ 263,523 $ 226,188 $ 25,220 $ 251,408 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment The composition of property and equipment consisted of the following: December 31, 2020 2019 Cost Accumulated Net Cost Accumulated Net Land $ 5,788 $ — $ 5,788 $ 5,788 $ — $ 5,788 Buildings 26,245 (3,416) 22,829 24,997 (2,669) 22,328 Leasehold improvements 39,591 (17,305) 22,286 34,238 (12,372) 21,866 Other equipment 26,909 (3,916) 22,993 24,627 (3,044) 21,583 Hardware and software 417,970 (241,420) 176,550 387,618 (196,294) 191,324 Finance lease right-of-use assets 38,867 (22,631) 16,236 37,515 (16,511) 21,004 Operating lease right-of-use assets 111,001 — 111,001 119,934 — 119,934 Total $ 666,371 $ (288,688) $ 377,683 $ 634,717 $ (230,890) $ 403,827 NGHC $ 657,312 $ (279,629) $ 377,683 $ 625,658 $ (222,072) $ 403,586 Reciprocal Exchanges 9,059 (9,059) — 9,059 (8,818) 241 Total $ 666,371 $ (288,688) $ 377,683 $ 634,717 $ (230,890) $ 403,827 Depreciation and amortization expense related to property and equipment for the years ended December 31, 2020, 2019, and 2018, was $59,926, $61,965 and $55,928 , respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill and intangible assets, net of amortization, are recorded as a consequence of business acquisitions. Goodwill represents the excess, if any, of the purchase price over the fair value of their net assets as of the date of acquisition. Intangible assets are recorded at their fair value as of the acquisition date. Intangible assets that are not deemed to have an indefinite useful life are amortized over their estimated useful lives. Goodwill and intangible assets that have an indefinite useful life are not subject to amortization. Goodwill and intangible assets deemed to have an indefinite useful life are tested annually in the fourth quarter of every year for impairment. Goodwill and intangible assets are also tested whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. If it is determined that an asset has been impaired, the asset is written down by the amount of the impairment, with a corresponding charge to earnings. With respect to goodwill, a qualitative assessment is first made to determine whether it is necessary to perform quantitative testing. This initial assessment includes, among other factors, consideration of: (i) past, current and projected future earnings and equity; (ii) recent trends and market conditions; and (iii) valuation metrics involving similar companies that are publicly-traded and acquisitions of similar companies, if available. If this initial qualitative assessment indicates that the fair value of an operating segment may be less than its carrying amount, a second step is taken, involving a comparison between the estimated fair values of the Company’s operating subsidiary with its respective carrying amount including goodwill. If the carrying value exceeds estimated fair value, there is an indication of impairment. As of December 31, 2020, there were no circumstances that indicate that the carrying amount of goodwill and intangible assets deemed to have an indefinite useful life may not be recoverable. The composition of intangible assets and loss reserve premium consisted of the following: December 31, 2020 Gross Accumulated Net Value Weighted-average amortization period Agent/Customer relationships $ 175,352 $ (90,986) $ 84,366 6.7 years Renewal rights 33,565 (29,351) 4,214 0.7 years Other intangibles 47,711 (33,491) 14,220 2.9 years Total intangible assets subject to amortization 256,628 (153,828) 102,800 5.2 years Management contracts 118,600 — 118,600 indefinite life State licenses 89,325 — 89,325 indefinite life Trademarks 30,000 — 30,000 indefinite life Total intangible assets $ 494,553 $ (153,828) $ 340,725 NGHC $ 490,653 $ (152,973) $ 337,680 Reciprocal Exchanges 3,900 (855) 3,045 Total intangible assets $ 494,553 $ (153,828) $ 340,725 Net loss reserve plus a risk premium (1) $ (17,266) $ 14,977 $ (2,289) 0.8 years Total $ (17,266) $ 14,977 $ (2,289) NGHC $ (13,253) $ 10,998 $ (2,255) Reciprocal Exchanges (4,013) 3,979 (34) Total $ (17,266) $ 14,977 $ (2,289) December 31, 2019 Gross Accumulated Net Value Agent/Customer relationships $ 175,157 $ (76,156) $ 99,001 Renewal rights 48,566 (41,257) 7,309 Other intangibles 49,511 (27,923) 21,588 Total intangible assets subject to amortization 273,234 (145,336) 127,898 Management contracts 118,600 — 118,600 State licenses 89,325 — 89,325 Trademarks 30,000 — 30,000 Total intangible assets $ 511,159 $ (145,336) $ 365,823 NGHC $ 507,259 $ (144,661) $ 362,598 Reciprocal Exchanges 3,900 (675) 3,225 Total intangible assets $ 511,159 $ (145,336) $ 365,823 Net loss reserve plus a risk premium (1) $ (17,266) $ 9,947 $ (7,319) Total $ (17,266) $ 9,947 $ (7,319) NGHC $ (13,253) $ 6,017 $ (7,236) Reciprocal Exchanges (4,013) 3,930 (83) Total $ (17,266) $ 9,947 $ (7,319) (1) Net loss reserve plus a risk premium is recorded as a liability. Intangible assets amortization expense consisted of the following: Year Ended December 31, 2020 2019 2018 Amortization $ 25,798 $ 39,024 $ 31,999 Amortization of loss reserve premium (5,030) (4,288) (632) Total $ 20,768 $ 34,736 $ 31,367 NGHC $ 20,637 $ 34,665 $ 31,323 Reciprocal Exchanges 131 71 44 Total $ 20,768 $ 34,736 $ 31,367 The estimated aggregate amortization expense for each of the next five years and thereafter is: Year ending NGHC Reciprocal Total 2021 $ 16,609 $ 23 $ 16,632 2022 14,657 (9) 14,648 2023 12,386 (3) 12,383 2024 11,452 — 11,452 2025 10,989 — 10,989 Thereafter 34,407 — 34,407 Total $ 100,500 $ 11 $ 100,511 |
Unpaid Losses and Loss Adjustme
Unpaid Losses and Loss Adjustment Expense Reserves | 12 Months Ended |
Dec. 31, 2020 | |
Insurance [Abstract] | |
Unpaid Losses and Loss Adjustment Expense Reserves | Unpaid Losses and Loss Adjustment Expense Reserves The unpaid losses and Loss Adjustment Expense (“LAE”) reserves are an estimate of the Company’s liability from incurred claims at the end of the reporting period. The unpaid losses and LAE reserves are the result of an ongoing analysis of recent loss development trends and emerging historical experience. Original estimates are increased or decreased as additional information becomes known regarding individual claims. In setting its reserves, the Company reviews its loss data to estimate expected loss development. Management believes that its use of standard actuarial methodology applied to its analyses of its historical experience provides a reasonable estimate of future losses. However, actual future losses may differ from the Company’s estimate, and may be affected by future events beyond the control of management, including inflation, which may favorably or unfavorably impact the ultimate settlement of the Company’s losses and LAE, as well as changes in the law and judicial interpretations. The anticipated effect of inflation is implicitly considered when estimating liabilities for losses and LAE. In addition to inflation, the average severity of claims is affected by a number of factors that may vary by types and features of policies written. Future average severities are projected from historical trends, adjusted for implemented changes in underwriting standards and policy provisions, as well as general economic trends. These estimated trends are monitored and revised as necessary based on actual development. The following tables present a reconciliation of beginning and ending balances for unpaid losses and LAE: Year Ended December 31, 2020 Property Accident NGHC Reciprocal Total Gross balance at beginning of the year $ 2,528,754 $ 151,874 $ 2,680,628 $ 205,786 $ 2,886,414 Less: Reinsurance recoverable at beginning of the year (1,016,368) (11,266) (1,027,634) (84,174) (1,111,808) Net balance at beginning of the year 1,512,386 140,608 1,652,994 121,612 1,774,606 Incurred losses and LAE related to: Current year 2,323,797 342,714 2,666,511 153,380 2,819,891 Prior year 27,042 (23,821) 3,221 970 4,191 Total incurred 2,350,839 318,893 2,669,732 154,350 2,824,082 Paid losses and LAE related to: Current year (1,432,498) (209,319) (1,641,817) (94,287) (1,736,104) Prior year (827,745) (90,952) (918,697) (53,317) (972,014) Total paid (2,260,243) (300,271) (2,560,514) (147,604) (2,708,118) Net balance at end of the year 1,602,982 159,230 1,762,212 128,358 1,890,570 Plus: Reinsurance recoverable at end of the year 899,217 21,697 920,914 77,614 998,528 Gross balance at end of the year $ 2,502,199 $ 180,927 $ 2,683,126 $ 205,972 $ 2,889,098 Year Ended December 31, 2019 Property Accident NGHC Reciprocal Total Gross balance at beginning of the year $ 2,507,409 $ 271,280 $ 2,778,689 $ 178,470 $ 2,957,159 Less: Reinsurance recoverable at beginning of the year (1,182,588) (24,575) (1,207,163) (77,979) (1,285,142) Net balance at beginning of the year 1,324,821 246,705 1,571,526 100,491 1,672,017 Incurred losses and LAE related to: Current year 2,320,053 356,036 2,676,089 173,215 2,849,304 Prior year 46,623 (45,356) 1,267 3,897 5,164 Total incurred 2,366,676 310,680 2,677,356 177,112 2,854,468 Paid losses and LAE related to: Current year (1,430,072) (219,234) (1,649,306) (111,380) (1,760,686) Prior year (841,613) (109,653) (951,266) (44,611) (995,877) Total paid (2,271,685) (328,887) (2,600,572) (155,991) (2,756,563) Acquired losses and LAE reserves 92,574 — 92,574 — 92,574 Disposed losses and LAE reserves — (87,890) (87,890) — (87,890) Net balance at end of the year 1,512,386 140,608 1,652,994 121,612 1,774,606 Plus: Reinsurance recoverable at end of the year 1,016,368 11,266 1,027,634 84,174 1,111,808 Gross balance at end of the year $ 2,528,754 $ 151,874 $ 2,680,628 $ 205,786 $ 2,886,414 Year Ended December 31, 2018 Property Accident NGHC Reciprocal Total Gross balance at beginning of the year $ 2,270,551 $ 249,653 $ 2,520,204 $ 143,353 $ 2,663,557 Less: Reinsurance recoverable at beginning of the year (1,067,495) (9,840) (1,077,335) (52,408) (1,129,743) Net balance at beginning of the year 1,203,056 239,813 1,442,869 90,945 1,533,814 Incurred losses and LAE related to: Current year 2,182,923 352,322 2,535,245 161,015 2,696,260 Prior year (4,760) (30,977) (35,737) 1,703 (34,034) Total incurred 2,178,163 321,345 2,499,508 162,718 2,662,226 Paid losses and LAE related to: Current year (1,336,359) (188,014) (1,524,373) (110,053) (1,634,426) Prior year (720,039) (117,653) (837,692) (43,119) (880,811) Total paid (2,056,398) (305,667) (2,362,065) (153,172) (2,515,237) Unrealized foreign exchange gain — (8,786) (8,786) — (8,786) Net balance at end of the year 1,324,821 246,705 1,571,526 100,491 1,672,017 Plus: Reinsurance recoverable at end of the year 1,182,588 24,575 1,207,163 77,979 1,285,142 Gross balance at end of the year $ 2,507,409 $ 271,280 $ 2,778,689 $ 178,470 $ 2,957,159 Gross unpaid losses and loss adjustment expense reserves at December 31, 2019, decreased by $70,745 from December 31, 2018, primarily reflecting lower reserves from catastrophic events. Prior Year Loss Development, Net of Reinsurance Prior year loss development is based upon numerous estimates by line of business and accident year. No additional premiums or return premiums have been accrued as a result of the prior year effects. 2020. Loss and LAE for the year ended December 31, 2020, included $4,191 of unfavorable loss development on prior accident year loss and LAE reserves. The $28,012 of unfavorable loss development in the property and casualty segment (including $970 of unfavorable loss development for the Reciprocal Exchanges) was primarily driven by adverse development in the small business auto product line, while the $23,821 of favorable loss development in the accident and health segment was primarily driven by lower than expected loss ratios in the group segment. The changes in our estimates of ultimate claims costs was the result of ongoing analysis of loss emergence. 2019. Loss and LAE for the year ended December 31, 2019, included $5,164 of unfavorable loss development on prior accident year loss and LAE reserves. The $50,520 of unfavorable loss development in the property and casualty segment (including $3,897 of unfavorable loss development for the Reciprocal Exchanges), was primarily driven by adverse development in the small business auto product line, while the $45,356 of favorable loss development in the accident and health segment was primarily driven by overall improvement in loss ratio estimates. 2018. Loss and LAE for the year ended December 31, 2018, included $34,034 of favorable loss development on prior accident year loss and LAE reserves driven by $3,057 of favorable loss development in the property and casualty segment (including $1,703 of unfavorable loss development for the Reciprocal Exchanges), and $30,977 of favorable loss development in the accident and health segment primarily driven by favorable loss development in the domestic accident and health stop loss and short-term medical products. Short-duration contracts The following is information by reserving subgroups within segments about incurred and paid claims development as of December 31, 2020, net of reinsurance, as well as cumulative claim frequency and the total of incurred-but-not-reported liabilities (“IBNR”) plus expected development on reported claims included within the net incurred claims amounts. The information about incurred and paid claims development for the years ended prior to December 31, 2020, is presented as unaudited supplementary information. Property and Casualty - auto liability, including recreational vehicles and motorcycles: Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, December 31, 2020 Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total of IBNR Cumulative (unaudited) 2011 $ 490,230 $ 485,762 $ 489,010 $ 494,922 $ 493,873 $ 497,109 $ 497,324 $ 496,408 $ 497,424 $ 497,712 $ 522 238,319 2012 511,797 522,296 529,140 527,386 528,090 527,531 529,885 531,887 533,045 281 249,890 2013 544,833 556,262 556,290 563,834 567,410 572,538 575,521 575,264 287 250,134 2014 740,531 759,577 760,566 766,640 779,992 783,869 786,619 572 270,161 2015 820,213 838,040 849,051 872,064 892,244 901,823 3,434 291,921 2016 932,350 940,849 976,749 1,005,184 1,017,124 13,710 302,083 2017 929,211 912,370 941,837 968,645 16,952 296,226 2018 1,047,041 1,033,488 1,054,906 79,287 309,025 2019 1,162,750 1,153,160 169,765 406,201 2020 1,106,907 455,534 293,834 Total (A) $ 8,595,205 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (unaudited) 2011 $ 224,676 $ 385,749 $ 442,365 $ 468,059 $ 482,861 $ 489,191 $ 494,145 $ 495,833 $ 496,680 $ 497,044 2012 242,285 413,018 470,515 501,819 518,079 523,703 527,695 530,570 532,182 2013 259,665 440,751 504,569 540,497 559,064 567,949 571,643 573,312 2014 342,710 601,980 694,002 728,256 757,933 773,124 780,972 2015 385,592 679,461 761,150 820,007 864,226 884,717 2016 400,052 737,927 855,407 937,997 978,785 2017 392,084 706,151 832,553 902,264 2018 429,231 777,888 889,127 2019 470,341 833,977 2020 425,674 Total (B) $ 7,298,054 Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C) 1,915 Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) $ 1,299,066 Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 (unaudited) Property and Casualty - auto liability, including recreational vehicles and motorcycles 41.6 % 32.9 % 11.5 % 6.8 % 3.7 % 1.8 % 0.9 % 0.4 % 0.2 % 0.2 % Property and Casualty - auto physical damage, including recreational vehicles, motorcycles and lender placed auto: Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, December 31, 2020 Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total of IBNR Cumulative (unaudited) 2011 $ 315,273 $ 308,729 $ 308,298 $ 308,486 $ 308,760 $ 308,512 $ 308,536 $ 308,249 $ 308,132 $ 308,142 $ (2) 298,034 2012 308,056 298,208 295,984 296,257 296,050 295,970 295,026 294,710 294,697 (10) 292,486 2013 335,454 329,049 328,748 328,284 328,262 328,010 327,506 327,503 (26) 285,750 2014 496,227 487,302 486,206 486,383 486,373 486,156 486,146 16 311,603 2015 541,008 544,097 544,769 544,510 544,684 544,677 4 329,111 2016 626,643 622,456 621,717 620,546 620,692 (414) 337,873 2017 600,813 570,699 567,411 566,641 370 385,080 2018 548,063 526,092 530,023 (472) 360,454 2019 577,970 552,692 2,482 370,057 2020 560,894 18,588 351,548 Total (A) $ 4,792,107 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (unaudited) 2011 $ 283,501 $ 308,824 $ 308,634 $ 308,608 $ 308,578 $ 308,571 $ 308,557 $ 308,266 $ 308,131 $ 308,145 2012 268,989 298,381 295,978 295,975 296,029 295,995 294,975 294,702 294,699 2013 291,064 328,832 328,456 328,299 328,280 327,976 327,510 327,522 2014 430,998 487,531 486,364 486,309 486,251 486,108 486,080 2015 478,268 544,754 544,707 544,485 544,699 544,652 2016 542,970 622,930 621,529 621,181 620,963 2017 533,907 568,639 566,918 566,181 2018 483,149 532,083 530,330 2019 512,072 549,540 2020 517,035 Total (B) $ 4,745,147 Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C) (15) Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) $ 46,945 Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 (unaudited) Property and Casualty - auto physical damage, including recreational vehicles, motorcycles and lender placed auto 90.6 % 9.6 % (0.1) % — % — % — % (0.1) % — % — % — % Property and Casualty - homeowners & other property, including lender placed homeowners: Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, December 31, 2020 Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total of IBNR Cumulative (unaudited) 2011 $ 506,352 $ 499,170 $ 498,050 $ 498,184 $ 497,244 $ 495,246 $ 494,825 $ 495,170 $ 495,148 $ 495,156 $ 1 107,871 2012 485,454 480,353 478,880 477,577 476,538 474,649 476,166 475,792 475,990 7 112,061 2013 306,761 300,868 299,561 296,618 296,907 296,756 296,760 297,159 66 75,918 2014 318,488 306,471 303,925 304,496 304,237 304,350 304,934 279 73,498 2015 357,023 349,559 351,747 353,688 351,305 351,590 1,152 69,920 2016 350,737 341,762 340,711 343,525 344,763 1,481 61,047 2017 402,798 365,092 370,068 362,176 2,096 59,284 2018 327,462 328,721 327,525 4,192 73,117 2019 247,760 256,369 16,533 66,710 2020 352,477 52,664 48,924 Total (A) $ 3,568,139 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (unaudited) 2011 $ 314,139 $ 457,480 $ 485,054 $ 489,778 $ 493,408 $ 494,198 $ 494,525 $ 494,904 $ 494,922 $ 494,950 2012 300,271 452,589 466,266 471,084 473,190 473,781 475,765 475,762 475,964 2013 219,937 279,743 289,302 293,101 295,332 296,383 296,442 296,567 2014 198,781 278,255 289,456 297,640 301,742 303,100 303,660 2015 233,264 319,284 336,921 342,156 345,257 346,554 2016 227,650 320,564 331,102 337,889 341,037 2017 258,234 338,065 349,600 355,265 2018 227,908 298,212 315,302 2019 172,462 226,895 2020 249,268 Total (B) $ 3,405,462 Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C) 930 Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) $ 163,607 Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 (unaudited) Property and Casualty - homeowners & other property, including lender placed homeowners 67.3 % 25.1 % 4.4 % 1.5 % 0.8 % 0.3 % 0.4 % 0.1 % 0.1 % — % Accident and Health: Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, December 31, 2020 Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total of IBNR Cumulative (unaudited) 2011 $ 4,804 $ 4,483 $ 4,481 $ 4,481 $ 4,481 $ 4,481 $ 4,481 $ 4,481 $ 4,481 $ 4,481 $ — 8,139 2012 4,400 4,227 4,161 4,161 4,161 4,110 4,110 4,110 4,110 — 7,630 2013 23,253 28,578 26,457 26,361 26,272 26,274 26,274 26,265 — 34,173 2014 52,245 52,694 52,311 52,026 52,022 52,034 52,028 — 69,716 2015 176,104 184,586 181,536 181,740 181,717 181,678 — 242,669 2016 215,097 200,817 202,155 201,722 201,850 1 320,319 2017 211,293 186,415 182,865 182,809 135 302,098 2018 234,558 205,152 203,238 364 269,021 2019 256,745 239,017 4,726 304,234 2020 296,453 112,869 262,469 Total (A) $ 1,391,929 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (unaudited) 2011 $ 2,528 $ 4,469 $ 4,481 $ 4,481 $ 4,481 $ 4,481 $ 4,481 $ 4,481 $ 4,481 $ 4,481 2012 3,330 4,095 4,110 4,110 4,161 4,110 4,110 4,110 4,110 2013 15,421 25,754 26,327 26,242 26,154 26,155 26,155 26,147 2014 31,765 52,053 52,405 52,147 52,140 52,153 52,147 2015 123,576 178,918 181,459 181,719 181,696 181,678 2016 125,845 196,421 201,720 201,549 201,849 2017 104,809 178,047 181,519 182,674 2018 126,269 201,457 202,874 2019 158,345 234,291 2020 183,585 Total (B) $ 1,273,836 Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C) — Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) $ 118,093 Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 (unaudited) Accident and Health 62.9 % 35.3 % 1.6 % 0.1 % 0.1 % — % — % (0.4) % 0.3 % — % Reciprocal Exchanges - auto liability: Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, December 31, 2020 Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total of IBNR Cumulative (unaudited) 2011 $ 47,666 $ 47,834 $ 47,459 $ 48,841 $ 51,107 $ 50,898 $ 50,998 $ 51,161 $ 51,247 $ 50,703 $ — 5,065 2012 44,834 47,275 48,044 48,665 50,370 50,767 50,303 50,538 50,606 — 4,999 2013 43,684 44,341 45,479 50,180 51,263 49,854 50,595 50,810 — 5,097 2014 38,656 40,850 45,930 48,246 49,168 49,369 50,055 — 4,873 2015 35,573 33,409 34,390 34,615 34,268 34,962 — 4,335 2016 24,619 24,460 26,109 24,310 24,657 356 4,005 2017 26,214 28,762 28,804 29,806 1,244 4,949 2018 32,339 33,891 35,870 3,540 6,127 2019 49,757 50,212 11,727 6,262 2020 40,757 18,459 3,383 Total (A) $ 418,438 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (unaudited) 2011 $ 15,857 $ 26,603 $ 35,911 $ 41,931 $ 46,559 $ 49,570 $ 50,481 $ 50,979 $ 51,121 $ 50,676 2012 13,568 29,286 37,241 42,768 46,358 48,990 49,836 50,090 50,504 2013 14,683 29,218 35,105 41,787 47,449 48,449 49,605 50,432 2014 13,925 26,070 32,382 39,328 46,001 48,389 49,602 2015 11,910 19,501 24,614 29,538 31,587 33,223 2016 7,516 13,478 16,994 20,567 22,500 2017 9,111 17,136 19,529 23,838 2018 10,755 19,471 24,985 2019 15,504 28,210 2020 13,567 Total (B) $ 347,537 Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C) 27 Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) $ 70,928 Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 (unaudited) Reciprocal Exchanges - auto liability 30.2 % 25.1 % 13.9 % 13.0 % 9.6 % 4.6 % 2.3 % 0.9 % 0.7 % (0.3) % Reciprocal Exchanges - auto physical damage: Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, December 31, 2020 Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total of IBNR Cumulative (unaudited) 2011 $ 26,936 $ 26,055 $ 26,022 $ 26,060 $ 26,037 $ 26,029 $ 26,023 $ 26,028 $ 26,028 $ 26,027 $ — 12,041 2012 25,752 26,459 26,189 25,914 25,842 25,841 25,845 25,842 25,820 — 11,301 2013 23,375 25,214 25,292 24,709 24,703 24,704 24,704 24,704 — 11,066 2014 29,240 27,424 25,806 25,588 25,882 26,074 26,074 — 11,526 2015 21,247 18,592 18,673 18,789 18,842 18,890 — 10,281 2016 12,270 12,921 12,985 13,213 13,197 — 8,740 2017 15,301 15,410 15,612 15,490 (5) 10,682 2018 19,146 19,272 19,200 108 13,615 2019 27,212 27,585 (51) 14,549 2020 21,240 (810) 10,027 Total (A) $ 218,227 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (unaudited) 2011 $ 28,274 $ 26,269 $ 26,106 $ 26,056 $ 26,037 $ 26,033 $ 26,027 $ 26,028 $ 26,028 $ 26,027 2012 23,760 26,651 26,172 25,914 25,854 25,850 25,845 25,842 25,817 2013 22,651 25,088 24,549 24,725 24,716 24,704 24,704 24,704 2014 24,528 26,165 25,772 25,427 25,685 25,946 26,071 2015 19,080 18,797 18,750 18,748 18,719 18,730 2016 12,579 13,147 13,080 13,137 13,114 2017 15,438 16,141 15,500 15,495 2018 18,925 19,246 19,093 2019 27,974 27,632 2020 21,633 Total (B) $ 218,316 Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C) — Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) $ (89) Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 (unaudited) Reciprocal Exchanges - auto physical damage 98.4 % 2.6 % (1.3) % 0.2 % — % — % — % — % — % — % Reciprocal Exchanges - homeowners & other property: Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, December 31, 2020 Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total of IBNR Cumulative (unaudited) 2011 $ 38,470 $ 28,869 $ 28,511 $ 28,209 $ 27,954 $ 27,950 $ 28,002 $ 28,075 $ 28,095 $ 28,144 $ — 6,652 2012 25,289 20,625 21,184 19,971 20,403 20,876 20,251 20,301 20,283 — 8,427 2013 22,638 21,232 20,132 20,309 20,615 20,367 23,109 22,649 — 3,165 2014 27,706 24,846 25,625 26,614 27,141 27,231 27,212 — 4,232 2015 30,081 21,031 21,527 22,007 21,881 22,714 — 5,455 2016 36,838 35,274 34,851 34,501 34,655 78 4,799 2017 48,222 50,871 51,852 51,477 648 8,830 2018 76,925 78,166 77,582 1,471 12,998 2019 65,888 65,380 3,312 12,238 2020 68,723 10,427 9,349 Total (A) $ 418,819 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (unaudited) 2011 $ 21,474 $ 24,997 $ 25,799 $ 26,700 $ 27,661 $ 27,656 $ 27,692 $ 27,758 $ 27,803 $ 27,825 2012 11,087 18,021 19,367 19,847 19,961 20,668 20,121 20,256 20,238 2013 11,277 17,435 18,107 19,104 19,653 19,626 20,232 22,731 2014 15,344 22,834 23,820 25,230 26,170 27,003 27,115 2015 12,979 18,518 19,834 20,339 20,733 21,994 2016 20,978 30,615 31,632 32,933 33,399 2017 33,166 46,003 47,517 49,506 2018 55,519 69,672 72,859 2019 45,432 58,788 2020 44,371 Total (B) $ 378,826 Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C) 2,658 Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) $ 42,651 Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 (unaudited) Reciprocal Exchanges - homeowners & other property 64.9 % 22.8 % 3.3 % 2.5 % 1.3 % 1.8 % 1.0 % 0.8 % 0.5 % 1.1 % The reconciliation of the net incurred and paid claims development tables to the liability for unpaid loss and LAE reserves is as follows: December 31, 2020 Net outstanding liabilities: Property and Casualty - Auto Liability $ 1,299,066 Property and Casualty - Auto Physical Damage 46,945 Property and Casualty - Homeowners and Other Property 163,607 Accident and Health 118,093 Reciprocal Exchanges - Auto Liability 70,928 Reciprocal Exchanges - Auto Physical Damage (89) Reciprocal Exchanges - Homeowners and Other Property 42,651 Net reserve for claims and allocated claim adjustment expenses $ 1,741,201 Reinsurance recoverable (1): Property and Casualty - Auto Liability $ 766,929 Property and Casualty - Auto Physical Damage 8,198 Property and Casualty - Homeowners and Other Property 124,090 Accident and Health 21,697 Reciprocal Exchanges - Auto Liability 28,745 Reciprocal Exchanges - Auto Physical Damage 557 Reciprocal Exchanges - Homeowners and Other Property 48,312 Reinsurance recoverable on unpaid claims and allocated claim adjustment expenses $ 998,528 Insurance lines other than short-duration $ 35,688 Acquisition 17,488 Unallocated claims adjustment expenses (“ULAE”) 96,193 Subtotal $ 149,369 Gross reserve for claims and claim adjustment expenses $ 2,889,098 (1) I ncludes $535,433 from MCCA and $157,611 from NCRF. See Note 10, “Reinsurance” for additional information. The reconciliation of the net incurred and paid loss information in the loss reserve rollforward table and loss development tables with respect to the current accident year is as follows: 2020 - Current Accident Year Incurred 2020 - Current Accident Year Paid Property Accident Reciprocal Total Property Accident Reciprocal Total Rollforward table $ 2,323,797 $ 342,714 $ 153,380 $ 2,819,891 $ 1,432,498 $ 209,319 $ 94,287 $ 1,736,104 Development tables 2,020,278 296,453 130,720 2,447,451 1,191,977 183,585 79,571 1,455,133 Variance $ 303,519 $ 46,261 $ 22,660 $ 372,440 $ 240,521 $ 25,734 $ 14,716 $ 280,971 Unallocated claims adjustment expenses $ 303,112 $ 15,883 $ 22,660 $ 341,655 $ 240,263 $ 10,539 $ 14,716 $ 265,518 Long-duration contracts — 30,789 — 30,789 — 15,449 — 15,449 Other 407 (411) — (4) 258 (254) — 4 Variance $ 303,519 $ 46,261 $ 22,660 $ 372,440 $ 240,521 $ 25,734 $ 14,716 $ 280,971 The reconciliation of the net incurred and paid loss information in the loss reserve rollforward table and loss development tables with respect to the prior accident year is as follows: 2020 - Prior Accident Year Incurred 2020 - Prior Accident Year Paid Property Accident Reciprocal Total Property Accident Reciprocal Total Rollforward table $ 27,042 $ (23,821) $ 970 $ 4,191 $ 827,745 $ 90,952 $ 53,317 $ 972,014 Development tables 44,333 (19,624) 4,162 28,871 734,614 78,786 50,568 863,968 Variance $ (17,291) $ (4,197) $ (3,192) $ (24,680) $ 93,131 $ 12,166 $ 2,749 $ 108,046 Unallocated claims adjustment expenses $ (8,881) $ (1,285) $ (3,586) $ (13,752) $ 58,163 $ 3,395 $ 2,556 $ 64,114 Accident years prior to 2011 (493) — 394 (99) 1,442 — 193 1,635 Long-duration contracts — (2,912) — (2,912) — 8,771 — 8,771 Acquisition (7,917) — — (7,917) 33,526 — — 33,526 Variance $ (17,291) $ (4,197) $ (3,192) $ (24,680) $ 93,131 $ 12,166 $ 2,749 $ 108,046 The $44,333 of unfavorable prior year loss development for Property and Casualty on a combined basis for the incurred loss development tables relates to Loss and Allocated Claims Adjustment Expenses (“ALAE”), which does not include ULAE and other items excluded from the loss development tables as identified in the reconciliation table and further identified in the prior accident year incurred reconciliation table above. The reserve rollforward table shows prior year loss development for Loss and LAE, which includes loss development from ULAE and other items excluded from the loss development tables as identified in the reconciliation table and further identified in the prior accident year incurred reconciliation table above. Favorable prior year loss development of $17,291 in total attributable to liabilities excluded from the incurred loss development tables resulted in total P&C Loss and LAE unfavorable prior year loss development of $27,042 shown in the reserve rollforward table. The $19,624 of favorable prior year loss development for Accident and Health shown in the incurred loss development table relates to Loss and ALAE, which does not include ULAE and other items excluded from the loss development tables as identified in the reconciliation table and further identified in the prior accident year incurred reconciliation table above. The reserve rollforward table shows prior year loss development for Loss and LAE, which includes prior year loss development from ULAE and other items excluded from the loss development tables as identified in the reconciliation table and further identified in the prior accident year incurred reconciliation table above. Favorable prior year loss development of $4,197 in total attributable to liabilities excluded from the incurred loss development table resulted in total Accident and Health Loss and LAE favorable prior year loss development of $23,821 shown in the reserve rollforward table. The $4,162 of unfavorable prior year loss development for the Reciprocal Exchanges on a combined basis for the incurred loss development tables relates to Loss and ALAE, which does not include ULAE and other items excluded from the loss development tables as identified in the reconciliation table and further identified in the prior accident year incurred reconciliation table above. The reserve rollforward table shows prior year loss development for Loss and LAE, which includes loss development from ULAE and other items excluded from the loss development tables as identified in the reconciliation table and further identified in the prior accident year incurred reconciliation table above. Favorable prior year loss development of $3,192 in total attributable to liabilities excluded from the incurred loss development tables resulted in total Reciprocal Exchanges Loss and LAE unfavorable prior year loss development of $970 shown in the reserve rollforward table. Methodology for Estimating Incurred-But-Not-Reported Reserves Loss and LAE reserves represent management's estimate of the ultimate liability for claims that have been reported and claims that have been incurred but not yet reported as of the balance sheet date. Because the establishment of loss and LAE reserves is a process involving estimates and judgment, currently estimated reserves may change. The Company reflects changes to the reserves in the results of operations for the period during which the estimates are changed. Incurred-but-not-reported reserve estimates are generally calculated by first projecting the ultimate cost of all claims that have occurred and then subtracting reported losses and loss expenses. Reported losses include cumulative paid losses and loss expenses plus case reserves. Therefore, the IBNR also includes provision for expected development on reported claims. The Company’s internal actuarial analysis of the historical data provides the factors the Company uses in its actuarial analysis in estimating its loss and LAE reserves. These factors are implicit measures over time of claims reported, average case incurred amounts, case development, severity and payment patterns. However, these factors cannot be directly used as they do not take into consideration changes in business mix, claims management, regulatory issues, medical trends, and other subjective factors. In accordance with Actuarial Standards of Practice, the Company generally uses multiple traditional methods in determining our estimates of the ultimate unpaid claim liabilities. Each of these methods require actuarial judgment and assumptions. The techniques can include, but are not limited to: • Paid Development Method - uses historical, cumulative paid losses by accident year and develops those actual losses to estimated ultimate losses based upon the assumption that each accident year will develop to estimated ultimate cost in a manner that is analogous to prior years. • Paid Generalized Cape Cod Method - combines the Paid Development Method with the expected loss method, where the expected loss ratios are estimated from exposure and claims experience weighted across multiple accident periods. The selected expected loss ratio for a given accident year is derived by giving some weight to all of the accident years in the experience history rather than treating each accident year independently. • Paid Bornhuetter-Ferguson Method - a combination of the Paid Development Method and the Expected Loss Method, the Paid Bornhuetter-Ferguson Method estimates ultimate losses by adding actual paid losses and projected future unpaid losses. The amounts produced are then added to cumulative paid losses to produce the final estimates of ultimate incurred losses. • Incurred Development Method - uses historical, cumulative incurred losses by accident year and develops those actual losses to estimated ultimate losses based upon the assumption that each accident year will develop to estimated ultimate cost in a manner that is analogous to prior years. • Incurred Generalized Cape Cod Method - combines the Incurred Development Method with the expected loss method, where the expected loss ratios are estimated from exposure and claims experience weighted across multiple accident periods. The selected expected loss ratio for a given accident year is derived by giving some weight to all of the accident years in the experience history rather than treating each accident year independently. • Incurred Bornhuetter - Ferguson Method - a combination of the Incurred Development Method and the Expected Loss Method, the Incurred Bornhuetter-Ferguson Method estimates ultimate losses by adding actual incurred losses and projected future unreported losses. The amounts produced are then added to cumulative incurred losses to produce an estimate of ultimate incurred losses. • Expected Loss Method - utilizes an expected ultimate loss ratio based on historical experience adjusted for trends multiplied by earned premium to project ultimate losses. For each method, losses are projected to the ultimate amount to be paid. The Company then analyzes the results and may emphasize or deemphasize some or all of the outcomes to reflect actuarial judgment regarding their reasonableness in relation to supplementary information and operational and industry changes. These outcomes are then aggregated to produce a single selected point estimate that is the basis for the internal actuary’s point estimate for loss reserves. Methodology for Determining Cumulative Number of Reported Claims When the Company is notified of an incident of poten |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2020 | |
Insurance [Abstract] | |
Reinsurance | Reinsurance The Company utilizes various excess of loss, quota share, state-based industry pools or facilities, and catastrophe reinsurance programs to limit its exposure. Reinsurance agreements transfer portions of the underlying risk on the business the Company writes. Reinsurance does not discharge or diminish the Company’s obligation to pay claims covered by the insurance policies it issues; however, it does permit the Company to recover certain incurred losses from its reinsurers and the Company’s reinsurance recoveries reduce the maximum loss that it may incur as a result of a covered loss event. The Company’s reinsurers generally carry at least an A.M. Best rating of “A-” (Excellent) or the reinsurance recoverable balances are collateralized. The Company also maintains funds held liabilities under the auto quota share reinsurance agreement. The total amount, cost and limits relating to the reinsurance coverage the Company purchases may vary from year to year based upon a variety of factors, including the availability of quality reinsurance at an acceptable price and the level of risk that the Company chooses to retain for its account. The Company assumes and cedes insurance risks under various reinsurance agreements, on both a pro-rata basis and excess of loss basis. The Company purchases reinsurance to mitigate the volatility of direct and assumed business, which may be caused by the aggregate value or the concentration of written exposures in a particular geographic area or business segment and may arise from catastrophes or other events. The Company pays a premium as consideration for ceding the risk. Reinsurance recoverable is as follows: December 31, 2020 2019 Reinsurance recoverable on paid losses $ 221,212 $ 282,500 Reinsurance recoverable on unpaid losses 998,528 1,111,808 Allowance for uncollectible reinsurance (810) — Reinsurance recoverable, net $ 1,218,930 $ 1,394,308 The following is the effect of reinsurance on unpaid loss and LAE reserves and unearned premiums: December 31, 2020 2019 Assumed Ceded Assumed Ceded Unpaid loss and LAE reserves $ 27,568 $ 998,528 $ 50,884 $ 1,111,808 Unearned premiums 18,845 414,010 15,278 575,747 The following is the effect of reinsurance on premiums and loss and LAE: Year Ended December 31, 2020 2019 2018 Premium: Written Earned Written Earned Written Earned Direct $ 5,574,550 $ 5,613,630 $ 5,508,245 $ 5,486,835 $ 5,317,742 $ 5,049,512 Assumed 59,997 56,430 74,835 80,572 99,097 123,265 Total Gross Premium 5,634,547 5,670,060 5,583,080 5,567,407 5,416,839 5,172,777 Ceded (1,013,703) (1,175,440) (1,358,459) (1,449,365) (1,589,126) (1,440,575) Net Premium $ 4,620,844 $ 4,494,620 $ 4,224,621 $ 4,118,042 $ 3,827,713 $ 3,732,202 Year Ended December 31, 2020 2019 2018 Assumed Ceded Assumed Ceded Assumed Ceded Loss and LAE $ 9,713 $ 729,628 $ 32,745 $ 801,041 $ 29,290 $ 1,041,286 Reinsurance Agreements In 2017, the Company entered into an Auto Quota Share Agreement (the “Auto Quota Share Agreement”) covering the Company’s auto lines of business. Effective January 1, 2019, the Company ceded 7.0% of net liability. On July 1, 2019, the Company renewed its Auto Quota Share Agreement for a two-year term. Effective July 1, 2019, the Company ceded 10.0% of net liability. The Company receives a 31.2% provisional ceding commission on premiums ceded to the reinsurer during the term of the Auto Quota Share Agreement, subject to a sliding scale adjustment to a maximum of 32.8% if the loss ratio for the reinsured business is 64.7% or less and a minimum of 30.0% if the loss ratio is 67.5% or higher. Effective January 1, 2020, the Company cedes 5.0% of net liability under new and renewal auto policies written. In 2017, the Company entered into a Homeowners Quota Share Agreement (the “HO Quota Share Agreement”) covering the Company’s homeowners line of business. On July 1, 2019, the Company renewed its HO Quota Share Agreement for a one-year term. Effective July 1, 2019, the Company ceded 40.0% of net liability and received a 36.0% ceding commission on new and renewal business and a portion of the in-force business. A portion of the in-force business is being run-off under the prior agreements. On July 1, 2020, the Company renewed its HO Quota Share Agreement for a one-year term. Effective July 1, 2020, the Company cedes 20.0% of net liability and receives a 37.0% ceding commission on in-force, new and renewal business. Effective May 1, 2020, with additional purchases made at June 1, 2020, and July 1, 2020, the Company renewed its property catastrophe excess of loss program, protecting the Company against catastrophic events and other large losses. The program provides coverage up to $650,000 with one reinstatement and attaches at $70,000 for the first event and $50,000 for the second event. The Company purchased additional first event coverage for named wind that attaches at $50,000. Effective October 1, 2020, the Company’s casualty program provides $35,000 in coverage in excess of a $5,000 retention. Reciprocal Exchanges In 2019, the Reciprocal Exchanges entered into a personal lines quota share agreement for a one-year term. The Reciprocal Exchanges ceded 42.3% of net liability on new and renewal homeowners multiple peril, dwelling fire, and automobile physical damage (comprehensive only) policies written in the states of New Jersey and New York. Effective July 1, 2020, the Reciprocal Exchanges renewed their personal lines quota share agreement for a one-year term, ceding 42.0% combined weighted average of net liability. This includes a 55.0% quota share covering homeowners multiple peril, dwelling fire, and automobile physical damage (comprehensive only) policies written in the states of New Jersey and New York as well as a 25.0% quota share on automobile liability and collision coverages. Effective July 1, 2020, the Reciprocal Exchanges’ property catastrophe excess of loss program provided coverage up to $475,000 with a $20,000 retention, and one reinstatement. Effective July 17, 2020, the Company purchased an additional $125,000 of top layer coverage. Industry Pools and Facilities The Company’s reinsurance programs include premiums written under state-mandated involuntary plans for automobile, motorcycle and commercial vehicles and premiums ceded to state-provided reinsurance facilities such as Michigan Catastrophic Claims Association (“MCCA”) and North Carolina Reinsurance Facility (“NCRF”), for which the Company retains no loss indemnity risk. Prepaid reinsurance premiums are recognized on a pro-rata basis over the period of risk, consistent with premiums written. MCCA is a reinsurance mechanism that covers no-fault first party medical losses of retentions in excess of $580 until June 30, 2021. Insurers are reimbursed for their covered losses in excess of this threshold. All automobile insurers doing business in Michigan are required to participate in MCCA. Funding for MCCA comes from assessments against automobile insurers based upon their share of insured automobiles in the state. Insurers are allowed to pass along this cost to Michigan automobile policyholders. Reinsurance recoverable from MCCA are as follows: December 31, 2020 2019 Reinsurance recoverable on paid losses $ 10,221 $ 9,940 Reinsurance recoverable on unpaid losses 535,433 548,370 Allowance for uncollectible reinsurance — — Reinsurance recoverable, net $ 545,654 $ 558,310 The following is a summary of premiums and losses ceded to MCCA: Year Ended December 31, 2020 2019 2018 Ceded earned premiums $ 7,856 $ 9,867 $ 9,676 Ceded Loss and LAE 3,624 (23,616) (54,105) NCRF is a mechanism for pooling of insurance risks for insureds who cannot obtain coverage by ordinary methods. Under the Facility law, licensed and writing carriers and agents must accept and insure any eligible applicant for coverages and limits which may be ceded to the Facility. The Facility accepts cession of bodily injury and property damage liability, medical payments, and uninsured and combined uninsured/underinsured motorist’s coverages. Funding for the NCRF comes from collected premiums from automobile insurers based upon the provided coverage of the insured automobiles in the state. Reinsurance recoverable from NCRF are as follows: December 31, 2020 2019 Reinsurance recoverable on paid losses $ 35,684 $ 44,759 Reinsurance recoverable on unpaid losses 157,611 146,496 Allowance for uncollectible reinsurance — — Reinsurance recoverable, net $ 193,295 $ 191,255 The following is a summary of premiums and losses ceded to NCRF: Year Ended December 31, 2020 2019 2018 Ceded earned premiums $ 236,837 $ 234,370 $ 232,270 Ceded Loss and LAE 208,316 222,796 210,297 The Company believes that it is unlikely to incur any material loss as a result of non-payment of amounts owed to the Company by MCCA and NCRF because (i) the payment obligations are extended over many years, resulting in relatively small current payment obligations, (ii) both MCCA and NCRF are supported by assessments permitted by statute, and (iii) the Company has not historically incurred losses as a result of non-payment. Because MCCA and NCRF are supported by assessments permitted by statute, and there have been no significant and uncollectible balances from MCCA and NCRF, the Company believes that it has no significant exposure to uncollectible reinsurance balances from these entities. The Company has a concentration of credit risk associated with its reinsurance recoverable and premiums ceded to reinsurers. The following tables present information for each reinsurer by reinsurance recoverable, prepaid reinsurance and funds held balances: Recoverable on December 31, 2020 A.M. Best Unpaid Paid Allowance for uncollectible reinsurance Prepaid Funds Held Net Reinsurer: MCCA NR (1) $ 535,433 $ 10,221 $ — $ 1,251 $ — $ 546,905 NCRF NR (1) 157,611 35,684 — 92,783 — 286,078 Hannover Ruck SE A+ 74,485 47,726 — 68,167 (149,402) 40,976 Other reinsurers' balances - each less than 5% of total (2) — 230,999 127,581 (810) 251,809 (19,606) 589,973 Total $ 998,528 $ 221,212 $ (810) $ 414,010 $ (169,008) $ 1,463,932 NGHC $ 920,914 $ 173,137 $ (636) $ 324,160 $ (153,903) $ 1,263,672 Reciprocal Exchanges 77,614 48,075 (174) 89,850 (15,105) 200,260 Total $ 998,528 $ 221,212 $ (810) $ 414,010 $ (169,008) $ 1,463,932 Recoverable on December 31, 2019 A.M. Best Unpaid Paid Prepaid Funds Held Net Reinsurer: MCCA NR (1) $ 548,370 $ 9,940 $ 3,927 $ — $ 562,237 NCRF NR (1) 146,496 44,759 88,022 — 279,277 Hannover Ruck SE A+ 155,223 101,064 134,878 (254,558) 136,607 Other reinsurers' balances - each less than 5% of total (2) — 261,719 126,737 348,920 (4,884) 732,492 Total $ 1,111,808 $ 282,500 $ 575,747 $ (259,442) $ 1,710,613 NGHC $ 1,027,634 $ 247,549 $ 469,853 $ (259,442) $ 1,485,594 Reciprocal Exchanges 84,174 34,951 105,894 — 225,019 Total $ 1,111,808 $ 282,500 $ 575,747 $ (259,442) $ 1,710,613 (1) NR - not rated by A.M. Best. (2) Rated A- or higher by A.M. Best or collateralized. Funds held for reinsurers are recorded within reinsurance payable in the consolidated balance sheets. Additionally, collateral is available to the Company in the form of letters of credit and trust agreements in the amounts of $245,049 and $143,069, as of December 31, 2020, and 2019, respectively. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following table represents the Company’s debt: December 31, Interest Rate Maturity 2020 2019 Fixed-rate: 6.75% Notes 6.75% 2024 $ 350,000 $ 350,000 7.625% Notes 7.625% 2055 100,000 100,000 Floating-rate: Subordinated Debentures I (1) LIBOR + 3.40% 2035 41,238 41,238 Subordinated Debentures II (2) LIBOR + 4.25% 2037 30,930 30,930 2019 Credit Agreement (3) LIBOR + 1.75% 2023 140,000 140,000 Finance lease liabilities Various Various 16,690 20,477 Other 3.5% Various 3,194 9,342 Unamortized debt issuance costs and unamortized discount (5,242) (5,981) Total carrying amount of debt $ 676,810 $ 686,006 (1) Interest rate was 3.62% and 5.29%, as of December 31, 2020, and 2019, respectively. (2) Interest rate was 4.47% and 6.14%, as of December 31, 2020, and 2019, respectively. (3) Weighted-average interest rate was 4.00% and 3.59% as of December 31, 2020, and 2019, respectively. The following table presents the Company’s interest expense: Year Ended December 31, Interest Payment Frequency 2020 2019 2018 6.75% Notes Semiannually $ 23,625 $ 23,625 $ 23,625 7.625% Notes Quarterly 7,625 7,625 7,625 Subordinated Debentures Quarterly 3,287 4,536 4,346 2016 Credit Agreement Quarterly — 1,211 7,491 2019 Credit Agreement Quarterly 3,421 5,340 — Finance lease liabilities Various 1,150 1,176 621 Other (1) Various (5,336) 8,031 7,717 Total interest expense $ 33,772 $ 51,544 $ 51,425 (1) Includes interest for other liabilities, interest credited on funds held balances and accretion of debt issuance costs. Notes The 6.75% Notes are the Company’s general unsecured obligations and rank (i) equally in right of payment with its other existing and future senior unsecured indebtedness and (ii) senior in right of payment to any of its indebtedness that is contractually subordinated to the 6.75% Notes. The 6.75% Notes are also effectively subordinated to any of the Company’s existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness and are structurally subordinated to the existing and future indebtedness of the Company’s subsidiaries (including trade payables). The 6.75% Notes mature on May 15, 2024, unless earlier redeemed or purchased by the Company. The 7.625% Notes were the Company’s subordinated unsecured obligations and ranked (i) senior in right of payment to any future junior subordinated debt, (ii) equal in right of payment with any unsecured, subordinated debt that the Company incurs in the future that ranks equally with the 7.625% Notes, and (iii) subordinate in right of payment to any of the Company’s existing and future senior debt, including amounts outstanding under the Company’s revolving credit facility, the Company’s 6.75% notes and certain of the Company’s other obligations. Also, the 7.625% Notes were structurally subordinated to all existing and future indebtedness, liabilities, and other obligations of the Company’s subsidiaries. The 7.625% Notes were schedule to mature on September 15, 2055. See Note 22, “Subsequent Events” for additional information. Subordinated Debentures The Company, through a subsidiary, is the issuer of junior subordinated debentures (the “Subordinated Debentures”) relating to the issuance of trust preferred securities. The Subordinated Debentures require interest-only payments to be made quarterly, with principal due at maturity. The Subordinated Debentures’ principal amounts of $41,238 and $30,930 mature in 2035 and 2037, respectively, and bear interest at an annual rate equal to LIBOR plus 3.40% and LIBOR plus 4.25%, respectively. The Subordinated Debentures are redeemable by the Company at a redemption price equal to 100% of their principal amount. The Subordinated Debentures have been called for redemption and are expected to be redeemed in full on March 15, 2021. Credit Agreement In 2019, the Company refinanced its existing credit agreement and entered into a new credit agreement (the “2019 Credit Agreement”), with JPMorgan Chase Bank, N.A., as Administrative Agent, KeyBank National Association and Fifth Third Bank, as Co-Syndication Agents, and the various lending institutions party thereto. The 2019 Credit Agreement was a $340,000 base revolving credit facility with a letter of credit sub-limit of $150,000 and an expansion feature of up to $50,000. Borrowings under the 2019 Credit Agreement bore interest at either the Alternate Base Rate (“ABR”) or the LIBOR rate. ABR borrowings under the 2019 Credit Agreement bore interest at the greatest of (a) the prime rate in effect on such day, (b) the federal funds effective rate on such day plus 0.5 percent, or (c) the adjusted LIBOR rate for a one-month interest period on such day plus 1 percent. Eurodollar borrowings under the 2019 Credit Agreement bore interest at the adjusted LIBOR rate plus the Eurodollar spread for the interest period in effect. Fees payable by the Company under the 2019 Credit Agreement included a letter of credit participation fee, a letter of credit fronting fee with respect to each letter of credit (0.125%), and a commitment fee on the available commitments of the lenders (a range of 0.175% to 0.25% based on the Company’s consolidated leverage ratio; and as of December 31, 2020, the rate was 0.225%). The 2019 Credit Agreement had a maturity date of February 25, 2023. Maturities of the Company’s debt for the years subsequent to December 31, 2020 are as follows: 2021 2022 2023 2024 2025 and thereafter Total 6.75% Notes $ — $ — $ — $ 350,000 $ — $ 350,000 7.625% Notes (1) — — — — 100,000 100,000 Subordinated Debentures I — — — — 41,238 41,238 Subordinated Debentures II — — — — 30,930 30,930 2019 Credit Agreement (2) — — 140,000 — — 140,000 Finance lease liabilities 5,986 3,875 2,433 1,436 2,960 16,690 Other 3,194 — — — — 3,194 Total principal amount of debt $ 9,180 $ 3,875 $ 142,433 $ 351,436 $ 175,128 $ 682,052 Unamortized debt issuance costs and unamortized discount (5,242) Carrying amount of debt $ 676,810 (1) Were repaid on February 3, 2021. (2) Was repaid on January 4, 2021. Covenants and Compliance The indenture relating to the 6.75% Notes and 7.625% Notes contains customary covenants, such as reporting of annual and quarterly financial results, and restrictions on certain mergers and consolidations, as well as covenants relating to the incurrence of debt if the Company’s consolidated leverage ratio would exceed 0.35 to 1.00, a limitation on liens, a limitation on the disposition of stock of certain of the Company’s subsidiaries and a limitation on transactions with certain of the Company’s affiliates. The 2019 Credit Agreement contained certain restrictive covenants customary for facilities of its type (subject to negotiated exceptions and baskets), including restrictions on indebtedness, liens, acquisitions and investments, restricted payments and dispositions. There were also financial covenants that require the Company to maintain a minimum consolidated net worth, a maximum consolidated leverage ratio, a minimum risk-based capital and a minimum rating. The 2019 Credit Agreement also provided for customary events of default, with grace periods where customary, including failure to pay principal when due, failure to pay interest or fees within three business days after becoming due, failure to comply with covenants, breaches of representations and warranties, default under certain other indebtedness, certain insolvency or receivership events affecting the Company and its subsidiaries, the occurrence of certain material judgments, or a change in control of the Company. Upon the occurrence and during the continuation of an event of default, the administrative agent, upon the request of the requisite percentage of the lenders, may have terminated the obligations of the lenders to make loans and to issue letters of credit under the 2019 Credit Agreement, declared the Company’s obligations under the 2019 Credit Agreement to become immediately due and payable and/or exercised any and all remedies and other rights under the 2019 Credit Agreement. As of December 31, 2020, the Company was in compliance with the covenants contained in the Company’s debt agreements. See Note 22, “Subsequent Events” for additional information on debt instruments. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company files a consolidated Federal income tax return and is a party to a Federal income tax allocation agreement. Under the tax allocation agreement, each subsidiary computes and pays to the Company its respective share of the federal income tax liability primarily based on separate return calculations. The Reciprocal Exchanges are not included in the Company’s consolidated tax return as the Company does not have an ownership interest in the Reciprocal Exchanges, and they are not a part of the consolidated tax sharing agreement among the Company and its subsidiaries. Federal income tax expense consisted of the following: Year Ended December 31, 2020 2019 2018 NGHC Reciprocal Exchanges Total NGHC Reciprocal Exchanges Total NGHC Reciprocal Exchanges Total Current tax expense (benefit) Federal $ 115,416 $ 7 $ 115,423 $ 69,985 $ (2,257) $ 67,728 $ 27,039 $ (2,290) $ 24,749 Foreign 213 — 213 2,621 — 2,621 1,376 — 1,376 Total current tax expense (benefit) $ 115,629 $ 7 $ 115,636 $ 72,606 $ (2,257) $ 70,349 $ 28,415 $ (2,290) $ 26,125 Deferred tax expense (benefit) Federal $ 19,048 $ 1,777 $ 20,825 $ 13,497 $ (6,833) $ 6,664 $ 28,015 $ (1,260) $ 26,755 Foreign — — — — — — 604 — 604 Total deferred tax expense (benefit) $ 19,048 $ 1,777 $ 20,825 $ 13,497 $ (6,833) $ 6,664 $ 28,619 $ (1,260) $ 27,359 Provision (benefit) for income taxes $ 134,677 $ 1,784 $ 136,461 $ 86,103 $ (9,090) $ 77,013 $ 57,034 $ (3,550) $ 53,484 The domestic and foreign components of income before taxes are as follows: Year Ended December 31, 2020 2019 2018 NGHC Reciprocal Total NGHC Reciprocal Total NGHC Reciprocal Total Domestic $ 608,186 $ 12,661 $ 620,847 $ 358,079 $ (29,729) $ 328,350 $ 244,463 $ (43,380) $ 201,083 Foreign 39,822 — 39,822 76,093 — 76,093 19,925 — 19,925 Income (loss) $ 648,008 $ 12,661 $ 660,669 $ 434,172 $ (29,729) $ 404,443 $ 264,388 $ (43,380) $ 221,008 The TCJA included provisions for Global Intangible Low-Taxed Income (“GILTI”), which imposes a minimum tax on global intangible low-tax income, defined as the excess income of foreign subsidiaries over a 10 percent rate of routine return on tangible business assets, and for Base Erosion and Anti-Abuse tax (“BEAT”) which imposes tax on certain base eroding payments to affiliated foreign companies. Consistent with accounting guidance, the Company treats both GILTI and BEAT as an in period tax charges when incurred in future periods for which no deferred taxes need be provided. The Company analyzed the impact of both GILTI and BEAT on its operations for the period and determined that for the year ended December 31, 2020, the Company was subject to GILTI but was not subject to the BEAT. Deferred income taxes are recognized for the future tax consequences of temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities. The tax effects of temporary differences that give rise to the net deferred tax asset or liability are presented below based upon the 2020 enacted rate of 21%. December 31, 2020 2019 NGHC Reciprocal Total NGHC Reciprocal Total Deferred tax assets: Accrued expenses $ 7,577 $ 289 $ 7,866 $ 3,178 $ 683 $ 3,861 Unearned premiums and other revenue 71,872 4,242 76,114 64,155 5,146 69,301 Bad debt 4,628 281 4,909 4,876 114 4,990 Loss reserve discount 13,071 1,167 14,238 10,355 1,042 11,397 Net operating loss carryforwards 107,869 11,175 119,044 102,535 13,962 116,497 Surplus note interest — — — 2,081 — 2,081 Other 7,773 2,099 9,872 9,740 4,882 14,622 Gross deferred tax assets 212,790 19,253 232,043 196,920 25,829 222,749 Less: Valuation allowance (72,212) (5,670) (77,882) (65,257) (6,523) (71,780) Total deferred tax assets 140,578 13,583 154,161 131,663 19,306 150,969 Deferred tax liabilities: Deferred acquisition costs 52,719 4,032 56,751 49,828 4,894 54,722 Intangible assets 39,348 632 39,980 36,495 700 37,195 Goodwill 4,418 — 4,418 4,204 — 4,204 Property and equipment 39,160 — 39,160 28,922 — 28,922 Investments 4,390 107 4,497 — — — Deferred commissions 18,875 — 18,875 — — — Surplus note interest — 10,747 10,747 — 13,828 13,828 Unrealized capital gains 54,016 1,080 55,096 19,870 1,062 20,932 Other — — — 11,671 81 11,752 Gross deferred tax liabilities 212,926 16,598 229,524 150,990 20,565 171,555 Deferred tax asset $ — $ — $ — $ — $ — $ — Deferred tax liability $ (72,348) $ (3,015) $ (75,363) $ (19,327) $ (1,259) $ (20,586) Excluding the Reciprocal Exchanges, there were $72,212 and $65,257 of deferred tax asset valuation allowances as of December 31, 2020, and 2019, respectively. In assessing the reliability of gross deferred tax assets, management considers whether it is more likely than not that some portion or all of the gross deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. During 2019 the Company recognized significant increases in its Net Operating Loss carryforwards (“NOL”) related to foreign operations. Management believes that it is more likely than not that the results of future operations will not generate sufficient taxable income to realize all of the deferred tax assets related to the NOLs from foreign operations within a reasonable time period. As such, the Company recorded a change in valuation allowance of $6,954 against these NOLs. For the Reciprocal Exchanges, the Company had a partial valuation allowance against the net deferred tax assets as of December 31, 2020, and 2019, respectively, and no tax benefit from consolidated pre-tax losses generated for the years ended December 31, 2020, and 2019, was recognized. For the year ended December 31, 2020, New Jersey Skylands Insurance Association (“NJSIA”) had negative evidence in the form of a multi-year history of net operating losses for tax purposes that supported the determination that the realized net deferred tax asset should be fully reserved. Excluding the Reciprocal Exchanges, the Company had U.S. federal NOLs of $62,731, $67,406 and $58,082 available for tax purposes for the years ended December 31, 2020, 2019, and 2018, respectively. The NOLs expire between December 31, 2029 and December 31, 2037. The Reciprocal Exchanges had NOLs of $53,214, $66,484 and $54,300 available for the years ended December 31, 2020, 2019, and 2018, respectively. The NOLs expire between December 31, 2020 and December 31, 2039. The Company’s income tax expense (benefit) differs from the statutory U.S. federal amount computed by applying the federal income tax rate of 21% for the years ended December 31, 2020, 2019, and 2018. The reasons for such differences are as follows: Year Ended December 31, 2020 NGHC Tax Rate Reciprocal Tax Rate Total Tax Rate Income before provision for income taxes $ 648,008 $ 12,661 $ 660,669 Tax rate 21.0 % 21.0 % 21.0 % Computed “expected” tax expense $ 136,082 21.0 % $ 2,659 21.0 % $ 138,741 21.0 % Tax effects resulting from: Tax-exempt interest (486) (0.1) (13) (0.1) (499) (0.1) Effect of foreign operations 351 0.1 — — 351 0.1 State taxes 1,556 0.2 — — 1,556 0.2 Change in valuation allowance 6,954 1.1 (903) (7.1) 6,051 0.9 Benefits of operating loss carryforwards (6,954) (1.1) — — (6,954) (1.1) Other permanent items (2,826) (0.4) 41 0.3 (2,785) (0.3) Provision for income taxes $ 134,677 20.8 % $ 1,784 14.1 % $ 136,461 20.7 % Year Ended December 31, 2019 NGHC Tax Rate Reciprocal Exchanges Tax Rate Total Tax Rate Income (loss) before provision for income taxes $ 434,172 $ (29,729) $ 404,443 Tax rate 21.0 % 21.0 % 21.0 % Computed “expected” tax expense $ 91,176 21.0 % $ (6,243) 21.0 % $ 84,933 21.0 % Tax effects resulting from: Tax-exempt interest (810) (0.2) (28) 0.1 (838) (0.2) Effect of foreign operations (1,192) (0.3) — — (1,192) (0.3) State taxes (2,357) (0.5) 210 (0.7) (2,147) (0.5) Change in valuation allowance 11,541 2.7 (105) 0.4 11,436 2.8 Benefits of operating loss carryforwards (11,541) (2.7) — — (11,541) (2.9) Other permanent items (714) (0.2) (2,924) 9.8 (3,638) (0.9) Provision (benefit) for income taxes $ 86,103 19.8 % $ (9,090) 30.6 % $ 77,013 19.0 % Year Ended December 31, 2018 NGHC Tax Rate Reciprocal Exchanges Tax Rate Total Tax Rate Income (loss) before provision for income taxes $ 264,388 $ (43,380) $ 221,008 Tax rate 21.0 % 21.0 % 21.0 % Computed “expected” tax expense $ 55,521 21.0 % $ (9,110) 21.0 % $ 46,411 21.0 % Tax effects resulting from: Tax-exempt interest (910) (0.3) (30) 0.1 (940) (0.4) Effect of foreign operations 2,807 1.1 — — 2,807 1.3 State taxes 4,578 1.7 — — 4,578 2.1 Change in valuation allowance 53,716 20.3 1,218 (2.8) 54,934 24.9 Benefits of operating loss carryforwards (53,716) (20.3) — — (53,716) (24.3) Effects of TCJA (951) (0.4) (366) 0.8 (1,317) (0.6) Other permanent items (4,011) (1.5) 4,738 (10.9) 727 0.2 Provision (benefit) for income taxes $ 57,034 21.6 % $ (3,550) 8.2 % $ 53,484 24.2 % Accounting for Uncertainty in Income Taxes Unrecognized tax benefits The Company recognizes tax positions in the consolidated financial statements only when it is more likely than not that the position will be sustained on examination by the relevant taxing authority based on the technical merits of the position. A position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized on settlement. A liability is established for differences between positions taken in a tax return and amounts recognized in the consolidated financial statements. The following table represents a reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits: Year Ended December 31, 2020 Gross unrecognized tax benefits, beginning of the year $ — Increases in tax positions for prior years 3,889 Increases in tax positions for current year 720 Gross unrecognized tax benefits, end of the year $ 4,609 No unrecognized tax benefits or related interest and penalties were recorded prior to 2020. At December 31, 2020, our unrecognized tax benefits, excluding interest and penalties, were $4,609. Interest and penalties related to unrecognized tax benefits are recorded in the income tax expense. At December 31, 2020, NGHC accrued an expense of $1,300 (net of federal benefit) and $1,100, respectively, for payment of interest and penalties. The Company does not anticipate any significant changes to the total unrecognized tax liabilities in the next 12 months. Regulatory tax examinations All tax liabilities are payable to the Internal Revenue Service (“IRS”) and various state and local taxing agencies. The Company’s subsidiaries are currently under audit by the IRS for the 2016, 2017, and 2018 tax years and open to audit for the 2019 tax year. For state and local tax purposes, the Company is open to audit for tax years ended December 31, 2014 forward, depending on jurisdiction. On March 27, 2020, the U.S. enacted the Coronavirus Aid, Relief and Economic Security Act (the “CARES” Act) to mitigate the economic impacts of COVID-19. The Company believes that the provisions of the CARES Act did not have a material impact on its U.S. federal tax liabilities. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lease Commitments The Company leases certain retail stores, office space, land, and equipment. The Company is obligated under leases for office space and storefronts expiring at various dates through 2028. The office space and storefronts lease expense for the years ended December 31, 2020, 2019, and 2018, was $37,827, $37,082, and $35,723, respectively. Future minimum lease payments as of December 31, 2020, for each of the next five years and thereafter are as follows: Operating Finance December 31, Leases Leases Total 2021 $ 31,525 $ 6,601 $ 38,126 2022 27,225 4,296 31,521 2023 21,824 2,720 24,544 2024 18,186 1,638 19,824 2025 15,109 882 15,991 Thereafter 22,222 2,393 24,615 Total lease payments $ 136,091 $ 18,530 $ 154,621 Less: Interest (16,764) (1,840) Present value of lease liabilities $ 119,327 $ 16,690 Employment Agreements The Company has entered into employment agreements with certain individuals. The employment agreements provide for bonuses, executive benefits and severance payments under certain circumstances. Amounts payable under these agreements for the next five years are as follows: December 31, 2021 $ 4,672 2022 2,574 2023 1,303 2024 773 2025 — Total $ 9,322 Litigation The Company is routinely involved in legal proceedings arising in the ordinary course of business, in particular in connection with claims adjudication with respect to its policies. Management believes it has recorded adequate reserves for these liabilities and that there is no individual case pending that is likely to have a material adverse effect on our financial condition or results of operations. On July 25, 2019, the City of North Miami Beach Police Officers’ and Firefighters’ Retirement Plan filed a complaint in the U.S. District Court for the Central District of California against the Company and certain of its officers. On November 19, 2019, the U.S. District Court for the Central District of California granted the Company’s Motion to Transfer the case to the Southern District of New York. On January 10, 2020, lead plaintiffs Town of Davie Police Officers Retirement System and Massachusetts Laborers’ Pension Fund filed an amended Complaint asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder based on allegedly false and misleading statements made by the Company in its SEC |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Preferred Stock In 2014, the Company completed a public offering of 2,200,000 shares of 7.50% Non-Cumulative Preferred Stock, Series A, $0.01 par value per share (the “Series A Preferred Stock”). Dividends were payable on the liquidation preference amount of $25 per share, on a non-cumulative basis, when, as and if declared by the Board of Directors, quarterly in arrears on the 15th day of January, April, July, and October of each year at an annual rate of 7.50%. Dividends on the Series A Preferred Stock were not cumulative. Accordingly, in the event dividends were not declared on the Series A Preferred Stock for payment on any dividend payment date, then those dividends did not accumulate and were not payable. If the Company did not declare a dividend before the dividend payment date for any dividend period, the Company did not have an obligation to pay dividends for that dividend period, whether or not dividends on the Series A Preferred Stock were declared for any future dividend payment. The Series A Preferred Stock was not redeemable before July 15, 2019. After that date, the Company may have redeemed at its option, in whole or in part, the Series A Preferred Stock at a redemption price of $25 per share, plus any declared and unpaid dividends for prior dividend periods and accrued but unpaid dividends (whether or not declared) for the then-current dividend period. In 2015, the Company completed a public offering of 6,600,000 of its depositary shares, each representing a 1/40th interest in a share of its 7.50% Non-Cumulative Preferred Stock, Series B, $0.01 par value per share (the “Series B Preferred Stock”), with a liquidation preference of $1,000 per share (equivalent to $25 per depositary share). Each depositary share entitled the holder to a proportional fractional interest in all rights and preferences of the Series B Preferred Stock represented thereby (including any dividend, liquidation, redemption, and voting rights). Dividends on the Series B Preferred Stock represented by the depositary shares were payable on the liquidation preference amount, on a non-cumulative basis, when, as and if declared by the Company’s Board of Directors, at a rate of 7.50% per annum, quarterly in arrears, on January 15, April 15, July 15, and October 15 of each year. Dividends on the Series B Preferred Stock were not cumulative. Accordingly, in the event dividends were not declared on the Series B Preferred Stock for payment on any dividend payment date, then those dividends did not accumulate and were not be payable. If the Company did not declare a dividend before the dividend payment date for any dividend period, the Company did not have an obligation to pay dividends for that dividend period, whether or not dividends on the Series B Preferred Stock were declared for any future dividend payment. The Series B Preferred Stock represented by the depositary shares was not redeemable before April 15, 2020. After that date, the Company may have redeemed at its option, in whole or in part, the Series B Preferred Stock represented by the depositary shares at a redemption price of $1,000 per share (equivalent to $25 per depositary share) plus any declared and unpaid dividends for prior dividend periods and accrued but unpaid dividends (whether or not declared) for the then-current dividend period. A total of 6,600,000 depositary shares (equivalent to 165,000 shares of Series B Preferred Stock) were issued. In 2016, the Company completed a public offering of 8,000,000 of its depositary shares, each representing a 1/40th interest in a share of its 7.50% Non-Cumulative Preferred Stock, Series C, $0.01 par value per share (the “Series C Preferred Stock”), with a liquidation preference of $1,000 per share (equivalent to $25 per depositary share). Each depositary share entitles the holder to a proportional fractional interest in all rights and preferences of the Series C Preferred Stock represented thereby (including any dividend, liquidation, redemption, and voting rights). Dividends on the Series C Preferred Stock represented by the depositary shares will be payable on the liquidation preference amount, on a non-cumulative basis, when, as and if declared by the Company’s Board of Directors, at a rate of 7.50% per annum, quarterly in arrears, on January 15, April 15, July 15, and October 15 of each year. Dividends on the Series C Preferred Stock are not cumulative. Accordingly, in the event dividends are not declared on the Series C Preferred Stock for payment on any dividend payment date, then those dividends will not accumulate and will not be payable. If the Company has not declared a dividend before the dividend payment date for any dividend period, the Company will have no obligation to pay dividends for that dividend period, whether or not dividends on the Series C Preferred Stock are declared for any future dividend payment. The Series C Preferred Stock represented by the depositary shares is not redeemable before July 15, 2021. After that date, the Company may redeem at its option, in whole or in part, the Series C Preferred Stock represented by the depositary shares at a redemption price of $1,000 per share (equivalent to $25 per depositary share) plus any declared and unpaid dividends for prior dividend periods and accrued but unpaid dividends (whether or not declared) for the then-current dividend period. A total of 8,000,000 depositary shares (equivalent to 200,000 shares of Series C Preferred Stock) were issued. In 2018, the Company completed a private placement of 120 shares of a new series of preferred stock, par value $0.01 per share, designated as its Fixed/Floating Rate Non-Cumulative Convertible Preferred Stock, Series D (the “Series D Preferred Stock”), with a liquidation preference of $250,000 per share, for aggregate proceeds of $30,000. Holders of Series D Preferred Stock were entitled to receive, when, as and if declared by the Company’s board of directors, non-cumulative cash dividends per share at the per annum rate of 7.00% before July 15, 2023, and thereafter at the annual rate of six-month LIBOR plus 5.4941%. Dividends were payable semi-annually in arrears on the 15th day of January and July of each year, commencing on January 15, 2019. On or after July 15, 2023 (or in the event of a fundamental change of the Company, at any time), the Series D Preferred Stock could be converted at the holder’s option into shares of the Company’s common stock at a conversion rate of 6,578.9474 shares of common stock for each share of Series D Preferred Stock, subject to adjustment, which equates to an initial conversion price of $38 per share. See Note 22, “Subsequent Events” for additional information on shareholders’ equity. The following table summarizes the Company’s preferred stock issued and outstanding as of December 31, 2020, and 2019. Series Dividend rate Shares of preferred stock issued and outstanding Depositary shares issued and outstanding Liquidation preference per share Aggregate liquidation preference A 7.50 % 2,200,000 — $ 25 $ 55,000 B 7.50 % 165,000 6,600,000 $ 1,000 $ 165,000 C 7.50 % 200,000 8,000,000 $ 1,000 $ 200,000 D Fixed/ Floating (1) 120 — $ 250,000 $ 30,000 2,565,120 $ 450,000 (1) Dividend rate is fixed at 7.00% prior to July 15, 2023, and floating at six-month LIBOR plus 5.4941% thereafter. Common and Preferred Stock Dividends Dividends are payable on the Company’s common and preferred stock only when, as and if declared by the Company’s Board of Directors in its discretion, from funds legally available for this purpose. The following tables present the class of stock, declaration date and dividends paid per share in 2020, 2019, and 2018: Class of Stock Declaration Date Dividend Dividend Per Depositary Share Common stock October 29, 2020 $ 0.05 Common stock July 31, 2020 $ 0.05 Common stock April 29, 2020 $ 0.05 Common stock February 20, 2020 $ 0.05 Preferred stock Series A October 29, 2020 $ 0.46875 Preferred stock Series A July 31, 2020 $ 0.46875 Preferred stock Series A April 29, 2020 $ 0.46875 Preferred stock Series A February 20, 2020 $ 0.46875 Preferred stock Series B and Series C October 29, 2020 $ 18.75 $ 0.46875 Preferred stock Series B and Series C July 31, 2020 $ 18.75 $ 0.46875 Preferred stock Series B and Series C April 29, 2020 $ 18.75 $ 0.46875 Preferred stock Series B and Series C February 20, 2020 $ 18.75 $ 0.46875 Preferred stock Series D October 29, 2020 $ 8,750.00 Preferred stock Series D April 29, 2020 $ 8,750.00 Class of Stock Declaration Date Dividend Dividend Per Depositary Share Common stock October 30, 2019 $ 0.05 Common stock July 29, 2019 $ 0.05 Common stock May 6, 2019 $ 0.04 Common stock February 25, 2019 $ 0.04 Preferred stock Series A October 30, 2019 $ 0.46875 Preferred stock Series A July 29, 2019 $ 0.46875 Preferred stock Series A May 6, 2019 $ 0.46875 Preferred stock Series A February 25, 2019 $ 0.46875 Preferred stock Series B and Series C October 30, 2019 $ 18.75 $ 0.46875 Preferred stock Series B and Series C July 29, 2019 $ 18.75 $ 0.46875 Preferred stock Series B and Series C May 6, 2019 $ 18.75 $ 0.46875 Preferred stock Series B and Series C February 25, 2019 $ 18.75 $ 0.46875 Preferred stock Series D October 30, 2019 $ 8,750.00 Preferred stock Series D May 6, 2019 $ 8,750.00 Class of Stock Declaration Date Dividend Dividend Per Depositary Share Common stock October 29, 2018 $ 0.04 Common stock August 6, 2018 $ 0.04 Common stock May 7, 2018 $ 0.04 Common stock February 26, 2018 $ 0.04 Preferred stock Series A October 29, 2018 $ 0.46875 Preferred stock Series A August 6, 2018 $ 0.46875 Preferred stock Series A May 7, 2018 $ 0.46875 Preferred stock Series A February 26, 2018 $ 0.46875 Preferred stock Series B and Series C October 29, 2018 $ 18.75 $ 0.46875 Preferred stock Series B and Series C August 6, 2018 $ 18.75 $ 0.46875 Preferred stock Series B and Series C May 7, 2018 $ 18.75 $ 0.46875 Preferred stock Series B and Series C February 26, 2018 $ 18.75 $ 0.46875 Preferred stock Series D October 29, 2018 $ 8,263.89 Share Repurchase Program On April 29, 2020, the Board of Directors authorized and approved a share repurchase program with a 12- month term for up to $50,000 aggregate purchase price of the Company’s outstanding common shares. During the year ended December 31, 2020, the Company purchased 459,083 common shares with a cost of $8,482. The purchases were made in the open market in accordance with applicable federal securities laws, including Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934. Pursuant to the terms of the Merger Agreement with Allstate signed July 7, 2020, the Company ceased making any further common share repurchases. Shares Roll forward The following table presents a roll forward of outstanding common shares. Year Ended December 31, 2020 2019 Common stock: Balance, beginning of the year 113,368,811 112,940,595 Shares issued under employee stock plans and exercises of stock options 854,914 578,201 Shares withheld related to net share settlement (179,599) (149,985) Balance, end of the year 114,044,126 113,368,811 Treasury stock: Balance beginning of the year — — Repurchases of common stock (459,083) — Balance, end of the period (459,083) — Shares outstanding at end of the year 113,585,043 113,368,811 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation In 2019, the Company’s stockholders approved the 2019 Omnibus Incentive Plan (the “2019 Plan”). The 2019 Plan authorized up to 2.5 million shares of the Company’s stock for awards of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSU”), performance share units, performance units, cash-based awards, or other stock-based awards. The number of shares of common stock for which awards could be issued under the 2019 Plan could not exceed 2.5 million shares, subject to the authority of the Company’s Board of Directors to adjust this amount in the event of consolidation, reorganization, stock dividend, recapitalization, or similar transaction affecting the Company’s common stock. The 2019 Plan served as a successor of the Company’s prior equity incentive plans. Outstanding awards under the prior plans continued to be outstanding and subject to their terms and conditions. As of December 31, 2020, approximately 1.9 million shares of the Company’s common stock remained available for grants under the 2019 Plan. Stock Options A summary of the stock option awards granted under the prior plans is shown below: Shares Subject to Options Outstanding Year Ended December 31, 2020 Number of Shares Weighted-Average Weighted-Average Aggregate Intrinsic Value (1) Outstanding at beginning of the year 3,025,587 $ 9.83 Exercised (388,236) 6.79 Outstanding and exercisable at end of the year 2,637,351 $ 10.28 2.4 $ 63,036 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the closing price of the Company’s common stock of $34.18, as reported on the Nasdaq Global Market on December 31, 2020. No options were granted, forfeited or expired during the year ended December 31, 2020. The total intrinsic value of the options exercised during the years ended December 31, 2020, 2019, and 2018, was $7,685, $3,105 and $5,011, respectively. The total fair value of stock options vested for the years ended December 31, 2020, 2019, and 2018 was $1,044, $239 and $783, respectively. Restricted Stock Units The Company granted RSUs with a grant date value equal to the closing stock price of the Company’s stock on the dates the units were granted. Prior to the acquisition of the Company by Allstate, the RSUs vested over three A summary of the RSUs is shown below: RSUs Year Ended December 31, 2020 Number of RSUs Weighted-Average Non-vested at beginning of the year 1,033,631 $ 23.98 Granted 561,497 21.46 Vested (466,678) 23.68 Forfeited (11,874) 21.75 Non-vested at end of the year 1,116,576 $ 22.86 The weighted-average grant date fair value of RSUs for the years ended December 31, 2020, 2019, and 2018, was $21.46, $25.42 and $21.36, respectively. The total fair value of the RSUs vested for the years ended December 31, 2020, 2019, and 2018, was $11,051, $9,259 and $7,068, respectively. Stock-Based Compensation Expense Stock-based compensation expense, included in general and administrative expenses, for all stock-based compensation plans was $12,421, $10,996 and $9,020 for the years ended December 31, 2020, 2019, and 2018, respectively. As of December 31, 2020, the Company had approximately $15,577 of unrecognized stock-based compensation expense related to RSU awards. This unrecognized stock-based compensation expense was expected to be recognized over a weighted-average period of approximately 1.3 years. On January 4, 2021, following the acquisition of the Company by Allstate, the Company’s outstanding 2,637,351 options and 1,116,576 RSUs were cancelled and converted into the right to receive cash consideration, less applicable withholding taxes. See Note 22, “Subsequent Events” for additional information. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The significant shareholder of the Company prior to the Merger also has an ownership interest in AmTrust and ACP Re. Accordingly, as of December 31, 2020, AmTrust and ACP Re were related entities of the Company. The Company is a party to the following transactions with these related entities : Equity Method Investments The Company has an ownership interest in an LSC Entity, limited liability companies and limited partnerships with related parties. See Note 4, “Investments - Equity Method Investments - Related Parties” for additional information. Agreements with ACP Re Credit Agreement The Company is party to a credit agreement (the “ACP Re Credit Agreement”) by and among AmTrust, as administrative agent, ACP Re Holdings, LLC, a Delaware limited liability company owned by a related party trust (the “Trust”), as borrower, and AmTrust and the Company, as lenders of $250,000 ($125,000 each lender). The amounts borrowed are secured by equity interests, cash and, other investments held by ACP Re Holdings, LLC in an amount equal to 115% of the outstanding loan balance. The maturity date of the loan is September 20, 2036. The interest rate on the outstanding principal balance is a fixed annual rate of 3.7%, provided that up to 1.2% thereof may be paid in kind. The Trust is required to cause ACP Re Holdings, LLC to maintain assets having a value greater than 115% of the outstanding loan balance, and if there is a shortfall, the Trust will make a contribution to ACP Re Holdings, LLC of assets having a market value of at least the shortfall (the “Maintenance Covenant”). Commencing on September 20, 2026, and for each year thereafter, two percent of the then outstanding principal balance of the loan (inclusive of any amounts previously paid in kind) is due and payable. A change of control of greater than 50% and an uncured breach of the Maintenance Covenant are included as events of default. As of December 31, 2020, and 2019, the Company had a receivable for the principal amount related to the ACP Re Credit Agreement of $130,784 and $129,229, respectively. The Company recorded interest income of $4,825, $4,767 and $4,711 for the years ended December 31, 2020, 2019, and 2018, respectively, under the ACP Re Credit Agreement. Management determined no impairment reserve was needed for the carrying value of the loan at December 31, 2020, and 2019, based on the collateral levels maintained. Other Related Party Transactions Lease Agreements The Company leases office space at 59 Maiden Lane in New York, New York from 59 Maiden Lane Associates LLC, an entity that is wholly-owned by the Karfunkel family. The lease term is through 2022. The Company paid $830, $830 and $830 in rent for the years ended December 31, 2020, 2019, and 2018, respectively. The Company leases office space at 30 North LaSalle Street, Chicago, Illinois from 30 North LaSalle Street Partners LLC, an entity that is wholly-owned by the Karfunkel family. The lease term is through 2025. The Company paid $440, $309 and $302 in rent for the years ended December 31, 2020, 2019, and 2018, respectively. |
Benefits Plan
Benefits Plan | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Benefits Plan | Benefits PlanA significant number of the Company’s employees participate in a defined contribution plan. Employer contributions vary based on criteria specific to the plan. Contribution expense was $11,624, $10,212 and $9,292 for the years ended December 31, 2020, 2019, and 2018, respectively. |
Statutory Financial Data, Risk-
Statutory Financial Data, Risk-Based Capital and Dividend Restrictions | 12 Months Ended |
Dec. 31, 2020 | |
Insurance [Abstract] | |
Statutory Financial Data, Risk-Based Capital and Dividend Restrictions | Statutory Financial Data, Risk-Based Capital and Dividend RestrictionsThe Company’s insurance subsidiaries file financial statements in accordance with statutory accounting practices (“SAP”) prescribed or permitted by domestic or foreign insurance regulatory authorities. The differences between statutory financial statements and financial statements prepared in accordance with GAAP vary between domestic and foreign jurisdictions. The principal differences relate to: (1) acquisition costs incurred in connection with acquiring new business which are charged to expense under SAP but under GAAP are deferred and amortized as the related premiums are earned; (2) ceding commission revenues are earned when ceded premiums are written except for ceding commission revenues in excess of anticipated acquisition costs, which are deferred and amortized as ceded premiums are earned. GAAP requires that all ceding commission revenues be earned as the underlying ceded premiums are earned over the term of the reinsurance agreements; (3) certain assets including certain receivables, a portion of the net deferred tax asset, prepaid expenses and furniture and equipment are not admitted; (4) limitation on net deferred tax assets created by the tax effects of temporary differences; (5) unpaid losses and loss expense, and unearned premium reserves are presented gross of reinsurance with a corresponding asset recorded; and (6) debt securities portfolios that are carried at fair value and changes in fair value are reflected directly in unassigned surplus, net of related deferred taxes. Risk-Based Capital Insurance companies in the U.S. are subject to certain Risk-Based Capital (“RBC”) requirements as specified by the National Association of Insurance Commissioners (“NAIC”). Under such requirements, the amount of statutory capital and surplus maintained by an insurance company is to be determined on asset risk, underwriting risk and other risk factors. As of December 31, 2020, and 2019, the statutory capital and surplus of all of the Company’s insurance subsidiaries domiciled in the U.S. exceeded the RBC requirements. Our Bermuda subsidiaries, National General Re Ltd. (“NG Re”) and National General Insurance Ltd. (“NGIL”, and together with NG Re, the “Bermuda Insurers”) are registered as Class 3A insurers by the Bermuda Monetary Authority (“BMA”) under the Bermuda Insurance Act 1978, and related regulations as amended (the “Insurance Act - Bermuda”). As a result, the revised regulations require that the available statutory capital and surplus for each Bermuda Insurer be equal to or exceed the value of both its Minimum Margin of Solvency (“MMS”) and the Enhanced Capital Requirement (“ECR”). The capital and solvency return will be filed with the BMA on or before April 30, 2021, and the ECR based on the economic balance sheet will not be available until this filing is completed. The capital and surplus requirement is based on the statutory capital MMS prior to the ECR and the 25% of ECR criteria being calculated. The required MMS on this basis was $269,219 and $255,393 as of December 31, 2020, and 2019, respectively. Statutory Financial Data The following tables present the statutory capital and surplus, and net income under SAP: December 31, Statutory capital and surplus 2020 2019 Property and Casualty Insurance Companies: Domestic $ 1,619,460 $ 1,600,740 Foreign 791,028 760,658 Total $ 2,410,488 $ 2,361,398 Life Insurance Companies: Domestic $ 79,977 $ 53,022 Year Ended December 31, Statutory net income (loss) 2020 2019 2018 Property and Casualty Insurance Companies: Domestic $ 214,313 $ 156,771 $ 16,737 Foreign 174,861 106,734 64,810 Total $ 389,174 $ 263,505 $ 81,547 Life Insurance Companies: Domestic $ 7,963 $ 7,125 $ 9,827 Reciprocal Exchanges The Reciprocal Exchanges prepare their statutory basis financial statements under SAP. As of December 31, 2020, and 2019, the Reciprocal Exchanges had combined statutory capital and surplus of $109,314 and $84,340, respectively. For the years ended December 31, 2020, 2019, and 2018, the Reciprocal Exchanges had combined SAP net income (loss) of $26,106, $(27,033) and $(24,194), respectively. The Reciprocal Exchanges are required to maintain minimum capital and surplus in accordance with regulatory requirements. As of December 31, 2020, and 2019, the capital and surplus levels of the Reciprocal Exchanges exceeded such required levels. The Reciprocal Exchanges are not owned by the Company but managed through management agreements. Accordingly, the Reciprocal Exchanges’ net assets are not available to the Company. Due to the finalization of the Company’s combined statutory filings, amounts for 2019 have changed compared to those previously reported in our Annual Report on Form 10-K for the year ended December 31, 2019. Dividend Restrictions The Company’s insurance subsidiaries are subject to statutory and regulatory restrictions, applicable to insurance companies, imposed by the states of domicile, which limit the amount of cash dividends or distributions that they may pay unless special permission is received from the state of domicile. This limit was approximately $156,400 and $402,970 as of December 31, 2020, and 2019, respectively. During the years ended December 31, 2020, 2019, and 2018, there were $300,000, $7,000 and $156,660 of dividends and return of capital paid by the Company’s insurance subsidiaries to their parent company or the Company, respectively. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following is a summary of the elements used in calculating basic and diluted earnings per common share: Year Ended December 31, 2020 2019 2018 Numerator: Net income attributable to NGHC $ 513,331 $ 348,069 $ 207,354 Preferred stock dividends - nonconvertible (31,500) (31,500) (31,500) Preferred stock dividends - convertible (2,100) (2,100) (992) Numerator for basic EPS 479,731 314,469 174,862 Effect of dilutive securities: Preferred stock dividends - convertible 2,100 2,100 992 Numerator for diluted EPS - after assumed conversions $ 481,831 $ 316,569 $ 175,854 Denominator: Denominator for basic EPS - weighted-average shares outstanding 113,511,669 113,199,501 107,659,813 Effect of dilutive securities: Employee stock options 1,739,871 1,833,736 2,053,681 RSUs 385,582 274,262 319,089 Convertible preferred stock 789,473 789,473 789,473 Dilutive potential common shares 2,914,926 2,897,471 3,162,243 Denominator for diluted EPS - weighted-average shares outstanding and assumed conversions 116,426,595 116,096,972 110,822,056 EPS attributable to NGHC common stockholders: Basic EPS $ 4.23 $ 2.78 $ 1.62 Diluted EPS $ 4.14 $ 2.73 $ 1.59 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company currently operates two business segments, “Property and Casualty” and “Accident and Health.” The “Corporate and Other” column represents the activities of the holding company, as well as income from the Company’s investment portfolio. The Company evaluates segment profits attributable to the performance of activities within the segment separately from the results of the Company’s investment portfolio. Other operating expenses allocated to the segments are called “General and administrative expenses” which are allocated on an actual basis except corporate salaries and benefits where management’s judgment is applied. In determining total assets by segment, the Company identifies those assets that are attributable to a particular segment such as premiums receivable, deferred acquisition costs, reinsurance recoverable, prepaid reinsurance premiums, intangible assets and goodwill, while the remaining assets are allocated to Corporate and Other. The Property and Casualty segment, which includes the Reciprocal Exchanges and the management companies, reports the management fees earned by the Company from the Reciprocal Exchanges for underwriting, investment management and other services as service and fee income. The effects of these transactions between the Company and the Reciprocal Exchanges are eliminated in consolidation to derive consolidated net income. However, the management fee income is reported in net income attributable to NGHC and included in the basic and diluted earnings per share. The following tables summarize the results of operations of the operating segments: Year Ended December 31, 2020 Property Accident Corporate Total Underwriting revenues: Gross premium written $ 4,857,631 $ 776,916 $ — $ 5,634,547 Ceded premiums (923,168) (90,535) — (1,013,703) Net premium written 3,934,463 686,381 — 4,620,844 Change in unearned premium (125,310) (914) — (126,224) Net earned premium 3,809,153 685,467 — 4,494,620 Ceding commission income 152,671 (214) — 152,457 Service and fee income 391,702 368,672 — 760,374 Total underwriting revenues 4,353,526 1,053,925 — 5,407,451 Underwriting expenses: Loss and loss adjustment expense 2,505,189 318,893 — 2,824,082 Acquisition costs and other underwriting expenses 681,286 309,283 — 990,569 General and administrative expenses 792,929 242,238 8,026 1,043,193 Total underwriting expenses 3,979,404 870,414 8,026 4,857,844 Underwriting income 374,122 183,511 (8,026) 549,607 Net investment income — — 118,257 118,257 Net gain on investments — — 26,577 26,577 Interest expense — — (33,772) (33,772) Provision for income taxes — — (136,461) (136,461) Net income attributable to noncontrolling interest — — (10,877) (10,877) Net income attributable to NGHC $ 374,122 $ 183,511 $ (44,302) $ 513,331 Year Ended December 31, 2019 Property Accident Corporate Total Underwriting revenues: Gross premium written $ 4,814,463 $ 768,617 $ — $ 5,583,080 Ceded premiums (1,250,448) (108,011) — (1,358,459) Net premium written 3,564,015 660,606 — 4,224,621 Change in unearned premium (108,992) 2,413 — (106,579) Net earned premium 3,455,023 663,019 — 4,118,042 Ceding commission income 227,514 10,939 — 238,453 Service and fee income 392,478 249,487 — 641,965 Total underwriting revenues 4,075,015 923,445 — 4,998,460 Underwriting expenses: Loss and loss adjustment expense 2,543,788 310,680 — 2,854,468 Acquisition costs and other underwriting expenses 605,019 222,348 — 827,367 General and administrative expenses 773,291 254,208 14,273 1,041,772 Total underwriting expenses 3,922,098 787,236 14,273 4,723,607 Underwriting income 152,917 136,209 (14,273) 274,853 Net investment income — — 141,233 141,233 Net gain on investments — — 13,473 13,473 Other income 26,428 26,428 Interest expense — — (51,544) (51,544) Provision for income taxes — — (77,013) (77,013) Net loss attributable to noncontrolling interest — — 20,639 20,639 Net income attributable to NGHC $ 152,917 $ 136,209 $ 58,943 $ 348,069 Year Ended December 31, 2018 Property Accident Corporate Total Underwriting revenues: Gross premium written $ 4,718,730 $ 698,109 $ — $ 5,416,839 Ceded premiums (1,517,556) (71,570) — (1,589,126) Net premium written 3,201,174 626,539 — 3,827,713 Change in unearned premium (85,385) (10,126) — (95,511) Net earned premium 3,115,789 616,413 — 3,732,202 Ceding commission income 217,694 7,003 — 224,697 Service and fee income 375,603 185,980 — 561,583 Total underwriting revenues 3,709,086 809,396 — 4,518,482 Underwriting expenses: Loss and loss adjustment expense 2,340,881 321,345 — 2,662,226 Acquisition costs and other underwriting expenses 550,540 184,726 — 735,266 General and administrative expenses 726,238 201,808 10,000 938,046 Total underwriting expenses 3,617,659 707,879 10,000 4,335,538 Underwriting income 91,427 101,517 (10,000) 182,944 Net investment income — — 119,034 119,034 Net loss on investments — — (29,545) (29,545) Interest expense — — (51,425) (51,425) Provision for income taxes — — (53,484) (53,484) Net loss attributable to noncontrolling interest — — 39,830 39,830 Net income attributable to NGHC $ 91,427 $ 101,517 $ 14,410 $ 207,354 The following tables summarize the financial position of the operating segments: December 31, 2020 Property Accident Corporate Total Premiums and other receivables, net $ 1,304,636 $ 237,474 $ 3,270 $ 1,545,380 Deferred acquisition costs 259,163 26,742 — 285,905 Reinsurance recoverable, net 1,187,855 31,075 — 1,218,930 Prepaid reinsurance premiums 412,950 1,060 — 414,010 Goodwill and Intangible assets, net 416,828 103,225 — 520,053 Prepaid and other assets 45,235 18,322 5,535 69,092 Corporate and other assets — — 6,074,524 6,074,524 Total assets $ 3,626,667 $ 417,898 $ 6,083,329 $ 10,127,894 December 31, 2019 Property Accident Corporate Total Premiums and other receivables, net $ 1,292,813 $ 131,877 $ 4,258 $ 1,428,948 Deferred acquisition costs 239,293 24,230 — 263,523 Reinsurance recoverable, net 1,377,284 17,024 — 1,394,308 Prepaid reinsurance premiums 575,712 35 — 575,747 Goodwill and Intangible assets, net 436,724 108,427 — 545,151 Prepaid and other assets 56,960 32,852 4,830 94,642 Corporate and other assets — — 5,454,215 5,454,215 Total assets $ 3,978,786 $ 314,445 $ 5,463,303 $ 9,756,534 The following table summarizes service and fee income by source within each operating segment: Year Ended December 31, 2020 2019 2018 Property Accident Total Property Accident Total Property Accident Total Commission revenue $ 60,103 $ 124,578 $ 184,681 $ 87,486 $ 83,476 $ 170,962 $ 93,235 $ 70,086 $ 163,321 Finance and processing fees 129,327 9,546 138,873 128,302 6,197 134,499 121,058 4,535 125,593 Group health administrative fees — 124,523 124,523 — 100,951 100,951 — 79,411 79,411 Installment fees 104,915 — 104,915 97,997 — 97,997 92,785 — 92,785 Late payment fees 32,377 59 32,436 34,210 309 34,519 33,765 86 33,851 Other service and fee income 64,980 109,966 174,946 44,483 58,554 103,037 34,760 31,862 66,622 Total $ 391,702 $ 368,672 $ 760,374 $ 392,478 $ 249,487 $ 641,965 $ 375,603 $ 185,980 $ 561,583 NGHC $ 385,391 $ 368,672 $ 754,063 $ 386,723 $ 249,487 $ 636,210 $ 369,852 $ 185,980 $ 555,832 Reciprocal Exchanges 6,311 — 6,311 5,755 — 5,755 5,751 — 5,751 Total $ 391,702 $ 368,672 $ 760,374 $ 392,478 $ 249,487 $ 641,965 $ 375,603 $ 185,980 $ 561,583 The following tables show a summary of premiums and fee income by product line: Year Ended December 31, Gross Premium Written 2020 2019 2018 Property and Casualty Personal Auto $ 2,817,396 $ 2,721,202 $ 2,637,176 Homeowners 751,918 718,819 688,006 RV/Packaged 215,138 212,746 208,394 Small Business Auto 251,328 315,569 319,299 Lender-placed Insurance 402,768 342,267 363,056 Other 45,482 56,413 53,876 Total Property and Casualty 4,484,030 4,367,016 4,269,807 Accident and Health Group 366,847 288,549 239,729 Individual 410,069 340,731 308,122 International — 139,337 150,258 Total Accident and Health 776,916 768,617 698,109 Total NGHC $ 5,260,946 $ 5,135,633 $ 4,967,916 Reciprocal Exchanges Personal Auto $ 131,286 $ 152,688 $ 153,129 Homeowners 238,972 290,972 291,907 Other 3,343 3,787 3,887 Total Reciprocal Exchanges $ 373,601 $ 447,447 $ 448,923 Total Gross Premium Written $ 5,634,547 $ 5,583,080 $ 5,416,839 Year Ended December 31, Net Premium Written 2020 2019 2018 Property and Casualty Personal Auto $ 2,475,384 $ 2,260,385 $ 2,016,858 Homeowners 521,331 404,278 331,120 RV/Packaged 209,479 198,737 206,740 Small Business Auto 192,859 249,067 233,456 Lender-placed Insurance 314,642 198,171 202,069 Other 19,552 18,905 27,366 Total Property and Casualty 3,733,247 3,329,543 3,017,609 Accident and Health Group 284,189 231,388 197,386 Individual 402,192 340,049 308,065 International — 89,169 121,088 Total Accident and Health 686,381 660,606 626,539 Total NGHC $ 4,419,628 $ 3,990,149 $ 3,644,148 Reciprocal Exchanges Personal Auto $ 91,182 $ 134,958 $ 61,759 Homeowners 108,624 98,009 120,875 Other 1,410 1,505 931 Total Reciprocal Exchanges $ 201,216 $ 234,472 $ 183,565 Total Net Premium Written $ 4,620,844 $ 4,224,621 $ 3,827,713 Year Ended December 31, Net Earned Premium 2020 2019 2018 Property and Casualty Personal Auto $ 2,403,879 $ 2,190,748 $ 1,927,667 Homeowners 452,739 405,306 329,850 RV/Packaged 200,854 195,639 197,258 Small Business Auto 216,888 252,359 237,587 Lender-placed Insurance 293,353 182,231 215,811 Other 20,191 18,509 20,855 Total Property and Casualty 3,587,904 3,244,792 2,929,028 Accident and Health Group 284,197 231,398 197,406 Individual 401,270 340,251 307,952 International — 91,370 111,055 Total Accident and Health 685,467 663,019 616,413 Total NGHC $ 4,273,371 $ 3,907,811 $ 3,545,441 Reciprocal Exchanges Personal Auto $ 111,353 $ 106,549 $ 59,923 Homeowners 108,629 101,964 125,806 Other 1,267 1,718 1,032 Total Reciprocal Exchanges $ 221,249 $ 210,231 $ 186,761 Total Net Earned Premium $ 4,494,620 $ 4,118,042 $ 3,732,202 Year Ended December 31, Fee Income 2020 2019 2018 Property and Casualty Service and Fee Income $ 385,391 $ 386,723 $ 369,852 Ceding Commission Income 110,377 164,013 160,945 Total Property and Casualty 495,768 550,736 530,797 Accident and Health Service and Fee Income Group 172,526 134,206 104,504 Individual 11,062 9,650 9,304 Third-Party Fee 185,084 105,631 72,172 Total Service and Fee Income 368,672 249,487 185,980 Ceding Commission Income (214) 10,939 7,003 Total Accident and Health 368,458 260,426 192,983 Total NGHC $ 864,226 $ 811,162 $ 723,780 Reciprocal Exchanges Service and Fee Income $ 6,311 $ 5,755 $ 5,751 Ceding Commission Income 42,294 63,501 56,749 Total Reciprocal Exchanges $ 48,605 $ 69,256 $ 62,500 Total Fee Income $ 912,831 $ 880,418 $ 786,280 |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | Selected Quarterly Financial Data (Unaudited) The following tables summarize quarterly financial data: 2020 March 31, June 30, September 30, December 31, Total revenues $ 1,328,334 $ 1,329,132 $ 1,443,009 $ 1,451,810 Total expenses 1,199,589 1,104,012 1,298,712 1,289,303 Provision for income taxes 28,172 50,507 27,428 30,354 Net income 100,573 174,613 116,869 132,153 Net income attributable to NGHC 100,759 166,574 109,969 136,029 Net income attributable to NGHC common stockholders 92,884 157,649 102,094 127,104 Basic EPS $ 0.82 $ 1.39 $ 0.90 $ 1.12 Diluted EPS $ 0.80 $ 1.37 $ 0.88 $ 1.10 2019 March 31, June 30, September 30, December 31, Total revenues $ 1,232,665 $ 1,269,652 $ 1,308,172 $ 1,369,105 Total expenses 1,124,820 1,170,353 1,231,186 1,248,792 Provision for income taxes 22,506 22,241 16,747 15,519 Net income 85,339 77,058 60,239 104,794 Net income attributable to NGHC 91,758 77,876 71,154 107,281 Net income attributable to NGHC common stockholders 83,883 68,951 63,279 98,356 Basic EPS $ 0.74 $ 0.61 $ 0.56 $ 0.87 Diluted EPS $ 0.72 $ 0.60 $ 0.54 $ 0.85 Due to changes in number of shares outstanding from quarter to quarter, the total earnings per share of the four quarters may not necessarily equal the earnings per share for the year. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Effective January 4, 2021 the Company was acquired by Allstate pursuant to the Agreement and Plan of Merger (“Merger”), dated as of July 7, 2020, by and among the Company, Allstate, and Bluebird Acquisition Corp., an indirect wholly owned subsidiary of Allstate. As a result of the Merger, the Company became a wholly owned indirect subsidiary of Allstate and our common shares were delisted from the NASDAQ Global Select Market (“NASDAQ”) and NASDAQ filed a Form 25 with respect to the common shares and we subsequently filed a Form 15 with the Securities and Exchange Commission requesting that our duty to file reports under Section 13 of the Securities Exchange Act of 1934, as amended (the “Act”) with respect to such securities be terminated and our duty to file reports under Section 15(d) of the Act with respect to such securities be suspended. The Company’s shareholders received $32.00 per share in cash from Allstate, plus a closing dividend of $2.50 per share, providing $34.50 in total value per share. In addition, (i) each outstanding option to purchase a share of Common Stock, regardless of whether vested or unvested, was cancelled and converted into the right to receive $34.50 in cash, subject to any applicable tax withholding, minus the exercise price per share underlying such option and (ii) each outstanding RSU, regardless of whether vested or unvested, was cancelled and converted into the right to receive $34.50 in cash, subject to any applicable tax withholding. On January 4, 2021 and in connection with the Merger, the Company entered into the Third Supplemental Indenture (the “Third Supplemental Indenture”), by and among the Company, as the issuer, Allstate, as the guarantor, and The Bank of New York Mellon (the “Notes Trustee”), as trustee, supplementing that certain Indenture, dated as of May 23, 2014, by and between the Company and the Notes Trustee, as supplemented by the First Supplemental Indenture, dated as of May 23, 2014 (as supplemented, the “Indenture”), relating to the issuance of 6.75% Senior Notes due 2024 (the “2024 Notes”), pursuant to which the Company, Allstate and the Notes Trustee agreed to amend the Indenture to: (i) amend certain information covenants in the Indenture to replace the requirement of the Company to provide certain information to the holders of the 2024 Notes with a requirement of Allstate to provide similar information in respect of Allstate, and (ii) add Allstate as a guarantor of the payment obligations of the Company with respect to the 2024 Notes. As required by the Indenture, a majority of the holders of the 2024 Notes consented to the Third Supplemental Indenture. On January 4, 2021, and in connection with the Merger, the Company terminated the Credit Agreement, dated as of February 25, 2019 (the “2019 Credit Agreement”), by and among the Company, as the borrower, JPMorgan Chase Bank, N.A., as the administrative agent (the “Agent”), KeyBank National Association and Fifth Third Bank as co-syndication agents, and Associated Bank, National Association and The Bank of Nova Scotia, as co-documentation agents, and the various lending institutions party thereto, and the other Loan Documents (as defined in the 2019 Credit Agreement) by prepaying all outstanding amounts thereunder. Effective January 4, 2021, a subsidiary of the Company ceded certain new, renewal, and in-force business to Allstate Insurance Company, a subsidiary of Allstate. The Company transferred approximately $988,144 in settlement of the initial transfer. Following the consummation of the Merger, we voluntarily redeemed the following securities effective February 3, 2021: (a) all outstanding shares of 7.50% Non-Cumulative Preferred Stock, Series A, (par value $0.01 per share) (the “Class A Preferred Stock”), (b) all outstanding Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series B and the underlying shares of 7.50% Non-Cumulative Preferred Stock, Series B (par value $0.01 per share) (collectively, the “Class B Preferred Stock”), (c) all outstanding shares of Fixed/Floating Rate Non-Cumulative Convertible Preferred Stock, Series D (the “Series D Preferred Stock”) (par value $0.01 per share), and (d) the aggregate outstanding principal amount of our 7.625% Subordinated Notes Due 2055 (the “2055 Notes”). All outstanding Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series C and the underlying shares of 7.50% Non-Cumulative Preferred Stock, Series C (par value $0.01 per share) (collectively, the “Class C Preferred Stock”) were delisted from NASDAQ effective January 25, 2021, and we subsequently filed a Form 15 with the Securities and Exchange Commission requesting that our duty to file reports under Section 13 of the Act with respect to such securities be terminated and our duty to file reports under Section 15(d) of the Act with respect to such securities be suspended. |
Schedule I - Summary of Investm
Schedule I - Summary of Investments Other than Investments in Related Parties | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Abstract] | |
Schedule I - Summary of Investments Other than Investments in Related Parties | Schedule I NATIONAL GENERAL HOLDINGS CORP. SUMMARY OF INVESTMENTS OTHER THAN INVESTMENTS IN RELATED PARTIES (In Thousands) December 31, 2020 Cost (1) Value Amount Debt Securities: Bonds: U.S. government and government agencies and authorities $ 52,004 $ 55,208 $ 55,208 States, municipalities and political subdivisions 304,688 322,441 322,441 Foreign governments 1,765 1,884 1,884 Public utilities 56,998 61,608 61,608 All other corporate bonds (2) 3,818,758 4,055,989 4,055,989 Total Debt Securities 4,234,213 4,497,130 4,497,130 Equity Securities: Common Stock Industrial, miscellaneous and all other (3) 18,911 2,909 2,909 Total Equity Securities 18,911 2,909 2,909 Other investments (4) 46,219 46,219 46,219 Other short-term investments 191,086 191,086 191,086 Total Investments (other than investments in related parties) $ 4,490,429 $ 4,737,344 $ 4,737,344 (1) Original cost of equity securities and, as to debt securities, original cost reduced by repayments and adjusted for amortization of premiums or accrual of discounts. (2) Includes structured securities, residential and commercial mortgage-backed securities. (3) Included in “Other investments” in the consolidated balance sheets. (4) Excludes equity securities. |
Schedule II - Condensed Financi
Schedule II - Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule II - Condensed Financial Information of Registrant | Schedule II NATIONAL GENERAL HOLDINGS CORP. CONDENSED FINANCIAL INFORMATION OF REGISTRANT BALANCE SHEETS — PARENT COMPANY ONLY (In Thousands) December 31, 2020 2019 ASSETS Investments: Debt securities, available-for-sale, at fair value (amortized cost - $0 and $95,527) $ — $ 98,187 Short-term investments — 4,807 Equity investment in subsidiaries 3,289,136 2,937,575 Total investments 3,289,136 3,040,569 Cash and cash equivalents 403,631 852 Accrued investment income — 835 Property and equipment, net 142,042 158,670 Prepaid and other assets 10,874 26,658 Total assets $ 3,845,683 $ 3,227,584 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities: Accounts payable, accrued expenses and other liabilities $ 44,927 $ 26,071 Debt 584,758 584,019 Total liabilities $ 629,685 $ 610,090 Stockholders’ equity: Total stockholders’ equity $ 3,215,998 $ 2,617,494 Total liabilities and stockholders’ equity $ 3,845,683 $ 3,227,584 See accompanying notes to condensed financial statements. Schedule II NATIONAL GENERAL HOLDINGS CORP. CONDENSED FINANCIAL INFORMATION OF REGISTRANT STATEMENTS OF INCOME AND COMPREHENSIVE INCOME — PARENT COMPANY ONLY (In Thousands) Year Ended December 31, 2020 2019 2018 Revenues: Service and fee income $ 53,005 $ 48,781 $ 44,932 Investment income 2,200 3,929 1,205 Net gain (loss) on investments 7,094 1,026 (1,571) Equity in undistributed net income of subsidiaries 513,023 365,932 232,101 Total revenues 575,322 419,668 276,667 Expenses: Interest expense 35,618 38,670 39,380 Other expense, net 30,906 38,499 30,847 Total expenses 66,524 77,169 70,227 Income before provision (benefit) for income taxes 508,798 342,499 206,440 Benefit for income taxes (4,533) (5,570) (914) Net income attributable to NGHC 513,331 348,069 207,354 Dividends on preferred stock (33,600) (33,600) (32,492) Net income attributable to NGHC common stockholders $ 479,731 $ 314,469 $ 174,862 Net income attributable to NGHC $ 513,331 $ 348,069 $ 207,354 Other comprehensive income (loss), net of tax 128,655 126,678 (44,054) Comprehensive income attributable to NGHC $ 641,986 $ 474,747 $ 163,300 See accompanying notes to condensed financial statements. Schedule II NATIONAL GENERAL HOLDINGS CORP. CONDENSED FINANCIAL INFORMATION OF REGISTRANT STATEMENTS OF CASH FLOWS — PARENT COMPANY ONLY (In Thousands) Year Ended December 31, 2020 2019 2018 Cash flows from operating activities: Net income attributable to NGHC $ 513,331 $ 348,069 $ 207,354 Adjustments to reconcile net income to cash provided by (used in) operating activities: Net (gain) loss on investments (7,094) (1,026) 1,571 Depreciation and amortization 26,244 23,280 20,668 Net amortization of premium net of discount on debt securities 700 233 581 Stock-based compensation expense 12,421 10,996 9,020 Equity in undistributed net income of subsidiaries (513,023) (365,932) (232,101) Changes in assets and liabilities: Accrued investment income 835 (108) (500) Prepaid and other assets 15,499 4,927 23,334 Accounts payable, accrued expenses and other liabilities 301,328 (1,728) 8,993 Net cash provided by operating activities 350,241 18,711 38,920 Cash flows from investing activities: Purchases of: Debt securities, available-for-sale (6,986) (46,832) (70,308) Short-term investments (389,372) (284,875) (342,137) Property and equipment (9,840) (75,673) (73,563) Proceeds from: Sale of debt securities, available-for-sale 91,301 20,723 16,052 Maturity of debt securities, available-for-sale 16,813 10,218 2,208 Sale of short-term investments 394,296 397,945 225,395 Distributions received from subsidiaries 102,150 50,825 130,772 Contributions and acquisition of subsidiaries (80,000) (17,091) (9,875) Net cash provided by (used in) investing activities 118,362 55,240 (121,456) Cash flows from financing activities: Common stock repurchased (8,482) — — Payments of debt issuance costs — (1,134) — Repayments of debt and return of capital — (20,000) (30,000) Issuances of common and preferred stock, net of fees — — 162,120 Issuance of common stock — employee share options 2,635 594 1,978 Taxes paid related to net share settlement of equity awards (3,678) (3,734) (3,024) Dividends paid to common and preferred shareholders (56,299) (52,781) (48,611) Net cash (used in) provided by financing activities (65,824) (77,055) 82,463 Net increase (decrease) in cash and cash equivalents 402,779 (3,104) (73) Cash and cash equivalents, beginning of the year 852 3,956 4,029 Cash and cash equivalents, end of the year $ 403,631 $ 852 $ 3,956 See accompanying notes to condensed financial statements. Schedule II NATIONAL GENERAL HOLDINGS CORP. CONDENSED FINANCIAL INFORMATION OF REGISTRANT NOTES — PARENT COMPANY ONLY 1. Basis of Presentation In the parent-company-only financial statements, the Company’s investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries since the date of acquisition. The Company’s share of net income of its unconsolidated subsidiaries is included in consolidated income using the equity method. The parent-company-only financial statements should be read in conjunction with the Company’s consolidated financial statements. Certain prior period amounts have been reclassified to conform to the current-year presentation. 2. Debt For information relating to debt, see Note 11, “Debt” in the notes to the Company’s consolidated financial statements. 3. Dividends For information relating to cash dividends paid to the registrant or the Company by its consolidated subsidiaries and investees accounted for by the equity method, see Note 18, “Statutory Financial Data, Risk-Based Capital and Dividend Restrictions” in the notes to the Company’s consolidated financial statements. 4. Subsequent Events For information relating to subsequent events, see Note 22, “Subsequent Events” in the notes to the Company’s consolidated financial statements. |
Schedule III - Supplementary In
Schedule III - Supplementary Insurance Information | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Abstract] | |
Schedule III - Supplementary Insurance Information | Schedule III NATIONAL GENERAL HOLDINGS CORP. SUPPLEMENTARY INSURANCE INFORMATION (In Thousands) As of December 31, Year Ended December 31, Segment Deferred Unpaid Unearned Net Net Loss and Deferred Other Net 2020 Property and Casualty $ 259,163 $ 2,708,171 $ 2,173,399 $ 3,809,153 $ — $ 2,505,189 $ 613,905 $ 67,381 $ 3,934,463 Accident and Health 26,742 180,927 10,307 685,467 — 318,893 21,908 287,375 686,381 Corporate and Other — — — — 118,257 — — — — Total $ 285,905 $ 2,889,098 $ 2,183,706 $ 4,494,620 $ 118,257 $ 2,824,082 $ 635,813 $ 354,756 $ 4,620,844 2019 Property and Casualty $ 239,293 $ 2,734,540 $ 2,210,851 $ 3,455,023 $ — $ 2,543,788 $ 539,816 $ 65,203 $ 3,564,015 Accident and Health 24,230 151,874 8,368 663,019 — 310,680 37,541 184,807 660,606 Corporate and Other — — — — 141,233 — — — — Total $ 263,523 $ 2,886,414 $ 2,219,219 $ 4,118,042 $ 141,233 $ 2,854,468 $ 577,357 $ 250,010 $ 4,224,621 2018 Property and Casualty $ 226,188 $ 2,685,879 $ 2,120,283 $ 3,115,789 $ — $ 2,340,881 $ 495,009 $ 55,531 $ 3,201,174 Accident and Health 25,220 271,280 36,554 616,413 — 321,345 15,784 168,942 626,539 Corporate and Other — — — — 119,034 — — — — Total $ 251,408 $ 2,957,159 $ 2,156,837 $ 3,732,202 $ 119,034 $ 2,662,226 $ 510,793 $ 224,473 $ 3,827,713 |
Schedule IV - Reinsurance
Schedule IV - Reinsurance | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract] | |
Schedule IV - Reinsurance | Schedule IV NATIONAL GENERAL HOLDINGS CORP. REINSURANCE (In Thousands) Year Ended December 31, Gross Ceded to Assumed from Net Percent of 2020 Earned Premiums $ 5,613,630 $ (1,175,440) $ 56,430 $ 4,494,620 1.3 % 2019 Earned Premiums $ 5,486,835 $ (1,449,365) $ 80,572 $ 4,118,042 2.0 % 2018 Earned Premiums $ 5,049,512 $ (1,440,575) $ 123,265 $ 3,732,202 3.3 % |
Schedule VI - Supplemental Info
Schedule VI - Supplemental Information Concerning Property-Casualty Insurance Operations | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-18, Supplemental Information, Property-Casualty Insurance Underwriters [Abstract] | |
Schedule VI - Supplemental Information Concerning Property-Casualty Insurance Operations | Schedule VI NATIONAL GENERAL HOLDINGS CORP. SUPPLEMENTAL INFORMATION CONCERNING PROPERTY-CASUALTY INSURANCE OPERATIONS (In Thousands) Losses and Loss Adjustment Expenses Incurred Related to Paid Losses Year Ended December 31, Current Year Prior Years 2020 Property and Casualty (1) $ 2,477,177 $ 28,012 $ 2,407,847 Accident and Health 342,714 (23,821) 300,271 Total $ 2,819,891 $ 4,191 $ 2,708,118 2019 Property and Casualty (1) $ 2,493,268 $ 50,520 $ 2,427,676 Accident and Health 356,036 (45,356) 328,887 Total $ 2,849,304 $ 5,164 $ 2,756,563 2018 Property and Casualty (1) $ 2,343,938 $ (3,057) $ 2,209,570 Accident and Health 352,322 (30,977) 305,667 Total $ 2,696,260 $ (34,034) $ 2,515,237 (1) Property and Casualty includes the Reciprocal Exchanges. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and variable interest entities (“VIE”) of which the Company is the primary beneficiary. All significant intercompany transactions and accounts have been eliminated in consolidation. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s principal estimates include unpaid losses and loss adjustment expense reserves; deferred acquisition costs; reinsurance recoverable, including the provision for uncollectible amounts; determining the fair value of investments; determining the fair value of stock-based awards for stock compensation; the valuation of intangibles and the determination of goodwill and goodwill impairment; and income taxes. In developing the estimates and assumptions, management uses all available evidence. Because of uncertainties associated with estimating the amounts, timing and likelihood of possible outcomes, actual results could differ from estimates. |
Premiums and Other Receivables | Premiums and Other ReceivablesThe Company recognizes earned premium on a pro rata basis over the terms of the policies, generally periods of six |
Allowance for Uncollectible Premiums | Net premiums receivable represent premiums written and not yet collected, net of an allowance for uncollectible premiums. The Company regularly evaluates premiums and other receivables and adjusts its allowance for uncollectible amounts as appropriate. Receivables specifically identified as uncollectible are charged to expense in the period the determination is made. Premium refunds are recorded as an offset against gross premium written.Premiums and other receivables are reported net of an allowance for expected credit losses. The allowance is based upon the Company’s ongoing review of amounts outstanding, historical loss data, including delinquencies and write-offs, current and forecasted economic conditions, and other relevant factors. The Company uses a loss-rate method to estimate the expected credit losses. Credit risk is partially mitigated by the Company’s ability to cancel the policy if the policyholder does not pay the premium. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company’s cash and cash equivalents include cash on hand, money market instruments and other debt instruments with a maturity of 90 days or less when purchased. Certain securities with original maturities of 90 days or less that are held as a portion of fixed maturity portfolios are classified as short-term investments. |
Restricted Cash and Cash Equivalents and Short-term Investments | Restricted Cash and Cash Equivalents Restricted cash and cash equivalents balances relate primarily to deposits in certain states in order to conduct business and certain third-party agreements. The Company also utilizes trust accounts to collateralize business with its reinsurance counterparties. Amounts described as restricted cash and restricted cash equivalents are included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Short-term Investments Short-term investments include commercial paper, U.S. Treasury bills and money market funds with maturities between 91 days and less than one year at the date of acquisition. |
Deferred Acquisition Costs | Deferred Acquisition Costs Deferred acquisition costs include commissions, premium taxes, payments to affinity partners, and other direct sales costs that are directly related to successful acquisition of insurance policies. These costs, net of ceding allowances, are deferred and amortized to the extent recoverable, over the policy period in which the related premiums are earned and/or over the expected life of the policy as applicable to A&H. Anticipated investment income is considered in determining the recoverability of these costs. Management believes that these costs are recoverable. |
Ceding Commission Revenue and Service and fee income | Ceding Commission Revenue Commissions on reinsurance premiums ceded are earned in a manner consistent with the recognition of the costs to acquire the underlying policies on a pro-rata basis over the terms of the policies reinsured. The portion of ceding commission which represents reimbursement of acquisition costs related to the underlying policies is recorded as an offset to acquisition costs and other underwriting expenses. Commission in excess of acquisition costs is recorded as ceding commission income over the terms of the policies. Certain reinsurance agreements contain provisions whereby the ceding commission rates vary based on the loss experience of the policies covered by the agreements. The Company records ceding commission revenue based on its current estimate of losses on the reinsured policies subject to variable commission rates. The Company records adjustments to the ceding commission revenue in the period that changes in the estimated losses are determined. Service and Fee Income The Company currently generates policy service and fee income from installment fees, late payment fees, and other finance and processing fees related to policy cancellation, policy reinstatement and insufficient funds check returns. These fees are generally designed to offset expenses incurred in the administration of the Company’s insurance business, and are generated as follows. Installment fees are charged to permit a policyholder to pay premiums in installments rather than in a lump sum. Late payment fees are charged when premiums are remitted after the due date and any applicable grace periods. Policy cancellation fees are charged to policyholders when a policy is terminated by the policyholder prior to the expiration of the policy’s term or renewal term, as applicable. Reinstatement fees are charged to reinstate a policy that has lapsed, generally as a result of non-payment of premiums. Insufficient fund fees are charged when the customer’s payment is returned by the financial institution. All fee income is recognized as follows. An installment fee is recognized at the time each policy installment bill is due. A late payment fee is recognized when the customer’s payment is not received after the listed due date and any applicable grace period. A policy cancellation fee is recognized at the time the customer’s policy is canceled. A policy reinstatement fee is recognized when the customer’s policy is reinstated. An insufficient fund fee is recognized when the customer’s payment is returned by the financial institution. The amounts charged are primarily intended to compensate the Company for the administrative costs associated with processing and administering policies that generate insurance premium; however, the amounts of fees charged are not dependent on the amount or period of insurance coverage provided and do not entail any obligation to return any portion of those funds. The direct and indirect costs associated with generating fee income are not separately tracked. The Company estimates an allowance for doubtful accounts based on a percentage of fee income. The Company also collects service fees in the following forms: (i) Commission and general agent fees by selling policies issued by third-party insurance companies. The Company does not bear insurance underwriting risk with respect to these policies. Commission income and general agent fees are recognized, net of an allowance for estimated policy cancellations, at the time when the policy is sold. The allowance for estimated third-party cancellations is periodically evaluated and adjusted as necessary. (ii) Group health administrative fees by performing enrollment and claims services for self-funded employer plans. The Company does not bear insurance underwriting risk in these administrative activities. Group health administrative fees are recognized pro-rata over the term of the administrative contract with the employer, which generally covers twelve months. |
Loss and Loss Adjustment Expenses | Loss and Loss Adjustment Expense Loss and loss adjustment expense (“LAE”) represent the estimated ultimate net costs of all reported and unreported losses incurred through the period end. The reserves for unpaid losses and LAE represent the accumulation of estimates for both reported losses and those incurred but not reported relating to direct insurance and assumed reinsurance agreements. Estimates for salvage and subrogation recoverables are recognized at the time losses are incurred and netted against the provision for losses. Insurance liabilities are based on estimates, and the |
Business Combinations | Business Combinations The Company accounts for business combinations under the acquisition method of accounting, which requires the Company to record assets acquired, liabilities assumed and any noncontrolling interest in the acquiree at their respective fair values as of the acquisition date. The Company accounts for the insurance and reinsurance contracts under the acquisition method as new contracts, which requires the Company to record assets and liabilities at fair value. The Company adjusts the fair value of loss and LAE reserves starting with the acquired loss reserves based on the Company’s existing accounting policies and then discounting them based on expected reserve payout patterns using a current risk-free rate of interest. This risk-free interest rate is then adjusted based on different cash flow scenarios that use different payout and ultimate reserve assumptions deemed to be reasonably possible based upon the inherent uncertainties present in determining the amount and timing of payment of such reserves. The difference between the acquired loss and LAE reserves and the Company’s best estimate of the fair value of such reserves at the acquisition date is recorded as either an intangible asset (net loss reserve discount) or another liability (net loss reserve plus a risk premium), as applicable and is amortized proportionately to the reduction in the related loss reserves (e.g., over the estimated payout period of the acquired loss and LAE reserves). The Company assigns fair values to intangible assets acquired based on valuation techniques including the income and market approaches. The Company records contingent consideration at fair value based on the terms of the purchase agreement with subsequent changes in fair value recorded through earnings. The purchase price is the fair value of the total consideration conveyed to the seller and we record the excess (deficiency) of the purchase price over the fair value of the acquired net assets, where applicable, as goodwill or bargain purchase gain. The Company expenses costs associated with the acquisition of a business in the period incurred. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets A purchase price paid that is in excess of net assets, i.e., goodwill, arising from a business combination is recorded as an asset and is not amortized. Intangible assets with an indefinite useful life are not amortized. Goodwill and intangible assets are tested for impairment on an annual basis or more frequently if changes in circumstances indicate that the carrying amount may not be recoverable. If the goodwill or intangible asset is impaired, it is written down to its realizable value with a corresponding expense reflected in general and administrative expenses in the consolidated statements of income. Intangible assets that have finite lives, including but not limited to, agent and customer relationships and trademarks, are amortized over the estimated useful life of the asset. For intangible assets with finite lives, impairment is recognized if the carrying amount is not recoverable and exceeds the fair value of the intangible asset. Generally intangible assets with finite lives are only tested for impairment if indicators of impairment, i.e, triggers, are identified. Triggers include, but are not limited to, a significant adverse change in the extent, manner or length of time in which the intangible asset is being used or a significant adverse change in legal factors or in the business climate that could affect the value of the other intangible asset. |
Investments | Investments The Company has classified its debt securities as available for sale measured at fair value with unrealized gains and losses reported as a separate component of comprehensive income. Equity investments (except those accounted for under the equity method, and those that result in consolidation of the investee and certain other investments) are measured at fair value with all gains and losses reported in net income. The Company may sell its available-for-sale and equity securities in response to changes in interest rates, risk/reward characteristics, liquidity needs or other factors. Available-for-sale and equity securities are reported at their estimated fair values based on quoted market prices or recognized pricing services. Purchases and sales of investments are recorded on a trade date basis. Realized gains and losses are determined based on the specific identification method. Net investment income is recognized when earned and includes interest and dividend income together with amortization of market premiums and discounts using the effective yield method and is net of investment management fees and other expenses. For mortgage-backed securities and any other holdings for which there is a prepayment risk, prepayment assumptions are evaluated and revised as necessary. Any adjustments required due to the change in effective yields and maturities are recognized on a prospective basis through yield adjustments. As of December 31, 2020, and 2019, the Company had the following major types of investments: (i) Debt securities are classified as available-for-sale and are carried at fair value. Unrealized gains or losses on available-for-sale debt securities are reported as a component of accumulated other comprehensive income. (ii) Mortgage and structured securities are carried at fair value. The Company recognizes income using the retrospective adjustment method based on prepayments and the estimated economic lives of the securities. The effective yield reflects actual payments to date plus anticipated future payments. These investments are recorded as debt securities, available-for-sale in the consolidated balance sheets. (iii) Short-term investments are carried at amortized cost, which approximates fair value, and includes investments with maturities between 91 days and less than one year at the date of acquisition. Income from short-term investments is reported within net investment income. (iv) Other investments consisted of equity method investments, in which the company has the power to influence the operating or financial decisions but does not require consolidation; common stock carried at fair value (equity securities); notes receivable; long-term certificates of deposits; and other instruments carried at fair value and at cost or amortized cost. Income from other investments is reported within net investment income. Gains or losses on equity securities are reported within net gain (loss) on investments. |
Investments | Beginning on January 1, 2020, credit losses on available-for-sale debt securities are recognized through an allowance account. The Company reports accrued investment income separately from debt securities in the Consolidated Balance Sheets, and has elected not to measure an allowance for credit losses. Accrued investment income is written-off by reversing interest income through net investment income at the time the issuer of the bond defaults or is expected to default on payments. Uncollectible debt securities are written-off to net gain (loss) on investments when the Company determines that no additional payments of principal or interest will be received. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s estimates of fair value for financial assets and financial liabilities are based on the inputs used in valuation and gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the hierarchy is based on whether the significant inputs into the valuation are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company’s significant market assumptions. Additionally, valuation of debt securities investments is more subjective when markets are less liquid due to lack of market-based inputs, which may increase the potential that the estimated fair value of an investment is not reflective of the price at which an actual transaction could occur. Fair values of other financial instruments which are short-term in nature approximate their carrying values. |
Equity Method Investments | Equity Method Investments The Company uses the equity method of accounting for investments in which its ownership interest enables the Company to influence operating or financial decisions of the investee, but the Company’s interest does not require consolidation. In applying the equity method, the Company records its investment at cost, and subsequently increases or decreases the carrying amount of the investment by its proportionate share of the net earnings or losses and other comprehensive income of the investee. Any dividends or distributions received are recorded as a decrease in the carrying value of the investment. The Company’s proportionate share of net income is reported in net investment income. |
Stock Compensation Expense | Stock Compensation Expense The Company recognizes stock-based compensation expense including stock options and Restricted Stock Units (“RSUs”), to be measured based on the grant date fair value of the awards, with the resulting expense recognized on a straight-line basis over the period during which the employee is required to perform service in exchange for the award. The majority of the Company’s awards are earned over a service period of three |
Earnings Per Share | Earnings Per Share Basic earnings per share are computed by dividing income available to common stockholders by the number of weighted average common shares outstanding. Dilutive earnings per share are computed by dividing income available to common stockholders, adjusted for the effects of the presumed issuance of potential common shares, by the number of weighted average common shares outstanding, plus potentially issuable shares, such as options, unvested stock-based payment awards and convertible securities. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The carrying value of long-lived assets is evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable from the estimated undiscounted future cash flows expected to result from its use and eventual disposition. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment is measured as the amount by which the carrying amount of the assets exceeds the fair value as estimated by discounted cash flows. |
Income Taxes | Income Taxes The Company joins its subsidiaries in the filing of a consolidated Federal income tax return and is party to a Federal income tax allocation agreement. Under the tax allocation agreement, the Company pays to or receives from its subsidiaries the amount, if any, by which the group’s Federal income tax liability was affected by virtue of inclusion of the subsidiary in the consolidated Federal return. The Reciprocal Exchanges are not party to the tax allocation agreement and file separate tax returns. Deferred income taxes reflect the impact of temporary differences between the amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws and regulations. The deferred tax asset and liability primarily consists of book versus tax differences for earned premiums, loss and LAE reserve discounting, deferred acquisition costs, earned but unbilled premiums, and unrealized holding gains and losses on debt securities. Changes in deferred income tax assets and liabilities that are associated with components of other comprehensive income, primarily unrealized investment gains and losses, are recorded directly to other comprehensive income. Otherwise, changes in deferred income tax assets and liabilities are included as a component of income tax expense. In assessing the recoverability of deferred tax assets, management considers whether it is more likely than not that the Company will generate future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, tax planning strategies and projected future taxable income in making this assessment. If necessary, the Company establishes a valuation allowance to reduce the deferred tax assets to the amounts more likely than not to be realized. The Company recognizes tax benefits for tax positions that are more likely than not to be sustained upon examination by taxing authorities. The Company’s policy is to prospectively classify accrued interest and penalties related to any unrecognized tax benefits in its income tax provision. |
Reinsurance | Reinsurance The Company cedes insurance risk under various reinsurance agreements. The Company seeks to reduce the loss that may arise from catastrophes or other events that cause unfavorable underwriting results by reinsuring certain levels of risk with other insurance enterprises. The Company remains liable with respect to any insurance ceded if the assuming companies are unable to meet their obligations under these reinsurance agreements. Reinsurance premiums, losses and LAE ceded to other companies are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. Earned premiums and losses and LAE incurred ceded to other companies have been recorded as a reduction of premium revenue and losses and LAE. Commissions allowed by reinsurers on business ceded have been recorded as ceding commission revenue to the extent the ceding commission exceeds acquisition costs. Reinsurance recoverable is reported based on the portion of reserves and paid losses and LAE that are ceded to other companies. If the Company determines that a reinsurance contract does not transfer sufficient risk, it accounts for the contract under deposit accounting. Amounts recoverable from reinsurers are estimated in a manner consistent with the associated claim liability. The Company reports its reinsurance recoverable net of an allowance for estimated uncollectible reinsurance. The allowance is based upon the Company’s ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, applicable coverage defenses, and other relevant factors. The Company evaluates and monitors the financial condition of its reinsurers under voluntary reinsurance arrangements to minimize its exposure to significant losses from reinsurer insolvencies. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Maintenance and repairs are charged to operations as incurred. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, as follows: Buildings and improvements 30 years Leasehold improvements Remaining lease term Other equipment 3 to 20 years Hardware and software 3 to 5 years The Company capitalizes costs of computer software developed or obtained for internal use that is specifically identifiable, has determinable lives and relates to future use. |
Variable Interest Entities and Noncontrolling Interest | Variable Interest Entities A VIE is a legal entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured such that equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights or do not substantively participate in the gains and losses of the entity. The Company’s consolidation principles require the inclusion of VIEs in which the Company is deemed the primary beneficiary. The primary beneficiary is the entity that has both (1) the power to direct the activities of the VIE that most significantly affect that entity’s economic performance and (2) the obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE. The consolidated financial statements also include the accounts and operations of Adirondack Insurance Exchange, a New York reciprocal insurer, and New Jersey Skylands Insurance Association, a New Jersey reciprocal insurer (together, the “Reciprocal Exchanges” or “Exchanges”), VIEs of which the Company is the primary beneficiary. The Company does not own the Reciprocal Exchanges but is paid a fee to manage them. The Company consolidates the Reciprocal Exchanges as it has determined that these are VIEs of which the Company is the primary beneficiary. The Company manages the business operations of the Reciprocal Exchanges and has the ability to direct their activities. The Company receives a management fee for the services provided to the Reciprocal Exchanges. The Reciprocal Exchanges are insurance carriers organized as unincorporated associations. In the event of dissolution, policyholders would share any residual unassigned surplus in the same proportion as the amount of insurance purchased but are not subject to assessment for any deficit in unassigned surplus of the Reciprocal Exchanges. The assets of the Reciprocal Exchanges can be used only to settle the obligations of the Reciprocal Exchanges and general creditors to their liabilities have no recourse to the Company as primary beneficiary. The results of operations of the Reciprocal Exchanges and the management companies are included in the Company’s P&C segment. Noncontrolling Interest Non-redeemable noncontrolling interest is the portion of equity (net assets) not attributable, directly or indirectly, to a parent. The Company has no ownership interest in the Reciprocal Exchanges. Therefore, the difference between the value of their assets and liabilities represent the value of the noncontrolling interest. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk are primarily cash and cash equivalents, investments and premiums and other receivables. Investments are diversified through many industries and geographic regions through the use of an investment manager who employs different investment strategies. The Company limits the amount of credit exposure with any one financial institution and believes that no significant concentration of credit risk exists with respect to cash and investments. At December 31, 2020 and 2019, the outstanding premiums and other receivables balance was generally diversified due to the Company’s diversified customer base. To reduce credit risk, the Company performs ongoing evaluations for uncollectible amounts. The Company also has receivables from its reinsurers. See Note 10, “Reinsurance” for additional information about concentration of credit risk. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company periodically evaluates the financial condition of its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. It is the policy of management to review all outstanding receivables at period end as well as the bad debt write-offs experienced in the past and establish an allowance for uncollectible accounts, if deemed necessary. |
Recent Accounting Standards | Accounting Standards Recent Accounting Standards, Adopted Standard Description Date of Adoption Effect on the Company ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and related amendments. This standard changed the impairment model to a new forward-looking expected loss model for most financial assets and certain other instruments. The standard requires immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, which generally results in earlier recognition of allowances for credit losses on loans and other financial instruments. Many of the loss estimation techniques applied prior the adoption of the standard are still permitted, although the inputs to those techniques changed to reflect the full amount of expected credit losses. The Company continues to use judgement to determine which loss estimation method is appropriate for its circumstances. The standard became effective for interim and annual reporting periods beginning after December 15, 2019 and requires using a modified retrospective approach, recognizing a cumulative-effect adjustment as of the beginning of the first reporting period in which the standard is effective. January 1, 2020 The Company adopted ASU 2016-13 using the modified retrospective approach and recorded a cumulative-effect adjustment, net of tax of $(863) and $(147) to the opening balance of retained earnings and non-controlling interest, respectively. The Company also increased the allowance for premiums receivable, reinsurance recoverable and deferred taxes by the same cumulative amount. ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This standard established a one-step process for testing the value of the goodwill which an entity carries. ASU 2017-04 requires the goodwill impairment to be measured as the excess of the reporting unit’s carrying amount over its fair value. January 1, 2020 The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. Recent Accounting Standards, Not Yet Adopted Standard Description Effective Date Effect on the Company ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This standard simplifies the accounting for income taxes by eliminating some exceptions to the general approach in Accounting Standards Codification (“ASC”) 740, Income Taxes. It also clarifies certain aspects of the existing guidance to promote more consistent application, among other things. January 1, 2021 The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. ASU 2018-12, Financial Services-Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts and related amendments. This standard makes targeted improvements to the existing recognition, measurement, presentation and disclosure requirements for long-duration contracts issued by an insurance entity. The standard is intended to: (i) improve the timeliness of recognizing changes in the liability for future policy benefits and modify the rate used to discount future cash flows, (ii) simplify and improve the accounting for certain market-based options or guarantees associated with deposit or account balance contracts, (iii) simplify the amortization of deferred acquisition costs and (iv) improve the effectiveness of the required disclosures. January 1, 2022 The Company is currently evaluating the impact this guidance will have on its consolidated financial condition, results of operations, cash flows and disclosures. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Useful Lives of Property and Equipment | Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, as follows: Buildings and improvements 30 years Leasehold improvements Remaining lease term Other equipment 3 to 20 years Hardware and software 3 to 5 years The composition of property and equipment consisted of the following: December 31, 2020 2019 Cost Accumulated Net Cost Accumulated Net Land $ 5,788 $ — $ 5,788 $ 5,788 $ — $ 5,788 Buildings 26,245 (3,416) 22,829 24,997 (2,669) 22,328 Leasehold improvements 39,591 (17,305) 22,286 34,238 (12,372) 21,866 Other equipment 26,909 (3,916) 22,993 24,627 (3,044) 21,583 Hardware and software 417,970 (241,420) 176,550 387,618 (196,294) 191,324 Finance lease right-of-use assets 38,867 (22,631) 16,236 37,515 (16,511) 21,004 Operating lease right-of-use assets 111,001 — 111,001 119,934 — 119,934 Total $ 666,371 $ (288,688) $ 377,683 $ 634,717 $ (230,890) $ 403,827 NGHC $ 657,312 $ (279,629) $ 377,683 $ 625,658 $ (222,072) $ 403,586 Reciprocal Exchanges 9,059 (9,059) — 9,059 (8,818) 241 Total $ 666,371 $ (288,688) $ 377,683 $ 634,717 $ (230,890) $ 403,827 |
Accounting Standards | Recent Accounting Standards, Adopted Standard Description Date of Adoption Effect on the Company ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and related amendments. This standard changed the impairment model to a new forward-looking expected loss model for most financial assets and certain other instruments. The standard requires immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, which generally results in earlier recognition of allowances for credit losses on loans and other financial instruments. Many of the loss estimation techniques applied prior the adoption of the standard are still permitted, although the inputs to those techniques changed to reflect the full amount of expected credit losses. The Company continues to use judgement to determine which loss estimation method is appropriate for its circumstances. The standard became effective for interim and annual reporting periods beginning after December 15, 2019 and requires using a modified retrospective approach, recognizing a cumulative-effect adjustment as of the beginning of the first reporting period in which the standard is effective. January 1, 2020 The Company adopted ASU 2016-13 using the modified retrospective approach and recorded a cumulative-effect adjustment, net of tax of $(863) and $(147) to the opening balance of retained earnings and non-controlling interest, respectively. The Company also increased the allowance for premiums receivable, reinsurance recoverable and deferred taxes by the same cumulative amount. ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This standard established a one-step process for testing the value of the goodwill which an entity carries. ASU 2017-04 requires the goodwill impairment to be measured as the excess of the reporting unit’s carrying amount over its fair value. January 1, 2020 The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. Recent Accounting Standards, Not Yet Adopted Standard Description Effective Date Effect on the Company ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This standard simplifies the accounting for income taxes by eliminating some exceptions to the general approach in Accounting Standards Codification (“ASC”) 740, Income Taxes. It also clarifies certain aspects of the existing guidance to promote more consistent application, among other things. January 1, 2021 The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. ASU 2018-12, Financial Services-Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts and related amendments. This standard makes targeted improvements to the existing recognition, measurement, presentation and disclosure requirements for long-duration contracts issued by an insurance entity. The standard is intended to: (i) improve the timeliness of recognizing changes in the liability for future policy benefits and modify the rate used to discount future cash flows, (ii) simplify and improve the accounting for certain market-based options or guarantees associated with deposit or account balance contracts, (iii) simplify the amortization of deferred acquisition costs and (iv) improve the effectiveness of the required disclosures. January 1, 2022 The Company is currently evaluating the impact this guidance will have on its consolidated financial condition, results of operations, cash flows and disclosures. |
Allowance for Expected Credit_2
Allowance for Expected Credit Losses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Credit Loss [Abstract] | |
Premiums and Other Receivables, Allowance for Credit Losses | The following tables present the balances of premiums and other receivables, net of the allowance for expected credit losses, as of January 1, 2020, and December 31, 2020, and changes in the allowance for expected credit losses for the year ended December 31, 2020. Year Ended December 31, 2020 Premiums and Other Receivables, Net Allowance for Expected Credit Losses Balance, beginning of the year $ 1,428,948 $ 24,067 Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2020 762 Current period provision for expected credit losses (1) 94,374 Write-offs of uncollectible premiums and other receivables (96,422) Balance, end of the year $ 1,545,380 $ 22,781 (1) Current period charges for expected losses are recorded in general and administrative expenses. |
Reinsurance Recoverable, Allowance for Credit Losses | The following tables present the balances of reinsurance recoverable, net of the allowance for estimated uncollectible reinsurance, as of January 1, 2020, and December 31, 2020, and changes in the allowance for estimated uncollectible reinsurance for the year ended December 31, 2020. Year Ended December 31, 2020 Reinsurance Recoverable, Net Allowance for Expected Credit Losses Balance, beginning of the year $ 1,394,308 $ — Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2020 517 Current period provision for expected credit losses 293 Balance, end of the year $ 1,218,930 $ 810 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-for-Sale Debt Securities | The following tables summarize the unrealized positions for available-for-sale debt securities, disaggregated by major security type. Amortized Allowance for Gross Unrealized Fair December 31, 2020 Cost Credit Losses (1) Gains Losses Value U.S. Treasury $ 51,749 $ — $ 3,199 $ — $ 54,948 Federal agencies 258 — 3 — 261 States and political subdivision bonds 304,687 — 17,758 (4) 322,441 Foreign government 1,764 — 119 — 1,883 Corporate bonds 1,992,193 — 141,234 (126) 2,133,301 Residential mortgage-backed securities 1,064,041 — 42,597 (222) 1,106,416 Commercial mortgage-backed securities 596,408 — 58,476 (252) 654,632 Asset-backed securities 27,988 — 1,140 (236) 28,892 Structured securities 195,125 — 1,009 (1,778) 194,356 Total $ 4,234,213 $ — $ 265,535 $ (2,618) $ 4,497,130 NGHC $ 3,929,138 $ — $ 260,138 $ (2,361) $ 4,186,915 Reciprocal Exchanges 305,075 — 5,397 (257) 310,215 Total $ 4,234,213 $ — $ 265,535 $ (2,618) $ 4,497,130 (1) Represents the amount of impairment that has resulted from credit-related factors recorded in net gain (loss) on investments. Amortized Gross Unrealized Fair December 31, 2019 Cost Gains Losses Value U.S. Treasury $ 65,037 $ 1,992 $ (23) $ 67,006 Federal agencies 3,907 8 — 3,915 States and political subdivision bonds 298,345 4,778 (1,441) 301,682 Foreign government 1,762 40 — 1,802 Corporate bonds 1,859,736 59,184 (2,357) 1,916,563 Residential mortgage-backed securities 1,265,830 15,747 (4,117) 1,277,460 Commercial mortgage-backed securities 585,044 27,261 (112) 612,193 Asset-backed securities 74,465 1,194 (48) 75,611 Structured securities 222,565 226 (2,665) 220,126 Total $ 4,376,691 $ 110,430 $ (10,763) $ 4,476,358 NGHC $ 4,057,501 $ 104,951 $ (10,343) $ 4,152,109 Reciprocal Exchanges 319,190 5,479 (420) 324,249 Total $ 4,376,691 $ 110,430 $ (10,763) $ 4,476,358 |
Available-for-Sale Debt Securities Classified by Contractual Maturity | The amortized cost and fair value of available-for-sale debt securities held as of December 31, 2020, by contractual maturity, are shown in the table below. Actual maturities may differ from contractual maturities because some borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. NGHC Reciprocal Exchanges Total December 31, 2020 Amortized Fair Amortized Fair Amortized Fair Due in one year or less $ 61,921 $ 62,731 $ — $ — $ 61,921 $ 62,731 Due after one year through five years 1,006,518 1,075,299 69,060 71,231 1,075,578 1,146,530 Due after five years through ten years 1,050,331 1,127,435 65,495 67,259 1,115,826 1,194,694 Due after ten years 270,237 280,867 22,214 22,368 292,451 303,235 Mortgage-backed securities 1,540,131 1,640,583 148,306 149,357 1,688,437 1,789,940 Total $ 3,929,138 $ 4,186,915 $ 305,075 $ 310,215 $ 4,234,213 $ 4,497,130 |
Gross Unrealized Losses | The tables below summarize the gross unrealized losses on debt securities classified as available-for-sale, by length of time the security has continuously been in an unrealized loss position. Less Than 12 Months 12 Months or More Total December 31, 2020 Fair Unrealized Fair Unrealized Fair Unrealized States and political subdivision bonds $ 1,111 $ (4) $ — $ — $ 1,111 $ (4) Corporate bonds 29,161 (126) — — 29,161 (126) Residential mortgage-backed securities 58,742 (222) — — 58,742 (222) Commercial mortgage-backed securities 40,891 (252) — — 40,891 (252) Asset-backed securities 5,041 (228) 151 (8) 5,192 (236) Structured securities 60,359 (514) 43,906 (1,264) 104,265 (1,778) Total $ 195,305 $ (1,346) $ 44,057 $ (1,272) $ 239,362 $ (2,618) NGHC $ 137,628 $ (1,135) $ 40,103 $ (1,226) $ 177,731 $ (2,361) Reciprocal Exchanges 57,677 (211) 3,954 (46) 61,631 (257) Total $ 195,305 $ (1,346) $ 44,057 $ (1,272) $ 239,362 $ (2,618) Less Than 12 Months 12 Months or More Total December 31, 2019 Fair Unrealized Fair Unrealized Fair Unrealized U.S. Treasury $ 19,903 $ (23) $ 500 $ — $ 20,403 $ (23) States and political subdivision bonds 106,103 (1,415) 2,580 (26) 108,683 (1,441) Corporate bonds 586,817 (2,253) 5,976 (104) 592,793 (2,357) Residential mortgage-backed securities 410,484 (4,074) 3,983 (43) 414,467 (4,117) Commercial mortgage-backed securities 18,250 (105) 748 (7) 18,998 (112) Asset-backed securities 5,406 (29) 920 (19) 6,326 (48) Structured securities 40,979 (94) 109,880 (2,571) 150,859 (2,665) Total $ 1,187,942 $ (7,993) $ 124,587 $ (2,770) $ 1,312,529 $ (10,763) NGHC $ 1,104,244 $ (7,654) $ 117,681 $ (2,689) $ 1,221,925 $ (10,343) Reciprocal Exchanges 83,698 (339) 6,906 (81) 90,604 (420) Total $ 1,187,942 $ (7,993) $ 124,587 $ (2,770) $ 1,312,529 $ (10,763) |
Net Investment Income | The components of net investment income consisted of the following: Year Ended December 31, 2020 2019 2018 Cash and short-term investments $ 542 $ 4,075 $ 1,659 Debt securities, available-for-sale 119,873 124,379 107,077 Other, net (related parties - $(2,230), $7,718 and $4,876) 2,728 17,353 14,597 Investment income 123,143 145,807 123,333 Investment expenses (4,886) (4,574) (4,299) Net investment income $ 118,257 $ 141,233 $ 119,034 NGHC $ 111,001 $ 132,595 $ 110,159 Reciprocal Exchanges 7,256 8,638 8,875 Net investment income $ 118,257 $ 141,233 $ 119,034 |
Net Realized Gains and Losses on Investments | The table below indicates realized gains and losses on investments. Purchases and sales of investments are recorded on a trade date basis. Realized gains and losses are determined based on the specific identification method. Year Ended December 31, 2020 2019 2018 Debt securities, available-for-sale: Gross gains $ 29,666 $ 23,178 $ 4,590 Gross losses (1,483) (3,457) (22,860) Net realized gain (loss) on debt securities, available-for-sale 28,183 19,721 (18,270) Other, net (1) (1,606) (6,248) (11,275) Net realized gain (loss) on investments $ 26,577 $ 13,473 $ (29,545) NGHC $ 14,145 $ 13,603 $ (26,179) Reciprocal Exchanges 12,432 (130) (3,366) Net realized gain (loss) on investments $ 26,577 $ 13,473 $ (29,545) (1) Includes gains and losses on publicly traded equity securities, other investments, and foreign currency. |
Credit Quality of Investments | The tables below summarize the credit quality of debt securities, as rated by Standard & Poor’s (“S&P”). If a security is not rated by S&P, an S&P equivalent is determined based on ratings from similar rating agencies. Securities that are not rated are included in the “BB+ and lower” category. NGHC Reciprocal Exchanges December 31, 2020 Amortized Fair Percentage Amortized Fair Percentage U.S. Treasury $ 37,307 $ 40,213 1.0 % $ 14,441 $ 14,734 4.7 % AAA 523,929 568,028 13.6 % 28,232 28,496 9.2 % AA, AA+, AA- 1,428,942 1,507,760 36.0 % 150,794 152,059 49.0 % A, A+, A- 1,106,964 1,167,933 27.9 % 42,283 43,605 14.1 % BBB, BBB+, BBB- 818,523 888,515 21.2 % 69,325 71,321 23.0 % BB+ and lower 13,473 14,466 0.3 % — — — % Total $ 3,929,138 $ 4,186,915 100.0 % $ 305,075 $ 310,215 100.0 % NGHC Reciprocal Exchanges December 31, 2019 Amortized Fair Percentage Amortized Fair Percentage U.S. Treasury $ 52,108 $ 53,599 1.3 % $ 12,929 $ 13,407 4.1 % AAA 515,869 537,508 12.9 % 20,947 21,555 6.6 % AA, AA+, AA- 1,677,787 1,697,220 40.9 % 120,113 121,720 37.5 % A, A+, A- 954,312 976,468 23.5 % 116,747 119,041 36.7 % BBB, BBB+, BBB- 795,594 823,239 19.8 % 48,021 48,093 14.8 % BB+ and lower 61,831 64,075 1.6 % 433 433 0.3 % Total $ 4,057,501 $ 4,152,109 100.0 % $ 319,190 $ 324,249 100.0 % The tables below summarize the investment quality of the corporate bond holdings and industry concentrations. December 31, 2020 AAA AA+, A+,A,A- BBB+, BB+ or Fair % of Financial Institutions — % 2.3 % 24.1 % 14.1 % — % $ 863,046 40.5 % Industrials 0.3 % 3.2 % 25.5 % 27.6 % 0.1 % 1,208,646 56.7 % Utilities/Other — % — % 1.6 % 1.2 % — % 61,609 2.8 % Total 0.3 % 5.5 % 51.2 % 42.9 % 0.1 % $ 2,133,301 100.0 % NGHC 0.3 % 5.5 % 49.2 % 39.5 % 0.1 % $ 2,018,325 94.6 % Reciprocal Exchanges — % — % 2.0 % 3.4 % — % 114,976 5.4 % Total 0.3 % 5.5 % 51.2 % 42.9 % 0.1 % $ 2,133,301 100.0 % December 31, 2019 AAA AA+, A+,A,A- BBB+, BB+ or Fair % of Financial Institutions — % 3.6 % 25.0 % 12.1 % 0.3 % $ 785,910 41.0 % Industrials 0.7 % 2.7 % 24.1 % 29.0 % 0.1 % 1,083,959 56.6 % Utilities/Other — % — % 1.0 % 1.4 % — % 46,694 2.4 % Total 0.7 % 6.3 % 50.1 % 42.5 % 0.4 % $ 1,916,563 100.0 % NGHC 0.3 % 5.1 % 44.0 % 40.0 % 0.4 % $ 1,720,962 89.8 % Reciprocal Exchanges 0.4 % 1.2 % 6.1 % 2.5 % — % 195,601 10.2 % Total 0.7 % 6.3 % 50.1 % 42.5 % 0.4 % $ 1,916,563 100.0 % |
Cash and Cash Equivalents, Restricted Cash and Restricted Investments | Cash, cash equivalents, and restricted cash are as follows: December 31, 2020 2019 Cash and cash equivalents $ 662,772 $ 135,942 Restricted cash and cash equivalents 36,995 28,521 Total cash, cash equivalents and restricted cash $ 699,767 $ 164,463 Restricted investments are as follows: December 31, 2020 2019 Securities on deposit with state regulatory authorities $ 83,764 $ 74,061 Restricted investments to trusts in certain reinsurance transactions 26,650 49,502 Total restricted investments $ 110,414 $ 123,563 |
Cash and Cash Equivalents, Restricted Cash and Restricted Investments | Cash, cash equivalents, and restricted cash are as follows: December 31, 2020 2019 Cash and cash equivalents $ 662,772 $ 135,942 Restricted cash and cash equivalents 36,995 28,521 Total cash, cash equivalents and restricted cash $ 699,767 $ 164,463 Restricted investments are as follows: December 31, 2020 2019 Securities on deposit with state regulatory authorities $ 83,764 $ 74,061 Restricted investments to trusts in certain reinsurance transactions 26,650 49,502 Total restricted investments $ 110,414 $ 123,563 |
Other Investments | The table below summarizes the composition of other investments: December 31, 2020 2019 Equity method investments (related parties - $101,143 and $109,612) $ 136,201 $ 143,511 Notes receivable (related parties - $130,784 and $129,229) (1) 130,824 129,299 Long-term Certificates of Deposit (CDs), at cost 134 20,150 Investments, at fair value 5,936 9,365 Investments, at cost or amortized cost 7,960 8,962 Total $ 281,055 $ 311,287 (1) See Note 16, “Related Party Transactions” for additional information. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets Measured at Fair Value on a Recurring Basis | Assets measured at fair value on a recurring basis are as follows: December 31, 2020 Level 1 Level 2 Level 3 Total Debt securities, available-for-sale: U.S. Treasury $ 54,948 $ — $ — $ 54,948 Federal agencies 261 — — 261 States and political subdivision bonds — 319,921 2,520 322,441 Foreign government — 1,883 — 1,883 Corporate bonds — 2,130,977 2,324 2,133,301 Residential mortgage-backed securities — 1,106,416 — 1,106,416 Commercial mortgage-backed securities — 654,632 — 654,632 Asset-backed securities — 28,892 — 28,892 Structured securities — 194,356 — 194,356 Total debt securities, available-for-sale 55,209 4,437,077 4,844 4,497,130 Short-term investments 171,086 20,000 — 191,086 Other investments 2,907 — 3,029 5,936 Total $ 229,202 $ 4,457,077 $ 7,873 $ 4,694,152 NGHC $ 187,582 $ 4,161,595 $ 7,873 $ 4,357,050 Reciprocal Exchanges 41,620 295,482 — 337,102 Total $ 229,202 $ 4,457,077 $ 7,873 $ 4,694,152 December 31, 2019 Level 1 Level 2 Level 3 Total Debt securities, available-for-sale: U.S. Treasury $ 67,006 $ — $ — $ 67,006 Federal agencies 3,915 — — 3,915 States and political subdivision bonds — 298,582 3,100 301,682 Foreign government — 1,802 — 1,802 Corporate bonds — 1,908,235 8,328 1,916,563 Residential mortgage-backed securities — 1,277,460 — 1,277,460 Commercial mortgage-backed securities — 612,193 — 612,193 Asset-backed securities — 75,611 — 75,611 Structured securities — 220,126 — 220,126 Total debt securities, available-for-sale: 70,921 4,394,009 11,428 4,476,358 Short-term investments 59,953 7,400 — 67,353 Other investments 4,881 — 4,484 9,365 Total $ 135,755 $ 4,401,409 $ 15,912 $ 4,553,076 NGHC $ 116,602 $ 4,091,068 $ 15,912 $ 4,223,582 Reciprocal Exchanges 19,153 310,341 — 329,494 Total $ 135,755 $ 4,401,409 $ 15,912 $ 4,553,076 |
Reconciliation of Recurring Fair Value Measurements of Level 3 Financial Assets | The following tables provide a reconciliation of recurring fair value measurements of the Level 3 financial assets: States and political subdivision bonds Corporate Other Total Balance as of January 1, 2020 $ 3,100 $ 8,328 $ 4,484 $ 15,912 Total gains (losses) for the period: Included in net income — — (531) (531) Included in other comprehensive income (580) (6,004) — (6,584) Sales — — (924) (924) Balance as of December 31, 2020 $ 2,520 $ 2,324 $ 3,029 $ 7,873 Change in unrealized gains (losses) for the period included in net income for assets held at the end of the reporting period $ (531) $ (531) Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period $ (580) $ (6,004) $ (6,584) States and political subdivision bonds Corporate Other Total Balance as of January 1, 2019 $ 3,596 $ 11,767 $ 7,593 $ 22,956 Total gains (losses) for the period: Included in net income — — (1,851) (1,851) Included in other comprehensive income (496) (3,439) — (3,935) Sales — — (1,258) (1,258) Balance as of December 31, 2019 $ 3,100 $ 8,328 $ 4,484 $ 15,912 Change in unrealized gains (losses) for the period included in net income for assets held at the end of the reporting period $ (1,851) $ (1,851) Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period $ (496) $ (3,439) $ (3,935) |
Schedule of Carrying Values and Estimated Fair Values of Debt not Carried at Fair Value | The following table presents the carrying amount and estimated fair value of debt not carried at fair value, excluding finance lease and other liabilities, as well as the input level used to determine the fair value: December 31, 2020 December 31, 2019 Input Level Carrying amount Fair value Carrying amount Fair value 7.625% Notes Level 2 $ 97,015 $ 101,400 $ 96,928 $ 103,560 6.75% Notes Level 3 347,743 386,275 347,091 371,366 Subordinated Debentures Level 3 72,168 72,139 72,168 72,103 2019 Credit Agreement Level 3 140,000 144,063 140,000 148,272 |
Deferred Acquisition Costs (Tab
Deferred Acquisition Costs (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |
Deferred Acquisition Costs | The following table reflects the amounts of policy acquisition costs deferred and amortized: Year Ended December 31, 2020 2019 2018 Property Accident Total Property Accident Total Property Accident Total Balance, beginning of the year $ 239,293 $ 24,230 $ 263,523 $ 226,188 $ 25,220 $ 251,408 $ 198,283 $ 18,106 $ 216,389 Additions 633,775 24,420 658,195 552,921 39,491 592,412 522,914 22,898 545,812 Amortization (613,905) (21,908) (635,813) (539,816) (37,541) (577,357) (495,009) (15,784) (510,793) Disposition — — — — (2,940) (2,940) — — — Change in DAC 19,870 2,512 22,382 13,105 (990) 12,115 27,905 7,114 35,019 End of the year $ 259,163 $ 26,742 $ 285,905 $ 239,293 $ 24,230 $ 263,523 $ 226,188 $ 25,220 $ 251,408 NGHC $ 239,963 $ 26,742 $ 266,705 $ 215,986 $ 24,230 $ 240,216 $ 206,181 $ 25,220 $ 231,401 Reciprocal Exchanges 19,200 — 19,200 23,307 — 23,307 20,007 — 20,007 Balance, end of the year $ 259,163 $ 26,742 $ 285,905 $ 239,293 $ 24,230 $ 263,523 $ 226,188 $ 25,220 $ 251,408 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Composition of Property and Equipment | Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, as follows: Buildings and improvements 30 years Leasehold improvements Remaining lease term Other equipment 3 to 20 years Hardware and software 3 to 5 years The composition of property and equipment consisted of the following: December 31, 2020 2019 Cost Accumulated Net Cost Accumulated Net Land $ 5,788 $ — $ 5,788 $ 5,788 $ — $ 5,788 Buildings 26,245 (3,416) 22,829 24,997 (2,669) 22,328 Leasehold improvements 39,591 (17,305) 22,286 34,238 (12,372) 21,866 Other equipment 26,909 (3,916) 22,993 24,627 (3,044) 21,583 Hardware and software 417,970 (241,420) 176,550 387,618 (196,294) 191,324 Finance lease right-of-use assets 38,867 (22,631) 16,236 37,515 (16,511) 21,004 Operating lease right-of-use assets 111,001 — 111,001 119,934 — 119,934 Total $ 666,371 $ (288,688) $ 377,683 $ 634,717 $ (230,890) $ 403,827 NGHC $ 657,312 $ (279,629) $ 377,683 $ 625,658 $ (222,072) $ 403,586 Reciprocal Exchanges 9,059 (9,059) — 9,059 (8,818) 241 Total $ 666,371 $ (288,688) $ 377,683 $ 634,717 $ (230,890) $ 403,827 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Composition of Intangible Assets and Loss Reserve Premium | The composition of intangible assets and loss reserve premium consisted of the following: December 31, 2020 Gross Accumulated Net Value Weighted-average amortization period Agent/Customer relationships $ 175,352 $ (90,986) $ 84,366 6.7 years Renewal rights 33,565 (29,351) 4,214 0.7 years Other intangibles 47,711 (33,491) 14,220 2.9 years Total intangible assets subject to amortization 256,628 (153,828) 102,800 5.2 years Management contracts 118,600 — 118,600 indefinite life State licenses 89,325 — 89,325 indefinite life Trademarks 30,000 — 30,000 indefinite life Total intangible assets $ 494,553 $ (153,828) $ 340,725 NGHC $ 490,653 $ (152,973) $ 337,680 Reciprocal Exchanges 3,900 (855) 3,045 Total intangible assets $ 494,553 $ (153,828) $ 340,725 Net loss reserve plus a risk premium (1) $ (17,266) $ 14,977 $ (2,289) 0.8 years Total $ (17,266) $ 14,977 $ (2,289) NGHC $ (13,253) $ 10,998 $ (2,255) Reciprocal Exchanges (4,013) 3,979 (34) Total $ (17,266) $ 14,977 $ (2,289) December 31, 2019 Gross Accumulated Net Value Agent/Customer relationships $ 175,157 $ (76,156) $ 99,001 Renewal rights 48,566 (41,257) 7,309 Other intangibles 49,511 (27,923) 21,588 Total intangible assets subject to amortization 273,234 (145,336) 127,898 Management contracts 118,600 — 118,600 State licenses 89,325 — 89,325 Trademarks 30,000 — 30,000 Total intangible assets $ 511,159 $ (145,336) $ 365,823 NGHC $ 507,259 $ (144,661) $ 362,598 Reciprocal Exchanges 3,900 (675) 3,225 Total intangible assets $ 511,159 $ (145,336) $ 365,823 Net loss reserve plus a risk premium (1) $ (17,266) $ 9,947 $ (7,319) Total $ (17,266) $ 9,947 $ (7,319) NGHC $ (13,253) $ 6,017 $ (7,236) Reciprocal Exchanges (4,013) 3,930 (83) Total $ (17,266) $ 9,947 $ (7,319) (1) Net loss reserve plus a risk premium is recorded as a liability. |
Schedule of Intangible Assets Amortization Expense | Intangible assets amortization expense consisted of the following: Year Ended December 31, 2020 2019 2018 Amortization $ 25,798 $ 39,024 $ 31,999 Amortization of loss reserve premium (5,030) (4,288) (632) Total $ 20,768 $ 34,736 $ 31,367 NGHC $ 20,637 $ 34,665 $ 31,323 Reciprocal Exchanges 131 71 44 Total $ 20,768 $ 34,736 $ 31,367 |
Schedule of Aggregated Amortization Expense for Each of the Next Five Years and Thereafter | The estimated aggregate amortization expense for each of the next five years and thereafter is: Year ending NGHC Reciprocal Total 2021 $ 16,609 $ 23 $ 16,632 2022 14,657 (9) 14,648 2023 12,386 (3) 12,383 2024 11,452 — 11,452 2025 10,989 — 10,989 Thereafter 34,407 — 34,407 Total $ 100,500 $ 11 $ 100,511 |
Unpaid Losses and Loss Adjust_2
Unpaid Losses and Loss Adjustment Expense Reserves (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Insurance [Abstract] | |
Schedule of Liability for Unpaid Claims and Claims Adjustment Expenses | The following tables present a reconciliation of beginning and ending balances for unpaid losses and LAE: Year Ended December 31, 2020 Property Accident NGHC Reciprocal Total Gross balance at beginning of the year $ 2,528,754 $ 151,874 $ 2,680,628 $ 205,786 $ 2,886,414 Less: Reinsurance recoverable at beginning of the year (1,016,368) (11,266) (1,027,634) (84,174) (1,111,808) Net balance at beginning of the year 1,512,386 140,608 1,652,994 121,612 1,774,606 Incurred losses and LAE related to: Current year 2,323,797 342,714 2,666,511 153,380 2,819,891 Prior year 27,042 (23,821) 3,221 970 4,191 Total incurred 2,350,839 318,893 2,669,732 154,350 2,824,082 Paid losses and LAE related to: Current year (1,432,498) (209,319) (1,641,817) (94,287) (1,736,104) Prior year (827,745) (90,952) (918,697) (53,317) (972,014) Total paid (2,260,243) (300,271) (2,560,514) (147,604) (2,708,118) Net balance at end of the year 1,602,982 159,230 1,762,212 128,358 1,890,570 Plus: Reinsurance recoverable at end of the year 899,217 21,697 920,914 77,614 998,528 Gross balance at end of the year $ 2,502,199 $ 180,927 $ 2,683,126 $ 205,972 $ 2,889,098 Year Ended December 31, 2019 Property Accident NGHC Reciprocal Total Gross balance at beginning of the year $ 2,507,409 $ 271,280 $ 2,778,689 $ 178,470 $ 2,957,159 Less: Reinsurance recoverable at beginning of the year (1,182,588) (24,575) (1,207,163) (77,979) (1,285,142) Net balance at beginning of the year 1,324,821 246,705 1,571,526 100,491 1,672,017 Incurred losses and LAE related to: Current year 2,320,053 356,036 2,676,089 173,215 2,849,304 Prior year 46,623 (45,356) 1,267 3,897 5,164 Total incurred 2,366,676 310,680 2,677,356 177,112 2,854,468 Paid losses and LAE related to: Current year (1,430,072) (219,234) (1,649,306) (111,380) (1,760,686) Prior year (841,613) (109,653) (951,266) (44,611) (995,877) Total paid (2,271,685) (328,887) (2,600,572) (155,991) (2,756,563) Acquired losses and LAE reserves 92,574 — 92,574 — 92,574 Disposed losses and LAE reserves — (87,890) (87,890) — (87,890) Net balance at end of the year 1,512,386 140,608 1,652,994 121,612 1,774,606 Plus: Reinsurance recoverable at end of the year 1,016,368 11,266 1,027,634 84,174 1,111,808 Gross balance at end of the year $ 2,528,754 $ 151,874 $ 2,680,628 $ 205,786 $ 2,886,414 Year Ended December 31, 2018 Property Accident NGHC Reciprocal Total Gross balance at beginning of the year $ 2,270,551 $ 249,653 $ 2,520,204 $ 143,353 $ 2,663,557 Less: Reinsurance recoverable at beginning of the year (1,067,495) (9,840) (1,077,335) (52,408) (1,129,743) Net balance at beginning of the year 1,203,056 239,813 1,442,869 90,945 1,533,814 Incurred losses and LAE related to: Current year 2,182,923 352,322 2,535,245 161,015 2,696,260 Prior year (4,760) (30,977) (35,737) 1,703 (34,034) Total incurred 2,178,163 321,345 2,499,508 162,718 2,662,226 Paid losses and LAE related to: Current year (1,336,359) (188,014) (1,524,373) (110,053) (1,634,426) Prior year (720,039) (117,653) (837,692) (43,119) (880,811) Total paid (2,056,398) (305,667) (2,362,065) (153,172) (2,515,237) Unrealized foreign exchange gain — (8,786) (8,786) — (8,786) Net balance at end of the year 1,324,821 246,705 1,571,526 100,491 1,672,017 Plus: Reinsurance recoverable at end of the year 1,182,588 24,575 1,207,163 77,979 1,285,142 Gross balance at end of the year $ 2,507,409 $ 271,280 $ 2,778,689 $ 178,470 $ 2,957,159 |
Short-duration Insurance Contracts, Claims Development | Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, December 31, 2020 Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total of IBNR Cumulative (unaudited) 2011 $ 490,230 $ 485,762 $ 489,010 $ 494,922 $ 493,873 $ 497,109 $ 497,324 $ 496,408 $ 497,424 $ 497,712 $ 522 238,319 2012 511,797 522,296 529,140 527,386 528,090 527,531 529,885 531,887 533,045 281 249,890 2013 544,833 556,262 556,290 563,834 567,410 572,538 575,521 575,264 287 250,134 2014 740,531 759,577 760,566 766,640 779,992 783,869 786,619 572 270,161 2015 820,213 838,040 849,051 872,064 892,244 901,823 3,434 291,921 2016 932,350 940,849 976,749 1,005,184 1,017,124 13,710 302,083 2017 929,211 912,370 941,837 968,645 16,952 296,226 2018 1,047,041 1,033,488 1,054,906 79,287 309,025 2019 1,162,750 1,153,160 169,765 406,201 2020 1,106,907 455,534 293,834 Total (A) $ 8,595,205 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (unaudited) 2011 $ 224,676 $ 385,749 $ 442,365 $ 468,059 $ 482,861 $ 489,191 $ 494,145 $ 495,833 $ 496,680 $ 497,044 2012 242,285 413,018 470,515 501,819 518,079 523,703 527,695 530,570 532,182 2013 259,665 440,751 504,569 540,497 559,064 567,949 571,643 573,312 2014 342,710 601,980 694,002 728,256 757,933 773,124 780,972 2015 385,592 679,461 761,150 820,007 864,226 884,717 2016 400,052 737,927 855,407 937,997 978,785 2017 392,084 706,151 832,553 902,264 2018 429,231 777,888 889,127 2019 470,341 833,977 2020 425,674 Total (B) $ 7,298,054 Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C) 1,915 Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) $ 1,299,066 Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, December 31, 2020 Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total of IBNR Cumulative (unaudited) 2011 $ 315,273 $ 308,729 $ 308,298 $ 308,486 $ 308,760 $ 308,512 $ 308,536 $ 308,249 $ 308,132 $ 308,142 $ (2) 298,034 2012 308,056 298,208 295,984 296,257 296,050 295,970 295,026 294,710 294,697 (10) 292,486 2013 335,454 329,049 328,748 328,284 328,262 328,010 327,506 327,503 (26) 285,750 2014 496,227 487,302 486,206 486,383 486,373 486,156 486,146 16 311,603 2015 541,008 544,097 544,769 544,510 544,684 544,677 4 329,111 2016 626,643 622,456 621,717 620,546 620,692 (414) 337,873 2017 600,813 570,699 567,411 566,641 370 385,080 2018 548,063 526,092 530,023 (472) 360,454 2019 577,970 552,692 2,482 370,057 2020 560,894 18,588 351,548 Total (A) $ 4,792,107 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (unaudited) 2011 $ 283,501 $ 308,824 $ 308,634 $ 308,608 $ 308,578 $ 308,571 $ 308,557 $ 308,266 $ 308,131 $ 308,145 2012 268,989 298,381 295,978 295,975 296,029 295,995 294,975 294,702 294,699 2013 291,064 328,832 328,456 328,299 328,280 327,976 327,510 327,522 2014 430,998 487,531 486,364 486,309 486,251 486,108 486,080 2015 478,268 544,754 544,707 544,485 544,699 544,652 2016 542,970 622,930 621,529 621,181 620,963 2017 533,907 568,639 566,918 566,181 2018 483,149 532,083 530,330 2019 512,072 549,540 2020 517,035 Total (B) $ 4,745,147 Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C) (15) Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) $ 46,945 Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, December 31, 2020 Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total of IBNR Cumulative (unaudited) 2011 $ 506,352 $ 499,170 $ 498,050 $ 498,184 $ 497,244 $ 495,246 $ 494,825 $ 495,170 $ 495,148 $ 495,156 $ 1 107,871 2012 485,454 480,353 478,880 477,577 476,538 474,649 476,166 475,792 475,990 7 112,061 2013 306,761 300,868 299,561 296,618 296,907 296,756 296,760 297,159 66 75,918 2014 318,488 306,471 303,925 304,496 304,237 304,350 304,934 279 73,498 2015 357,023 349,559 351,747 353,688 351,305 351,590 1,152 69,920 2016 350,737 341,762 340,711 343,525 344,763 1,481 61,047 2017 402,798 365,092 370,068 362,176 2,096 59,284 2018 327,462 328,721 327,525 4,192 73,117 2019 247,760 256,369 16,533 66,710 2020 352,477 52,664 48,924 Total (A) $ 3,568,139 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (unaudited) 2011 $ 314,139 $ 457,480 $ 485,054 $ 489,778 $ 493,408 $ 494,198 $ 494,525 $ 494,904 $ 494,922 $ 494,950 2012 300,271 452,589 466,266 471,084 473,190 473,781 475,765 475,762 475,964 2013 219,937 279,743 289,302 293,101 295,332 296,383 296,442 296,567 2014 198,781 278,255 289,456 297,640 301,742 303,100 303,660 2015 233,264 319,284 336,921 342,156 345,257 346,554 2016 227,650 320,564 331,102 337,889 341,037 2017 258,234 338,065 349,600 355,265 2018 227,908 298,212 315,302 2019 172,462 226,895 2020 249,268 Total (B) $ 3,405,462 Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C) 930 Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) $ 163,607 Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, December 31, 2020 Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total of IBNR Cumulative (unaudited) 2011 $ 4,804 $ 4,483 $ 4,481 $ 4,481 $ 4,481 $ 4,481 $ 4,481 $ 4,481 $ 4,481 $ 4,481 $ — 8,139 2012 4,400 4,227 4,161 4,161 4,161 4,110 4,110 4,110 4,110 — 7,630 2013 23,253 28,578 26,457 26,361 26,272 26,274 26,274 26,265 — 34,173 2014 52,245 52,694 52,311 52,026 52,022 52,034 52,028 — 69,716 2015 176,104 184,586 181,536 181,740 181,717 181,678 — 242,669 2016 215,097 200,817 202,155 201,722 201,850 1 320,319 2017 211,293 186,415 182,865 182,809 135 302,098 2018 234,558 205,152 203,238 364 269,021 2019 256,745 239,017 4,726 304,234 2020 296,453 112,869 262,469 Total (A) $ 1,391,929 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (unaudited) 2011 $ 2,528 $ 4,469 $ 4,481 $ 4,481 $ 4,481 $ 4,481 $ 4,481 $ 4,481 $ 4,481 $ 4,481 2012 3,330 4,095 4,110 4,110 4,161 4,110 4,110 4,110 4,110 2013 15,421 25,754 26,327 26,242 26,154 26,155 26,155 26,147 2014 31,765 52,053 52,405 52,147 52,140 52,153 52,147 2015 123,576 178,918 181,459 181,719 181,696 181,678 2016 125,845 196,421 201,720 201,549 201,849 2017 104,809 178,047 181,519 182,674 2018 126,269 201,457 202,874 2019 158,345 234,291 2020 183,585 Total (B) $ 1,273,836 Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C) — Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) $ 118,093 Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, December 31, 2020 Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total of IBNR Cumulative (unaudited) 2011 $ 47,666 $ 47,834 $ 47,459 $ 48,841 $ 51,107 $ 50,898 $ 50,998 $ 51,161 $ 51,247 $ 50,703 $ — 5,065 2012 44,834 47,275 48,044 48,665 50,370 50,767 50,303 50,538 50,606 — 4,999 2013 43,684 44,341 45,479 50,180 51,263 49,854 50,595 50,810 — 5,097 2014 38,656 40,850 45,930 48,246 49,168 49,369 50,055 — 4,873 2015 35,573 33,409 34,390 34,615 34,268 34,962 — 4,335 2016 24,619 24,460 26,109 24,310 24,657 356 4,005 2017 26,214 28,762 28,804 29,806 1,244 4,949 2018 32,339 33,891 35,870 3,540 6,127 2019 49,757 50,212 11,727 6,262 2020 40,757 18,459 3,383 Total (A) $ 418,438 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (unaudited) 2011 $ 15,857 $ 26,603 $ 35,911 $ 41,931 $ 46,559 $ 49,570 $ 50,481 $ 50,979 $ 51,121 $ 50,676 2012 13,568 29,286 37,241 42,768 46,358 48,990 49,836 50,090 50,504 2013 14,683 29,218 35,105 41,787 47,449 48,449 49,605 50,432 2014 13,925 26,070 32,382 39,328 46,001 48,389 49,602 2015 11,910 19,501 24,614 29,538 31,587 33,223 2016 7,516 13,478 16,994 20,567 22,500 2017 9,111 17,136 19,529 23,838 2018 10,755 19,471 24,985 2019 15,504 28,210 2020 13,567 Total (B) $ 347,537 Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C) 27 Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) $ 70,928 Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, December 31, 2020 Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total of IBNR Cumulative (unaudited) 2011 $ 26,936 $ 26,055 $ 26,022 $ 26,060 $ 26,037 $ 26,029 $ 26,023 $ 26,028 $ 26,028 $ 26,027 $ — 12,041 2012 25,752 26,459 26,189 25,914 25,842 25,841 25,845 25,842 25,820 — 11,301 2013 23,375 25,214 25,292 24,709 24,703 24,704 24,704 24,704 — 11,066 2014 29,240 27,424 25,806 25,588 25,882 26,074 26,074 — 11,526 2015 21,247 18,592 18,673 18,789 18,842 18,890 — 10,281 2016 12,270 12,921 12,985 13,213 13,197 — 8,740 2017 15,301 15,410 15,612 15,490 (5) 10,682 2018 19,146 19,272 19,200 108 13,615 2019 27,212 27,585 (51) 14,549 2020 21,240 (810) 10,027 Total (A) $ 218,227 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (unaudited) 2011 $ 28,274 $ 26,269 $ 26,106 $ 26,056 $ 26,037 $ 26,033 $ 26,027 $ 26,028 $ 26,028 $ 26,027 2012 23,760 26,651 26,172 25,914 25,854 25,850 25,845 25,842 25,817 2013 22,651 25,088 24,549 24,725 24,716 24,704 24,704 24,704 2014 24,528 26,165 25,772 25,427 25,685 25,946 26,071 2015 19,080 18,797 18,750 18,748 18,719 18,730 2016 12,579 13,147 13,080 13,137 13,114 2017 15,438 16,141 15,500 15,495 2018 18,925 19,246 19,093 2019 27,974 27,632 2020 21,633 Total (B) $ 218,316 Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C) — Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) $ (89) Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, December 31, 2020 Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total of IBNR Cumulative (unaudited) 2011 $ 38,470 $ 28,869 $ 28,511 $ 28,209 $ 27,954 $ 27,950 $ 28,002 $ 28,075 $ 28,095 $ 28,144 $ — 6,652 2012 25,289 20,625 21,184 19,971 20,403 20,876 20,251 20,301 20,283 — 8,427 2013 22,638 21,232 20,132 20,309 20,615 20,367 23,109 22,649 — 3,165 2014 27,706 24,846 25,625 26,614 27,141 27,231 27,212 — 4,232 2015 30,081 21,031 21,527 22,007 21,881 22,714 — 5,455 2016 36,838 35,274 34,851 34,501 34,655 78 4,799 2017 48,222 50,871 51,852 51,477 648 8,830 2018 76,925 78,166 77,582 1,471 12,998 2019 65,888 65,380 3,312 12,238 2020 68,723 10,427 9,349 Total (A) $ 418,819 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Year Ended December 31, Accident 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (unaudited) 2011 $ 21,474 $ 24,997 $ 25,799 $ 26,700 $ 27,661 $ 27,656 $ 27,692 $ 27,758 $ 27,803 $ 27,825 2012 11,087 18,021 19,367 19,847 19,961 20,668 20,121 20,256 20,238 2013 11,277 17,435 18,107 19,104 19,653 19,626 20,232 22,731 2014 15,344 22,834 23,820 25,230 26,170 27,003 27,115 2015 12,979 18,518 19,834 20,339 20,733 21,994 2016 20,978 30,615 31,632 32,933 33,399 2017 33,166 46,003 47,517 49,506 2018 55,519 69,672 72,859 2019 45,432 58,788 2020 44,371 Total (B) $ 378,826 Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C) 2,658 Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) $ 42,651 |
Short-duration Insurance Contracts, Schedule of Historical Claims Duration | Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 (unaudited) Property and Casualty - auto liability, including recreational vehicles and motorcycles 41.6 % 32.9 % 11.5 % 6.8 % 3.7 % 1.8 % 0.9 % 0.4 % 0.2 % 0.2 % Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 (unaudited) Property and Casualty - auto physical damage, including recreational vehicles, motorcycles and lender placed auto 90.6 % 9.6 % (0.1) % — % — % — % (0.1) % — % — % — % Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 (unaudited) Property and Casualty - homeowners & other property, including lender placed homeowners 67.3 % 25.1 % 4.4 % 1.5 % 0.8 % 0.3 % 0.4 % 0.1 % 0.1 % — % Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 (unaudited) Accident and Health 62.9 % 35.3 % 1.6 % 0.1 % 0.1 % — % — % (0.4) % 0.3 % — % Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 (unaudited) Reciprocal Exchanges - auto liability 30.2 % 25.1 % 13.9 % 13.0 % 9.6 % 4.6 % 2.3 % 0.9 % 0.7 % (0.3) % Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 (unaudited) Reciprocal Exchanges - auto physical damage 98.4 % 2.6 % (1.3) % 0.2 % — % — % — % — % — % — % Average Annual Percentage Payout of Accident Year Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 (unaudited) Reciprocal Exchanges - homeowners & other property 64.9 % 22.8 % 3.3 % 2.5 % 1.3 % 1.8 % 1.0 % 0.8 % 0.5 % 1.1 % |
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | The reconciliation of the net incurred and paid claims development tables to the liability for unpaid loss and LAE reserves is as follows: December 31, 2020 Net outstanding liabilities: Property and Casualty - Auto Liability $ 1,299,066 Property and Casualty - Auto Physical Damage 46,945 Property and Casualty - Homeowners and Other Property 163,607 Accident and Health 118,093 Reciprocal Exchanges - Auto Liability 70,928 Reciprocal Exchanges - Auto Physical Damage (89) Reciprocal Exchanges - Homeowners and Other Property 42,651 Net reserve for claims and allocated claim adjustment expenses $ 1,741,201 Reinsurance recoverable (1): Property and Casualty - Auto Liability $ 766,929 Property and Casualty - Auto Physical Damage 8,198 Property and Casualty - Homeowners and Other Property 124,090 Accident and Health 21,697 Reciprocal Exchanges - Auto Liability 28,745 Reciprocal Exchanges - Auto Physical Damage 557 Reciprocal Exchanges - Homeowners and Other Property 48,312 Reinsurance recoverable on unpaid claims and allocated claim adjustment expenses $ 998,528 Insurance lines other than short-duration $ 35,688 Acquisition 17,488 Unallocated claims adjustment expenses (“ULAE”) 96,193 Subtotal $ 149,369 Gross reserve for claims and claim adjustment expenses $ 2,889,098 (1) I ncludes $535,433 from MCCA and $157,611 from NCRF. See Note 10, “Reinsurance” for additional information. The reconciliation of the net incurred and paid loss information in the loss reserve rollforward table and loss development tables with respect to the current accident year is as follows: 2020 - Current Accident Year Incurred 2020 - Current Accident Year Paid Property Accident Reciprocal Total Property Accident Reciprocal Total Rollforward table $ 2,323,797 $ 342,714 $ 153,380 $ 2,819,891 $ 1,432,498 $ 209,319 $ 94,287 $ 1,736,104 Development tables 2,020,278 296,453 130,720 2,447,451 1,191,977 183,585 79,571 1,455,133 Variance $ 303,519 $ 46,261 $ 22,660 $ 372,440 $ 240,521 $ 25,734 $ 14,716 $ 280,971 Unallocated claims adjustment expenses $ 303,112 $ 15,883 $ 22,660 $ 341,655 $ 240,263 $ 10,539 $ 14,716 $ 265,518 Long-duration contracts — 30,789 — 30,789 — 15,449 — 15,449 Other 407 (411) — (4) 258 (254) — 4 Variance $ 303,519 $ 46,261 $ 22,660 $ 372,440 $ 240,521 $ 25,734 $ 14,716 $ 280,971 The reconciliation of the net incurred and paid loss information in the loss reserve rollforward table and loss development tables with respect to the prior accident year is as follows: 2020 - Prior Accident Year Incurred 2020 - Prior Accident Year Paid Property Accident Reciprocal Total Property Accident Reciprocal Total Rollforward table $ 27,042 $ (23,821) $ 970 $ 4,191 $ 827,745 $ 90,952 $ 53,317 $ 972,014 Development tables 44,333 (19,624) 4,162 28,871 734,614 78,786 50,568 863,968 Variance $ (17,291) $ (4,197) $ (3,192) $ (24,680) $ 93,131 $ 12,166 $ 2,749 $ 108,046 Unallocated claims adjustment expenses $ (8,881) $ (1,285) $ (3,586) $ (13,752) $ 58,163 $ 3,395 $ 2,556 $ 64,114 Accident years prior to 2011 (493) — 394 (99) 1,442 — 193 1,635 Long-duration contracts — (2,912) — (2,912) — 8,771 — 8,771 Acquisition (7,917) — — (7,917) 33,526 — — 33,526 Variance $ (17,291) $ (4,197) $ (3,192) $ (24,680) $ 93,131 $ 12,166 $ 2,749 $ 108,046 |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Ceded Credit Risk | |
Schedule of Effects of Reinsurance on Premiums and Losses | Reinsurance recoverable is as follows: December 31, 2020 2019 Reinsurance recoverable on paid losses $ 221,212 $ 282,500 Reinsurance recoverable on unpaid losses 998,528 1,111,808 Allowance for uncollectible reinsurance (810) — Reinsurance recoverable, net $ 1,218,930 $ 1,394,308 The following is the effect of reinsurance on unpaid loss and LAE reserves and unearned premiums: December 31, 2020 2019 Assumed Ceded Assumed Ceded Unpaid loss and LAE reserves $ 27,568 $ 998,528 $ 50,884 $ 1,111,808 Unearned premiums 18,845 414,010 15,278 575,747 The following is the effect of reinsurance on premiums and loss and LAE: Year Ended December 31, 2020 2019 2018 Premium: Written Earned Written Earned Written Earned Direct $ 5,574,550 $ 5,613,630 $ 5,508,245 $ 5,486,835 $ 5,317,742 $ 5,049,512 Assumed 59,997 56,430 74,835 80,572 99,097 123,265 Total Gross Premium 5,634,547 5,670,060 5,583,080 5,567,407 5,416,839 5,172,777 Ceded (1,013,703) (1,175,440) (1,358,459) (1,449,365) (1,589,126) (1,440,575) Net Premium $ 4,620,844 $ 4,494,620 $ 4,224,621 $ 4,118,042 $ 3,827,713 $ 3,732,202 Year Ended December 31, 2020 2019 2018 Assumed Ceded Assumed Ceded Assumed Ceded Loss and LAE $ 9,713 $ 729,628 $ 32,745 $ 801,041 $ 29,290 $ 1,041,286 |
Schedule of Information for each Reinsurer | The following tables present information for each reinsurer by reinsurance recoverable, prepaid reinsurance and funds held balances: Recoverable on December 31, 2020 A.M. Best Unpaid Paid Allowance for uncollectible reinsurance Prepaid Funds Held Net Reinsurer: MCCA NR (1) $ 535,433 $ 10,221 $ — $ 1,251 $ — $ 546,905 NCRF NR (1) 157,611 35,684 — 92,783 — 286,078 Hannover Ruck SE A+ 74,485 47,726 — 68,167 (149,402) 40,976 Other reinsurers' balances - each less than 5% of total (2) — 230,999 127,581 (810) 251,809 (19,606) 589,973 Total $ 998,528 $ 221,212 $ (810) $ 414,010 $ (169,008) $ 1,463,932 NGHC $ 920,914 $ 173,137 $ (636) $ 324,160 $ (153,903) $ 1,263,672 Reciprocal Exchanges 77,614 48,075 (174) 89,850 (15,105) 200,260 Total $ 998,528 $ 221,212 $ (810) $ 414,010 $ (169,008) $ 1,463,932 Recoverable on December 31, 2019 A.M. Best Unpaid Paid Prepaid Funds Held Net Reinsurer: MCCA NR (1) $ 548,370 $ 9,940 $ 3,927 $ — $ 562,237 NCRF NR (1) 146,496 44,759 88,022 — 279,277 Hannover Ruck SE A+ 155,223 101,064 134,878 (254,558) 136,607 Other reinsurers' balances - each less than 5% of total (2) — 261,719 126,737 348,920 (4,884) 732,492 Total $ 1,111,808 $ 282,500 $ 575,747 $ (259,442) $ 1,710,613 NGHC $ 1,027,634 $ 247,549 $ 469,853 $ (259,442) $ 1,485,594 Reciprocal Exchanges 84,174 34,951 105,894 — 225,019 Total $ 1,111,808 $ 282,500 $ 575,747 $ (259,442) $ 1,710,613 (1) NR - not rated by A.M. Best. (2) Rated A- or higher by A.M. Best or collateralized. |
MCCA | |
Ceded Credit Risk | |
Schedule of Effects of Reinsurance on Premiums and Losses | Reinsurance recoverable from MCCA are as follows: December 31, 2020 2019 Reinsurance recoverable on paid losses $ 10,221 $ 9,940 Reinsurance recoverable on unpaid losses 535,433 548,370 Allowance for uncollectible reinsurance — — Reinsurance recoverable, net $ 545,654 $ 558,310 |
Schedule of Summary of Premiums and Losses Ceded | The following is a summary of premiums and losses ceded to MCCA: Year Ended December 31, 2020 2019 2018 Ceded earned premiums $ 7,856 $ 9,867 $ 9,676 Ceded Loss and LAE 3,624 (23,616) (54,105) |
NCRF | |
Ceded Credit Risk | |
Schedule of Effects of Reinsurance on Premiums and Losses | Reinsurance recoverable from NCRF are as follows: December 31, 2020 2019 Reinsurance recoverable on paid losses $ 35,684 $ 44,759 Reinsurance recoverable on unpaid losses 157,611 146,496 Allowance for uncollectible reinsurance — — Reinsurance recoverable, net $ 193,295 $ 191,255 |
Schedule of Summary of Premiums and Losses Ceded | The following is a summary of premiums and losses ceded to NCRF: Year Ended December 31, 2020 2019 2018 Ceded earned premiums $ 236,837 $ 234,370 $ 232,270 Ceded Loss and LAE 208,316 222,796 210,297 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Instruments | The following table represents the Company’s debt: December 31, Interest Rate Maturity 2020 2019 Fixed-rate: 6.75% Notes 6.75% 2024 $ 350,000 $ 350,000 7.625% Notes 7.625% 2055 100,000 100,000 Floating-rate: Subordinated Debentures I (1) LIBOR + 3.40% 2035 41,238 41,238 Subordinated Debentures II (2) LIBOR + 4.25% 2037 30,930 30,930 2019 Credit Agreement (3) LIBOR + 1.75% 2023 140,000 140,000 Finance lease liabilities Various Various 16,690 20,477 Other 3.5% Various 3,194 9,342 Unamortized debt issuance costs and unamortized discount (5,242) (5,981) Total carrying amount of debt $ 676,810 $ 686,006 (1) Interest rate was 3.62% and 5.29%, as of December 31, 2020, and 2019, respectively. (2) Interest rate was 4.47% and 6.14%, as of December 31, 2020, and 2019, respectively. (3) Weighted-average interest rate was 4.00% and 3.59% as of December 31, 2020, and 2019, respectively. |
Schedule of Interest Expense | The following table presents the Company’s interest expense: Year Ended December 31, Interest Payment Frequency 2020 2019 2018 6.75% Notes Semiannually $ 23,625 $ 23,625 $ 23,625 7.625% Notes Quarterly 7,625 7,625 7,625 Subordinated Debentures Quarterly 3,287 4,536 4,346 2016 Credit Agreement Quarterly — 1,211 7,491 2019 Credit Agreement Quarterly 3,421 5,340 — Finance lease liabilities Various 1,150 1,176 621 Other (1) Various (5,336) 8,031 7,717 Total interest expense $ 33,772 $ 51,544 $ 51,425 (1) Includes interest for other liabilities, interest credited on funds held balances and accretion of debt issuance costs. |
Schedule of Maturities of Long-term Debt | Maturities of the Company’s debt for the years subsequent to December 31, 2020 are as follows: 2021 2022 2023 2024 2025 and thereafter Total 6.75% Notes $ — $ — $ — $ 350,000 $ — $ 350,000 7.625% Notes (1) — — — — 100,000 100,000 Subordinated Debentures I — — — — 41,238 41,238 Subordinated Debentures II — — — — 30,930 30,930 2019 Credit Agreement (2) — — 140,000 — — 140,000 Finance lease liabilities 5,986 3,875 2,433 1,436 2,960 16,690 Other 3,194 — — — — 3,194 Total principal amount of debt $ 9,180 $ 3,875 $ 142,433 $ 351,436 $ 175,128 $ 682,052 Unamortized debt issuance costs and unamortized discount (5,242) Carrying amount of debt $ 676,810 (1) Were repaid on February 3, 2021. (2) Was repaid on January 4, 2021. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | Federal income tax expense consisted of the following: Year Ended December 31, 2020 2019 2018 NGHC Reciprocal Exchanges Total NGHC Reciprocal Exchanges Total NGHC Reciprocal Exchanges Total Current tax expense (benefit) Federal $ 115,416 $ 7 $ 115,423 $ 69,985 $ (2,257) $ 67,728 $ 27,039 $ (2,290) $ 24,749 Foreign 213 — 213 2,621 — 2,621 1,376 — 1,376 Total current tax expense (benefit) $ 115,629 $ 7 $ 115,636 $ 72,606 $ (2,257) $ 70,349 $ 28,415 $ (2,290) $ 26,125 Deferred tax expense (benefit) Federal $ 19,048 $ 1,777 $ 20,825 $ 13,497 $ (6,833) $ 6,664 $ 28,015 $ (1,260) $ 26,755 Foreign — — — — — — 604 — 604 Total deferred tax expense (benefit) $ 19,048 $ 1,777 $ 20,825 $ 13,497 $ (6,833) $ 6,664 $ 28,619 $ (1,260) $ 27,359 Provision (benefit) for income taxes $ 134,677 $ 1,784 $ 136,461 $ 86,103 $ (9,090) $ 77,013 $ 57,034 $ (3,550) $ 53,484 |
Schedule of Income before Income Tax, Domestic and Foreign | The domestic and foreign components of income before taxes are as follows: Year Ended December 31, 2020 2019 2018 NGHC Reciprocal Total NGHC Reciprocal Total NGHC Reciprocal Total Domestic $ 608,186 $ 12,661 $ 620,847 $ 358,079 $ (29,729) $ 328,350 $ 244,463 $ (43,380) $ 201,083 Foreign 39,822 — 39,822 76,093 — 76,093 19,925 — 19,925 Income (loss) $ 648,008 $ 12,661 $ 660,669 $ 434,172 $ (29,729) $ 404,443 $ 264,388 $ (43,380) $ 221,008 |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to the net deferred tax asset or liability are presented below based upon the 2020 enacted rate of 21%. December 31, 2020 2019 NGHC Reciprocal Total NGHC Reciprocal Total Deferred tax assets: Accrued expenses $ 7,577 $ 289 $ 7,866 $ 3,178 $ 683 $ 3,861 Unearned premiums and other revenue 71,872 4,242 76,114 64,155 5,146 69,301 Bad debt 4,628 281 4,909 4,876 114 4,990 Loss reserve discount 13,071 1,167 14,238 10,355 1,042 11,397 Net operating loss carryforwards 107,869 11,175 119,044 102,535 13,962 116,497 Surplus note interest — — — 2,081 — 2,081 Other 7,773 2,099 9,872 9,740 4,882 14,622 Gross deferred tax assets 212,790 19,253 232,043 196,920 25,829 222,749 Less: Valuation allowance (72,212) (5,670) (77,882) (65,257) (6,523) (71,780) Total deferred tax assets 140,578 13,583 154,161 131,663 19,306 150,969 Deferred tax liabilities: Deferred acquisition costs 52,719 4,032 56,751 49,828 4,894 54,722 Intangible assets 39,348 632 39,980 36,495 700 37,195 Goodwill 4,418 — 4,418 4,204 — 4,204 Property and equipment 39,160 — 39,160 28,922 — 28,922 Investments 4,390 107 4,497 — — — Deferred commissions 18,875 — 18,875 — — — Surplus note interest — 10,747 10,747 — 13,828 13,828 Unrealized capital gains 54,016 1,080 55,096 19,870 1,062 20,932 Other — — — 11,671 81 11,752 Gross deferred tax liabilities 212,926 16,598 229,524 150,990 20,565 171,555 Deferred tax asset $ — $ — $ — $ — $ — $ — Deferred tax liability $ (72,348) $ (3,015) $ (75,363) $ (19,327) $ (1,259) $ (20,586) |
Schedule of Effective Income Tax Rate Reconciliation | The Company’s income tax expense (benefit) differs from the statutory U.S. federal amount computed by applying the federal income tax rate of 21% for the years ended December 31, 2020, 2019, and 2018. The reasons for such differences are as follows: Year Ended December 31, 2020 NGHC Tax Rate Reciprocal Tax Rate Total Tax Rate Income before provision for income taxes $ 648,008 $ 12,661 $ 660,669 Tax rate 21.0 % 21.0 % 21.0 % Computed “expected” tax expense $ 136,082 21.0 % $ 2,659 21.0 % $ 138,741 21.0 % Tax effects resulting from: Tax-exempt interest (486) (0.1) (13) (0.1) (499) (0.1) Effect of foreign operations 351 0.1 — — 351 0.1 State taxes 1,556 0.2 — — 1,556 0.2 Change in valuation allowance 6,954 1.1 (903) (7.1) 6,051 0.9 Benefits of operating loss carryforwards (6,954) (1.1) — — (6,954) (1.1) Other permanent items (2,826) (0.4) 41 0.3 (2,785) (0.3) Provision for income taxes $ 134,677 20.8 % $ 1,784 14.1 % $ 136,461 20.7 % Year Ended December 31, 2019 NGHC Tax Rate Reciprocal Exchanges Tax Rate Total Tax Rate Income (loss) before provision for income taxes $ 434,172 $ (29,729) $ 404,443 Tax rate 21.0 % 21.0 % 21.0 % Computed “expected” tax expense $ 91,176 21.0 % $ (6,243) 21.0 % $ 84,933 21.0 % Tax effects resulting from: Tax-exempt interest (810) (0.2) (28) 0.1 (838) (0.2) Effect of foreign operations (1,192) (0.3) — — (1,192) (0.3) State taxes (2,357) (0.5) 210 (0.7) (2,147) (0.5) Change in valuation allowance 11,541 2.7 (105) 0.4 11,436 2.8 Benefits of operating loss carryforwards (11,541) (2.7) — — (11,541) (2.9) Other permanent items (714) (0.2) (2,924) 9.8 (3,638) (0.9) Provision (benefit) for income taxes $ 86,103 19.8 % $ (9,090) 30.6 % $ 77,013 19.0 % Year Ended December 31, 2018 NGHC Tax Rate Reciprocal Exchanges Tax Rate Total Tax Rate Income (loss) before provision for income taxes $ 264,388 $ (43,380) $ 221,008 Tax rate 21.0 % 21.0 % 21.0 % Computed “expected” tax expense $ 55,521 21.0 % $ (9,110) 21.0 % $ 46,411 21.0 % Tax effects resulting from: Tax-exempt interest (910) (0.3) (30) 0.1 (940) (0.4) Effect of foreign operations 2,807 1.1 — — 2,807 1.3 State taxes 4,578 1.7 — — 4,578 2.1 Change in valuation allowance 53,716 20.3 1,218 (2.8) 54,934 24.9 Benefits of operating loss carryforwards (53,716) (20.3) — — (53,716) (24.3) Effects of TCJA (951) (0.4) (366) 0.8 (1,317) (0.6) Other permanent items (4,011) (1.5) 4,738 (10.9) 727 0.2 Provision (benefit) for income taxes $ 57,034 21.6 % $ (3,550) 8.2 % $ 53,484 24.2 % |
Reconciliation of Gross Unrecognized Tax Benefits | The following table represents a reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits: Year Ended December 31, 2020 Gross unrecognized tax benefits, beginning of the year $ — Increases in tax positions for prior years 3,889 Increases in tax positions for current year 720 Gross unrecognized tax benefits, end of the year $ 4,609 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Maturity of Operating Lease Liabilities | Future minimum lease payments as of December 31, 2020, for each of the next five years and thereafter are as follows: Operating Finance December 31, Leases Leases Total 2021 $ 31,525 $ 6,601 $ 38,126 2022 27,225 4,296 31,521 2023 21,824 2,720 24,544 2024 18,186 1,638 19,824 2025 15,109 882 15,991 Thereafter 22,222 2,393 24,615 Total lease payments $ 136,091 $ 18,530 $ 154,621 Less: Interest (16,764) (1,840) Present value of lease liabilities $ 119,327 $ 16,690 |
Schedule of Maturity of Financing Lease Liabilities | Future minimum lease payments as of December 31, 2020, for each of the next five years and thereafter are as follows: Operating Finance December 31, Leases Leases Total 2021 $ 31,525 $ 6,601 $ 38,126 2022 27,225 4,296 31,521 2023 21,824 2,720 24,544 2024 18,186 1,638 19,824 2025 15,109 882 15,991 Thereafter 22,222 2,393 24,615 Total lease payments $ 136,091 $ 18,530 $ 154,621 Less: Interest (16,764) (1,840) Present value of lease liabilities $ 119,327 $ 16,690 |
Schedule of Amounts Payable under Employment Agreements | The Company has entered into employment agreements with certain individuals. The employment agreements provide for bonuses, executive benefits and severance payments under certain circumstances. Amounts payable under these agreements for the next five years are as follows: December 31, 2021 $ 4,672 2022 2,574 2023 1,303 2024 773 2025 — Total $ 9,322 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of Preferred Stock | The following table summarizes the Company’s preferred stock issued and outstanding as of December 31, 2020, and 2019. Series Dividend rate Shares of preferred stock issued and outstanding Depositary shares issued and outstanding Liquidation preference per share Aggregate liquidation preference A 7.50 % 2,200,000 — $ 25 $ 55,000 B 7.50 % 165,000 6,600,000 $ 1,000 $ 165,000 C 7.50 % 200,000 8,000,000 $ 1,000 $ 200,000 D Fixed/ Floating (1) 120 — $ 250,000 $ 30,000 2,565,120 $ 450,000 (1) Dividend rate is fixed at 7.00% prior to July 15, 2023, and floating at six-month LIBOR plus 5.4941% thereafter. |
Schedule of Dividends Declared | The following tables present the class of stock, declaration date and dividends paid per share in 2020, 2019, and 2018: Class of Stock Declaration Date Dividend Dividend Per Depositary Share Common stock October 29, 2020 $ 0.05 Common stock July 31, 2020 $ 0.05 Common stock April 29, 2020 $ 0.05 Common stock February 20, 2020 $ 0.05 Preferred stock Series A October 29, 2020 $ 0.46875 Preferred stock Series A July 31, 2020 $ 0.46875 Preferred stock Series A April 29, 2020 $ 0.46875 Preferred stock Series A February 20, 2020 $ 0.46875 Preferred stock Series B and Series C October 29, 2020 $ 18.75 $ 0.46875 Preferred stock Series B and Series C July 31, 2020 $ 18.75 $ 0.46875 Preferred stock Series B and Series C April 29, 2020 $ 18.75 $ 0.46875 Preferred stock Series B and Series C February 20, 2020 $ 18.75 $ 0.46875 Preferred stock Series D October 29, 2020 $ 8,750.00 Preferred stock Series D April 29, 2020 $ 8,750.00 Class of Stock Declaration Date Dividend Dividend Per Depositary Share Common stock October 30, 2019 $ 0.05 Common stock July 29, 2019 $ 0.05 Common stock May 6, 2019 $ 0.04 Common stock February 25, 2019 $ 0.04 Preferred stock Series A October 30, 2019 $ 0.46875 Preferred stock Series A July 29, 2019 $ 0.46875 Preferred stock Series A May 6, 2019 $ 0.46875 Preferred stock Series A February 25, 2019 $ 0.46875 Preferred stock Series B and Series C October 30, 2019 $ 18.75 $ 0.46875 Preferred stock Series B and Series C July 29, 2019 $ 18.75 $ 0.46875 Preferred stock Series B and Series C May 6, 2019 $ 18.75 $ 0.46875 Preferred stock Series B and Series C February 25, 2019 $ 18.75 $ 0.46875 Preferred stock Series D October 30, 2019 $ 8,750.00 Preferred stock Series D May 6, 2019 $ 8,750.00 Class of Stock Declaration Date Dividend Dividend Per Depositary Share Common stock October 29, 2018 $ 0.04 Common stock August 6, 2018 $ 0.04 Common stock May 7, 2018 $ 0.04 Common stock February 26, 2018 $ 0.04 Preferred stock Series A October 29, 2018 $ 0.46875 Preferred stock Series A August 6, 2018 $ 0.46875 Preferred stock Series A May 7, 2018 $ 0.46875 Preferred stock Series A February 26, 2018 $ 0.46875 Preferred stock Series B and Series C October 29, 2018 $ 18.75 $ 0.46875 Preferred stock Series B and Series C August 6, 2018 $ 18.75 $ 0.46875 Preferred stock Series B and Series C May 7, 2018 $ 18.75 $ 0.46875 Preferred stock Series B and Series C February 26, 2018 $ 18.75 $ 0.46875 Preferred stock Series D October 29, 2018 $ 8,263.89 |
Schedule of Common Stock Outstanding Roll Forward | The following table presents a roll forward of outstanding common shares. Year Ended December 31, 2020 2019 Common stock: Balance, beginning of the year 113,368,811 112,940,595 Shares issued under employee stock plans and exercises of stock options 854,914 578,201 Shares withheld related to net share settlement (179,599) (149,985) Balance, end of the year 114,044,126 113,368,811 Treasury stock: Balance beginning of the year — — Repurchases of common stock (459,083) — Balance, end of the period (459,083) — Shares outstanding at end of the year 113,585,043 113,368,811 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity | A summary of the stock option awards granted under the prior plans is shown below: Shares Subject to Options Outstanding Year Ended December 31, 2020 Number of Shares Weighted-Average Weighted-Average Aggregate Intrinsic Value (1) Outstanding at beginning of the year 3,025,587 $ 9.83 Exercised (388,236) 6.79 Outstanding and exercisable at end of the year 2,637,351 $ 10.28 2.4 $ 63,036 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the closing price of the Company’s common stock of $34.18, as reported on the Nasdaq Global Market on December 31, 2020. |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity | A summary of the RSUs is shown below: RSUs Year Ended December 31, 2020 Number of RSUs Weighted-Average Non-vested at beginning of the year 1,033,631 $ 23.98 Granted 561,497 21.46 Vested (466,678) 23.68 Forfeited (11,874) 21.75 Non-vested at end of the year 1,116,576 $ 22.86 |
Statutory Financial Data, Ris_2
Statutory Financial Data, Risk-Based Capital and Dividend Restrictions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Insurance [Abstract] | |
Statutory Accounting Practices Disclosure | The following tables present the statutory capital and surplus, and net income under SAP: December 31, Statutory capital and surplus 2020 2019 Property and Casualty Insurance Companies: Domestic $ 1,619,460 $ 1,600,740 Foreign 791,028 760,658 Total $ 2,410,488 $ 2,361,398 Life Insurance Companies: Domestic $ 79,977 $ 53,022 Year Ended December 31, Statutory net income (loss) 2020 2019 2018 Property and Casualty Insurance Companies: Domestic $ 214,313 $ 156,771 $ 16,737 Foreign 174,861 106,734 64,810 Total $ 389,174 $ 263,505 $ 81,547 Life Insurance Companies: Domestic $ 7,963 $ 7,125 $ 9,827 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following is a summary of the elements used in calculating basic and diluted earnings per common share: Year Ended December 31, 2020 2019 2018 Numerator: Net income attributable to NGHC $ 513,331 $ 348,069 $ 207,354 Preferred stock dividends - nonconvertible (31,500) (31,500) (31,500) Preferred stock dividends - convertible (2,100) (2,100) (992) Numerator for basic EPS 479,731 314,469 174,862 Effect of dilutive securities: Preferred stock dividends - convertible 2,100 2,100 992 Numerator for diluted EPS - after assumed conversions $ 481,831 $ 316,569 $ 175,854 Denominator: Denominator for basic EPS - weighted-average shares outstanding 113,511,669 113,199,501 107,659,813 Effect of dilutive securities: Employee stock options 1,739,871 1,833,736 2,053,681 RSUs 385,582 274,262 319,089 Convertible preferred stock 789,473 789,473 789,473 Dilutive potential common shares 2,914,926 2,897,471 3,162,243 Denominator for diluted EPS - weighted-average shares outstanding and assumed conversions 116,426,595 116,096,972 110,822,056 EPS attributable to NGHC common stockholders: Basic EPS $ 4.23 $ 2.78 $ 1.62 Diluted EPS $ 4.14 $ 2.73 $ 1.59 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Results of Operations by Segment | The following tables summarize the results of operations of the operating segments: Year Ended December 31, 2020 Property Accident Corporate Total Underwriting revenues: Gross premium written $ 4,857,631 $ 776,916 $ — $ 5,634,547 Ceded premiums (923,168) (90,535) — (1,013,703) Net premium written 3,934,463 686,381 — 4,620,844 Change in unearned premium (125,310) (914) — (126,224) Net earned premium 3,809,153 685,467 — 4,494,620 Ceding commission income 152,671 (214) — 152,457 Service and fee income 391,702 368,672 — 760,374 Total underwriting revenues 4,353,526 1,053,925 — 5,407,451 Underwriting expenses: Loss and loss adjustment expense 2,505,189 318,893 — 2,824,082 Acquisition costs and other underwriting expenses 681,286 309,283 — 990,569 General and administrative expenses 792,929 242,238 8,026 1,043,193 Total underwriting expenses 3,979,404 870,414 8,026 4,857,844 Underwriting income 374,122 183,511 (8,026) 549,607 Net investment income — — 118,257 118,257 Net gain on investments — — 26,577 26,577 Interest expense — — (33,772) (33,772) Provision for income taxes — — (136,461) (136,461) Net income attributable to noncontrolling interest — — (10,877) (10,877) Net income attributable to NGHC $ 374,122 $ 183,511 $ (44,302) $ 513,331 Year Ended December 31, 2019 Property Accident Corporate Total Underwriting revenues: Gross premium written $ 4,814,463 $ 768,617 $ — $ 5,583,080 Ceded premiums (1,250,448) (108,011) — (1,358,459) Net premium written 3,564,015 660,606 — 4,224,621 Change in unearned premium (108,992) 2,413 — (106,579) Net earned premium 3,455,023 663,019 — 4,118,042 Ceding commission income 227,514 10,939 — 238,453 Service and fee income 392,478 249,487 — 641,965 Total underwriting revenues 4,075,015 923,445 — 4,998,460 Underwriting expenses: Loss and loss adjustment expense 2,543,788 310,680 — 2,854,468 Acquisition costs and other underwriting expenses 605,019 222,348 — 827,367 General and administrative expenses 773,291 254,208 14,273 1,041,772 Total underwriting expenses 3,922,098 787,236 14,273 4,723,607 Underwriting income 152,917 136,209 (14,273) 274,853 Net investment income — — 141,233 141,233 Net gain on investments — — 13,473 13,473 Other income 26,428 26,428 Interest expense — — (51,544) (51,544) Provision for income taxes — — (77,013) (77,013) Net loss attributable to noncontrolling interest — — 20,639 20,639 Net income attributable to NGHC $ 152,917 $ 136,209 $ 58,943 $ 348,069 Year Ended December 31, 2018 Property Accident Corporate Total Underwriting revenues: Gross premium written $ 4,718,730 $ 698,109 $ — $ 5,416,839 Ceded premiums (1,517,556) (71,570) — (1,589,126) Net premium written 3,201,174 626,539 — 3,827,713 Change in unearned premium (85,385) (10,126) — (95,511) Net earned premium 3,115,789 616,413 — 3,732,202 Ceding commission income 217,694 7,003 — 224,697 Service and fee income 375,603 185,980 — 561,583 Total underwriting revenues 3,709,086 809,396 — 4,518,482 Underwriting expenses: Loss and loss adjustment expense 2,340,881 321,345 — 2,662,226 Acquisition costs and other underwriting expenses 550,540 184,726 — 735,266 General and administrative expenses 726,238 201,808 10,000 938,046 Total underwriting expenses 3,617,659 707,879 10,000 4,335,538 Underwriting income 91,427 101,517 (10,000) 182,944 Net investment income — — 119,034 119,034 Net loss on investments — — (29,545) (29,545) Interest expense — — (51,425) (51,425) Provision for income taxes — — (53,484) (53,484) Net loss attributable to noncontrolling interest — — 39,830 39,830 Net income attributable to NGHC $ 91,427 $ 101,517 $ 14,410 $ 207,354 The following tables summarize the financial position of the operating segments: December 31, 2020 Property Accident Corporate Total Premiums and other receivables, net $ 1,304,636 $ 237,474 $ 3,270 $ 1,545,380 Deferred acquisition costs 259,163 26,742 — 285,905 Reinsurance recoverable, net 1,187,855 31,075 — 1,218,930 Prepaid reinsurance premiums 412,950 1,060 — 414,010 Goodwill and Intangible assets, net 416,828 103,225 — 520,053 Prepaid and other assets 45,235 18,322 5,535 69,092 Corporate and other assets — — 6,074,524 6,074,524 Total assets $ 3,626,667 $ 417,898 $ 6,083,329 $ 10,127,894 December 31, 2019 Property Accident Corporate Total Premiums and other receivables, net $ 1,292,813 $ 131,877 $ 4,258 $ 1,428,948 Deferred acquisition costs 239,293 24,230 — 263,523 Reinsurance recoverable, net 1,377,284 17,024 — 1,394,308 Prepaid reinsurance premiums 575,712 35 — 575,747 Goodwill and Intangible assets, net 436,724 108,427 — 545,151 Prepaid and other assets 56,960 32,852 4,830 94,642 Corporate and other assets — — 5,454,215 5,454,215 Total assets $ 3,978,786 $ 314,445 $ 5,463,303 $ 9,756,534 |
Revenue from External Customers by Geographic Areas | The following table summarizes service and fee income by source within each operating segment: Year Ended December 31, 2020 2019 2018 Property Accident Total Property Accident Total Property Accident Total Commission revenue $ 60,103 $ 124,578 $ 184,681 $ 87,486 $ 83,476 $ 170,962 $ 93,235 $ 70,086 $ 163,321 Finance and processing fees 129,327 9,546 138,873 128,302 6,197 134,499 121,058 4,535 125,593 Group health administrative fees — 124,523 124,523 — 100,951 100,951 — 79,411 79,411 Installment fees 104,915 — 104,915 97,997 — 97,997 92,785 — 92,785 Late payment fees 32,377 59 32,436 34,210 309 34,519 33,765 86 33,851 Other service and fee income 64,980 109,966 174,946 44,483 58,554 103,037 34,760 31,862 66,622 Total $ 391,702 $ 368,672 $ 760,374 $ 392,478 $ 249,487 $ 641,965 $ 375,603 $ 185,980 $ 561,583 NGHC $ 385,391 $ 368,672 $ 754,063 $ 386,723 $ 249,487 $ 636,210 $ 369,852 $ 185,980 $ 555,832 Reciprocal Exchanges 6,311 — 6,311 5,755 — 5,755 5,751 — 5,751 Total $ 391,702 $ 368,672 $ 760,374 $ 392,478 $ 249,487 $ 641,965 $ 375,603 $ 185,980 $ 561,583 |
Revenue from External Customers by Product Type | The following tables show a summary of premiums and fee income by product line: Year Ended December 31, Gross Premium Written 2020 2019 2018 Property and Casualty Personal Auto $ 2,817,396 $ 2,721,202 $ 2,637,176 Homeowners 751,918 718,819 688,006 RV/Packaged 215,138 212,746 208,394 Small Business Auto 251,328 315,569 319,299 Lender-placed Insurance 402,768 342,267 363,056 Other 45,482 56,413 53,876 Total Property and Casualty 4,484,030 4,367,016 4,269,807 Accident and Health Group 366,847 288,549 239,729 Individual 410,069 340,731 308,122 International — 139,337 150,258 Total Accident and Health 776,916 768,617 698,109 Total NGHC $ 5,260,946 $ 5,135,633 $ 4,967,916 Reciprocal Exchanges Personal Auto $ 131,286 $ 152,688 $ 153,129 Homeowners 238,972 290,972 291,907 Other 3,343 3,787 3,887 Total Reciprocal Exchanges $ 373,601 $ 447,447 $ 448,923 Total Gross Premium Written $ 5,634,547 $ 5,583,080 $ 5,416,839 Year Ended December 31, Net Premium Written 2020 2019 2018 Property and Casualty Personal Auto $ 2,475,384 $ 2,260,385 $ 2,016,858 Homeowners 521,331 404,278 331,120 RV/Packaged 209,479 198,737 206,740 Small Business Auto 192,859 249,067 233,456 Lender-placed Insurance 314,642 198,171 202,069 Other 19,552 18,905 27,366 Total Property and Casualty 3,733,247 3,329,543 3,017,609 Accident and Health Group 284,189 231,388 197,386 Individual 402,192 340,049 308,065 International — 89,169 121,088 Total Accident and Health 686,381 660,606 626,539 Total NGHC $ 4,419,628 $ 3,990,149 $ 3,644,148 Reciprocal Exchanges Personal Auto $ 91,182 $ 134,958 $ 61,759 Homeowners 108,624 98,009 120,875 Other 1,410 1,505 931 Total Reciprocal Exchanges $ 201,216 $ 234,472 $ 183,565 Total Net Premium Written $ 4,620,844 $ 4,224,621 $ 3,827,713 Year Ended December 31, Net Earned Premium 2020 2019 2018 Property and Casualty Personal Auto $ 2,403,879 $ 2,190,748 $ 1,927,667 Homeowners 452,739 405,306 329,850 RV/Packaged 200,854 195,639 197,258 Small Business Auto 216,888 252,359 237,587 Lender-placed Insurance 293,353 182,231 215,811 Other 20,191 18,509 20,855 Total Property and Casualty 3,587,904 3,244,792 2,929,028 Accident and Health Group 284,197 231,398 197,406 Individual 401,270 340,251 307,952 International — 91,370 111,055 Total Accident and Health 685,467 663,019 616,413 Total NGHC $ 4,273,371 $ 3,907,811 $ 3,545,441 Reciprocal Exchanges Personal Auto $ 111,353 $ 106,549 $ 59,923 Homeowners 108,629 101,964 125,806 Other 1,267 1,718 1,032 Total Reciprocal Exchanges $ 221,249 $ 210,231 $ 186,761 Total Net Earned Premium $ 4,494,620 $ 4,118,042 $ 3,732,202 Year Ended December 31, Fee Income 2020 2019 2018 Property and Casualty Service and Fee Income $ 385,391 $ 386,723 $ 369,852 Ceding Commission Income 110,377 164,013 160,945 Total Property and Casualty 495,768 550,736 530,797 Accident and Health Service and Fee Income Group 172,526 134,206 104,504 Individual 11,062 9,650 9,304 Third-Party Fee 185,084 105,631 72,172 Total Service and Fee Income 368,672 249,487 185,980 Ceding Commission Income (214) 10,939 7,003 Total Accident and Health 368,458 260,426 192,983 Total NGHC $ 864,226 $ 811,162 $ 723,780 Reciprocal Exchanges Service and Fee Income $ 6,311 $ 5,755 $ 5,751 Ceding Commission Income 42,294 63,501 56,749 Total Reciprocal Exchanges $ 48,605 $ 69,256 $ 62,500 Total Fee Income $ 912,831 $ 880,418 $ 786,280 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Selected Quarterly Financial Information | The following tables summarize quarterly financial data: 2020 March 31, June 30, September 30, December 31, Total revenues $ 1,328,334 $ 1,329,132 $ 1,443,009 $ 1,451,810 Total expenses 1,199,589 1,104,012 1,298,712 1,289,303 Provision for income taxes 28,172 50,507 27,428 30,354 Net income 100,573 174,613 116,869 132,153 Net income attributable to NGHC 100,759 166,574 109,969 136,029 Net income attributable to NGHC common stockholders 92,884 157,649 102,094 127,104 Basic EPS $ 0.82 $ 1.39 $ 0.90 $ 1.12 Diluted EPS $ 0.80 $ 1.37 $ 0.88 $ 1.10 2019 March 31, June 30, September 30, December 31, Total revenues $ 1,232,665 $ 1,269,652 $ 1,308,172 $ 1,369,105 Total expenses 1,124,820 1,170,353 1,231,186 1,248,792 Provision for income taxes 22,506 22,241 16,747 15,519 Net income 85,339 77,058 60,239 104,794 Net income attributable to NGHC 91,758 77,876 71,154 107,281 Net income attributable to NGHC common stockholders 83,883 68,951 63,279 98,356 Basic EPS $ 0.74 $ 0.61 $ 0.56 $ 0.87 Diluted EPS $ 0.72 $ 0.60 $ 0.54 $ 0.85 |
Organization (Details)
Organization (Details) | Dec. 31, 2020state |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of states in which the Company is licensed to operate | 50 |
Significant Accounting Polici_4
Significant Accounting Policies - Premiums and Other Receivables (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Premium receivables, period for recognition, minimum | 6 months |
Premium receivables, period for recognition, maximum | 12 months |
Significant Accounting Polici_5
Significant Accounting Policies - Stock Compensation Expense (Details) - Restricted Stock Units (RSUs) | 12 Months Ended |
Dec. 31, 2020 | |
Minimum | |
Share-based Compensation | |
Award vesting period | 3 years |
Maximum | |
Share-based Compensation | |
Award vesting period | 4 years |
Significant Accounting Polici_6
Significant Accounting Policies - Premises and Equipment (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Buildings and improvements | |
Property, Plant and Equipment | |
Estimated useful life | 30 years |
Other equipment | Minimum | |
Property, Plant and Equipment | |
Estimated useful life | 3 years |
Other equipment | Maximum | |
Property, Plant and Equipment | |
Estimated useful life | 20 years |
Hardware and software | Minimum | |
Property, Plant and Equipment | |
Estimated useful life | 3 years |
Hardware and software | Maximum | |
Property, Plant and Equipment | |
Estimated useful life | 5 years |
Significant Accounting Polici_7
Significant Accounting Policies - Recent Accounting Standards, Adopted (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle | ||
Cumulative-effect adjustment of change in accounting principles | $ 8,830 | |
Retained Earnings | ||
New Accounting Pronouncements or Change in Accounting Principle | ||
Cumulative-effect adjustment of change in accounting principles | $ 8,794 | |
Accounting Standards Update 2016-13 | ||
New Accounting Pronouncements or Change in Accounting Principle | ||
Cumulative-effect adjustment of change in accounting principles | $ (1,010) | |
Accounting Standards Update 2016-13 | Retained Earnings | ||
New Accounting Pronouncements or Change in Accounting Principle | ||
Cumulative-effect adjustment of change in accounting principles | (863) | |
Accounting Standards Update 2016-13 | Noncontrolling Interest | ||
New Accounting Pronouncements or Change in Accounting Principle | ||
Cumulative-effect adjustment of change in accounting principles | $ (147) |
Allowance for Expected Credit_3
Allowance for Expected Credit Losses - Premiums and Other receivables - Changes in Allowance for Expected Credit Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle | ||
Premiums and other receivables, net | $ 1,545,380 | $ 1,428,948 |
Premium Receivable, Allowance for Credit Loss | ||
Balance, beginning of the year | 24,067 | |
Current period provision for expected credit losses | 94,374 | |
Write-offs of uncollectible premiums and other receivables | (96,422) | |
Balance, end of the year | 22,781 | |
Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2020 | ||
Premium Receivable, Allowance for Credit Loss | ||
Balance, beginning of the year | $ 762 |
Allowance for Expected Credit_4
Allowance for Expected Credit Losses - Reinsurance Recoverable - Changes In Allowance for Expected Credit Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle | ||
Reinsurance recoverable, net | $ 1,218,930 | $ 1,394,308 |
Reinsurance Recoverable, Allowance for Credit Loss | ||
Balance, beginning of the year | 0 | |
Current period provision for expected credit losses | 293 | |
Balance, end of the year | 810 | |
Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2020 | ||
Reinsurance Recoverable, Allowance for Credit Loss | ||
Balance, beginning of the year | $ 517 |
Investments - Debt Securities,
Investments - Debt Securities, Available-for-sale (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale | ||
Amortized Cost | $ 4,234,213,000 | $ 4,376,691,000 |
Allowance for Credit Losses | 0 | |
Gross Unrealized Gains | 265,535,000 | 110,430,000 |
Gross Unrealized Losses | (2,618,000) | (10,763,000) |
Fair Value | 4,497,130,000 | 4,476,358,000 |
Reciprocal Exchanges | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | 305,075,000 | 319,190,000 |
Allowance for Credit Losses | 0 | |
Gross Unrealized Gains | 5,397,000 | 5,479,000 |
Gross Unrealized Losses | (257,000) | (420,000) |
Fair Value | 310,215,000 | 324,249,000 |
NGHC | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | 3,929,138,000 | 4,057,501,000 |
Allowance for Credit Losses | 0 | |
Gross Unrealized Gains | 260,138,000 | 104,951,000 |
Gross Unrealized Losses | (2,361,000) | (10,343,000) |
Fair Value | 4,186,915,000 | 4,152,109,000 |
U.S. Treasury | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | 51,749,000 | 65,037,000 |
Allowance for Credit Losses | 0 | |
Gross Unrealized Gains | 3,199,000 | 1,992,000 |
Gross Unrealized Losses | 0 | (23,000) |
Fair Value | 54,948,000 | 67,006,000 |
Federal agencies | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | 258,000 | 3,907,000 |
Allowance for Credit Losses | 0 | |
Gross Unrealized Gains | 3,000 | 8,000 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 261,000 | 3,915,000 |
States and political subdivision bonds | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | 304,687,000 | 298,345,000 |
Allowance for Credit Losses | 0 | |
Gross Unrealized Gains | 17,758,000 | 4,778,000 |
Gross Unrealized Losses | (4,000) | (1,441,000) |
Fair Value | 322,441,000 | 301,682,000 |
Foreign government | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | 1,764,000 | 1,762,000 |
Allowance for Credit Losses | 0 | |
Gross Unrealized Gains | 119,000 | 40,000 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 1,883,000 | 1,802,000 |
Corporate bonds | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | 1,992,193,000 | 1,859,736,000 |
Allowance for Credit Losses | 0 | |
Gross Unrealized Gains | 141,234,000 | 59,184,000 |
Gross Unrealized Losses | (126,000) | (2,357,000) |
Fair Value | 2,133,301,000 | 1,916,563,000 |
Residential mortgage-backed securities | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | 1,064,041,000 | 1,265,830,000 |
Allowance for Credit Losses | 0 | |
Gross Unrealized Gains | 42,597,000 | 15,747,000 |
Gross Unrealized Losses | (222,000) | (4,117,000) |
Fair Value | 1,106,416,000 | 1,277,460,000 |
Commercial mortgage-backed securities | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | 596,408,000 | 585,044,000 |
Allowance for Credit Losses | 0 | |
Gross Unrealized Gains | 58,476,000 | 27,261,000 |
Gross Unrealized Losses | (252,000) | (112,000) |
Fair Value | 654,632,000 | 612,193,000 |
Asset-backed securities | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | 27,988,000 | 74,465,000 |
Allowance for Credit Losses | 0 | |
Gross Unrealized Gains | 1,140,000 | 1,194,000 |
Gross Unrealized Losses | (236,000) | (48,000) |
Fair Value | 28,892,000 | 75,611,000 |
Structured securities | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | 195,125,000 | 222,565,000 |
Allowance for Credit Losses | 0 | |
Gross Unrealized Gains | 1,009,000 | 226,000 |
Gross Unrealized Losses | (1,778,000) | (2,665,000) |
Fair Value | $ 194,356,000 | $ 220,126,000 |
Investments - Debt Securities M
Investments - Debt Securities Maturities (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Amortized Cost | |
Due in one year or less | $ 61,921 |
Due after one year through five years | 1,075,578 |
Due after five years through ten years | 1,115,826 |
Due after ten years | 292,451 |
Mortgage-backed securities | 1,688,437 |
Total | 4,234,213 |
Fair Value | |
Due in one year or less | 62,731 |
Due after one year through five years | 1,146,530 |
Due after five years through ten years | 1,194,694 |
Due after ten years | 303,235 |
Mortgage-backed securities | 1,789,940 |
Total | 4,497,130 |
Reciprocal Exchanges | |
Amortized Cost | |
Due in one year or less | 0 |
Due after one year through five years | 69,060 |
Due after five years through ten years | 65,495 |
Due after ten years | 22,214 |
Mortgage-backed securities | 148,306 |
Total | 305,075 |
Fair Value | |
Due in one year or less | 0 |
Due after one year through five years | 71,231 |
Due after five years through ten years | 67,259 |
Due after ten years | 22,368 |
Mortgage-backed securities | 149,357 |
Total | 310,215 |
NGHC | |
Amortized Cost | |
Due in one year or less | 61,921 |
Due after one year through five years | 1,006,518 |
Due after five years through ten years | 1,050,331 |
Due after ten years | 270,237 |
Mortgage-backed securities | 1,540,131 |
Total | 3,929,138 |
Fair Value | |
Due in one year or less | 62,731 |
Due after one year through five years | 1,075,299 |
Due after five years through ten years | 1,127,435 |
Due after ten years | 280,867 |
Mortgage-backed securities | 1,640,583 |
Total | $ 4,186,915 |
Investments - Gross Unrealized
Investments - Gross Unrealized Losses (Details) | Dec. 31, 2020USD ($)security | Dec. 31, 2019USD ($)security |
Debt Securities, Available-for-sale | ||
Less Than 12 Months, Fair Value | $ 195,305,000 | $ 1,187,942,000 |
Less Than 12 Months, Unrealized Losses | (1,346,000) | (7,993,000) |
12 Months or More, Fair Value | 44,057,000 | 124,587,000 |
12 Months or More, Unrealized Losses | (1,272,000) | (2,770,000) |
Total, Fair Value | 239,362,000 | 1,312,529,000 |
Total, Unrealized Losses | $ (2,618,000) | $ (10,763,000) |
Number of securities with gross unrealized loss | security | 134 | 1,337 |
Percent of amortized cost | 25.00% | 25.00% |
Debt securities, available-for-sale, allowance for expected credit losses | $ 0 | |
Reciprocal Exchanges | ||
Debt Securities, Available-for-sale | ||
Less Than 12 Months, Fair Value | 57,677,000 | $ 83,698,000 |
Less Than 12 Months, Unrealized Losses | (211,000) | (339,000) |
12 Months or More, Fair Value | 3,954,000 | 6,906,000 |
12 Months or More, Unrealized Losses | (46,000) | (81,000) |
Total, Fair Value | 61,631,000 | 90,604,000 |
Total, Unrealized Losses | (257,000) | (420,000) |
Debt securities, available-for-sale, allowance for expected credit losses | 0 | |
NGHC | ||
Debt Securities, Available-for-sale | ||
Less Than 12 Months, Fair Value | 137,628,000 | 1,104,244,000 |
Less Than 12 Months, Unrealized Losses | (1,135,000) | (7,654,000) |
12 Months or More, Fair Value | 40,103,000 | 117,681,000 |
12 Months or More, Unrealized Losses | (1,226,000) | (2,689,000) |
Total, Fair Value | 177,731,000 | 1,221,925,000 |
Total, Unrealized Losses | (2,361,000) | (10,343,000) |
Debt securities, available-for-sale, allowance for expected credit losses | 0 | |
U.S. Treasury | ||
Debt Securities, Available-for-sale | ||
Less Than 12 Months, Fair Value | 19,903,000 | |
Less Than 12 Months, Unrealized Losses | (23,000) | |
12 Months or More, Fair Value | 500,000 | |
12 Months or More, Unrealized Losses | 0 | |
Total, Fair Value | 20,403,000 | |
Total, Unrealized Losses | (23,000) | |
Debt securities, available-for-sale, allowance for expected credit losses | 0 | |
States and political subdivision bonds | ||
Debt Securities, Available-for-sale | ||
Less Than 12 Months, Fair Value | 1,111,000 | 106,103,000 |
Less Than 12 Months, Unrealized Losses | (4,000) | (1,415,000) |
12 Months or More, Fair Value | 0 | 2,580,000 |
12 Months or More, Unrealized Losses | 0 | (26,000) |
Total, Fair Value | 1,111,000 | 108,683,000 |
Total, Unrealized Losses | (4,000) | (1,441,000) |
Debt securities, available-for-sale, allowance for expected credit losses | 0 | |
Corporate bonds | ||
Debt Securities, Available-for-sale | ||
Less Than 12 Months, Fair Value | 29,161,000 | 586,817,000 |
Less Than 12 Months, Unrealized Losses | (126,000) | (2,253,000) |
12 Months or More, Fair Value | 0 | 5,976,000 |
12 Months or More, Unrealized Losses | 0 | (104,000) |
Total, Fair Value | 29,161,000 | 592,793,000 |
Total, Unrealized Losses | (126,000) | (2,357,000) |
Debt securities, available-for-sale, allowance for expected credit losses | 0 | |
Residential mortgage-backed securities | ||
Debt Securities, Available-for-sale | ||
Less Than 12 Months, Fair Value | 58,742,000 | 410,484,000 |
Less Than 12 Months, Unrealized Losses | (222,000) | (4,074,000) |
12 Months or More, Fair Value | 0 | 3,983,000 |
12 Months or More, Unrealized Losses | 0 | (43,000) |
Total, Fair Value | 58,742,000 | 414,467,000 |
Total, Unrealized Losses | (222,000) | (4,117,000) |
Debt securities, available-for-sale, allowance for expected credit losses | 0 | |
Commercial mortgage-backed securities | ||
Debt Securities, Available-for-sale | ||
Less Than 12 Months, Fair Value | 40,891,000 | 18,250,000 |
Less Than 12 Months, Unrealized Losses | (252,000) | (105,000) |
12 Months or More, Fair Value | 0 | 748,000 |
12 Months or More, Unrealized Losses | 0 | (7,000) |
Total, Fair Value | 40,891,000 | 18,998,000 |
Total, Unrealized Losses | (252,000) | (112,000) |
Debt securities, available-for-sale, allowance for expected credit losses | 0 | |
Asset-backed securities | ||
Debt Securities, Available-for-sale | ||
Less Than 12 Months, Fair Value | 5,041,000 | 5,406,000 |
Less Than 12 Months, Unrealized Losses | (228,000) | (29,000) |
12 Months or More, Fair Value | 151,000 | 920,000 |
12 Months or More, Unrealized Losses | (8,000) | (19,000) |
Total, Fair Value | 5,192,000 | 6,326,000 |
Total, Unrealized Losses | (236,000) | (48,000) |
Debt securities, available-for-sale, allowance for expected credit losses | 0 | |
Structured securities | ||
Debt Securities, Available-for-sale | ||
Less Than 12 Months, Fair Value | 60,359,000 | 40,979,000 |
Less Than 12 Months, Unrealized Losses | (514,000) | (94,000) |
12 Months or More, Fair Value | 43,906,000 | 109,880,000 |
12 Months or More, Unrealized Losses | (1,264,000) | (2,571,000) |
Total, Fair Value | 104,265,000 | 150,859,000 |
Total, Unrealized Losses | (1,778,000) | $ (2,665,000) |
Debt securities, available-for-sale, allowance for expected credit losses | $ 0 |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net Investment Income | |||
Investment income | $ 123,143 | $ 145,807 | $ 123,333 |
Investment expenses | (4,886) | (4,574) | (4,299) |
Net investment income | 118,257 | 141,233 | 119,034 |
Reciprocal Exchanges | |||
Net Investment Income | |||
Net investment income | 7,256 | 8,638 | 8,875 |
NGHC | |||
Net Investment Income | |||
Net investment income | 111,001 | 132,595 | 110,159 |
Cash and short-term investments | |||
Net Investment Income | |||
Investment Income | 542 | 4,075 | 1,659 |
Debt securities, available-for-sale | |||
Net Investment Income | |||
Investment Income | 119,873 | 124,379 | 107,077 |
Other | |||
Net Investment Income | |||
Other, net | 2,728 | 17,353 | 14,597 |
Related parties | Other | |||
Net Investment Income | |||
Other, net | $ (2,230) | $ 7,718 | $ 4,876 |
Investments - Net Gain (Loss) o
Investments - Net Gain (Loss) on Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Gain (Loss) on Investments | |||
Other, net | $ (1,606) | $ (6,248) | $ (11,275) |
Net loss on investments | 26,577 | 13,473 | (29,545) |
Reciprocal Exchanges | |||
Gain (Loss) on Investments | |||
Net loss on investments | 12,432 | (130) | (3,366) |
NGHC | |||
Gain (Loss) on Investments | |||
Net loss on investments | 14,145 | 13,603 | (26,179) |
Debt securities, available-for-sale | |||
Gain (Loss) on Investments | |||
Gross gains | 29,666 | 23,178 | 4,590 |
Gross losses | (1,483) | (3,457) | (22,860) |
Net realized gain (loss) on debt securities, available-for-sale | $ 28,183 | $ 19,721 | $ (18,270) |
Investments - Credit Quality of
Investments - Credit Quality of Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt securities, available-for-sale | Reciprocal Exchanges | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | $ 305,075 | $ 319,190 |
Fair Value | $ 310,215 | $ 324,249 |
Percentage | 100.00% | 100.00% |
Debt securities, available-for-sale | NGHC | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | $ 3,929,138 | $ 4,057,501 |
Fair Value | $ 4,186,915 | $ 4,152,109 |
Percentage | 100.00% | 100.00% |
U.S. Treasury | Reciprocal Exchanges | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | $ 14,441 | $ 12,929 |
Fair Value | $ 14,734 | $ 13,407 |
Percentage | 4.70% | 4.10% |
U.S. Treasury | NGHC | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | $ 37,307 | $ 52,108 |
Fair Value | $ 40,213 | $ 53,599 |
Percentage | 1.00% | 1.30% |
Debt Securities and Preferred Securities, Excluding U.S. Treasury Securities | AAA | Reciprocal Exchanges | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | $ 28,232 | $ 20,947 |
Fair Value | $ 28,496 | $ 21,555 |
Percentage | 9.20% | 6.60% |
Debt Securities and Preferred Securities, Excluding U.S. Treasury Securities | AAA | NGHC | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | $ 523,929 | $ 515,869 |
Fair Value | $ 568,028 | $ 537,508 |
Percentage | 13.60% | 12.90% |
Debt Securities and Preferred Securities, Excluding U.S. Treasury Securities | AA, AA+, AA- | Reciprocal Exchanges | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | $ 150,794 | $ 120,113 |
Fair Value | $ 152,059 | $ 121,720 |
Percentage | 49.00% | 37.50% |
Debt Securities and Preferred Securities, Excluding U.S. Treasury Securities | AA, AA+, AA- | NGHC | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | $ 1,428,942 | $ 1,677,787 |
Fair Value | $ 1,507,760 | $ 1,697,220 |
Percentage | 36.00% | 40.90% |
Debt Securities and Preferred Securities, Excluding U.S. Treasury Securities | A, A+, A- | Reciprocal Exchanges | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | $ 42,283 | $ 116,747 |
Fair Value | $ 43,605 | $ 119,041 |
Percentage | 14.10% | 36.70% |
Debt Securities and Preferred Securities, Excluding U.S. Treasury Securities | A, A+, A- | NGHC | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | $ 1,106,964 | $ 954,312 |
Fair Value | $ 1,167,933 | $ 976,468 |
Percentage | 27.90% | 23.50% |
Debt Securities and Preferred Securities, Excluding U.S. Treasury Securities | BBB, BBB+, BBB- | Reciprocal Exchanges | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | $ 69,325 | $ 48,021 |
Fair Value | $ 71,321 | $ 48,093 |
Percentage | 23.00% | 14.80% |
Debt Securities and Preferred Securities, Excluding U.S. Treasury Securities | BBB, BBB+, BBB- | NGHC | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | $ 818,523 | $ 795,594 |
Fair Value | $ 888,515 | $ 823,239 |
Percentage | 21.20% | 19.80% |
Debt Securities and Preferred Securities, Excluding U.S. Treasury Securities | BB+ and lower | Reciprocal Exchanges | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | $ 0 | $ 433 |
Fair Value | $ 0 | $ 433 |
Percentage | 0.00% | 0.30% |
Debt Securities and Preferred Securities, Excluding U.S. Treasury Securities | BB+ and lower | NGHC | ||
Debt Securities, Available-for-sale | ||
Amortized Cost | $ 13,473 | $ 61,831 |
Fair Value | $ 14,466 | $ 64,075 |
Percentage | 0.30% | 1.60% |
Investments - Investment Qualit
Investments - Investment Quality Summary (Details) - Corporate Debt Securities - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Securities, Available-for-sale | ||
Fair Value | $ 2,133,301 | $ 1,916,563 |
% of Corporate Bonds Portfolio | 100.00% | 100.00% |
Reciprocal Exchanges | ||
Debt Securities, Available-for-sale | ||
Fair Value | $ 114,976 | $ 195,601 |
% of Corporate Bonds Portfolio | 5.40% | 10.20% |
NGHC | ||
Debt Securities, Available-for-sale | ||
Fair Value | $ 2,018,325 | $ 1,720,962 |
% of Corporate Bonds Portfolio | 94.60% | 89.80% |
Financial Institutions | ||
Debt Securities, Available-for-sale | ||
Fair Value | $ 863,046 | $ 785,910 |
% of Corporate Bonds Portfolio | 40.50% | 41.00% |
Industrials | ||
Debt Securities, Available-for-sale | ||
Fair Value | $ 1,208,646 | $ 1,083,959 |
% of Corporate Bonds Portfolio | 56.70% | 56.60% |
Utilities And Other | ||
Debt Securities, Available-for-sale | ||
Fair Value | $ 61,609 | $ 46,694 |
% of Corporate Bonds Portfolio | 2.80% | 2.40% |
AAA | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 0.30% | 0.70% |
AAA | Reciprocal Exchanges | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 0.00% | 0.40% |
AAA | NGHC | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 0.30% | 0.30% |
AAA | Financial Institutions | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 0.00% | 0.00% |
AAA | Industrials | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 0.30% | 0.70% |
AAA | Utilities And Other | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 0.00% | 0.00% |
AA, AA+, AA- | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 5.50% | 6.30% |
AA, AA+, AA- | Reciprocal Exchanges | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 0.00% | 1.20% |
AA, AA+, AA- | NGHC | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 5.50% | 5.10% |
AA, AA+, AA- | Financial Institutions | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 2.30% | 3.60% |
AA, AA+, AA- | Industrials | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 3.20% | 2.70% |
AA, AA+, AA- | Utilities And Other | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 0.00% | 0.00% |
A, A+, A- | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 51.20% | 50.10% |
A, A+, A- | Reciprocal Exchanges | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 2.00% | 6.10% |
A, A+, A- | NGHC | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 49.20% | 44.00% |
A, A+, A- | Financial Institutions | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 24.10% | 25.00% |
A, A+, A- | Industrials | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 25.50% | 24.10% |
A, A+, A- | Utilities And Other | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 1.60% | 1.00% |
BBB, BBB+, BBB- | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 42.90% | 42.50% |
BBB, BBB+, BBB- | Reciprocal Exchanges | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 3.40% | 2.50% |
BBB, BBB+, BBB- | NGHC | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 39.50% | 40.00% |
BBB, BBB+, BBB- | Financial Institutions | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 14.10% | 12.10% |
BBB, BBB+, BBB- | Industrials | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 27.60% | 29.00% |
BBB, BBB+, BBB- | Utilities And Other | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 1.20% | 1.40% |
BB+ and lower | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 0.10% | 0.40% |
BB+ and lower | Reciprocal Exchanges | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 0.00% | 0.00% |
BB+ and lower | NGHC | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 0.10% | 0.40% |
BB+ and lower | Financial Institutions | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 0.00% | 0.30% |
BB+ and lower | Industrials | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 0.10% | 0.10% |
BB+ and lower | Utilities And Other | ||
Debt Securities, Available-for-sale | ||
Investment quality - corporate bond holdings and industry concentrations | 0.00% | 0.00% |
Investments - Cash and Cash Equ
Investments - Cash and Cash Equivalents, Restricted Cash and Restricted Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Investments, Debt and Equity Securities [Abstract] | ||||
Cash and cash equivalents | $ 662,772 | $ 135,942 | ||
Restricted cash and cash equivalents | 36,995 | 28,521 | ||
Total cash, cash equivalents and restricted cash | 699,767 | 164,463 | $ 233,583 | $ 357,484 |
Securities on deposit with state regulatory authorities | 83,764 | 74,061 | ||
Restricted investments to trusts in certain reinsurance transactions | 26,650 | 49,502 | ||
Total restricted investments | $ 110,414 | $ 123,563 |
Investments - Other Investments
Investments - Other Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Investment | ||
Other investments | $ 281,055 | $ 311,287 |
Equity Method Investments | ||
Investment | ||
Other investments | 136,201 | 143,511 |
Notes Receivable | ||
Investment | ||
Other investments | 130,784 | 129,229 |
Long-term Certificates of Deposit (CDs), at cost | ||
Investment | ||
Other investments | 134 | 20,150 |
Investments, at fair value | ||
Investment | ||
Other investments | 5,936 | 9,365 |
Investments, at cost or amortized cost | ||
Investment | ||
Other investments | 7,960 | 8,962 |
Related parties | ||
Investment | ||
Other investments | 231,927 | 238,841 |
Related parties | Equity Method Investments | ||
Investment | ||
Other investments | 101,143 | 109,612 |
Related parties | Notes Receivable | ||
Investment | ||
Other investments | $ 130,824 | $ 129,299 |
Investments - Related Parties -
Investments - Related Parties - LSC Entity (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020USD ($)contract | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
LSC Entity | AmTrust Financial Services, Inc. | |||
Schedule of Equity Method Investments | |||
Equity method investment, ownership percentage | 50.00% | ||
LSC Entities investment in LP | |||
Schedule of Equity Method Investments | |||
Equity method investment, ownership percentage | 30.00% | ||
VIE, Not primary beneficiary | LSC Entity | Related parties | |||
Schedule of Equity Method Investments | |||
Equity method investment, ownership percentage | 50.00% | ||
Life settlement contracts, investment method, number of contracts | contract | 1 | ||
Equity method investments | $ 44,847 | $ 49,477 | $ 48,324 |
Earnings (losses) of equity method investments | (5,630) | 3,395 | 4,276 |
Payments to Acquire Equity Method Investments | 1,000 | 258 | 2,000 |
Distributions | $ 0 | $ 2,500 | $ 118,635 |
Investments - Related Parties_2
Investments - Related Parties - 800 Superior, LLC (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule of Equity Method Investments | |||
Rent expense | $ 35,723 | ||
800 Superior, LLC | Related parties | |||
Schedule of Equity Method Investments | |||
Rent expense | $ 3,045 | $ 2,967 | 2,889 |
800 Superior, LLC | Related parties | VIE, Not primary beneficiary | |||
Schedule of Equity Method Investments | |||
Equity method investments | 9,559 | 9,365 | |
Earnings (losses) of equity method investments | 194 | 1,953 | (531) |
Payments to Acquire Equity Method Investments | $ 0 | $ 2,287 | $ 0 |
800 Superior, LLC | AmTrust Financial Services, Inc. | Related parties | VIE, Not primary beneficiary | |||
Schedule of Equity Method Investments | |||
Equity method investment, ownership percentage | 50.00% |
Investments - Related Parties_3
Investments - Related Parties - North Dearborn Building Company, L.P. (Details) - North Dearborn Building Company, L.P. - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related parties | VIE, Not primary beneficiary | |||
Schedule of Equity Method Investments | |||
Equity method investments | $ 5,744 | $ 5,317 | |
Earnings (losses) of equity method investments | 967 | (357) | $ (243) |
Distributions | $ 540 | $ 540 | $ 1,125 |
AmTrust Financial Services, Inc. | Related parties | VIE, Not primary beneficiary | |||
Schedule of Equity Method Investments | |||
Equity method investment, ownership percentage | 45.00% | ||
NA Advisors GP LLC | |||
Schedule of Equity Method Investments | |||
Limited partnership, percentage participation | 10.00% | ||
Limited partnership, percentage of profit interest | 10.00% |
Investments - Related Parties_4
Investments - Related Parties - 4455 LBJ Freeway, LLC (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule of Equity Method Investments | |||
Rent expense | $ 35,723 | ||
4455 LBJ Freeway, LLC | Related parties | |||
Schedule of Equity Method Investments | |||
Equity method investments | $ 1,677 | $ 1,074 | |
4455 LBJ Freeway, LLC | Related parties | VIE, Not primary beneficiary | |||
Schedule of Equity Method Investments | |||
Earnings (losses) of equity method investments | $ 603 | 281 | 53 |
4455 LBJ Freeway, LLC | Related parties | AmTrust Financial Services, Inc. | VIE, Not primary beneficiary | |||
Schedule of Equity Method Investments | |||
Equity method investment, ownership percentage | 50.00% | ||
4455 LBJ Freeway, LLC | Related parties | 4455 LBJ Freeway, LLC | |||
Schedule of Equity Method Investments | |||
Rent expense | $ 2,482 | $ 2,422 | $ 2,225 |
Investments - Related Parties_5
Investments - Related Parties - Illinois Center Building, L.P. (Details) - Illinois Center Building, L.P. - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related parties | VIE, Not primary beneficiary | |||
Schedule of Equity Method Investments | |||
Equity method investments | $ 39,316 | $ 44,379 | |
Earnings (losses) of equity method investments | (3,188) | (2,321) | $ (3,390) |
Payments to Acquire Equity Method Investments | 0 | 1,125 | 2,250 |
Distributions | $ 1,875 | $ 0 | $ 0 |
AmTrust Financial Services, Inc. | Related parties | VIE, Not primary beneficiary | |||
Schedule of Equity Method Investments | |||
Equity method investment, ownership percentage | 37.50% | ||
ACP Re | |||
Schedule of Equity Method Investments | |||
Limited partnership, percentage participation | 15.00% | ||
NA Advisors GP LLC | |||
Schedule of Equity Method Investments | |||
Limited partnership, percentage participation | 10.00% | ||
Limited partnership, percentage of profit interest | 10.00% |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | $ 4,497,130 | $ 4,476,358 |
Short-term investments | 191,086 | 67,353 |
Other investments | 281,055 | 311,287 |
Reciprocal Exchanges | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 310,215 | 324,249 |
Short-term investments | 26,887 | 5,245 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 4,497,130 | 4,476,358 |
Total | 4,694,152 | 4,553,076 |
Recurring | Reciprocal Exchanges | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Total | 337,102 | 329,494 |
Level 1 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 55,209 | 70,921 |
Total | 229,202 | 135,755 |
Level 1 | Recurring | Reciprocal Exchanges | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Total | 41,620 | 19,153 |
Level 2 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 4,437,077 | 4,394,009 |
Total | 4,457,077 | 4,401,409 |
Level 2 | Recurring | Reciprocal Exchanges | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Total | 295,482 | 310,341 |
Level 3 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 4,844 | 11,428 |
Total | 7,873 | 15,912 |
Level 3 | Recurring | Reciprocal Exchanges | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Total | 0 | 0 |
NGHC | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 4,186,915 | 4,152,109 |
NGHC | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Total | 4,357,050 | 4,223,582 |
NGHC | Level 1 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Total | 187,582 | 116,602 |
NGHC | Level 2 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Total | 4,161,595 | 4,091,068 |
NGHC | Level 3 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Total | 7,873 | 15,912 |
U.S. Treasury | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 54,948 | 67,006 |
U.S. Treasury | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 54,948 | 67,006 |
U.S. Treasury | Level 1 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 54,948 | 67,006 |
U.S. Treasury | Level 2 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 0 | 0 |
U.S. Treasury | Level 3 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 0 | 0 |
Federal agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 261 | 3,915 |
Federal agencies | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 261 | 3,915 |
Federal agencies | Level 1 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 261 | 3,915 |
Federal agencies | Level 2 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 0 | 0 |
Federal agencies | Level 3 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 0 | 0 |
States and political subdivision bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 322,441 | 301,682 |
States and political subdivision bonds | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 322,441 | 301,682 |
States and political subdivision bonds | Level 1 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 0 | 0 |
States and political subdivision bonds | Level 2 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 319,921 | 298,582 |
States and political subdivision bonds | Level 3 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 2,520 | 3,100 |
Foreign government | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 1,883 | 1,802 |
Foreign government | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 1,883 | 1,802 |
Foreign government | Level 1 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 0 | 0 |
Foreign government | Level 2 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 1,883 | 1,802 |
Foreign government | Level 3 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 0 | 0 |
Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 2,133,301 | 1,916,563 |
Corporate bonds | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 2,133,301 | 1,916,563 |
Corporate bonds | Level 1 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 0 | 0 |
Corporate bonds | Level 2 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 2,130,977 | 1,908,235 |
Corporate bonds | Level 3 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 2,324 | 8,328 |
Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 1,106,416 | 1,277,460 |
Residential mortgage-backed securities | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 1,106,416 | 1,277,460 |
Residential mortgage-backed securities | Level 1 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 0 | 0 |
Residential mortgage-backed securities | Level 2 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 1,106,416 | 1,277,460 |
Residential mortgage-backed securities | Level 3 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 0 | 0 |
Commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 654,632 | 612,193 |
Commercial mortgage-backed securities | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 654,632 | 612,193 |
Commercial mortgage-backed securities | Level 1 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 0 | 0 |
Commercial mortgage-backed securities | Level 2 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 654,632 | 612,193 |
Commercial mortgage-backed securities | Level 3 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 0 | 0 |
Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 28,892 | 75,611 |
Asset-backed securities | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 28,892 | 75,611 |
Asset-backed securities | Level 1 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 0 | 0 |
Asset-backed securities | Level 2 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 28,892 | 75,611 |
Asset-backed securities | Level 3 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 0 | 0 |
Structured securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 194,356 | 220,126 |
Structured securities | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 194,356 | 220,126 |
Structured securities | Level 1 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 0 | 0 |
Structured securities | Level 2 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 194,356 | 220,126 |
Structured securities | Level 3 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, available-for-sale at fair value | 0 | 0 |
Short-term Investments | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Short-term investments | 191,086 | 67,353 |
Short-term Investments | Level 1 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Short-term investments | 171,086 | 59,953 |
Short-term Investments | Level 2 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Short-term investments | 20,000 | 7,400 |
Short-term Investments | Level 3 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Short-term investments | 0 | 0 |
Other investments | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Other investments | 5,936 | 9,365 |
Other investments | Level 1 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Other investments | 2,907 | 4,881 |
Other investments | Level 2 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Other investments | 0 | 0 |
Other investments | Level 3 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Other investments | $ 3,029 | $ 4,484 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Changes in Fair Value of Level 3 Financial Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||
Balance, beginning of period | $ 15,912 | $ 22,956 |
Total gains (losses) for the period: | ||
Included in net income | (531) | (1,851) |
Included in other comprehensive income | (6,584) | (3,935) |
Sales | (924) | (1,258) |
Balance, end of period | 7,873 | 15,912 |
Change in unrealized gains (losses) for the period included in net income for assets held at the end of the reporting period | (531) | (1,851) |
Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period | (6,584) | (3,935) |
States and political subdivision bonds | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||
Balance, beginning of period | 3,100 | 3,596 |
Total gains (losses) for the period: | ||
Included in net income | 0 | 0 |
Included in other comprehensive income | (580) | (496) |
Sales | 0 | 0 |
Balance, end of period | 2,520 | 3,100 |
Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period | (580) | (496) |
Corporate bonds | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||
Balance, beginning of period | 8,328 | 11,767 |
Total gains (losses) for the period: | ||
Included in net income | 0 | 0 |
Included in other comprehensive income | (6,004) | (3,439) |
Sales | 0 | 0 |
Balance, end of period | 2,324 | 8,328 |
Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period | (6,004) | (3,439) |
Other investments | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||
Balance, beginning of period | 4,484 | 7,593 |
Total gains (losses) for the period: | ||
Included in net income | (531) | (1,851) |
Included in other comprehensive income | 0 | 0 |
Sales | (924) | (1,258) |
Balance, end of period | 3,029 | 4,484 |
Change in unrealized gains (losses) for the period included in net income for assets held at the end of the reporting period | $ (531) | $ (1,851) |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Carrying Value and Fair Value of Debt not Carried at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Carrying amount | $ 676,810 | $ 686,006 |
7.625% Notes | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Interest rate on debt | 7.625% | |
Carrying amount | $ 97,015 | 96,928 |
6.75% Notes | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Interest rate on debt | 6.75% | |
Carrying amount | $ 347,743 | 347,091 |
Subordinated Debentures | Surplus Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Carrying amount | 72,168 | 72,168 |
2019 Credit Agreement | Line of Credit | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Carrying amount | 140,000 | 140,000 |
Level 2 | 7.625% Notes | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Fair value | 101,400 | 103,560 |
Level 3 | 6.75% Notes | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Fair value | 386,275 | 371,366 |
Level 3 | Subordinated Debentures | Surplus Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Fair value | 72,139 | 72,103 |
Level 3 | 2019 Credit Agreement | Line of Credit | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Fair value | $ 144,063 | $ 148,272 |
Deferred Acquisition Costs (Det
Deferred Acquisition Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Movement Analysis of Deferred Policy Acquisition Costs | |||
Balance, beginning of the year | $ 263,523 | $ 251,408 | $ 216,389 |
Additions | 658,195 | 592,412 | 545,812 |
Amortization | (635,813) | (577,357) | (510,793) |
Disposition | 0 | (2,940) | 0 |
Change in DAC | 22,382 | 12,115 | 35,019 |
Balance, end of the year | 285,905 | 263,523 | 251,408 |
Reciprocal Exchanges | |||
Movement Analysis of Deferred Policy Acquisition Costs | |||
Balance, beginning of the year | 23,307 | 20,007 | |
Balance, end of the year | 19,200 | 23,307 | 20,007 |
NGHC | |||
Movement Analysis of Deferred Policy Acquisition Costs | |||
Balance, beginning of the year | 240,216 | 231,401 | |
Balance, end of the year | 266,705 | 240,216 | 231,401 |
Property and Casualty | |||
Movement Analysis of Deferred Policy Acquisition Costs | |||
Balance, beginning of the year | 239,293 | 226,188 | 198,283 |
Additions | 633,775 | 552,921 | 522,914 |
Amortization | (613,905) | (539,816) | (495,009) |
Disposition | 0 | 0 | 0 |
Change in DAC | 19,870 | 13,105 | 27,905 |
Balance, end of the year | 259,163 | 239,293 | 226,188 |
Property and Casualty | Reciprocal Exchanges | |||
Movement Analysis of Deferred Policy Acquisition Costs | |||
Balance, beginning of the year | 23,307 | 20,007 | |
Balance, end of the year | 19,200 | 23,307 | 20,007 |
Property and Casualty | NGHC | |||
Movement Analysis of Deferred Policy Acquisition Costs | |||
Balance, beginning of the year | 215,986 | 206,181 | |
Balance, end of the year | 239,963 | 215,986 | 206,181 |
Accident and Health | |||
Movement Analysis of Deferred Policy Acquisition Costs | |||
Balance, beginning of the year | 24,230 | 25,220 | 18,106 |
Additions | 24,420 | 39,491 | 22,898 |
Amortization | (21,908) | (37,541) | (15,784) |
Disposition | 0 | (2,940) | 0 |
Change in DAC | 2,512 | (990) | 7,114 |
Balance, end of the year | 26,742 | 24,230 | 25,220 |
Accident and Health | Reciprocal Exchanges | |||
Movement Analysis of Deferred Policy Acquisition Costs | |||
Balance, beginning of the year | 0 | 0 | |
Balance, end of the year | 0 | 0 | 0 |
Accident and Health | NGHC | |||
Movement Analysis of Deferred Policy Acquisition Costs | |||
Balance, beginning of the year | 24,230 | 25,220 | |
Balance, end of the year | $ 26,742 | $ 24,230 | $ 25,220 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment | |||
Finance lease right-of-use assets, Cost | $ 38,867 | $ 37,515 | |
Finance lease right-of-use assets, Accumulated Depreciation | (22,631) | (16,511) | |
Finance lease right-of-use assets, Net Value | 16,236 | 21,004 | |
Operating lease right-of-use assets | 111,001 | 119,934 | |
Total, Cost | 666,371 | 634,717 | |
Total, Accumulated Depreciation | (288,688) | (230,890) | |
Total, Net Value | 377,683 | 403,827 | |
Depreciation and amortization expense | 59,926 | 61,965 | $ 55,928 |
Reciprocal Exchanges | |||
Property, Plant and Equipment | |||
Total, Cost | 9,059 | 9,059 | |
Total, Accumulated Depreciation | (9,059) | (8,818) | |
Total, Net Value | 0 | 241 | |
NGHC | |||
Property, Plant and Equipment | |||
Total, Cost | 657,312 | 625,658 | |
Total, Accumulated Depreciation | (279,629) | (222,072) | |
Total, Net Value | 377,683 | 403,586 | |
Land | |||
Property, Plant and Equipment | |||
Cost | 5,788 | 5,788 | |
Accumulated Depreciation | 0 | 0 | |
Net Value | 5,788 | 5,788 | |
Buildings | |||
Property, Plant and Equipment | |||
Cost | 26,245 | 24,997 | |
Accumulated Depreciation | (3,416) | (2,669) | |
Net Value | 22,829 | 22,328 | |
Leasehold improvements | |||
Property, Plant and Equipment | |||
Cost | 39,591 | 34,238 | |
Accumulated Depreciation | (17,305) | (12,372) | |
Net Value | 22,286 | 21,866 | |
Other equipment | |||
Property, Plant and Equipment | |||
Cost | 26,909 | 24,627 | |
Accumulated Depreciation | (3,916) | (3,044) | |
Net Value | 22,993 | 21,583 | |
Hardware and software | |||
Property, Plant and Equipment | |||
Cost | 417,970 | 387,618 | |
Accumulated Depreciation | (241,420) | (196,294) | |
Net Value | $ 176,550 | $ 191,324 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Composition of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets | ||
Finite-lived intangible assets, Gross Balance | $ 256,628 | $ 273,234 |
Finite-lived intangible assets, , Accumulated Amortization | (153,828) | (145,336) |
Total | $ 102,800 | 127,898 |
Finite-lived intangible assets, Weighted-average amortization period | 5 years 2 months 12 days | |
Total Intangible assets, Gross Balance | $ 494,553 | 511,159 |
Intangible assets, net | 340,725 | 365,823 |
Net loss reserve plus a risk premium, Gross Balance | (17,266) | (17,266) |
Net loss reserve plus a risk premium, Accumulated Amortization | 14,977 | 9,947 |
Net loss reserve plus a risk premium, Net Value | $ (2,289) | (7,319) |
Net loss reserve plus a risk premium, weighted average amortization period | 9 months 18 days | |
Reciprocal Exchanges | ||
Finite-Lived Intangible Assets | ||
Finite-lived intangible assets, , Accumulated Amortization | $ (855) | (675) |
Total Intangible assets, Gross Balance | 3,900 | 3,900 |
Intangible assets, net | 3,045 | 3,225 |
Net loss reserve plus a risk premium, Gross Balance | (4,013) | (4,013) |
Net loss reserve plus a risk premium, Accumulated Amortization | 3,979 | 3,930 |
Net loss reserve plus a risk premium, Net Value | (34) | (83) |
NGHC | ||
Finite-Lived Intangible Assets | ||
Finite-lived intangible assets, , Accumulated Amortization | (152,973) | (144,661) |
Total Intangible assets, Gross Balance | 490,653 | 507,259 |
Intangible assets, net | 337,680 | 362,598 |
Net loss reserve plus a risk premium, Gross Balance | (13,253) | (13,253) |
Net loss reserve plus a risk premium, Accumulated Amortization | 10,998 | 6,017 |
Net loss reserve plus a risk premium, Net Value | (2,255) | (7,236) |
Management contracts | ||
Indefinite-lived Intangible Assets | ||
Indefinite-lived intangible assets, excluding goodwill | 118,600 | 118,600 |
State licenses | ||
Indefinite-lived Intangible Assets | ||
Indefinite-lived intangible assets, excluding goodwill | 89,325 | 89,325 |
Trademarks | ||
Indefinite-lived Intangible Assets | ||
Indefinite-lived intangible assets, excluding goodwill | 30,000 | 30,000 |
Agent/Customer relationships | ||
Finite-Lived Intangible Assets | ||
Finite-lived intangible assets, Gross Balance | 175,352 | 175,157 |
Finite-lived intangible assets, , Accumulated Amortization | (90,986) | (76,156) |
Total | $ 84,366 | 99,001 |
Finite-lived intangible assets, Weighted-average amortization period | 6 years 8 months 12 days | |
Renewal rights | ||
Finite-Lived Intangible Assets | ||
Finite-lived intangible assets, Gross Balance | $ 33,565 | 48,566 |
Finite-lived intangible assets, , Accumulated Amortization | (29,351) | (41,257) |
Total | $ 4,214 | 7,309 |
Finite-lived intangible assets, Weighted-average amortization period | 8 months 12 days | |
Other intangibles | ||
Finite-Lived Intangible Assets | ||
Finite-lived intangible assets, Gross Balance | $ 47,711 | 49,511 |
Finite-lived intangible assets, , Accumulated Amortization | (33,491) | (27,923) |
Total | $ 14,220 | $ 21,588 |
Finite-lived intangible assets, Weighted-average amortization period | 2 years 10 months 24 days |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule of Amortization Expense | |||
Amortization | $ 80,694 | $ 96,279 | $ 86,346 |
Total | 20,768 | 34,736 | 31,367 |
Reciprocal Exchanges | |||
Schedule of Amortization Expense | |||
Total | 131 | 71 | 44 |
Other intangibles | |||
Schedule of Amortization Expense | |||
Amortization | 25,798 | 39,024 | 31,999 |
Loss reserve discount | |||
Schedule of Amortization Expense | |||
Amortization of loss reserve premium | (5,030) | (4,288) | (632) |
NGHC | |||
Schedule of Amortization Expense | |||
Total | $ 20,637 | $ 34,665 | $ 31,323 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Entity Information | ||
Total | $ 102,800 | $ 127,898 |
Finite-Lived Intangible Assets, Excluding Loss Reserve And Premium Risk | ||
Entity Information | ||
2021 | 16,632 | |
2022 | 14,648 | |
2023 | 12,383 | |
2024 | 11,452 | |
2025 | 10,989 | |
Thereafter | 34,407 | |
Total | 100,511 | |
Finite-Lived Intangible Assets, Excluding Loss Reserve And Premium Risk | Reciprocal Exchanges | ||
Entity Information | ||
2021 | 23 | |
2022 | (9) | |
2023 | (3) | |
2024 | 0 | |
2025 | 0 | |
Thereafter | 0 | |
Total | 11 | |
Finite-Lived Intangible Assets, Excluding Loss Reserve And Premium Risk | NGHC | ||
Entity Information | ||
2021 | 16,609 | |
2022 | 14,657 | |
2023 | 12,386 | |
2024 | 11,452 | |
2025 | 10,989 | |
Thereafter | 34,407 | |
Total | $ 100,500 |
Unpaid Losses and Loss Adjust_3
Unpaid Losses and Loss Adjustment Expense Reserves - Activity of Loss Reserves (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Liability for Unpaid Claims and Claims Adjustment Expense | |||
Gross balance at beginning of the year | $ 2,889,098 | $ 2,886,414 | $ 2,957,159 |
Less: Reinsurance recoverable at beginning of the year | (1,111,808) | (1,285,142) | (1,129,743) |
Net balance at beginning of the year | 1,774,606 | 1,672,017 | 1,533,814 |
Incurred losses and LAE related to: | |||
Current year | 2,819,891 | 2,849,304 | 2,696,260 |
Prior year | 4,191 | 5,164 | (34,034) |
Total incurred | 2,824,082 | 2,854,468 | 2,662,226 |
Paid losses and LAE related to: | |||
Current year | (1,736,104) | (1,760,686) | (1,634,426) |
Prior year | (972,014) | (995,877) | (880,811) |
Total paid | (2,708,118) | (2,756,563) | (2,515,237) |
Acquired losses and LAE reserves | 92,574 | ||
Disposed losses and LAE reserves | (87,890) | ||
Unrealized foreign exchange gain | (8,786) | ||
Net balance at end of the year | 1,890,570 | 1,774,606 | 1,672,017 |
Plus: Reinsurance recoverable at end of the year | 998,528 | 1,111,808 | 1,285,142 |
Gross balance at end of the year | 2,886,414 | 2,957,159 | 2,663,557 |
Reciprocal Exchanges | |||
Liability for Unpaid Claims and Claims Adjustment Expense | |||
Gross balance at beginning of the year | 205,972 | 205,786 | |
Paid losses and LAE related to: | |||
Gross balance at end of the year | 205,786 | ||
NGHC | |||
Liability for Unpaid Claims and Claims Adjustment Expense | |||
Gross balance at beginning of the year | 2,683,126 | 2,680,628 | 2,778,689 |
Less: Reinsurance recoverable at beginning of the year | (1,027,634) | (1,207,163) | (1,077,335) |
Net balance at beginning of the year | 1,652,994 | 1,571,526 | 1,442,869 |
Incurred losses and LAE related to: | |||
Current year | 2,666,511 | 2,676,089 | 2,535,245 |
Prior year | 3,221 | 1,267 | (35,737) |
Total incurred | 2,669,732 | 2,677,356 | 2,499,508 |
Paid losses and LAE related to: | |||
Current year | (1,641,817) | (1,649,306) | (1,524,373) |
Prior year | (918,697) | (951,266) | (837,692) |
Total paid | (2,560,514) | (2,600,572) | (2,362,065) |
Acquired losses and LAE reserves | 92,574 | ||
Disposed losses and LAE reserves | (87,890) | ||
Unrealized foreign exchange gain | (8,786) | ||
Net balance at end of the year | 1,762,212 | 1,652,994 | 1,571,526 |
Plus: Reinsurance recoverable at end of the year | 920,914 | 1,027,634 | 1,207,163 |
Gross balance at end of the year | 2,680,628 | 2,778,689 | 2,520,204 |
Property and Casualty | |||
Incurred losses and LAE related to: | |||
Current year | 2,477,177 | 2,493,268 | 2,343,938 |
Prior year | 28,012 | 50,520 | (3,057) |
Property and Casualty | Reciprocal Exchanges | |||
Liability for Unpaid Claims and Claims Adjustment Expense | |||
Gross balance at beginning of the year | 205,972 | 205,786 | 178,470 |
Less: Reinsurance recoverable at beginning of the year | (84,174) | (77,979) | (52,408) |
Net balance at beginning of the year | 121,612 | 100,491 | 90,945 |
Incurred losses and LAE related to: | |||
Current year | 153,380 | 173,215 | 161,015 |
Prior year | 970 | 3,897 | 1,703 |
Total incurred | 154,350 | 177,112 | 162,718 |
Paid losses and LAE related to: | |||
Current year | (94,287) | (111,380) | (110,053) |
Prior year | (53,317) | (44,611) | (43,119) |
Total paid | (147,604) | (155,991) | (153,172) |
Acquired losses and LAE reserves | 0 | ||
Disposed losses and LAE reserves | 0 | ||
Unrealized foreign exchange gain | 0 | ||
Net balance at end of the year | 128,358 | 121,612 | 100,491 |
Plus: Reinsurance recoverable at end of the year | 77,614 | 84,174 | 77,979 |
Gross balance at end of the year | 205,786 | 178,470 | 143,353 |
Property and Casualty | NGHC | |||
Liability for Unpaid Claims and Claims Adjustment Expense | |||
Gross balance at beginning of the year | 2,502,199 | 2,528,754 | 2,507,409 |
Less: Reinsurance recoverable at beginning of the year | (1,016,368) | (1,182,588) | (1,067,495) |
Net balance at beginning of the year | 1,512,386 | 1,324,821 | 1,203,056 |
Incurred losses and LAE related to: | |||
Current year | 2,323,797 | 2,320,053 | 2,182,923 |
Prior year | 27,042 | 46,623 | (4,760) |
Total incurred | 2,350,839 | 2,366,676 | 2,178,163 |
Paid losses and LAE related to: | |||
Current year | (1,432,498) | (1,430,072) | (1,336,359) |
Prior year | (827,745) | (841,613) | (720,039) |
Total paid | (2,260,243) | (2,271,685) | (2,056,398) |
Acquired losses and LAE reserves | 92,574 | ||
Disposed losses and LAE reserves | 0 | ||
Unrealized foreign exchange gain | 0 | ||
Net balance at end of the year | 1,602,982 | 1,512,386 | 1,324,821 |
Plus: Reinsurance recoverable at end of the year | 899,217 | 1,016,368 | 1,182,588 |
Gross balance at end of the year | 2,528,754 | 2,507,409 | 2,270,551 |
Accident and Health | |||
Incurred losses and LAE related to: | |||
Current year | 342,714 | 356,036 | 352,322 |
Prior year | (23,821) | (45,356) | (30,977) |
Accident and Health | NGHC | |||
Liability for Unpaid Claims and Claims Adjustment Expense | |||
Gross balance at beginning of the year | 180,927 | 151,874 | 271,280 |
Less: Reinsurance recoverable at beginning of the year | (11,266) | (24,575) | (9,840) |
Net balance at beginning of the year | 140,608 | 246,705 | 239,813 |
Incurred losses and LAE related to: | |||
Current year | 342,714 | 356,036 | 352,322 |
Prior year | (23,821) | (45,356) | (30,977) |
Total incurred | 318,893 | 310,680 | 321,345 |
Paid losses and LAE related to: | |||
Current year | (209,319) | (219,234) | (188,014) |
Prior year | (90,952) | (109,653) | (117,653) |
Total paid | (300,271) | (328,887) | (305,667) |
Acquired losses and LAE reserves | 0 | ||
Disposed losses and LAE reserves | (87,890) | ||
Unrealized foreign exchange gain | (8,786) | ||
Net balance at end of the year | 159,230 | 140,608 | 246,705 |
Plus: Reinsurance recoverable at end of the year | 21,697 | 11,266 | 24,575 |
Gross balance at end of the year | $ 151,874 | $ 271,280 | $ 249,653 |
Unpaid Losses and Loss Adjust_4
Unpaid Losses and Loss Adjustment Expense Reserves - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Liability for Claims and Claims Adjustment Expense | |||
Increase (decrease) in gross unpaid losses and loss adjustment expense reserves | $ (70,745) | ||
Unfavorable (favorable) loss development on prior year loss and LAE reserves | $ 4,191 | 5,164 | $ (34,034) |
NGHC | |||
Liability for Claims and Claims Adjustment Expense | |||
Unfavorable (favorable) loss development on prior year loss and LAE reserves | 3,221 | 1,267 | (35,737) |
Property and Casualty | |||
Liability for Claims and Claims Adjustment Expense | |||
Unfavorable (favorable) loss development on prior year loss and LAE reserves | 28,012 | 50,520 | (3,057) |
Property and Casualty | Reciprocal Exchanges | |||
Liability for Claims and Claims Adjustment Expense | |||
Unfavorable (favorable) loss development on prior year loss and LAE reserves | 970 | 3,897 | 1,703 |
Property and Casualty | NGHC | |||
Liability for Claims and Claims Adjustment Expense | |||
Unfavorable (favorable) loss development on prior year loss and LAE reserves | 27,042 | 46,623 | (4,760) |
Accident and Health | |||
Liability for Claims and Claims Adjustment Expense | |||
Unfavorable (favorable) loss development on prior year loss and LAE reserves | (23,821) | (45,356) | (30,977) |
Accident and Health | NGHC | |||
Liability for Claims and Claims Adjustment Expense | |||
Unfavorable (favorable) loss development on prior year loss and LAE reserves | $ (23,821) | $ (45,356) | $ (30,977) |
Unpaid Losses and Loss Adjust_5
Unpaid Losses and Loss Adjustment Expense Reserves - P&C - Auto Liability - Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) $ in Thousands | Dec. 31, 2020USD ($)claim | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) |
2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 28,871 | |||||||||
2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | 2,447,451 | |||||||||
Property and Casualty | 2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | 44,333 | |||||||||
Property and Casualty | 2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | 2,020,278 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | ||||||||||
Claims Development | ||||||||||
Total (A) | 8,595,205 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2011 | ||||||||||
Claims Development | ||||||||||
Total (A) | 497,712 | $ 497,424 | $ 496,408 | $ 497,324 | $ 497,109 | $ 493,873 | $ 494,922 | $ 489,010 | $ 485,762 | $ 490,230 |
Total of IBNR Plus Expected Development on Reported Claims | $ 522 | |||||||||
Cumulative Number of Reported Claims | claim | 238,319,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2012 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 533,045 | 531,887 | 529,885 | 527,531 | 528,090 | 527,386 | 529,140 | 522,296 | $ 511,797 | |
Total of IBNR Plus Expected Development on Reported Claims | $ 281 | |||||||||
Cumulative Number of Reported Claims | claim | 249,890,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2013 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 575,264 | 575,521 | 572,538 | 567,410 | 563,834 | 556,290 | 556,262 | $ 544,833 | ||
Total of IBNR Plus Expected Development on Reported Claims | $ 287 | |||||||||
Cumulative Number of Reported Claims | claim | 250,134,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2014 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 786,619 | 783,869 | 779,992 | 766,640 | 760,566 | 759,577 | $ 740,531 | |||
Total of IBNR Plus Expected Development on Reported Claims | $ 572 | |||||||||
Cumulative Number of Reported Claims | claim | 270,161,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2015 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 901,823 | 892,244 | 872,064 | 849,051 | 838,040 | $ 820,213 | ||||
Total of IBNR Plus Expected Development on Reported Claims | $ 3,434 | |||||||||
Cumulative Number of Reported Claims | claim | 291,921,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2016 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 1,017,124 | 1,005,184 | 976,749 | 940,849 | $ 932,350 | |||||
Total of IBNR Plus Expected Development on Reported Claims | $ 13,710 | |||||||||
Cumulative Number of Reported Claims | claim | 302,083,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2017 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 968,645 | 941,837 | 912,370 | $ 929,211 | ||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 16,952 | |||||||||
Cumulative Number of Reported Claims | claim | 296,226,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2018 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 1,054,906 | 1,033,488 | $ 1,047,041 | |||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 79,287 | |||||||||
Cumulative Number of Reported Claims | claim | 309,025,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 1,153,160 | $ 1,162,750 | ||||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 169,765 | |||||||||
Cumulative Number of Reported Claims | claim | 406,201,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 1,106,907 | |||||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 455,534 | |||||||||
Cumulative Number of Reported Claims | claim | 293,834,000 |
Unpaid Losses and Loss Adjust_6
Unpaid Losses and Loss Adjustment Expense Reserves - P&C - Auto Liability - Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Claims Development | ||||||||||
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) | $ 1,741,201 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | ||||||||||
Claims Development | ||||||||||
Total (B) | 7,298,054 | |||||||||
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C) | 1,915 | |||||||||
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) | 1,299,066 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2011 | ||||||||||
Claims Development | ||||||||||
Total (B) | 497,044 | $ 496,680 | $ 495,833 | $ 494,145 | $ 489,191 | $ 482,861 | $ 468,059 | $ 442,365 | $ 385,749 | $ 224,676 |
Property and Casualty | Property and Casualty - Auto Liability | 2012 | ||||||||||
Claims Development | ||||||||||
Total (B) | 532,182 | 530,570 | 527,695 | 523,703 | 518,079 | 501,819 | 470,515 | 413,018 | $ 242,285 | |
Property and Casualty | Property and Casualty - Auto Liability | 2013 | ||||||||||
Claims Development | ||||||||||
Total (B) | 573,312 | 571,643 | 567,949 | 559,064 | 540,497 | 504,569 | 440,751 | $ 259,665 | ||
Property and Casualty | Property and Casualty - Auto Liability | 2014 | ||||||||||
Claims Development | ||||||||||
Total (B) | 780,972 | 773,124 | 757,933 | 728,256 | 694,002 | 601,980 | $ 342,710 | |||
Property and Casualty | Property and Casualty - Auto Liability | 2015 | ||||||||||
Claims Development | ||||||||||
Total (B) | 884,717 | 864,226 | 820,007 | 761,150 | 679,461 | $ 385,592 | ||||
Property and Casualty | Property and Casualty - Auto Liability | 2016 | ||||||||||
Claims Development | ||||||||||
Total (B) | 978,785 | 937,997 | 855,407 | 737,927 | $ 400,052 | |||||
Property and Casualty | Property and Casualty - Auto Liability | 2017 | ||||||||||
Claims Development | ||||||||||
Total (B) | 902,264 | 832,553 | 706,151 | $ 392,084 | ||||||
Property and Casualty | Property and Casualty - Auto Liability | 2018 | ||||||||||
Claims Development | ||||||||||
Total (B) | 889,127 | 777,888 | $ 429,231 | |||||||
Property and Casualty | Property and Casualty - Auto Liability | 2019 | ||||||||||
Claims Development | ||||||||||
Total (B) | 833,977 | $ 470,341 | ||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2020 | ||||||||||
Claims Development | ||||||||||
Total (B) | $ 425,674 |
Unpaid Losses and Loss Adjust_7
Unpaid Losses and Loss Adjustment Expense Reserves - P&C - Auto Physical Damage - Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) $ in Thousands | Dec. 31, 2020USD ($)claim | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) |
2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 28,871 | |||||||||
2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | 2,447,451 | |||||||||
Property and Casualty | 2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | 44,333 | |||||||||
Property and Casualty | 2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | 2,020,278 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | ||||||||||
Claims Development | ||||||||||
Total (A) | 4,792,107 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2011 | ||||||||||
Claims Development | ||||||||||
Total (A) | 308,142 | $ 308,132 | $ 308,249 | $ 308,536 | $ 308,512 | $ 308,760 | $ 308,486 | $ 308,298 | $ 308,729 | $ 315,273 |
Total of IBNR Plus Expected Development on Reported Claims | $ (2) | |||||||||
Cumulative Number of Reported Claims | claim | 298,034,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2012 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 294,697 | 294,710 | 295,026 | 295,970 | 296,050 | 296,257 | 295,984 | 298,208 | $ 308,056 | |
Total of IBNR Plus Expected Development on Reported Claims | $ (10) | |||||||||
Cumulative Number of Reported Claims | claim | 292,486,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2013 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 327,503 | 327,506 | 328,010 | 328,262 | 328,284 | 328,748 | 329,049 | $ 335,454 | ||
Total of IBNR Plus Expected Development on Reported Claims | $ (26) | |||||||||
Cumulative Number of Reported Claims | claim | 285,750,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2014 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 486,146 | 486,156 | 486,373 | 486,383 | 486,206 | 487,302 | $ 496,227 | |||
Total of IBNR Plus Expected Development on Reported Claims | $ 16 | |||||||||
Cumulative Number of Reported Claims | claim | 311,603,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2015 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 544,677 | 544,684 | 544,510 | 544,769 | 544,097 | $ 541,008 | ||||
Total of IBNR Plus Expected Development on Reported Claims | $ 4 | |||||||||
Cumulative Number of Reported Claims | claim | 329,111,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2016 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 620,692 | 620,546 | 621,717 | 622,456 | $ 626,643 | |||||
Total of IBNR Plus Expected Development on Reported Claims | $ (414) | |||||||||
Cumulative Number of Reported Claims | claim | 337,873,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2017 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 566,641 | 567,411 | 570,699 | $ 600,813 | ||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 370 | |||||||||
Cumulative Number of Reported Claims | claim | 385,080,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2018 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 530,023 | 526,092 | $ 548,063 | |||||||
Total of IBNR Plus Expected Development on Reported Claims | $ (472) | |||||||||
Cumulative Number of Reported Claims | claim | 360,454,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 552,692 | $ 577,970 | ||||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 2,482 | |||||||||
Cumulative Number of Reported Claims | claim | 370,057,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 560,894 | |||||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 18,588 | |||||||||
Cumulative Number of Reported Claims | claim | 351,548,000 |
Unpaid Losses and Loss Adjust_8
Unpaid Losses and Loss Adjustment Expense Reserves - P&C - Auto Physical Damage - Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Claims Development | ||||||||||
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) | $ 1,741,201 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | ||||||||||
Claims Development | ||||||||||
Total (B) | 4,745,147 | |||||||||
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C) | (15) | |||||||||
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) | 46,945 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2011 | ||||||||||
Claims Development | ||||||||||
Total (B) | 308,145 | $ 308,131 | $ 308,266 | $ 308,557 | $ 308,571 | $ 308,578 | $ 308,608 | $ 308,634 | $ 308,824 | $ 283,501 |
Property and Casualty | Property and Casualty - Auto Physical Damage | 2012 | ||||||||||
Claims Development | ||||||||||
Total (B) | 294,699 | 294,702 | 294,975 | 295,995 | 296,029 | 295,975 | 295,978 | 298,381 | $ 268,989 | |
Property and Casualty | Property and Casualty - Auto Physical Damage | 2013 | ||||||||||
Claims Development | ||||||||||
Total (B) | 327,522 | 327,510 | 327,976 | 328,280 | 328,299 | 328,456 | 328,832 | $ 291,064 | ||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2014 | ||||||||||
Claims Development | ||||||||||
Total (B) | 486,080 | 486,108 | 486,251 | 486,309 | 486,364 | 487,531 | $ 430,998 | |||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2015 | ||||||||||
Claims Development | ||||||||||
Total (B) | 544,652 | 544,699 | 544,485 | 544,707 | 544,754 | $ 478,268 | ||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2016 | ||||||||||
Claims Development | ||||||||||
Total (B) | 620,963 | 621,181 | 621,529 | 622,930 | $ 542,970 | |||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2017 | ||||||||||
Claims Development | ||||||||||
Total (B) | 566,181 | 566,918 | 568,639 | $ 533,907 | ||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2018 | ||||||||||
Claims Development | ||||||||||
Total (B) | 530,330 | 532,083 | $ 483,149 | |||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2019 | ||||||||||
Claims Development | ||||||||||
Total (B) | 549,540 | $ 512,072 | ||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2020 | ||||||||||
Claims Development | ||||||||||
Total (B) | $ 517,035 |
Unpaid Losses and Loss Adjust_9
Unpaid Losses and Loss Adjustment Expense Reserves - P&C - Homeowners and other - Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) $ in Thousands | Dec. 31, 2020USD ($)claim | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) |
2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 28,871 | |||||||||
2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | 2,447,451 | |||||||||
Property and Casualty | 2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | 44,333 | |||||||||
Property and Casualty | 2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | 2,020,278 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | ||||||||||
Claims Development | ||||||||||
Total (A) | 3,568,139 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2011 | ||||||||||
Claims Development | ||||||||||
Total (A) | 495,156 | $ 495,148 | $ 495,170 | $ 494,825 | $ 495,246 | $ 497,244 | $ 498,184 | $ 498,050 | $ 499,170 | $ 506,352 |
Total of IBNR Plus Expected Development on Reported Claims | $ 1 | |||||||||
Cumulative Number of Reported Claims | claim | 107,871,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2012 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 475,990 | 475,792 | 476,166 | 474,649 | 476,538 | 477,577 | 478,880 | 480,353 | $ 485,454 | |
Total of IBNR Plus Expected Development on Reported Claims | $ 7 | |||||||||
Cumulative Number of Reported Claims | claim | 112,061,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2013 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 297,159 | 296,760 | 296,756 | 296,907 | 296,618 | 299,561 | 300,868 | $ 306,761 | ||
Total of IBNR Plus Expected Development on Reported Claims | $ 66 | |||||||||
Cumulative Number of Reported Claims | claim | 75,918,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2014 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 304,934 | 304,350 | 304,237 | 304,496 | 303,925 | 306,471 | $ 318,488 | |||
Total of IBNR Plus Expected Development on Reported Claims | $ 279 | |||||||||
Cumulative Number of Reported Claims | claim | 73,498,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2015 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 351,590 | 351,305 | 353,688 | 351,747 | 349,559 | $ 357,023 | ||||
Total of IBNR Plus Expected Development on Reported Claims | $ 1,152 | |||||||||
Cumulative Number of Reported Claims | claim | 69,920,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2016 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 344,763 | 343,525 | 340,711 | 341,762 | $ 350,737 | |||||
Total of IBNR Plus Expected Development on Reported Claims | $ 1,481 | |||||||||
Cumulative Number of Reported Claims | claim | 61,047,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2017 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 362,176 | 370,068 | 365,092 | $ 402,798 | ||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 2,096 | |||||||||
Cumulative Number of Reported Claims | claim | 59,284,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2018 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 327,525 | 328,721 | $ 327,462 | |||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 4,192 | |||||||||
Cumulative Number of Reported Claims | claim | 73,117,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 256,369 | $ 247,760 | ||||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 16,533 | |||||||||
Cumulative Number of Reported Claims | claim | 66,710,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 352,477 | |||||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 52,664 | |||||||||
Cumulative Number of Reported Claims | claim | 48,924,000 |
Unpaid Losses and Loss Adjus_10
Unpaid Losses and Loss Adjustment Expense Reserves - P&C - Homeowners and other - Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Claims Development | ||||||||||
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) | $ 1,741,201 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | ||||||||||
Claims Development | ||||||||||
Total (B) | 3,405,462 | |||||||||
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C) | 930 | |||||||||
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) | 163,607 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2011 | ||||||||||
Claims Development | ||||||||||
Total (B) | 494,950 | $ 494,922 | $ 494,904 | $ 494,525 | $ 494,198 | $ 493,408 | $ 489,778 | $ 485,054 | $ 457,480 | $ 314,139 |
Property and Casualty | Property and Casualty - Homeowners and other | 2012 | ||||||||||
Claims Development | ||||||||||
Total (B) | 475,964 | 475,762 | 475,765 | 473,781 | 473,190 | 471,084 | 466,266 | 452,589 | $ 300,271 | |
Property and Casualty | Property and Casualty - Homeowners and other | 2013 | ||||||||||
Claims Development | ||||||||||
Total (B) | 296,567 | 296,442 | 296,383 | 295,332 | 293,101 | 289,302 | 279,743 | $ 219,937 | ||
Property and Casualty | Property and Casualty - Homeowners and other | 2014 | ||||||||||
Claims Development | ||||||||||
Total (B) | 303,660 | 303,100 | 301,742 | 297,640 | 289,456 | 278,255 | $ 198,781 | |||
Property and Casualty | Property and Casualty - Homeowners and other | 2015 | ||||||||||
Claims Development | ||||||||||
Total (B) | 346,554 | 345,257 | 342,156 | 336,921 | 319,284 | $ 233,264 | ||||
Property and Casualty | Property and Casualty - Homeowners and other | 2016 | ||||||||||
Claims Development | ||||||||||
Total (B) | 341,037 | 337,889 | 331,102 | 320,564 | $ 227,650 | |||||
Property and Casualty | Property and Casualty - Homeowners and other | 2017 | ||||||||||
Claims Development | ||||||||||
Total (B) | 355,265 | 349,600 | 338,065 | $ 258,234 | ||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2018 | ||||||||||
Claims Development | ||||||||||
Total (B) | 315,302 | 298,212 | $ 227,908 | |||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2019 | ||||||||||
Claims Development | ||||||||||
Total (B) | 226,895 | $ 172,462 | ||||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2020 | ||||||||||
Claims Development | ||||||||||
Total (B) | $ 249,268 |
Unpaid Losses and Loss Adjus_11
Unpaid Losses and Loss Adjustment Expense Reserves - A&H - Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) $ in Thousands | Dec. 31, 2020USD ($)claim | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) |
2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 28,871 | |||||||||
2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | 2,447,451 | |||||||||
Accident and Health | 2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | (19,624) | |||||||||
Accident and Health | 2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | 296,453 | |||||||||
Accident and Health | Accident and Health | ||||||||||
Claims Development | ||||||||||
Total (A) | 1,391,929 | |||||||||
Accident and Health | Accident and Health | 2011 | ||||||||||
Claims Development | ||||||||||
Total (A) | 4,481 | $ 4,481 | $ 4,481 | $ 4,481 | $ 4,481 | $ 4,481 | $ 4,481 | $ 4,481 | $ 4,483 | $ 4,804 |
Total of IBNR Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 8,139,000 | |||||||||
Accident and Health | Accident and Health | 2012 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 4,110 | 4,110 | 4,110 | 4,110 | 4,161 | 4,161 | 4,161 | 4,227 | $ 4,400 | |
Total of IBNR Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 7,630,000 | |||||||||
Accident and Health | Accident and Health | 2013 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 26,265 | 26,274 | 26,274 | 26,272 | 26,361 | 26,457 | 28,578 | $ 23,253 | ||
Total of IBNR Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 34,173,000 | |||||||||
Accident and Health | Accident and Health | 2014 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 52,028 | 52,034 | 52,022 | 52,026 | 52,311 | 52,694 | $ 52,245 | |||
Total of IBNR Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 69,716,000 | |||||||||
Accident and Health | Accident and Health | 2015 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 181,678 | 181,717 | 181,740 | 181,536 | 184,586 | $ 176,104 | ||||
Total of IBNR Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 242,669,000 | |||||||||
Accident and Health | Accident and Health | 2016 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 201,850 | 201,722 | 202,155 | 200,817 | $ 215,097 | |||||
Total of IBNR Plus Expected Development on Reported Claims | $ 1 | |||||||||
Cumulative Number of Reported Claims | claim | 320,319,000 | |||||||||
Accident and Health | Accident and Health | 2017 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 182,809 | 182,865 | 186,415 | $ 211,293 | ||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 135 | |||||||||
Cumulative Number of Reported Claims | claim | 302,098,000 | |||||||||
Accident and Health | Accident and Health | 2018 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 203,238 | 205,152 | $ 234,558 | |||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 364 | |||||||||
Cumulative Number of Reported Claims | claim | 269,021,000 | |||||||||
Accident and Health | Accident and Health | 2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 239,017 | $ 256,745 | ||||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 4,726 | |||||||||
Cumulative Number of Reported Claims | claim | 304,234,000 | |||||||||
Accident and Health | Accident and Health | 2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 296,453 | |||||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 112,869 | |||||||||
Cumulative Number of Reported Claims | claim | 262,469,000 |
Unpaid Losses and Loss Adjus_12
Unpaid Losses and Loss Adjustment Expense Reserves - A&H - Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Claims Development | ||||||||||
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) | $ 1,741,201 | |||||||||
Accident and Health | Accident and Health | ||||||||||
Claims Development | ||||||||||
Total (B) | 1,273,836 | |||||||||
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C) | 0 | |||||||||
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) | 118,093 | |||||||||
Accident and Health | Accident and Health | 2011 | ||||||||||
Claims Development | ||||||||||
Total (B) | 4,481 | $ 4,481 | $ 4,481 | $ 4,481 | $ 4,481 | $ 4,481 | $ 4,481 | $ 4,481 | $ 4,469 | $ 2,528 |
Accident and Health | Accident and Health | 2012 | ||||||||||
Claims Development | ||||||||||
Total (B) | 4,110 | 4,110 | 4,110 | 4,110 | 4,161 | 4,110 | 4,110 | 4,095 | $ 3,330 | |
Accident and Health | Accident and Health | 2013 | ||||||||||
Claims Development | ||||||||||
Total (B) | 26,147 | 26,155 | 26,155 | 26,154 | 26,242 | 26,327 | 25,754 | $ 15,421 | ||
Accident and Health | Accident and Health | 2014 | ||||||||||
Claims Development | ||||||||||
Total (B) | 52,147 | 52,153 | 52,140 | 52,147 | 52,405 | 52,053 | $ 31,765 | |||
Accident and Health | Accident and Health | 2015 | ||||||||||
Claims Development | ||||||||||
Total (B) | 181,678 | 181,696 | 181,719 | 181,459 | 178,918 | $ 123,576 | ||||
Accident and Health | Accident and Health | 2016 | ||||||||||
Claims Development | ||||||||||
Total (B) | 201,849 | 201,549 | 201,720 | 196,421 | $ 125,845 | |||||
Accident and Health | Accident and Health | 2017 | ||||||||||
Claims Development | ||||||||||
Total (B) | 182,674 | 181,519 | 178,047 | $ 104,809 | ||||||
Accident and Health | Accident and Health | 2018 | ||||||||||
Claims Development | ||||||||||
Total (B) | 202,874 | 201,457 | $ 126,269 | |||||||
Accident and Health | Accident and Health | 2019 | ||||||||||
Claims Development | ||||||||||
Total (B) | 234,291 | $ 158,345 | ||||||||
Accident and Health | Accident and Health | 2020 | ||||||||||
Claims Development | ||||||||||
Total (B) | $ 183,585 |
Unpaid Losses and Loss Adjus_13
Unpaid Losses and Loss Adjustment Expense Reserves - Reciprocal Exchanges - Auto Liability - Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) $ in Thousands | Dec. 31, 2020USD ($)claim | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) |
2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 28,871 | |||||||||
2019 | Reciprocal Exchanges | ||||||||||
Claims Development | ||||||||||
Total (A) | 4,162 | |||||||||
2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | 2,447,451 | |||||||||
2020 | Reciprocal Exchanges | ||||||||||
Claims Development | ||||||||||
Total (A) | 130,720 | |||||||||
Property and Casualty | 2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | 44,333 | |||||||||
Property and Casualty | 2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | 2,020,278 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | ||||||||||
Claims Development | ||||||||||
Total (A) | 8,595,205 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges | ||||||||||
Claims Development | ||||||||||
Total (A) | 418,438 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2011 | ||||||||||
Claims Development | ||||||||||
Total (A) | 497,712 | $ 497,424 | $ 496,408 | $ 497,324 | $ 497,109 | $ 493,873 | $ 494,922 | $ 489,010 | $ 485,762 | $ 490,230 |
Total of IBNR Plus Expected Development on Reported Claims | $ 522 | |||||||||
Cumulative Number of Reported Claims | claim | 238,319,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2011 | Reciprocal Exchanges | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 50,703 | 51,247 | 51,161 | 50,998 | 50,898 | 51,107 | 48,841 | 47,459 | 47,834 | $ 47,666 |
Total of IBNR Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 5,065,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2012 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 533,045 | 531,887 | 529,885 | 527,531 | 528,090 | 527,386 | 529,140 | 522,296 | 511,797 | |
Total of IBNR Plus Expected Development on Reported Claims | $ 281 | |||||||||
Cumulative Number of Reported Claims | claim | 249,890,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2012 | Reciprocal Exchanges | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 50,606 | 50,538 | 50,303 | 50,767 | 50,370 | 48,665 | 48,044 | 47,275 | $ 44,834 | |
Total of IBNR Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 4,999,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2013 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 575,264 | 575,521 | 572,538 | 567,410 | 563,834 | 556,290 | 556,262 | 544,833 | ||
Total of IBNR Plus Expected Development on Reported Claims | $ 287 | |||||||||
Cumulative Number of Reported Claims | claim | 250,134,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2013 | Reciprocal Exchanges | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 50,810 | 50,595 | 49,854 | 51,263 | 50,180 | 45,479 | 44,341 | $ 43,684 | ||
Total of IBNR Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 5,097,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2014 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 786,619 | 783,869 | 779,992 | 766,640 | 760,566 | 759,577 | 740,531 | |||
Total of IBNR Plus Expected Development on Reported Claims | $ 572 | |||||||||
Cumulative Number of Reported Claims | claim | 270,161,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2014 | Reciprocal Exchanges | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 50,055 | 49,369 | 49,168 | 48,246 | 45,930 | 40,850 | $ 38,656 | |||
Total of IBNR Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 4,873,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2015 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 901,823 | 892,244 | 872,064 | 849,051 | 838,040 | 820,213 | ||||
Total of IBNR Plus Expected Development on Reported Claims | $ 3,434 | |||||||||
Cumulative Number of Reported Claims | claim | 291,921,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2015 | Reciprocal Exchanges | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 34,962 | 34,268 | 34,615 | 34,390 | 33,409 | $ 35,573 | ||||
Total of IBNR Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 4,335,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2016 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 1,017,124 | 1,005,184 | 976,749 | 940,849 | 932,350 | |||||
Total of IBNR Plus Expected Development on Reported Claims | $ 13,710 | |||||||||
Cumulative Number of Reported Claims | claim | 302,083,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2016 | Reciprocal Exchanges | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 24,657 | 24,310 | 26,109 | 24,460 | $ 24,619 | |||||
Total of IBNR Plus Expected Development on Reported Claims | $ 356 | |||||||||
Cumulative Number of Reported Claims | claim | 4,005,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2017 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 968,645 | 941,837 | 912,370 | 929,211 | ||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 16,952 | |||||||||
Cumulative Number of Reported Claims | claim | 296,226,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2017 | Reciprocal Exchanges | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 29,806 | 28,804 | 28,762 | $ 26,214 | ||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 1,244 | |||||||||
Cumulative Number of Reported Claims | claim | 4,949,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2018 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 1,054,906 | 1,033,488 | 1,047,041 | |||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 79,287 | |||||||||
Cumulative Number of Reported Claims | claim | 309,025,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2018 | Reciprocal Exchanges | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 35,870 | 33,891 | $ 32,339 | |||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 3,540 | |||||||||
Cumulative Number of Reported Claims | claim | 6,127,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 1,153,160 | 1,162,750 | ||||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 169,765 | |||||||||
Cumulative Number of Reported Claims | claim | 406,201,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2019 | Reciprocal Exchanges | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 50,212 | $ 49,757 | ||||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 11,727 | |||||||||
Cumulative Number of Reported Claims | claim | 6,262,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 1,106,907 | |||||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 455,534 | |||||||||
Cumulative Number of Reported Claims | claim | 293,834,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2020 | Reciprocal Exchanges | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 40,757 | |||||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 18,459 | |||||||||
Cumulative Number of Reported Claims | claim | 3,383,000 |
Unpaid Losses and Loss Adjus_14
Unpaid Losses and Loss Adjustment Expense Reserves - Reciprocal Exchanges - Auto Liability - Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Claims Development | ||||||||||
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) | $ 1,741,201 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | ||||||||||
Claims Development | ||||||||||
Total (B) | 7,298,054 | |||||||||
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C) | 1,915 | |||||||||
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) | 1,299,066 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2011 | ||||||||||
Claims Development | ||||||||||
Total (B) | 497,044 | $ 496,680 | $ 495,833 | $ 494,145 | $ 489,191 | $ 482,861 | $ 468,059 | $ 442,365 | $ 385,749 | $ 224,676 |
Property and Casualty | Property and Casualty - Auto Liability | 2012 | ||||||||||
Claims Development | ||||||||||
Total (B) | 532,182 | 530,570 | 527,695 | 523,703 | 518,079 | 501,819 | 470,515 | 413,018 | 242,285 | |
Property and Casualty | Property and Casualty - Auto Liability | 2013 | ||||||||||
Claims Development | ||||||||||
Total (B) | 573,312 | 571,643 | 567,949 | 559,064 | 540,497 | 504,569 | 440,751 | 259,665 | ||
Property and Casualty | Property and Casualty - Auto Liability | 2014 | ||||||||||
Claims Development | ||||||||||
Total (B) | 780,972 | 773,124 | 757,933 | 728,256 | 694,002 | 601,980 | 342,710 | |||
Property and Casualty | Property and Casualty - Auto Liability | 2015 | ||||||||||
Claims Development | ||||||||||
Total (B) | 884,717 | 864,226 | 820,007 | 761,150 | 679,461 | 385,592 | ||||
Property and Casualty | Property and Casualty - Auto Liability | 2016 | ||||||||||
Claims Development | ||||||||||
Total (B) | 978,785 | 937,997 | 855,407 | 737,927 | 400,052 | |||||
Property and Casualty | Property and Casualty - Auto Liability | 2017 | ||||||||||
Claims Development | ||||||||||
Total (B) | 902,264 | 832,553 | 706,151 | 392,084 | ||||||
Property and Casualty | Property and Casualty - Auto Liability | 2018 | ||||||||||
Claims Development | ||||||||||
Total (B) | 889,127 | 777,888 | 429,231 | |||||||
Property and Casualty | Property and Casualty - Auto Liability | 2019 | ||||||||||
Claims Development | ||||||||||
Total (B) | 833,977 | 470,341 | ||||||||
Property and Casualty | Property and Casualty - Auto Liability | 2020 | ||||||||||
Claims Development | ||||||||||
Total (B) | 425,674 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges | ||||||||||
Claims Development | ||||||||||
Total (B) | 347,537 | |||||||||
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C) | 27 | |||||||||
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) | 70,928 | |||||||||
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges | 2011 | ||||||||||
Claims Development | ||||||||||
Total (B) | 50,676 | 51,121 | 50,979 | 50,481 | 49,570 | 46,559 | 41,931 | 35,911 | 26,603 | $ 15,857 |
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges | 2012 | ||||||||||
Claims Development | ||||||||||
Total (B) | 50,504 | 50,090 | 49,836 | 48,990 | 46,358 | 42,768 | 37,241 | 29,286 | $ 13,568 | |
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges | 2013 | ||||||||||
Claims Development | ||||||||||
Total (B) | 50,432 | 49,605 | 48,449 | 47,449 | 41,787 | 35,105 | 29,218 | $ 14,683 | ||
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges | 2014 | ||||||||||
Claims Development | ||||||||||
Total (B) | 49,602 | 48,389 | 46,001 | 39,328 | 32,382 | 26,070 | $ 13,925 | |||
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges | 2015 | ||||||||||
Claims Development | ||||||||||
Total (B) | 33,223 | 31,587 | 29,538 | 24,614 | 19,501 | $ 11,910 | ||||
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges | 2016 | ||||||||||
Claims Development | ||||||||||
Total (B) | 22,500 | 20,567 | 16,994 | 13,478 | $ 7,516 | |||||
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges | 2017 | ||||||||||
Claims Development | ||||||||||
Total (B) | 23,838 | 19,529 | 17,136 | $ 9,111 | ||||||
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges | 2018 | ||||||||||
Claims Development | ||||||||||
Total (B) | 24,985 | 19,471 | $ 10,755 | |||||||
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges | 2019 | ||||||||||
Claims Development | ||||||||||
Total (B) | 28,210 | $ 15,504 | ||||||||
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges | 2020 | ||||||||||
Claims Development | ||||||||||
Total (B) | $ 13,567 |
Unpaid Losses and Loss Adjus_15
Unpaid Losses and Loss Adjustment Expense Reserves - Reciprocal Exchanges - Auto Physical Damage - Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) $ in Thousands | Dec. 31, 2020USD ($)claim | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) |
2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 28,871 | |||||||||
2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | 2,447,451 | |||||||||
Reciprocal Exchanges | 2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | 4,162 | |||||||||
Reciprocal Exchanges | 2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | 130,720 | |||||||||
Property and Casualty | 2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | 44,333 | |||||||||
Property and Casualty | 2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | 2,020,278 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | ||||||||||
Claims Development | ||||||||||
Total (A) | 4,792,107 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2011 | ||||||||||
Claims Development | ||||||||||
Total (A) | 308,142 | $ 308,132 | $ 308,249 | $ 308,536 | $ 308,512 | $ 308,760 | $ 308,486 | $ 308,298 | $ 308,729 | $ 315,273 |
Total of IBNR Plus Expected Development on Reported Claims | $ (2) | |||||||||
Cumulative Number of Reported Claims | claim | 298,034,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2012 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 294,697 | 294,710 | 295,026 | 295,970 | 296,050 | 296,257 | 295,984 | 298,208 | 308,056 | |
Total of IBNR Plus Expected Development on Reported Claims | $ (10) | |||||||||
Cumulative Number of Reported Claims | claim | 292,486,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2013 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 327,503 | 327,506 | 328,010 | 328,262 | 328,284 | 328,748 | 329,049 | 335,454 | ||
Total of IBNR Plus Expected Development on Reported Claims | $ (26) | |||||||||
Cumulative Number of Reported Claims | claim | 285,750,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2014 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 486,146 | 486,156 | 486,373 | 486,383 | 486,206 | 487,302 | 496,227 | |||
Total of IBNR Plus Expected Development on Reported Claims | $ 16 | |||||||||
Cumulative Number of Reported Claims | claim | 311,603,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2015 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 544,677 | 544,684 | 544,510 | 544,769 | 544,097 | 541,008 | ||||
Total of IBNR Plus Expected Development on Reported Claims | $ 4 | |||||||||
Cumulative Number of Reported Claims | claim | 329,111,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2016 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 620,692 | 620,546 | 621,717 | 622,456 | 626,643 | |||||
Total of IBNR Plus Expected Development on Reported Claims | $ (414) | |||||||||
Cumulative Number of Reported Claims | claim | 337,873,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2017 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 566,641 | 567,411 | 570,699 | 600,813 | ||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 370 | |||||||||
Cumulative Number of Reported Claims | claim | 385,080,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2018 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 530,023 | 526,092 | 548,063 | |||||||
Total of IBNR Plus Expected Development on Reported Claims | $ (472) | |||||||||
Cumulative Number of Reported Claims | claim | 360,454,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 552,692 | 577,970 | ||||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 2,482 | |||||||||
Cumulative Number of Reported Claims | claim | 370,057,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 560,894 | |||||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 18,588 | |||||||||
Cumulative Number of Reported Claims | claim | 351,548,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 218,227 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2011 | ||||||||||
Claims Development | ||||||||||
Total (A) | 26,027 | 26,028 | 26,028 | 26,023 | 26,029 | 26,037 | 26,060 | 26,022 | 26,055 | $ 26,936 |
Total of IBNR Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 12,041,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2012 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 25,820 | 25,842 | 25,845 | 25,841 | 25,842 | 25,914 | 26,189 | 26,459 | $ 25,752 | |
Total of IBNR Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 11,301,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2013 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 24,704 | 24,704 | 24,704 | 24,703 | 24,709 | 25,292 | 25,214 | $ 23,375 | ||
Total of IBNR Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 11,066,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2014 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 26,074 | 26,074 | 25,882 | 25,588 | 25,806 | 27,424 | $ 29,240 | |||
Total of IBNR Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 11,526,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2015 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 18,890 | 18,842 | 18,789 | 18,673 | 18,592 | $ 21,247 | ||||
Total of IBNR Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 10,281,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2016 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 13,197 | 13,213 | 12,985 | 12,921 | $ 12,270 | |||||
Total of IBNR Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 8,740,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2017 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 15,490 | 15,612 | 15,410 | $ 15,301 | ||||||
Total of IBNR Plus Expected Development on Reported Claims | $ (5) | |||||||||
Cumulative Number of Reported Claims | claim | 10,682,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2018 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 19,200 | 19,272 | $ 19,146 | |||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 108 | |||||||||
Cumulative Number of Reported Claims | claim | 13,615,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 27,585 | $ 27,212 | ||||||||
Total of IBNR Plus Expected Development on Reported Claims | $ (51) | |||||||||
Cumulative Number of Reported Claims | claim | 14,549,000 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 21,240 | |||||||||
Total of IBNR Plus Expected Development on Reported Claims | $ (810) | |||||||||
Cumulative Number of Reported Claims | claim | 10,027,000 |
Unpaid Losses and Loss Adjus_16
Unpaid Losses and Loss Adjustment Expense Reserves - Reciprocal Exchanges - Auto Physical Damage - Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Claims Development | ||||||||||
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) | $ 1,741,201 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | ||||||||||
Claims Development | ||||||||||
Total (B) | 4,745,147 | |||||||||
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C) | (15) | |||||||||
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) | 46,945 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2011 | ||||||||||
Claims Development | ||||||||||
Total (B) | 308,145 | $ 308,131 | $ 308,266 | $ 308,557 | $ 308,571 | $ 308,578 | $ 308,608 | $ 308,634 | $ 308,824 | $ 283,501 |
Property and Casualty | Property and Casualty - Auto Physical Damage | 2012 | ||||||||||
Claims Development | ||||||||||
Total (B) | 294,699 | 294,702 | 294,975 | 295,995 | 296,029 | 295,975 | 295,978 | 298,381 | 268,989 | |
Property and Casualty | Property and Casualty - Auto Physical Damage | 2013 | ||||||||||
Claims Development | ||||||||||
Total (B) | 327,522 | 327,510 | 327,976 | 328,280 | 328,299 | 328,456 | 328,832 | 291,064 | ||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2014 | ||||||||||
Claims Development | ||||||||||
Total (B) | 486,080 | 486,108 | 486,251 | 486,309 | 486,364 | 487,531 | 430,998 | |||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2015 | ||||||||||
Claims Development | ||||||||||
Total (B) | 544,652 | 544,699 | 544,485 | 544,707 | 544,754 | 478,268 | ||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2016 | ||||||||||
Claims Development | ||||||||||
Total (B) | 620,963 | 621,181 | 621,529 | 622,930 | 542,970 | |||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2017 | ||||||||||
Claims Development | ||||||||||
Total (B) | 566,181 | 566,918 | 568,639 | 533,907 | ||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2018 | ||||||||||
Claims Development | ||||||||||
Total (B) | 530,330 | 532,083 | 483,149 | |||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2019 | ||||||||||
Claims Development | ||||||||||
Total (B) | 549,540 | 512,072 | ||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | 2020 | ||||||||||
Claims Development | ||||||||||
Total (B) | 517,035 | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | ||||||||||
Claims Development | ||||||||||
Total (B) | 218,316 | |||||||||
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C) | 0 | |||||||||
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) | (89) | |||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2011 | ||||||||||
Claims Development | ||||||||||
Total (B) | 26,027 | 26,028 | 26,028 | 26,027 | 26,033 | 26,037 | 26,056 | 26,106 | 26,269 | $ 28,274 |
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2012 | ||||||||||
Claims Development | ||||||||||
Total (B) | 25,817 | 25,842 | 25,845 | 25,850 | 25,854 | 25,914 | 26,172 | 26,651 | $ 23,760 | |
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2013 | ||||||||||
Claims Development | ||||||||||
Total (B) | 24,704 | 24,704 | 24,704 | 24,716 | 24,725 | 24,549 | 25,088 | $ 22,651 | ||
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2014 | ||||||||||
Claims Development | ||||||||||
Total (B) | 26,071 | 25,946 | 25,685 | 25,427 | 25,772 | 26,165 | $ 24,528 | |||
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2015 | ||||||||||
Claims Development | ||||||||||
Total (B) | 18,730 | 18,719 | 18,748 | 18,750 | 18,797 | $ 19,080 | ||||
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2016 | ||||||||||
Claims Development | ||||||||||
Total (B) | 13,114 | 13,137 | 13,080 | 13,147 | $ 12,579 | |||||
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2017 | ||||||||||
Claims Development | ||||||||||
Total (B) | 15,495 | 15,500 | 16,141 | $ 15,438 | ||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2018 | ||||||||||
Claims Development | ||||||||||
Total (B) | 19,093 | 19,246 | $ 18,925 | |||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2019 | ||||||||||
Claims Development | ||||||||||
Total (B) | 27,632 | $ 27,974 | ||||||||
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | 2020 | ||||||||||
Claims Development | ||||||||||
Total (B) | $ 21,633 |
Unpaid Losses and Loss Adjus_17
Unpaid Losses and Loss Adjustment Expense Reserves - Reciprocal Exchanges - Homeowners and other - Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) $ in Thousands | Dec. 31, 2020USD ($)claim | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) |
2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 28,871 | |||||||||
2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | 2,447,451 | |||||||||
Reciprocal Exchanges | 2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | 4,162 | |||||||||
Reciprocal Exchanges | 2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | 130,720 | |||||||||
Property and Casualty | 2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | 44,333 | |||||||||
Property and Casualty | 2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | 2,020,278 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | ||||||||||
Claims Development | ||||||||||
Total (A) | 3,568,139 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2011 | ||||||||||
Claims Development | ||||||||||
Total (A) | 495,156 | $ 495,148 | $ 495,170 | $ 494,825 | $ 495,246 | $ 497,244 | $ 498,184 | $ 498,050 | $ 499,170 | $ 506,352 |
Total of IBNR Plus Expected Development on Reported Claims | $ 1 | |||||||||
Cumulative Number of Reported Claims | claim | 107,871,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2012 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 475,990 | 475,792 | 476,166 | 474,649 | 476,538 | 477,577 | 478,880 | 480,353 | 485,454 | |
Total of IBNR Plus Expected Development on Reported Claims | $ 7 | |||||||||
Cumulative Number of Reported Claims | claim | 112,061,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2013 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 297,159 | 296,760 | 296,756 | 296,907 | 296,618 | 299,561 | 300,868 | 306,761 | ||
Total of IBNR Plus Expected Development on Reported Claims | $ 66 | |||||||||
Cumulative Number of Reported Claims | claim | 75,918,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2014 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 304,934 | 304,350 | 304,237 | 304,496 | 303,925 | 306,471 | 318,488 | |||
Total of IBNR Plus Expected Development on Reported Claims | $ 279 | |||||||||
Cumulative Number of Reported Claims | claim | 73,498,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2015 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 351,590 | 351,305 | 353,688 | 351,747 | 349,559 | 357,023 | ||||
Total of IBNR Plus Expected Development on Reported Claims | $ 1,152 | |||||||||
Cumulative Number of Reported Claims | claim | 69,920,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2016 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 344,763 | 343,525 | 340,711 | 341,762 | 350,737 | |||||
Total of IBNR Plus Expected Development on Reported Claims | $ 1,481 | |||||||||
Cumulative Number of Reported Claims | claim | 61,047,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2017 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 362,176 | 370,068 | 365,092 | 402,798 | ||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 2,096 | |||||||||
Cumulative Number of Reported Claims | claim | 59,284,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2018 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 327,525 | 328,721 | 327,462 | |||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 4,192 | |||||||||
Cumulative Number of Reported Claims | claim | 73,117,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 256,369 | 247,760 | ||||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 16,533 | |||||||||
Cumulative Number of Reported Claims | claim | 66,710,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 352,477 | |||||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 52,664 | |||||||||
Cumulative Number of Reported Claims | claim | 48,924,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 418,819 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2011 | ||||||||||
Claims Development | ||||||||||
Total (A) | 28,144 | 28,095 | 28,075 | 28,002 | 27,950 | 27,954 | 28,209 | 28,511 | 28,869 | $ 38,470 |
Total of IBNR Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 6,652,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2012 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 20,283 | 20,301 | 20,251 | 20,876 | 20,403 | 19,971 | 21,184 | 20,625 | $ 25,289 | |
Total of IBNR Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 8,427,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2013 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 22,649 | 23,109 | 20,367 | 20,615 | 20,309 | 20,132 | 21,232 | $ 22,638 | ||
Total of IBNR Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 3,165,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2014 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 27,212 | 27,231 | 27,141 | 26,614 | 25,625 | 24,846 | $ 27,706 | |||
Total of IBNR Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 4,232,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2015 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 22,714 | 21,881 | 22,007 | 21,527 | 21,031 | $ 30,081 | ||||
Total of IBNR Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 5,455,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2016 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 34,655 | 34,501 | 34,851 | 35,274 | $ 36,838 | |||||
Total of IBNR Plus Expected Development on Reported Claims | $ 78 | |||||||||
Cumulative Number of Reported Claims | claim | 4,799,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2017 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 51,477 | 51,852 | 50,871 | $ 48,222 | ||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 648 | |||||||||
Cumulative Number of Reported Claims | claim | 8,830,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2018 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 77,582 | 78,166 | $ 76,925 | |||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 1,471 | |||||||||
Cumulative Number of Reported Claims | claim | 12,998,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2019 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 65,380 | $ 65,888 | ||||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 3,312 | |||||||||
Cumulative Number of Reported Claims | claim | 12,238,000 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2020 | ||||||||||
Claims Development | ||||||||||
Total (A) | $ 68,723 | |||||||||
Total of IBNR Plus Expected Development on Reported Claims | $ 10,427 | |||||||||
Cumulative Number of Reported Claims | claim | 9,349,000 |
Unpaid Losses and Loss Adjus_18
Unpaid Losses and Loss Adjustment Expense Reserves - Reciprocal Exchanges - Homeowners and other - Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Claims Development | ||||||||||
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) | $ 1,741,201 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | ||||||||||
Claims Development | ||||||||||
Total (B) | 3,405,462 | |||||||||
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C) | 930 | |||||||||
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) | 163,607 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2011 | ||||||||||
Claims Development | ||||||||||
Total (B) | 494,950 | $ 494,922 | $ 494,904 | $ 494,525 | $ 494,198 | $ 493,408 | $ 489,778 | $ 485,054 | $ 457,480 | $ 314,139 |
Property and Casualty | Property and Casualty - Homeowners and other | 2012 | ||||||||||
Claims Development | ||||||||||
Total (B) | 475,964 | 475,762 | 475,765 | 473,781 | 473,190 | 471,084 | 466,266 | 452,589 | 300,271 | |
Property and Casualty | Property and Casualty - Homeowners and other | 2013 | ||||||||||
Claims Development | ||||||||||
Total (B) | 296,567 | 296,442 | 296,383 | 295,332 | 293,101 | 289,302 | 279,743 | 219,937 | ||
Property and Casualty | Property and Casualty - Homeowners and other | 2014 | ||||||||||
Claims Development | ||||||||||
Total (B) | 303,660 | 303,100 | 301,742 | 297,640 | 289,456 | 278,255 | 198,781 | |||
Property and Casualty | Property and Casualty - Homeowners and other | 2015 | ||||||||||
Claims Development | ||||||||||
Total (B) | 346,554 | 345,257 | 342,156 | 336,921 | 319,284 | 233,264 | ||||
Property and Casualty | Property and Casualty - Homeowners and other | 2016 | ||||||||||
Claims Development | ||||||||||
Total (B) | 341,037 | 337,889 | 331,102 | 320,564 | 227,650 | |||||
Property and Casualty | Property and Casualty - Homeowners and other | 2017 | ||||||||||
Claims Development | ||||||||||
Total (B) | 355,265 | 349,600 | 338,065 | 258,234 | ||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2018 | ||||||||||
Claims Development | ||||||||||
Total (B) | 315,302 | 298,212 | 227,908 | |||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2019 | ||||||||||
Claims Development | ||||||||||
Total (B) | 226,895 | 172,462 | ||||||||
Property and Casualty | Property and Casualty - Homeowners and other | 2020 | ||||||||||
Claims Development | ||||||||||
Total (B) | 249,268 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | ||||||||||
Claims Development | ||||||||||
Total (B) | 378,826 | |||||||||
Unpaid loss and allocated loss adjustment expense reserves before 2011, net of reinsurance (C) | 2,658 | |||||||||
Unpaid loss and allocated loss adjustment expense reserves, net of reinsurance (A) - (B) + (C) | 42,651 | |||||||||
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2011 | ||||||||||
Claims Development | ||||||||||
Total (B) | 27,825 | 27,803 | 27,758 | 27,692 | 27,656 | 27,661 | 26,700 | 25,799 | 24,997 | $ 21,474 |
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2012 | ||||||||||
Claims Development | ||||||||||
Total (B) | 20,238 | 20,256 | 20,121 | 20,668 | 19,961 | 19,847 | 19,367 | 18,021 | $ 11,087 | |
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2013 | ||||||||||
Claims Development | ||||||||||
Total (B) | 22,731 | 20,232 | 19,626 | 19,653 | 19,104 | 18,107 | 17,435 | $ 11,277 | ||
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2014 | ||||||||||
Claims Development | ||||||||||
Total (B) | 27,115 | 27,003 | 26,170 | 25,230 | 23,820 | 22,834 | $ 15,344 | |||
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2015 | ||||||||||
Claims Development | ||||||||||
Total (B) | 21,994 | 20,733 | 20,339 | 19,834 | 18,518 | $ 12,979 | ||||
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2016 | ||||||||||
Claims Development | ||||||||||
Total (B) | 33,399 | 32,933 | 31,632 | 30,615 | $ 20,978 | |||||
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2017 | ||||||||||
Claims Development | ||||||||||
Total (B) | 49,506 | 47,517 | 46,003 | $ 33,166 | ||||||
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2018 | ||||||||||
Claims Development | ||||||||||
Total (B) | 72,859 | 69,672 | $ 55,519 | |||||||
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2019 | ||||||||||
Claims Development | ||||||||||
Total (B) | 58,788 | $ 45,432 | ||||||||
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | 2020 | ||||||||||
Claims Development | ||||||||||
Total (B) | $ 44,371 |
Unpaid Losses and Loss Adjus_19
Unpaid Losses and Loss Adjustment Expense Reserves - Historical Claims (Details) | Dec. 31, 2020 |
Property and Casualty | Property and Casualty - Auto Liability | |
Short-duration Insurance Contracts, Historical Claims Duration | |
Average annual percentage payout, year 1 | 41.60% |
Average annual percentage payout, year 2 | 32.90% |
Average annual percentage payout, year 3 | 11.50% |
Average annual percentage payout, year 4 | 6.80% |
Average annual percentage payout, year 5 | 3.70% |
Average annual percentage payout, year 6 | 1.80% |
Average annual percentage payout, year 7 | 0.90% |
Average annual percentage payout, year 8 | 0.40% |
Average annual percentage payout, year 9 | 0.20% |
Average annual percentage payout, year 10 | 0.20% |
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges | |
Short-duration Insurance Contracts, Historical Claims Duration | |
Average annual percentage payout, year 1 | 30.20% |
Average annual percentage payout, year 2 | 25.10% |
Average annual percentage payout, year 3 | 13.90% |
Average annual percentage payout, year 4 | 13.00% |
Average annual percentage payout, year 5 | 9.60% |
Average annual percentage payout, year 6 | 4.60% |
Average annual percentage payout, year 7 | 2.30% |
Average annual percentage payout, year 8 | 0.90% |
Average annual percentage payout, year 9 | 0.70% |
Average annual percentage payout, year 10 | (0.30%) |
Property and Casualty | Property and Casualty - Auto Physical Damage | |
Short-duration Insurance Contracts, Historical Claims Duration | |
Average annual percentage payout, year 1 | 90.60% |
Average annual percentage payout, year 2 | 9.60% |
Average annual percentage payout, year 3 | (0.10%) |
Average annual percentage payout, year 4 | 0.00% |
Average annual percentage payout, year 5 | 0.00% |
Average annual percentage payout, year 6 | 0.00% |
Average annual percentage payout, year 7 | (0.10%) |
Average annual percentage payout, year 8 | 0.00% |
Average annual percentage payout, year 9 | 0.00% |
Average annual percentage payout, year 10 | 0.00% |
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | |
Short-duration Insurance Contracts, Historical Claims Duration | |
Average annual percentage payout, year 1 | 98.40% |
Average annual percentage payout, year 2 | 2.60% |
Average annual percentage payout, year 3 | (1.30%) |
Average annual percentage payout, year 4 | 0.20% |
Average annual percentage payout, year 5 | 0.00% |
Average annual percentage payout, year 6 | 0.00% |
Average annual percentage payout, year 7 | 0.00% |
Average annual percentage payout, year 8 | 0.00% |
Average annual percentage payout, year 9 | 0.00% |
Average annual percentage payout, year 10 | 0.00% |
Property and Casualty | Property and Casualty - Homeowners and other | |
Short-duration Insurance Contracts, Historical Claims Duration | |
Average annual percentage payout, year 1 | 67.30% |
Average annual percentage payout, year 2 | 25.10% |
Average annual percentage payout, year 3 | 4.40% |
Average annual percentage payout, year 4 | 1.50% |
Average annual percentage payout, year 5 | 0.80% |
Average annual percentage payout, year 6 | 0.30% |
Average annual percentage payout, year 7 | 0.40% |
Average annual percentage payout, year 8 | 0.10% |
Average annual percentage payout, year 9 | 0.10% |
Average annual percentage payout, year 10 | 0.00% |
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | |
Short-duration Insurance Contracts, Historical Claims Duration | |
Average annual percentage payout, year 1 | 64.90% |
Average annual percentage payout, year 2 | 22.80% |
Average annual percentage payout, year 3 | 3.30% |
Average annual percentage payout, year 4 | 2.50% |
Average annual percentage payout, year 5 | 1.30% |
Average annual percentage payout, year 6 | 1.80% |
Average annual percentage payout, year 7 | 1.00% |
Average annual percentage payout, year 8 | 0.80% |
Average annual percentage payout, year 9 | 0.50% |
Average annual percentage payout, year 10 | 1.10% |
Accident and Health | Accident and Health | |
Short-duration Insurance Contracts, Historical Claims Duration | |
Average annual percentage payout, year 1 | 62.90% |
Average annual percentage payout, year 2 | 35.30% |
Average annual percentage payout, year 3 | 1.60% |
Average annual percentage payout, year 4 | 0.10% |
Average annual percentage payout, year 5 | 0.10% |
Average annual percentage payout, year 6 | 0.00% |
Average annual percentage payout, year 7 | 0.00% |
Average annual percentage payout, year 8 | (0.40%) |
Average annual percentage payout, year 9 | 0.30% |
Average annual percentage payout, year 10 | 0.00% |
Unpaid Losses and Loss Adjus_20
Unpaid Losses and Loss Adjustment Expense Reserves - Reconciliation of Net Incurred and Paid Claims Development (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Net reserve for claims and allocated claim adjustment expenses | $ 1,741,201 | |||
Reinsurance recoverable, net | 1,218,930 | $ 1,394,308 | ||
Reinsurance recoverable on unpaid losses | 998,528 | |||
Insurance lines other than short-duration | 35,688 | |||
Acquisition | 17,488 | |||
Unallocated claims adjustment expenses (“ULAE”) | 96,193 | |||
Subtotal | 149,369 | |||
Unpaid loss and loss adjustment expense reserves | 2,889,098 | 2,886,414 | $ 2,957,159 | $ 2,663,557 |
Recoverable on unpaid losses | 998,528 | 1,111,808 | 1,285,142 | 1,129,743 |
Reinsurance recoverable on unpaid losses | 998,528 | 1,111,808 | ||
Reciprocal Exchanges | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Reinsurance recoverable, net | 125,515 | 119,125 | ||
Unpaid loss and loss adjustment expense reserves | 205,972 | 205,786 | ||
Reinsurance recoverable on unpaid losses | 77,614 | 84,174 | ||
MCCA | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Reinsurance recoverable, net | 545,654 | 558,310 | ||
Reinsurance recoverable on unpaid losses | 535,433 | 548,370 | ||
NCRF | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Reinsurance recoverable, net | 193,295 | 191,255 | ||
Reinsurance recoverable on unpaid losses | 157,611 | 146,496 | ||
Property and Casualty | Reciprocal Exchanges | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Unpaid loss and loss adjustment expense reserves | 205,972 | 205,786 | 178,470 | 143,353 |
Recoverable on unpaid losses | 77,614 | $ 84,174 | $ 77,979 | $ 52,408 |
Property and Casualty | Property and Casualty - Auto Liability | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Net reserve for claims and allocated claim adjustment expenses | 1,299,066 | |||
Reinsurance recoverable, net | 766,929 | |||
Property and Casualty | Property and Casualty - Auto Liability | Reciprocal Exchanges | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Net reserve for claims and allocated claim adjustment expenses | 70,928 | |||
Reinsurance recoverable, net | 28,745 | |||
Property and Casualty | Property and Casualty - Auto Physical Damage | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Net reserve for claims and allocated claim adjustment expenses | 46,945 | |||
Reinsurance recoverable, net | 8,198 | |||
Property and Casualty | Property and Casualty - Auto Physical Damage | Reciprocal Exchanges | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Net reserve for claims and allocated claim adjustment expenses | (89) | |||
Reinsurance recoverable, net | 557 | |||
Property and Casualty | Property and Casualty - Homeowners and other | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Net reserve for claims and allocated claim adjustment expenses | 163,607 | |||
Reinsurance recoverable, net | 124,090 | |||
Property and Casualty | Property and Casualty - Homeowners and other | Reciprocal Exchanges | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Net reserve for claims and allocated claim adjustment expenses | 42,651 | |||
Reinsurance recoverable, net | 48,312 | |||
Accident and Health | Accident and Health | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Net reserve for claims and allocated claim adjustment expenses | 118,093 | |||
Reinsurance recoverable, net | $ 21,697 |
Unpaid Losses and Loss Adjus_21
Unpaid Losses and Loss Adjustment Expense Reserves - Reconciliation of Net Incurred and Paid Loss Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
2020 - Current Accident Year Paid | |||
Rollforward table | $ 1,736,104 | $ 1,760,686 | $ 1,634,426 |
Development tables | 2,819,891 | 2,849,304 | 2,696,260 |
Property and Casualty | |||
2020 - Current Accident Year Paid | |||
Development tables | 2,477,177 | 2,493,268 | 2,343,938 |
Property and Casualty | Reciprocal Exchanges | |||
2020 - Current Accident Year Paid | |||
Rollforward table | 94,287 | 111,380 | 110,053 |
Development tables | 153,380 | 173,215 | 161,015 |
Accident and Health | |||
2020 - Current Accident Year Paid | |||
Development tables | 342,714 | $ 356,036 | $ 352,322 |
2020 | |||
2020 - Current Accident Year Incurred | |||
Rollforward table | 2,819,891 | ||
Development tables | 2,447,451 | ||
Variance | 372,440 | ||
Unallocated claims adjustment expenses | 341,655 | ||
Long-duration contracts | 30,789 | ||
Other | (4) | ||
Variance | 372,440 | ||
2020 - Current Accident Year Paid | |||
Rollforward table | 1,736,104 | ||
Development tables | 1,455,133 | ||
Variance | 280,971 | ||
Unallocated claims adjustment expenses | 265,518 | ||
Long-duration contracts | 15,449 | ||
Other | 4 | ||
Variance | 280,971 | ||
2020 | Reciprocal Exchanges | |||
2020 - Current Accident Year Incurred | |||
Rollforward table | 153,380 | ||
Development tables | 130,720 | ||
Variance | 22,660 | ||
Unallocated claims adjustment expenses | 22,660 | ||
Long-duration contracts | 0 | ||
Other | 0 | ||
Variance | 22,660 | ||
2020 - Current Accident Year Paid | |||
Rollforward table | 94,287 | ||
Development tables | 79,571 | ||
Variance | 14,716 | ||
Unallocated claims adjustment expenses | 14,716 | ||
Long-duration contracts | 0 | ||
Other | 0 | ||
Variance | 14,716 | ||
2020 | Property and Casualty | |||
2020 - Current Accident Year Incurred | |||
Rollforward table | 2,323,797 | ||
Development tables | 2,020,278 | ||
Variance | 303,519 | ||
Unallocated claims adjustment expenses | 303,112 | ||
Long-duration contracts | 0 | ||
Other | 407 | ||
Variance | 303,519 | ||
2020 - Current Accident Year Paid | |||
Rollforward table | 1,432,498 | ||
Development tables | 1,191,977 | ||
Variance | 240,521 | ||
Unallocated claims adjustment expenses | 240,263 | ||
Long-duration contracts | 0 | ||
Other | 258 | ||
Variance | 240,521 | ||
2020 | Accident and Health | |||
2020 - Current Accident Year Incurred | |||
Rollforward table | 342,714 | ||
Development tables | 296,453 | ||
Variance | 46,261 | ||
Unallocated claims adjustment expenses | 15,883 | ||
Long-duration contracts | 30,789 | ||
Other | (411) | ||
Variance | 46,261 | ||
2020 - Current Accident Year Paid | |||
Rollforward table | 209,319 | ||
Development tables | 183,585 | ||
Variance | 25,734 | ||
Unallocated claims adjustment expenses | 10,539 | ||
Long-duration contracts | 15,449 | ||
Other | (254) | ||
Variance | 25,734 | ||
2019 | |||
2020 - Current Accident Year Incurred | |||
Rollforward table | 4,191 | ||
Development tables | 28,871 | ||
Variance | (24,680) | ||
Unallocated claims adjustment expenses | (13,752) | ||
Accident years prior to 2011 | (99) | ||
Long-duration contracts | (2,912) | ||
Acquisition | (7,917) | ||
Variance | (24,680) | ||
2020 - Current Accident Year Paid | |||
Rollforward table | 972,014 | ||
Development tables | 863,968 | ||
Variance | 108,046 | ||
Unallocated claims adjustment expenses | 64,114 | ||
Accident years prior to 2011 | 1,635 | ||
Long-duration contracts | 8,771 | ||
Acquisition | 33,526 | ||
Variance | 108,046 | ||
2019 | Reciprocal Exchanges | |||
2020 - Current Accident Year Incurred | |||
Rollforward table | 970 | ||
Development tables | 4,162 | ||
Variance | (3,192) | ||
Unallocated claims adjustment expenses | (3,586) | ||
Accident years prior to 2011 | 394 | ||
Long-duration contracts | 0 | ||
Acquisition | 0 | ||
Variance | (3,192) | ||
2020 - Current Accident Year Paid | |||
Rollforward table | 53,317 | ||
Development tables | 50,568 | ||
Variance | 2,749 | ||
Unallocated claims adjustment expenses | 2,556 | ||
Accident years prior to 2011 | 193 | ||
Long-duration contracts | 0 | ||
Acquisition | 0 | ||
Variance | 2,749 | ||
2019 | Property and Casualty | |||
2020 - Current Accident Year Incurred | |||
Rollforward table | 27,042 | ||
Development tables | 44,333 | ||
Variance | (17,291) | ||
Unallocated claims adjustment expenses | (8,881) | ||
Accident years prior to 2011 | (493) | ||
Long-duration contracts | 0 | ||
Acquisition | (7,917) | ||
Variance | (17,291) | ||
2020 - Current Accident Year Paid | |||
Rollforward table | 827,745 | ||
Development tables | 734,614 | ||
Variance | 93,131 | ||
Unallocated claims adjustment expenses | 58,163 | ||
Accident years prior to 2011 | 1,442 | ||
Long-duration contracts | 0 | ||
Acquisition | 33,526 | ||
Variance | 93,131 | ||
2019 | Accident and Health | |||
2020 - Current Accident Year Incurred | |||
Rollforward table | (23,821) | ||
Development tables | (19,624) | ||
Variance | (4,197) | ||
Unallocated claims adjustment expenses | (1,285) | ||
Accident years prior to 2011 | 0 | ||
Long-duration contracts | (2,912) | ||
Acquisition | 0 | ||
Variance | (4,197) | ||
2020 - Current Accident Year Paid | |||
Rollforward table | 90,952 | ||
Development tables | 78,786 | ||
Variance | 12,166 | ||
Unallocated claims adjustment expenses | 3,395 | ||
Accident years prior to 2011 | 0 | ||
Long-duration contracts | 8,771 | ||
Acquisition | 0 | ||
Variance | $ 12,166 |
Reinsurance - Reinsurance Recov
Reinsurance - Reinsurance Recoverable (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Reinsurance recoverable | ||
Reinsurance recoverable on paid losses | $ 221,212 | $ 282,500 |
Reinsurance recoverable on unpaid losses | 998,528 | 1,111,808 |
Allowance for uncollectible reinsurance | (810) | 0 |
Reinsurance recoverable, net | 1,218,930 | 1,394,308 |
MCCA | ||
Reinsurance recoverable | ||
Reinsurance recoverable on paid losses | 10,221 | 9,940 |
Reinsurance recoverable on unpaid losses | 535,433 | 548,370 |
Allowance for uncollectible reinsurance | 0 | 0 |
Reinsurance recoverable, net | 545,654 | 558,310 |
NCRF | ||
Reinsurance recoverable | ||
Reinsurance recoverable on paid losses | 35,684 | 44,759 |
Reinsurance recoverable on unpaid losses | 157,611 | 146,496 |
Allowance for uncollectible reinsurance | 0 | 0 |
Reinsurance recoverable, net | $ 193,295 | $ 191,255 |
Reinsurance - Effect of Reinsur
Reinsurance - Effect of Reinsurance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Assumed | |||
Unpaid loss and LAE reserves | $ 27,568 | $ 50,884 | |
Unearned premiums | 18,845 | 15,278 | |
Ceded | |||
Reinsurance recoverable on unpaid losses | 998,528 | 1,111,808 | |
Prepaid Reinsurance | 414,010 | 575,747 | |
Written | |||
Direct | 5,574,550 | 5,508,245 | $ 5,317,742 |
Assumed | 59,997 | 74,835 | 99,097 |
Total Gross Premium | 5,634,547 | 5,583,080 | 5,416,839 |
Ceded | (1,013,703) | (1,358,459) | (1,589,126) |
Net Premium | 4,620,844 | 4,224,621 | 3,827,713 |
Earned | |||
Direct | 5,613,630 | 5,486,835 | 5,049,512 |
Assumed | 56,430 | 80,572 | 123,265 |
Total Gross Premium | 5,670,060 | 5,567,407 | 5,172,777 |
Ceded | (1,175,440) | (1,449,365) | (1,440,575) |
Net Premium | 4,494,620 | 4,118,042 | 3,732,202 |
Loss and LAE | |||
Assumed | 9,713 | 32,745 | 29,290 |
Ceded | $ 729,628 | $ 801,041 | $ 1,041,286 |
Reinsurance - Narrative (Detail
Reinsurance - Narrative (Details) $ in Thousands | Oct. 01, 2020USD ($) | Jul. 17, 2020USD ($) | Jul. 01, 2020USD ($)reinstatement | May 01, 2020USD ($)reinstatement | Jan. 01, 2020 | Jul. 01, 2019 | Jan. 01, 2019 | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Reinsurance Retention Policy | |||||||||
Funds held under reinsurance agreements | $ 169,008 | $ 259,442 | |||||||
Ceded Credit Risk, Secured | |||||||||
Reinsurance Retention Policy | |||||||||
Funds held under reinsurance agreements | 245,049 | 143,069 | |||||||
MCCA | |||||||||
Reinsurance Retention Policy | |||||||||
Funds held under reinsurance agreements | 0 | 0 | |||||||
Reciprocal Exchanges | |||||||||
Reinsurance Retention Policy | |||||||||
Funds held under reinsurance agreements | 15,105 | $ 0 | |||||||
Personal Auto | |||||||||
Reinsurance Retention Policy | |||||||||
Reinsurance - percentage of business ceded | 5.00% | 10.00% | 7.00% | ||||||
Reinsurance - percentage of ceding commission | 31.20% | ||||||||
Quota share agreement, term | 2 years | ||||||||
Homeowners | |||||||||
Reinsurance Retention Policy | |||||||||
Reinsurance - percentage of business ceded | 20.00% | 40.00% | |||||||
Reinsurance - percentage of ceding commission | 37.00% | 36.00% | |||||||
Quota share agreement, term | 1 year | 1 year | |||||||
Property Catastrophe Program | |||||||||
Reinsurance Retention Policy | |||||||||
Amount of coverage in excess of retention | $ 650,000 | ||||||||
Number of reinstatements | reinstatement | 1 | ||||||||
Property Catastrophe Program | Reciprocal Exchanges | |||||||||
Reinsurance Retention Policy | |||||||||
Amount of coverage in excess of retention | $ 475,000 | ||||||||
Number of reinstatements | reinstatement | 1 | ||||||||
Retention amount | $ 20,000 | ||||||||
Casualty Program | |||||||||
Reinsurance Retention Policy | |||||||||
Amount of coverage in excess of retention | $ 35,000 | ||||||||
Retention amount | $ 5,000 | ||||||||
Medical Insurance | MCCA | |||||||||
Reinsurance Retention Policy | |||||||||
Amount of coverage in excess of retention | $ 580 | ||||||||
Personal Lines | Reciprocal Exchanges | |||||||||
Reinsurance Retention Policy | |||||||||
Reinsurance - percentage of business ceded | 42.00% | ||||||||
Quota share agreement, term | 1 year | 1 year | |||||||
Personal Lines, Homeowners | Reciprocal Exchanges | |||||||||
Reinsurance Retention Policy | |||||||||
Reinsurance - percentage of business ceded | 55.00% | 42.30% | |||||||
Personal Lines, Auto | Reciprocal Exchanges | |||||||||
Reinsurance Retention Policy | |||||||||
Reinsurance - percentage of business ceded | 25.00% | ||||||||
Top Layer Coverage | |||||||||
Reinsurance Retention Policy | |||||||||
Amount of coverage in excess of retention | $ 125,000 | ||||||||
Minimum | Personal Auto | |||||||||
Reinsurance Retention Policy | |||||||||
Reinsurance - percentage of ceding commission | 30.00% | ||||||||
Loss ratio | 64.70% | ||||||||
Maximum | Personal Auto | |||||||||
Reinsurance Retention Policy | |||||||||
Reinsurance - percentage of ceding commission | 32.80% | ||||||||
Loss ratio | 67.50% | ||||||||
First Event | Property Catastrophe Program | |||||||||
Reinsurance Retention Policy | |||||||||
Retention amount | $ 70,000 | ||||||||
Second Event | Property Catastrophe Program | |||||||||
Reinsurance Retention Policy | |||||||||
Retention amount | 50,000 | ||||||||
First Event, Named Wind | Property Catastrophe Program | |||||||||
Reinsurance Retention Policy | |||||||||
Retention amount | $ 50,000 |
Reinsurance - Premiums and Loss
Reinsurance - Premiums and Losses Ceded (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Ceded Credit Risk | |||
Ceded earned premiums | $ 1,175,440 | $ 1,449,365 | $ 1,440,575 |
Ceded Loss and LAE | 729,628 | 801,041 | 1,041,286 |
MCCA | |||
Ceded Credit Risk | |||
Ceded earned premiums | 7,856 | 9,867 | 9,676 |
Ceded Loss and LAE | 3,624 | (23,616) | (54,105) |
NCRF | |||
Ceded Credit Risk | |||
Ceded earned premiums | 236,837 | 234,370 | 232,270 |
Ceded Loss and LAE | $ 208,316 | $ 222,796 | $ 210,297 |
Reinsurance - Concentration of
Reinsurance - Concentration of Credit Risk by Reinsurer (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Ceded Credit Risk | ||
Reinsurance recoverable on unpaid losses | $ 998,528 | $ 1,111,808 |
Reinsurance recoverable on paid losses | 221,212 | 282,500 |
Allowance for uncollectible reinsurance | (810) | 0 |
Prepaid Reinsurance | 414,010 | 575,747 |
Funds Held | (169,008) | (259,442) |
Net | 1,463,932 | 1,710,613 |
Reciprocal Exchanges | ||
Ceded Credit Risk | ||
Reinsurance recoverable on unpaid losses | 77,614 | 84,174 |
Reinsurance recoverable on paid losses | 48,075 | 34,951 |
Allowance for uncollectible reinsurance | (174) | |
Prepaid Reinsurance | 89,850 | 105,894 |
Funds Held | (15,105) | 0 |
Net | 200,260 | 225,019 |
NGHC | ||
Ceded Credit Risk | ||
Reinsurance recoverable on unpaid losses | 920,914 | 1,027,634 |
Reinsurance recoverable on paid losses | 173,137 | 247,549 |
Allowance for uncollectible reinsurance | (636) | |
Prepaid Reinsurance | 324,160 | 469,853 |
Funds Held | (153,903) | (259,442) |
Net | 1,263,672 | 1,485,594 |
MCCA | ||
Ceded Credit Risk | ||
Reinsurance recoverable on unpaid losses | 535,433 | 548,370 |
Reinsurance recoverable on paid losses | 10,221 | 9,940 |
Allowance for uncollectible reinsurance | 0 | 0 |
Prepaid Reinsurance | 1,251 | 3,927 |
Funds Held | 0 | 0 |
Net | 546,905 | 562,237 |
NCRF | ||
Ceded Credit Risk | ||
Reinsurance recoverable on unpaid losses | 157,611 | 146,496 |
Reinsurance recoverable on paid losses | 35,684 | 44,759 |
Allowance for uncollectible reinsurance | 0 | 0 |
Prepaid Reinsurance | 92,783 | 88,022 |
Funds Held | 0 | 0 |
Net | 286,078 | 279,277 |
Hannover Ruck SE | ||
Ceded Credit Risk | ||
Reinsurance recoverable on unpaid losses | 74,485 | 155,223 |
Reinsurance recoverable on paid losses | 47,726 | 101,064 |
Allowance for uncollectible reinsurance | 0 | |
Prepaid Reinsurance | 68,167 | 134,878 |
Funds Held | (149,402) | (254,558) |
Net | 40,976 | 136,607 |
Other reinsurers' balances - each less than 5% of total | ||
Ceded Credit Risk | ||
Reinsurance recoverable on unpaid losses | 230,999 | 261,719 |
Reinsurance recoverable on paid losses | 127,581 | 126,737 |
Allowance for uncollectible reinsurance | (810) | |
Prepaid Reinsurance | 251,809 | 348,920 |
Funds Held | (19,606) | (4,884) |
Net | $ 589,973 | $ 732,492 |
Debt - Debt Instruments (Detail
Debt - Debt Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument | ||
Present value of lease liabilities | $ 16,690 | $ 20,477 |
Unamortized debt issuance costs and unamortized discount | (5,242) | (5,981) |
Carrying amount of debt | $ 676,810 | 686,006 |
Senior Notes | 6.75% Notes | ||
Debt Instrument | ||
Interest rate on debt | 6.75% | |
Notes payable | $ 350,000 | 350,000 |
Senior Notes | 7.625% Notes | ||
Debt Instrument | ||
Interest rate on debt | 7.625% | |
Notes payable | $ 100,000 | $ 100,000 |
Surplus Notes | Subordinated Debentures I | ||
Debt Instrument | ||
Interest rate on debt | 3.62% | 5.29% |
Notes payable | $ 41,238 | $ 41,238 |
Surplus Notes | Subordinated Debentures II | ||
Debt Instrument | ||
Interest rate on debt | 4.47% | 6.14% |
Notes payable | $ 30,930 | $ 30,930 |
Other | ||
Debt Instrument | ||
Interest rate on debt | 3.50% | |
Notes payable | $ 3,194 | 9,342 |
2019 Credit Agreement | ||
Debt Instrument | ||
Notes payable | $ 140,000 | $ 140,000 |
JPMorgan Chase, N.A. | 2019 Credit Agreement | ||
Debt Instrument | ||
Interest rate on credit agreement | 4.00% | 3.59% |
London Interbank Offered Rate (LIBOR) | Surplus Notes | Subordinated Debentures I | ||
Debt Instrument | ||
Debt Instrument, description of variable rate basis | LIBOR | |
Debt instrument, basis spread on variable rate | 3.40% | |
London Interbank Offered Rate (LIBOR) | Surplus Notes | Subordinated Debentures II | ||
Debt Instrument | ||
Debt Instrument, description of variable rate basis | LIBOR | |
Debt instrument, basis spread on variable rate | 4.25% | |
London Interbank Offered Rate (LIBOR) | JPMorgan Chase, N.A. | 2019 Credit Agreement | ||
Debt Instrument | ||
Debt Instrument, description of variable rate basis | LIBOR | |
Debt instrument, basis spread on variable rate | 1.75% | 1.00% |
Debt - Interest Expense (Detail
Debt - Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument | |||
Finance lease liabilities | $ 1,150 | $ 1,176 | $ 621 |
Interest expense | 33,772 | 51,544 | 51,425 |
Other | |||
Debt Instrument | |||
Interest expense, debt | $ (5,336) | 8,031 | 7,717 |
Senior Notes | 6.75% Notes | |||
Debt Instrument | |||
Interest rate on debt | 6.75% | ||
Interest expense, debt | $ 23,625 | 23,625 | 23,625 |
Senior Notes | 7.625% Notes | |||
Debt Instrument | |||
Interest rate on debt | 7.625% | ||
Interest expense, debt | $ 7,625 | 7,625 | 7,625 |
Surplus Notes | Subordinated Debentures | |||
Debt Instrument | |||
Interest expense, debt | 3,287 | 4,536 | 4,346 |
JPMorgan Chase, N.A. | 2016 Credit Agreement | |||
Debt Instrument | |||
Interest expense, debt | 0 | 1,211 | 7,491 |
JPMorgan Chase, N.A. | 2019 Credit Agreement | |||
Debt Instrument | |||
Interest expense, debt | $ 3,421 | $ 5,340 | $ 0 |
Debt - Notes (Details)
Debt - Notes (Details) - Senior Notes | Dec. 31, 2020 |
6.75% Notes | |
Debt Instrument | |
Interest rate on debt | 6.75% |
7.625% Notes | |
Debt Instrument | |
Interest rate on debt | 7.625% |
Debt - Subordinated Debentures
Debt - Subordinated Debentures (Details) - Surplus Notes - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Subordinated Debentures | ||
Debt Instrument | ||
Debt instrument, redemption price, percentage | 100.00% | |
Subordinated Debentures I | ||
Debt Instrument | ||
Notes payable | $ 41,238 | $ 41,238 |
Subordinated Debentures I | London Interbank Offered Rate (LIBOR) | ||
Debt Instrument | ||
Debt instrument, basis spread on variable rate | 3.40% | |
Debt Instrument, description of variable rate basis | LIBOR | |
Subordinated Debentures II | ||
Debt Instrument | ||
Notes payable | $ 30,930 | $ 30,930 |
Subordinated Debentures II | London Interbank Offered Rate (LIBOR) | ||
Debt Instrument | ||
Debt instrument, basis spread on variable rate | 4.25% | |
Debt Instrument, description of variable rate basis | LIBOR |
Debt - Credit Agreement (Detail
Debt - Credit Agreement (Details) - 2019 Credit Agreement - JPMorgan Chase, N.A. - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument | ||
Line of credit facility, maximum amount outstanding during period | $ 340,000 | |
Letter of credit fronting fee | 0.125% | |
Line of credit facility, commitment fee percentage | 0.225% | |
London Interbank Offered Rate (LIBOR) | ||
Debt Instrument | ||
Debt Instrument, description of variable rate basis | LIBOR | |
Debt instrument, basis spread on variable rate | 1.75% | 1.00% |
Fed Funds Rate | ||
Debt Instrument | ||
Debt instrument, basis spread on variable rate | 0.50% | |
Minimum | ||
Debt Instrument | ||
Line of credit facility, current borrowing capacity | $ 150,000 | |
Line of credit facility, commitment fee percentage | 0.175% | |
Maximum | ||
Debt Instrument | ||
Line of credit facility, current borrowing capacity | $ 50,000 | |
Line of credit facility, commitment fee percentage | 0.25% |
Debt - Debt Maturities (Details
Debt - Debt Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Finance Leases | ||
2021 | $ 5,986 | |
2022 | 3,875 | |
2023 | 2,433 | |
2024 | 1,436 | |
2025 and thereafter | 2,960 | |
Total | 16,690 | $ 20,477 |
Debt and Finance Leases | ||
2021 | 9,180 | |
2022 | 3,875 | |
2023 | 142,433 | |
2024 | 351,436 | |
2025 and thereafter | 175,128 | |
Total | 682,052 | |
Less: Unamortized debt issuance costs and unamortized discount | (5,242) | (5,981) |
Carrying amount of debt | 676,810 | $ 686,006 |
2019 Credit Agreement | JPMorgan Chase, N.A. | ||
Debt, Excluding Finance Leases | ||
2021 | 0 | |
2022 | 0 | |
2023 | 140,000 | |
2024 | 0 | |
2025 and thereafter | 0 | |
Total | $ 140,000 | |
Senior Notes | 6.75% Notes | ||
Maturities of Debt | ||
Interest rate on debt | 6.75% | |
Debt, Excluding Finance Leases | ||
2021 | $ 0 | |
2022 | 0 | |
2023 | 0 | |
2024 | 350,000 | |
2025 and thereafter | 0 | |
Total | $ 350,000 | |
Senior Notes | 7.625% Notes | ||
Maturities of Debt | ||
Interest rate on debt | 7.625% | |
Debt, Excluding Finance Leases | ||
2021 | $ 0 | |
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
2025 and thereafter | 100,000 | |
Total | $ 100,000 | |
Surplus Notes | Subordinated Debentures I | ||
Maturities of Debt | ||
Interest rate on debt | 3.62% | 5.29% |
Debt, Excluding Finance Leases | ||
2021 | $ 0 | |
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
2025 and thereafter | 41,238 | |
Total | $ 41,238 | |
Surplus Notes | Subordinated Debentures II | ||
Maturities of Debt | ||
Interest rate on debt | 4.47% | 6.14% |
Debt, Excluding Finance Leases | ||
2021 | $ 0 | |
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
2025 and thereafter | 30,930 | |
Total | $ 30,930 | |
Other | ||
Maturities of Debt | ||
Interest rate on debt | 3.50% | |
Other | Other | ||
Debt, Excluding Finance Leases | ||
2021 | $ 3,194 | |
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
2025 and thereafter | 0 | |
Total | $ 3,194 |
Debt - Covenants and Compliance
Debt - Covenants and Compliance (Details) - Senior Notes | Dec. 31, 2020 |
Indenture Excess Leverage Ratio | Minimum | |
Debt Instrument | |
Ratio of indebtedness to net capital | 0.35 |
Indenture Excess Leverage Ratio | Maximum | |
Debt Instrument | |
Ratio of indebtedness to net capital | 1 |
6.75% Notes | |
Debt Instrument | |
Interest rate on debt | 6.75% |
7.625% Notes | |
Debt Instrument | |
Interest rate on debt | 7.625% |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current tax expense (benefit) | |||||||||||
Federal | $ 115,423 | $ 67,728 | $ 24,749 | ||||||||
Foreign | 213 | 2,621 | 1,376 | ||||||||
Total current tax expense (benefit) | 115,636 | 70,349 | 26,125 | ||||||||
Deferred tax expense (benefit) | |||||||||||
Federal | 20,825 | 6,664 | 26,755 | ||||||||
Foreign | 0 | 0 | 604 | ||||||||
Total deferred tax expense (benefit) | 20,825 | 6,664 | 27,359 | ||||||||
Provision (benefit) for income taxes | $ 30,354 | $ 27,428 | $ 50,507 | $ 28,172 | $ 15,519 | $ 16,747 | $ 22,241 | $ 22,506 | 136,461 | 77,013 | 53,484 |
Reciprocal Exchanges | |||||||||||
Current tax expense (benefit) | |||||||||||
Federal | 7 | (2,257) | (2,290) | ||||||||
Foreign | 0 | 0 | 0 | ||||||||
Total current tax expense (benefit) | 7 | (2,257) | (2,290) | ||||||||
Deferred tax expense (benefit) | |||||||||||
Federal | 1,777 | (6,833) | (1,260) | ||||||||
Foreign | 0 | 0 | 0 | ||||||||
Total deferred tax expense (benefit) | 1,777 | (6,833) | (1,260) | ||||||||
Provision (benefit) for income taxes | 1,784 | (9,090) | (3,550) | ||||||||
NGHC | |||||||||||
Current tax expense (benefit) | |||||||||||
Federal | 115,416 | 69,985 | 27,039 | ||||||||
Foreign | 213 | 2,621 | 1,376 | ||||||||
Total current tax expense (benefit) | 115,629 | 72,606 | 28,415 | ||||||||
Deferred tax expense (benefit) | |||||||||||
Federal | 19,048 | 13,497 | 28,015 | ||||||||
Foreign | 0 | 0 | 604 | ||||||||
Total deferred tax expense (benefit) | 19,048 | 13,497 | 28,619 | ||||||||
Provision (benefit) for income taxes | $ 134,677 | $ 86,103 | $ 57,034 |
Income Taxes - Domestic and For
Income Taxes - Domestic and Foreign Components of Income Before Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Entity Information | |||
Domestic | $ 620,847 | $ 328,350 | $ 201,083 |
Foreign | 39,822 | 76,093 | 19,925 |
Income (loss) | 660,669 | 404,443 | 221,008 |
Reciprocal Exchanges | |||
Entity Information | |||
Domestic | 12,661 | (29,729) | (43,380) |
Foreign | 0 | 0 | 0 |
Income (loss) | 12,661 | (29,729) | (43,380) |
NGHC | |||
Entity Information | |||
Domestic | 608,186 | 358,079 | 244,463 |
Foreign | 39,822 | 76,093 | 19,925 |
Income (loss) | $ 648,008 | $ 434,172 | $ 264,388 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure | |||
Federal tax rate | 21.00% | 21.00% | 21.00% |
Deferred tax assets, valuation allowance | $ 77,882 | $ 71,780 | |
Benefits of operating loss carryforwards | 6,954 | 11,541 | $ 53,716 |
Net operating loss carryforwards | 62,731 | 67,406 | $ 58,082 |
Unrecognized tax benefits | 4,609 | $ 0 | |
Unrecognized tax benefits, Interest accrued | 1,300 | ||
Unrecognized tax benefits, penalties accrued | $ 1,100 | ||
Reciprocal Exchanges | |||
Income Tax Disclosure | |||
Federal tax rate | 21.00% | 21.00% | 21.00% |
Deferred tax assets, valuation allowance | $ 5,670 | $ 6,523 | |
Benefits of operating loss carryforwards | 0 | 0 | $ 0 |
Net operating loss carryforwards | $ 53,214 | $ 66,484 | $ 54,300 |
NGHC | |||
Income Tax Disclosure | |||
Federal tax rate | 21.00% | 21.00% | 21.00% |
Deferred tax assets, valuation allowance | $ 72,212 | $ 65,257 | |
Benefits of operating loss carryforwards | $ 6,954 | $ 11,541 | $ 53,716 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Accrued expenses | $ 7,866 | $ 3,861 |
Unearned premiums and other revenue | 76,114 | 69,301 |
Bad debt | 4,909 | 4,990 |
Loss reserve discount | 14,238 | 11,397 |
Net operating loss carryforwards | 119,044 | 116,497 |
Surplus note interest | 0 | 2,081 |
Other | 9,872 | 14,622 |
Gross deferred tax assets | 232,043 | 222,749 |
Less: Valuation allowance | (77,882) | (71,780) |
Total deferred tax assets | 154,161 | 150,969 |
Deferred tax liabilities: | ||
Deferred acquisition costs | 56,751 | 54,722 |
Intangible assets | 39,980 | 37,195 |
Goodwill | 4,418 | 4,204 |
Property and equipment | 39,160 | 28,922 |
Investments | 4,497 | 0 |
Deferred commissions | 18,875 | 0 |
Surplus note interest | 10,747 | 13,828 |
Unrealized capital gains | 55,096 | 20,932 |
Other | 0 | 11,752 |
Gross deferred tax liabilities | 229,524 | 171,555 |
Deferred tax asset | 0 | 0 |
Deferred tax liability | (75,363) | (20,586) |
Reciprocal Exchanges | ||
Deferred tax assets: | ||
Accrued expenses | 289 | 683 |
Unearned premiums and other revenue | 4,242 | 5,146 |
Bad debt | 281 | 114 |
Loss reserve discount | 1,167 | 1,042 |
Net operating loss carryforwards | 11,175 | 13,962 |
Surplus note interest | 0 | 0 |
Other | 2,099 | 4,882 |
Gross deferred tax assets | 19,253 | 25,829 |
Less: Valuation allowance | (5,670) | (6,523) |
Total deferred tax assets | 13,583 | 19,306 |
Deferred tax liabilities: | ||
Deferred acquisition costs | 4,032 | 4,894 |
Intangible assets | 632 | 700 |
Goodwill | 0 | 0 |
Property and equipment | 0 | 0 |
Investments | 107 | 0 |
Deferred commissions | 0 | 0 |
Surplus note interest | 10,747 | 13,828 |
Unrealized capital gains | 1,080 | 1,062 |
Other | 0 | 81 |
Gross deferred tax liabilities | 16,598 | 20,565 |
Deferred tax asset | 0 | 0 |
Deferred tax liability | (3,015) | (1,259) |
NGHC | ||
Deferred tax assets: | ||
Accrued expenses | 7,577 | 3,178 |
Unearned premiums and other revenue | 71,872 | 64,155 |
Bad debt | 4,628 | 4,876 |
Loss reserve discount | 13,071 | 10,355 |
Net operating loss carryforwards | 107,869 | 102,535 |
Surplus note interest | 0 | 2,081 |
Other | 7,773 | 9,740 |
Gross deferred tax assets | 212,790 | 196,920 |
Less: Valuation allowance | (72,212) | (65,257) |
Total deferred tax assets | 140,578 | 131,663 |
Deferred tax liabilities: | ||
Deferred acquisition costs | 52,719 | 49,828 |
Intangible assets | 39,348 | 36,495 |
Goodwill | 4,418 | 4,204 |
Property and equipment | 39,160 | 28,922 |
Investments | 4,390 | 0 |
Deferred commissions | 18,875 | 0 |
Surplus note interest | 0 | 0 |
Unrealized capital gains | 54,016 | 19,870 |
Other | 0 | 11,671 |
Gross deferred tax liabilities | 212,926 | 150,990 |
Deferred tax asset | 0 | 0 |
Deferred tax liability | $ (72,348) | $ (19,327) |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Entity Information | |||||||||||
Income (loss) before provision for income taxes | $ 660,669 | $ 404,443 | $ 221,008 | ||||||||
Tax rate | 21.00% | 21.00% | 21.00% | ||||||||
Computed “expected” tax expense | $ 138,741 | $ 84,933 | $ 46,411 | ||||||||
NGHC | |||||||||||
Tax-exempt interest | (499) | (838) | (940) | ||||||||
Effect of foreign operations | 351 | (1,192) | 2,807 | ||||||||
State taxes | 1,556 | (2,147) | 4,578 | ||||||||
Change in valuation allowance | 6,051 | 11,436 | 54,934 | ||||||||
Benefits of operating loss carryforwards | (6,954) | (11,541) | (53,716) | ||||||||
Effects of TCJA | (1,317) | ||||||||||
Other permanent items | (2,785) | (3,638) | 727 | ||||||||
Provision (benefit) for income taxes | $ 30,354 | $ 27,428 | $ 50,507 | $ 28,172 | $ 15,519 | $ 16,747 | $ 22,241 | $ 22,506 | $ 136,461 | $ 77,013 | $ 53,484 |
Tax Rate | |||||||||||
Tax rate | 21.00% | 21.00% | 21.00% | ||||||||
Tax-exempt interest | (0.10%) | (0.20%) | (0.40%) | ||||||||
Effect of foreign operations | 0.10% | (0.30%) | 1.30% | ||||||||
State taxes | 0.20% | (0.50%) | 2.10% | ||||||||
Change in valuation allowance | 0.90% | 2.80% | 24.90% | ||||||||
Benefits of operating loss carryforwards | (1.10%) | (2.90%) | (24.30%) | ||||||||
Effects of TCJA | (0.006) | ||||||||||
Other permanent items | (0.30%) | (0.90%) | 0.20% | ||||||||
Provision (benefit) for income taxes | 20.70% | 19.00% | 24.20% | ||||||||
Reciprocal Exchanges | |||||||||||
Entity Information | |||||||||||
Income (loss) before provision for income taxes | $ 12,661 | $ (29,729) | $ (43,380) | ||||||||
Tax rate | 21.00% | 21.00% | 21.00% | ||||||||
Computed “expected” tax expense | $ 2,659 | $ (6,243) | $ (9,110) | ||||||||
NGHC | |||||||||||
Tax-exempt interest | (13) | (28) | (30) | ||||||||
Effect of foreign operations | 0 | 0 | 0 | ||||||||
State taxes | 0 | 210 | 0 | ||||||||
Change in valuation allowance | (903) | (105) | 1,218 | ||||||||
Benefits of operating loss carryforwards | 0 | 0 | 0 | ||||||||
Effects of TCJA | (366) | ||||||||||
Other permanent items | 41 | (2,924) | 4,738 | ||||||||
Provision (benefit) for income taxes | $ 1,784 | $ (9,090) | $ (3,550) | ||||||||
Tax Rate | |||||||||||
Tax rate | 21.00% | 21.00% | 21.00% | ||||||||
Tax-exempt interest | (0.10%) | 0.10% | 0.10% | ||||||||
Effect of foreign operations | 0.00% | 0.00% | 0.00% | ||||||||
State taxes | 0.00% | (0.70%) | 0.00% | ||||||||
Change in valuation allowance | (7.10%) | 0.40% | (2.80%) | ||||||||
Benefits of operating loss carryforwards | 0.00% | 0.00% | 0.00% | ||||||||
Effects of TCJA | 0.008 | ||||||||||
Other permanent items | 0.30% | 9.80% | (10.90%) | ||||||||
Provision (benefit) for income taxes | 14.10% | 30.60% | 8.20% | ||||||||
NGHC | |||||||||||
Entity Information | |||||||||||
Income (loss) before provision for income taxes | $ 648,008 | $ 434,172 | $ 264,388 | ||||||||
Tax rate | 21.00% | 21.00% | 21.00% | ||||||||
Computed “expected” tax expense | $ 136,082 | $ 91,176 | $ 55,521 | ||||||||
NGHC | |||||||||||
Tax-exempt interest | (486) | (810) | (910) | ||||||||
Effect of foreign operations | 351 | (1,192) | 2,807 | ||||||||
State taxes | 1,556 | (2,357) | 4,578 | ||||||||
Change in valuation allowance | 6,954 | 11,541 | 53,716 | ||||||||
Benefits of operating loss carryforwards | (6,954) | (11,541) | (53,716) | ||||||||
Effects of TCJA | (951) | ||||||||||
Other permanent items | (2,826) | (714) | (4,011) | ||||||||
Provision (benefit) for income taxes | $ 134,677 | $ 86,103 | $ 57,034 | ||||||||
Tax Rate | |||||||||||
Tax rate | 21.00% | 21.00% | 21.00% | ||||||||
Tax-exempt interest | (0.10%) | (0.20%) | (0.30%) | ||||||||
Effect of foreign operations | 0.10% | (0.30%) | 1.10% | ||||||||
State taxes | 0.20% | (0.50%) | 1.70% | ||||||||
Change in valuation allowance | 1.10% | 2.70% | 20.30% | ||||||||
Benefits of operating loss carryforwards | (1.10%) | (2.70%) | (20.30%) | ||||||||
Effects of TCJA | (0.004) | ||||||||||
Other permanent items | (0.40%) | (0.20%) | (1.50%) | ||||||||
Provision (benefit) for income taxes | 20.80% | 19.80% | 21.60% |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Gross Unrecognized Tax Benefits (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |
Gross unrecognized tax benefits, beginning of the year | $ 0 |
Increases in tax positions for prior years | 3,889 |
Increases in tax positions for current year | 720 |
Gross unrecognized tax benefits, end of the year | $ 4,609 |
Commitments and Contingencies -
Commitments and Contingencies - Lease Commitments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | |||
Lease expense | $ 37,827 | $ 37,082 | |
Lease expense | $ 35,723 | ||
Operating Leases | |||
2021 | 31,525 | ||
2022 | 27,225 | ||
2023 | 21,824 | ||
2024 | 18,186 | ||
2025 | 15,109 | ||
Thereafter | 22,222 | ||
Total lease payments | 136,091 | ||
Less: Interest | (16,764) | ||
Present value of lease liabilities | 119,327 | ||
Finance Leases | |||
2021 | 6,601 | ||
2022 | 4,296 | ||
2023 | 2,720 | ||
2024 | 1,638 | ||
2025 | 882 | ||
Thereafter | 2,393 | ||
Total lease payments | 18,530 | ||
Less: Interest | (1,840) | ||
Present value of lease liabilities | 16,690 | $ 20,477 | |
Total | |||
2021 | 38,126 | ||
2022 | 31,521 | ||
2023 | 24,544 | ||
2024 | 19,824 | ||
2025 | 15,991 | ||
Thereafter | 24,615 | ||
Total lease payments | $ 154,621 |
Commitments and Contingencies_2
Commitments and Contingencies - Employment Agreements (Details) - Employment Agreements $ in Thousands | Dec. 31, 2020USD ($) |
Other Commitments | |
2021 | $ 4,672 |
2022 | 2,574 |
2023 | 1,303 |
2024 | 773 |
2025 | 0 |
Total | $ 9,322 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) | Jul. 15, 2023 | Apr. 29, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jul. 14, 2023 | Dec. 31, 2018 |
Class of Stock | |||||||||
Shares of preferred stock issued (in shares) | 2,565,120 | 2,565,120 | |||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||||||
Preferred stock, value, issued | $ 450,000,000 | $ 450,000,000 | |||||||
Stock repurchase program, period | 12 months | ||||||||
Stock repurchase program, authorized amount | $ 50,000,000 | ||||||||
Common stock repurchased (in shares) | 459,083 | ||||||||
Common stock repurchased | $ 8,482,000 | ||||||||
Preferred Stock | |||||||||
Class of Stock | |||||||||
Shares of preferred stock issued (in shares) | 2,565,120 | 2,565,120 | |||||||
Preferred Stock | American Depositary Shares | |||||||||
Class of Stock | |||||||||
Shares of preferred stock issued (in shares) | 8,000,000 | 6,600,000 | |||||||
Liquidation preference (in dollars per share) | $ 25 | $ 25 | |||||||
Preferred Stock | Series B Preferred Stock | |||||||||
Class of Stock | |||||||||
Shares of preferred stock issued (in shares) | 165,000 | 165,000 | |||||||
Dividend rate per year | 7.50% | 7.50% | 7.50% | ||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | ||||||||
Liquidation preference (in dollars per share) | $ 1,000 | $ 1,000 | 1,000 | ||||||
Preferred Stock | Preferred stock Series A | |||||||||
Class of Stock | |||||||||
Shares of preferred stock issued (in shares) | 2,200,000 | 2,200,000 | 2,200,000 | ||||||
Dividend rate per year | 7.50% | 7.50% | 7.50% | ||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | ||||||||
Liquidation preference (in dollars per share) | $ 25 | $ 25 | $ 25 | $ 25 | |||||
Preferred Stock | Series C Preferred Stock | |||||||||
Class of Stock | |||||||||
Shares of preferred stock issued (in shares) | 200,000 | 200,000 | 200,000 | ||||||
Dividend rate per year | 7.50% | 7.50% | 7.50% | ||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | ||||||||
Liquidation preference (in dollars per share) | $ 1,000 | $ 1,000 | $ 1,000 | ||||||
Preferred Stock | Preferred stock Series D | |||||||||
Class of Stock | |||||||||
Shares of preferred stock issued (in shares) | 120 | 120 | 120 | ||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | ||||||||
Liquidation preference (in dollars per share) | $ 250,000 | $ 250,000 | $ 250,000 | ||||||
Preferred stock, value, issued | $ 30,000,000 | ||||||||
Preferred Stock | Preferred stock Series D | Forecast | |||||||||
Class of Stock | |||||||||
Dividend rate per year | 5.4941% | 7.00% | |||||||
Convertible preferred stock, shares issued (in shares) | 6,578.9474 | ||||||||
Preferred stock, redemption price per share (in dollars per share) | $ 38 | ||||||||
Common stock | Series B Preferred Stock | |||||||||
Class of Stock | |||||||||
Shares of preferred stock issued (in shares) | 165,000 |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock (Details) - USD ($) | Jul. 15, 2023 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jul. 14, 2023 | Dec. 31, 2018 |
Class of Stock | ||||||||
Shares of preferred stock issued (in shares) | 2,565,120 | 2,565,120 | ||||||
Aggregate liquidation preference | $ 450,000,000 | $ 450,000,000 | ||||||
Preferred Stock | ||||||||
Class of Stock | ||||||||
Shares of preferred stock issued (in shares) | 2,565,120 | 2,565,120 | ||||||
Aggregate liquidation preference | $ 450,000,000 | $ 450,000,000 | ||||||
Preferred Stock | A | ||||||||
Class of Stock | ||||||||
Dividend rate per year | 7.50% | 7.50% | 7.50% | |||||
Shares of preferred stock issued (in shares) | 2,200,000 | 2,200,000 | 2,200,000 | |||||
Depositary shares issued (in shares) | 0 | 0 | ||||||
Liquidation preference (in dollars per share) | $ 25 | $ 25 | $ 25 | $ 25 | ||||
Aggregate liquidation preference | $ 55,000,000 | $ 55,000,000 | ||||||
Preferred Stock | B | ||||||||
Class of Stock | ||||||||
Dividend rate per year | 7.50% | 7.50% | 7.50% | |||||
Shares of preferred stock issued (in shares) | 165,000 | 165,000 | ||||||
Depositary shares issued (in shares) | 6,600,000 | 6,600,000 | ||||||
Liquidation preference (in dollars per share) | $ 1,000 | $ 1,000 | $ 1,000 | |||||
Aggregate liquidation preference | $ 165,000,000 | $ 165,000,000 | ||||||
Preferred Stock | C | ||||||||
Class of Stock | ||||||||
Dividend rate per year | 7.50% | 7.50% | 7.50% | |||||
Shares of preferred stock issued (in shares) | 200,000 | 200,000 | 200,000 | |||||
Depositary shares issued (in shares) | 8,000,000 | 8,000,000 | ||||||
Liquidation preference (in dollars per share) | $ 1,000 | $ 1,000 | $ 1,000 | |||||
Aggregate liquidation preference | $ 200,000,000 | $ 200,000,000 | ||||||
Preferred Stock | D | ||||||||
Class of Stock | ||||||||
Shares of preferred stock issued (in shares) | 120 | 120 | 120 | |||||
Depositary shares issued (in shares) | 0 | 0 | ||||||
Liquidation preference (in dollars per share) | $ 250,000 | $ 250,000 | $ 250,000 | |||||
Aggregate liquidation preference | $ 30,000,000 | $ 30,000,000 | ||||||
Preferred Stock | D | Forecast | ||||||||
Class of Stock | ||||||||
Dividend rate per year | 5.4941% | 7.00% |
Stockholders' Equity - Dividend
Stockholders' Equity - Dividends Declared (Details) - $ / shares | 3 Months Ended | |||||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | |
Common stock | ||||||||||||
Class of Stock | ||||||||||||
Declaration Date | Oct. 29, 2020 | Jul. 31, 2020 | Apr. 29, 2020 | Feb. 20, 2020 | Oct. 30, 2019 | Jul. 29, 2019 | May 6, 2019 | Feb. 25, 2019 | Oct. 29, 2018 | Aug. 6, 2018 | May 7, 2018 | Feb. 26, 2018 |
Dividend Per Share (in dollars per share) | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 |
Preferred stock Series A | ||||||||||||
Class of Stock | ||||||||||||
Declaration Date | Oct. 29, 2020 | Jul. 31, 2020 | Apr. 29, 2020 | Feb. 20, 2020 | Oct. 30, 2019 | Jul. 29, 2019 | May 6, 2019 | Feb. 25, 2019 | Oct. 29, 2018 | Aug. 6, 2018 | May 7, 2018 | Feb. 26, 2018 |
Dividend Per Share (in dollars per share) | $ 0.46875 | $ 0.46875 | $ 0.46875 | $ 0.46875 | $ 0.46875 | $ 0.46875 | $ 0.46875 | $ 0.46875 | $ 0.46875 | $ 0.46875 | $ 0.46875 | $ 0.46875 |
Preferred stock Series B and Series C | ||||||||||||
Class of Stock | ||||||||||||
Declaration Date | Oct. 29, 2020 | Jul. 31, 2020 | Apr. 29, 2020 | Feb. 20, 2020 | Oct. 30, 2019 | Jul. 29, 2019 | May 6, 2019 | Feb. 25, 2019 | Oct. 29, 2018 | Aug. 6, 2018 | May 7, 2018 | Feb. 26, 2018 |
Dividend Per Share (in dollars per share) | $ 18.75 | $ 18.75 | $ 18.75 | $ 18.75 | $ 18.75 | $ 18.75 | $ 18.75 | $ 18.75 | $ 18.75 | $ 18.75 | $ 18.75 | $ 18.75 |
Dividend Per Depositary Share (in dollars per share) | $ 0.46875 | $ 0.46875 | $ 0.46875 | $ 0.46875 | $ 0.46875 | $ 0.46875 | $ 0.46875 | $ 0.46875 | $ 0.46875 | $ 0.46875 | $ 0.46875 | $ 0.46875 |
Preferred stock Series D | ||||||||||||
Class of Stock | ||||||||||||
Declaration Date | Oct. 29, 2020 | Apr. 29, 2020 | Oct. 30, 2019 | May 6, 2019 | Oct. 29, 2018 | |||||||
Dividend Per Share (in dollars per share) | $ 8,750 | $ 8,750 | $ 8,750 | $ 8,750 | $ 8,263.89 |
Stockholders' Equity - Shares R
Stockholders' Equity - Shares Rollforward (Details) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Increase (Decrease) in Stockholders' Equity | ||
Common Stock, beginning of the year (in shares) | 113,368,811 | 112,940,595 |
Shares issued under employee stock plans and exercises of stock options (in shares) | 854,914 | 578,201 |
Shares withheld related to net share settlement (in shares) | (179,599) | (149,985) |
Common Stock, end of the year (in shares) | 114,044,126 | 113,368,811 |
Treasury Stock, beginning of the year (in shares) | 0 | 0 |
Repurchases of common stock (in shares) | (459,083) | |
Treasury Stock, at end of the year (in shares) | (459,083) | 0 |
Shares outstanding at end of the year (in shares) | 113,585,043 | 113,368,811 |
Common stock | ||
Increase (Decrease) in Stockholders' Equity | ||
Repurchases of common stock (in shares) | (459,083) | 0 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Share-based compensation expense | $ 12,421 | $ 10,996 | $ 9,020 |
Unrecognized compensation cost | $ 15,577 | ||
Nonvested award, cost not yet recognized, period for recognition (in years) | 1 year 3 months 18 days | ||
Employee Stock option | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Options granted in period (in shares) | 0 | ||
Options forfeited or expired (in shares) | 0 | ||
Intrinsic value of stock options exercised | $ 7,685 | 3,105 | 5,011 |
Fair value options vested in period | $ 1,044 | $ 239 | $ 783 |
Options outstanding | 2,637,351 | 3,025,587 | |
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Granted (in dollars per share) | $ 21.46 | $ 25.42 | $ 21.36 |
Vested in period, fair value | $ 11,051 | $ 9,259 | $ 7,068 |
RSUs outstanding | 1,116,576 | 1,033,631 | |
Restricted Stock Units (RSUs) | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Award vesting period | 3 years | ||
Restricted Stock Units (RSUs) | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Award vesting period | 4 years | ||
Common stock | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Number of shares authorized (in shares) | 2,500,000 | ||
Number of shares available (in shares) | 1,900,000 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
Aggregate Intrinsic Value | |
Share price (in dollars per share) | $ 34.18 |
Employee Stock option | |
Number of Shares | |
Outstanding at beginning of the year (in shares) | shares | 3,025,587 |
Exercised (in shares) | shares | (388,236) |
Outstanding at end of the year (in shares) | shares | 2,637,351 |
Exercisable at end of the year (in shares) | shares | 2,637,351 |
Weighted-Average Exercise Price | |
Outstanding at beginning of the year (in dollars per share) | $ 9.83 |
Exercised (in dollars per share) | 6.79 |
Outstanding at end of the year (in dollars per share) | 10.28 |
Exercisable at end of the year (in dollars per share) | $ 10.28 |
Weighted-Average Remaining Contractual Term (in years) | |
Outstanding at end of the year | 2 years 4 months 24 days |
Exercisable at end of the year | 2 years 4 months 24 days |
Aggregate Intrinsic Value | |
Outstanding at end of the year | $ | $ 63,036 |
Exercisable at end of the year | $ | $ 63,036 |
Stock-Based Compensation - RSU
Stock-Based Compensation - RSU Activity (Details) - Restricted Stock Units (RSUs) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Number of RSUs | |||
Non-vested at beginning of the year (in shares) | 1,033,631 | ||
Granted (in shares) | 561,497 | ||
Vested (in shares) | (466,678) | ||
Forfeited (in shares) | (11,874) | ||
Non-vested at end of of the year (in shares) | 1,116,576 | 1,033,631 | |
Weighted-Average Grant Date Fair Value | |||
Non-vested at beginning of the year(in dollars per share) | $ 23.98 | ||
Granted (in dollars per share) | 21.46 | $ 25.42 | $ 21.36 |
Vested (in dollars per share) | 23.68 | ||
Forfeited (in dollars per share) | 21.75 | ||
Non-vested at end of the year (in dollars per share) | $ 22.86 | $ 23.98 |
Related Party Transactions - Ag
Related Party Transactions - Agreements with ACP Re (Details) - USD ($) $ in Thousands | Sep. 20, 2026 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Related Party Transaction | ||||
Other investments | $ 281,055 | $ 311,287 | ||
Notes Receivable | ||||
Related Party Transaction | ||||
Other investments | 130,784 | 129,229 | ||
Related parties | ||||
Related Party Transaction | ||||
Other investments | 231,927 | 238,841 | ||
Related parties | Notes Receivable | ||||
Related Party Transaction | ||||
Other investments | 130,824 | 129,299 | ||
Related parties | ACP Re | ||||
Related Party Transaction | ||||
Notes receivable, related parties | $ 250,000 | |||
Maintenance covenant, minimum collateral interest as percent of value of outstanding loan balance | 115.00% | |||
Minimum percent of change in control included as events of default | 50.00% | |||
Related parties | Loans | ||||
Related Party Transaction | ||||
Notes receivable, related parties | $ 125,000 | |||
Related parties | Loans | ACP Re | ||||
Related Party Transaction | ||||
Interest rate on debt | 3.70% | |||
Maximum percent of interest that may be paid in kind | 1.20% | |||
Interest income, related party | $ 4,825 | $ 4,767 | $ 4,711 | |
Related parties | Loans | ACP Re | Forecast | ||||
Related Party Transaction | ||||
Percent of outstanding principal balance of loan due and payable annually after tenth anniversary | 2.00% |
Related Party Transactions - Ot
Related Party Transactions - Other Related Party Transactions (Details) - Related parties - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Lease Agreement 59 Maiden Lane | |||
Related Party Transaction | |||
Related party transaction, expenses from transactions with related party | $ 830 | $ 830 | $ 830 |
Lease Agreement 30 North LaSalle | |||
Related Party Transaction | |||
Related party transaction, expenses from transactions with related party | $ 440 | $ 309 | $ 302 |
Benefits Plan (Details)
Benefits Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |||
Contribution expense | $ 11,624 | $ 10,212 | $ 9,292 |
Statutory Financial Data, Ris_3
Statutory Financial Data, Risk-Based Capital and Dividend Restrictions - Statutory Financial Data (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statutory Accounting Practices | |||
Statutory capital and surplus | $ 269,219 | $ 255,393 | |
Reciprocal Exchanges | |||
Statutory Accounting Practices | |||
Statutory capital and surplus | 109,314 | 84,340 | |
Statutory net income (loss) | 26,106 | (27,033) | $ (24,194) |
Property and Casualty Domestic Entities | |||
Statutory Accounting Practices | |||
Statutory capital and surplus | 1,619,460 | 1,600,740 | |
Statutory net income (loss) | 214,313 | 156,771 | 16,737 |
Property and Casualty Foreign Entities | |||
Statutory Accounting Practices | |||
Statutory capital and surplus | 791,028 | 760,658 | |
Statutory net income (loss) | 174,861 | 106,734 | 64,810 |
Property and Casualty | |||
Statutory Accounting Practices | |||
Statutory capital and surplus | 2,410,488 | 2,361,398 | |
Statutory net income (loss) | 389,174 | 263,505 | 81,547 |
Life Insurance Domestic Entities | |||
Statutory Accounting Practices | |||
Statutory capital and surplus | 79,977 | 53,022 | |
Statutory net income (loss) | $ 7,963 | $ 7,125 | $ 9,827 |
Statutory Financial Data, Ris_4
Statutory Financial Data, Risk-Based Capital and Dividend Restrictions - Dividend Restrictions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Insurance [Abstract] | |||
Statutory accounting practices, statutory amount available for dividend payments with regulatory approval | $ 156,400 | $ 402,970 | |
Dividends and return of capital | $ 300,000 | $ 7,000 | $ 156,660 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator: | |||||||||||
Net income attributable to NGHC | $ 136,029 | $ 109,969 | $ 166,574 | $ 100,759 | $ 107,281 | $ 71,154 | $ 77,876 | $ 91,758 | $ 513,331 | $ 348,069 | $ 207,354 |
Dividends on preferred stock | (33,600) | (33,600) | (32,492) | ||||||||
Numerator for basic EPS | $ 127,104 | $ 102,094 | $ 157,649 | $ 92,884 | $ 98,356 | $ 63,279 | $ 68,951 | $ 83,883 | 479,731 | 314,469 | 174,862 |
Effect of dilutive securities: | |||||||||||
Preferred stock dividends - convertible | 2,100 | 2,100 | 992 | ||||||||
Numerator for diluted EPS - after assumed conversions | $ 481,831 | $ 316,569 | $ 175,854 | ||||||||
Denominator: | |||||||||||
Denominator for basic EPS - weighted-average shares outstanding (in shares) | 113,511,669 | 113,199,501 | 107,659,813 | ||||||||
Effect of dilutive securities: | |||||||||||
Convertible preferred stock (in shares) | 789,473 | 789,473 | 789,473 | ||||||||
Dilutive potential common shares (in shares) | 2,914,926 | 2,897,471 | 3,162,243 | ||||||||
Denominator for diluted EPS - weighted-average shares outstanding and assumed conversions (in shares) | 116,426,595 | 116,096,972 | 110,822,056 | ||||||||
EPS attributable to NGHC common stockholders: | |||||||||||
Basic EPS (in dollars per share) | $ 1.12 | $ 0.90 | $ 1.39 | $ 0.82 | $ 0.87 | $ 0.56 | $ 0.61 | $ 0.74 | $ 4.23 | $ 2.78 | $ 1.62 |
Diluted EPS (in dollars per share) | $ 1.10 | $ 0.88 | $ 1.37 | $ 0.80 | $ 0.85 | $ 0.54 | $ 0.60 | $ 0.72 | $ 4.14 | $ 2.73 | $ 1.59 |
Preferred stock dividends - nonconvertible | |||||||||||
Numerator: | |||||||||||
Dividends on preferred stock | $ (31,500) | $ (31,500) | $ (31,500) | ||||||||
Preferred stock dividends - convertible | |||||||||||
Numerator: | |||||||||||
Dividends on preferred stock | $ (2,100) | $ (2,100) | $ (992) | ||||||||
Employee stock options | |||||||||||
Effect of dilutive securities: | |||||||||||
Share options (in shares) | 1,739,871 | 1,833,736 | 2,053,681 | ||||||||
RSUs | |||||||||||
Effect of dilutive securities: | |||||||||||
Share options (in shares) | 385,582 | 274,262 | 319,089 |
Segment Information - Results o
Segment Information - Results of Operations (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2020USD ($)segment | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Segment Reporting [Abstract] | |||||||||||
Number of business segments | segment | 2 | ||||||||||
Underwriting revenues: | |||||||||||
Gross premium written | $ 5,634,547 | $ 5,583,080 | $ 5,416,839 | ||||||||
Ceded premiums | (1,013,703) | (1,358,459) | (1,589,126) | ||||||||
Net premium written | 4,620,844 | 4,224,621 | 3,827,713 | ||||||||
Change in unearned premium | (126,224) | (106,579) | (95,511) | ||||||||
Net earned premium | 4,494,620 | 4,118,042 | 3,732,202 | ||||||||
Ceding commission income | 152,457 | 238,453 | 224,697 | ||||||||
Service and fee income | 760,374 | 641,965 | 561,583 | ||||||||
Total underwriting revenues | 5,407,451 | 4,998,460 | 4,518,482 | ||||||||
Underwriting expenses: | |||||||||||
Loss and loss adjustment expense | 2,824,082 | 2,854,468 | 2,662,226 | ||||||||
Acquisition costs and other underwriting expenses | 990,569 | 827,367 | 735,266 | ||||||||
General and administrative expenses | 1,043,193 | 1,041,772 | 938,046 | ||||||||
Total underwriting expenses | 4,857,844 | 4,723,607 | 4,335,538 | ||||||||
Underwriting income | 549,607 | 274,853 | 182,944 | ||||||||
Net investment income | 118,257 | 141,233 | 119,034 | ||||||||
Net loss on investments | 26,577 | 13,473 | (29,545) | ||||||||
Other income | 0 | 26,428 | 0 | ||||||||
Interest expense | (33,772) | (51,544) | (51,425) | ||||||||
Provision for income taxes | $ (30,354) | $ (27,428) | $ (50,507) | $ (28,172) | $ (15,519) | $ (16,747) | $ (22,241) | $ (22,506) | (136,461) | (77,013) | (53,484) |
Net income attributable to noncontrolling interest | (10,877) | 20,639 | 39,830 | ||||||||
Net income attributable to NGHC | $ 136,029 | $ 109,969 | $ 166,574 | $ 100,759 | $ 107,281 | $ 71,154 | $ 77,876 | $ 91,758 | 513,331 | 348,069 | 207,354 |
Operating Segments | Property and Casualty | |||||||||||
Underwriting revenues: | |||||||||||
Gross premium written | 4,857,631 | 4,814,463 | 4,718,730 | ||||||||
Ceded premiums | (923,168) | (1,250,448) | (1,517,556) | ||||||||
Net premium written | 3,934,463 | 3,564,015 | 3,201,174 | ||||||||
Change in unearned premium | (125,310) | (108,992) | (85,385) | ||||||||
Net earned premium | 3,809,153 | 3,455,023 | 3,115,789 | ||||||||
Ceding commission income | 152,671 | 227,514 | 217,694 | ||||||||
Service and fee income | 391,702 | 392,478 | 375,603 | ||||||||
Total underwriting revenues | 4,353,526 | 4,075,015 | 3,709,086 | ||||||||
Underwriting expenses: | |||||||||||
Loss and loss adjustment expense | 2,505,189 | 2,543,788 | 2,340,881 | ||||||||
Acquisition costs and other underwriting expenses | 681,286 | 605,019 | 550,540 | ||||||||
General and administrative expenses | 792,929 | 773,291 | 726,238 | ||||||||
Total underwriting expenses | 3,979,404 | 3,922,098 | 3,617,659 | ||||||||
Underwriting income | 374,122 | 152,917 | 91,427 | ||||||||
Net investment income | 0 | 0 | 0 | ||||||||
Net loss on investments | 0 | 0 | 0 | ||||||||
Other income | |||||||||||
Interest expense | 0 | 0 | 0 | ||||||||
Provision for income taxes | 0 | 0 | 0 | ||||||||
Net income attributable to noncontrolling interest | 0 | 0 | 0 | ||||||||
Net income attributable to NGHC | 374,122 | 152,917 | 91,427 | ||||||||
Operating Segments | Accident and Health | |||||||||||
Underwriting revenues: | |||||||||||
Gross premium written | 776,916 | 768,617 | 698,109 | ||||||||
Ceded premiums | (90,535) | (108,011) | (71,570) | ||||||||
Net premium written | 686,381 | 660,606 | 626,539 | ||||||||
Change in unearned premium | (914) | 2,413 | (10,126) | ||||||||
Net earned premium | 685,467 | 663,019 | 616,413 | ||||||||
Ceding commission income | (214) | 10,939 | 7,003 | ||||||||
Service and fee income | 368,672 | 249,487 | 185,980 | ||||||||
Total underwriting revenues | 1,053,925 | 923,445 | 809,396 | ||||||||
Underwriting expenses: | |||||||||||
Loss and loss adjustment expense | 318,893 | 310,680 | 321,345 | ||||||||
Acquisition costs and other underwriting expenses | 309,283 | 222,348 | 184,726 | ||||||||
General and administrative expenses | 242,238 | 254,208 | 201,808 | ||||||||
Total underwriting expenses | 870,414 | 787,236 | 707,879 | ||||||||
Underwriting income | 183,511 | 136,209 | 101,517 | ||||||||
Net investment income | 0 | 0 | 0 | ||||||||
Net loss on investments | 0 | 0 | 0 | ||||||||
Other income | |||||||||||
Interest expense | 0 | 0 | 0 | ||||||||
Provision for income taxes | 0 | 0 | 0 | ||||||||
Net income attributable to noncontrolling interest | 0 | 0 | 0 | ||||||||
Net income attributable to NGHC | 183,511 | 136,209 | 101,517 | ||||||||
Corporate and Other | |||||||||||
Underwriting revenues: | |||||||||||
Gross premium written | 0 | 0 | 0 | ||||||||
Ceded premiums | 0 | 0 | 0 | ||||||||
Net premium written | 0 | 0 | 0 | ||||||||
Change in unearned premium | 0 | 0 | 0 | ||||||||
Net earned premium | 0 | 0 | 0 | ||||||||
Ceding commission income | 0 | 0 | 0 | ||||||||
Service and fee income | 0 | 0 | 0 | ||||||||
Total underwriting revenues | 0 | 0 | 0 | ||||||||
Underwriting expenses: | |||||||||||
Loss and loss adjustment expense | 0 | 0 | 0 | ||||||||
Acquisition costs and other underwriting expenses | 0 | 0 | 0 | ||||||||
General and administrative expenses | 8,026 | 14,273 | 10,000 | ||||||||
Total underwriting expenses | 8,026 | 14,273 | 10,000 | ||||||||
Underwriting income | (8,026) | (14,273) | (10,000) | ||||||||
Net investment income | 118,257 | 141,233 | 119,034 | ||||||||
Net loss on investments | 26,577 | 13,473 | (29,545) | ||||||||
Other income | 26,428 | ||||||||||
Interest expense | (33,772) | (51,544) | (51,425) | ||||||||
Provision for income taxes | (136,461) | (77,013) | (53,484) | ||||||||
Net income attributable to noncontrolling interest | (10,877) | 20,639 | 39,830 | ||||||||
Net income attributable to NGHC | $ (44,302) | $ 58,943 | $ 14,410 |
Segment Information - Financial
Segment Information - Financial Position (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Segment Reporting Information | ||
Premiums and other receivables, net | $ 1,545,380 | $ 1,428,948 |
Deferred acquisition costs | 285,905 | 263,523 |
Reinsurance recoverable, net | 1,218,930 | 1,394,308 |
Prepaid reinsurance premiums | 414,010 | 575,747 |
Goodwill and Intangible assets, net | 520,053 | 545,151 |
Prepaid and other assets | 69,092 | 94,642 |
Corporate and other assets | 6,074,524 | 5,454,215 |
Total assets | 10,127,894 | 9,756,534 |
Operating Segments | Property and Casualty | ||
Segment Reporting Information | ||
Premiums and other receivables, net | 1,304,636 | 1,292,813 |
Deferred acquisition costs | 259,163 | 239,293 |
Reinsurance recoverable, net | 1,187,855 | 1,377,284 |
Prepaid reinsurance premiums | 412,950 | 575,712 |
Goodwill and Intangible assets, net | 416,828 | 436,724 |
Prepaid and other assets | 45,235 | 56,960 |
Corporate and other assets | 0 | 0 |
Total assets | 3,626,667 | 3,978,786 |
Operating Segments | Accident and Health | ||
Segment Reporting Information | ||
Premiums and other receivables, net | 237,474 | 131,877 |
Deferred acquisition costs | 26,742 | 24,230 |
Reinsurance recoverable, net | 31,075 | 17,024 |
Prepaid reinsurance premiums | 1,060 | 35 |
Goodwill and Intangible assets, net | 103,225 | 108,427 |
Prepaid and other assets | 18,322 | 32,852 |
Corporate and other assets | 0 | 0 |
Total assets | 417,898 | 314,445 |
Corporate and Other | ||
Segment Reporting Information | ||
Premiums and other receivables, net | 3,270 | 4,258 |
Deferred acquisition costs | 0 | 0 |
Reinsurance recoverable, net | 0 | 0 |
Prepaid reinsurance premiums | 0 | 0 |
Goodwill and Intangible assets, net | 0 | 0 |
Prepaid and other assets | 5,535 | 4,830 |
Corporate and other assets | 6,074,524 | 5,454,215 |
Total assets | $ 6,083,329 | $ 5,463,303 |
Segment Information - Service a
Segment Information - Service and Fee Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information | |||
Service and fee income | $ 760,374 | $ 641,965 | $ 561,583 |
Reciprocal Exchanges | |||
Segment Reporting Information | |||
Service and fee income | 6,311 | 5,755 | 5,751 |
NGHC | |||
Segment Reporting Information | |||
Service and fee income | 754,063 | 636,210 | 555,832 |
Commission revenue | |||
Segment Reporting Information | |||
Service and fee income | 184,681 | 170,962 | 163,321 |
Finance and processing fees | |||
Segment Reporting Information | |||
Service and fee income | 138,873 | 134,499 | 125,593 |
Group health administrative fees | |||
Segment Reporting Information | |||
Service and fee income | 124,523 | 100,951 | 79,411 |
Installment fees | |||
Segment Reporting Information | |||
Service and fee income | 104,915 | 97,997 | 92,785 |
Late payment fees | |||
Segment Reporting Information | |||
Service and fee income | 32,436 | 34,519 | 33,851 |
Other service and fee income | |||
Segment Reporting Information | |||
Service and fee income | 174,946 | 103,037 | 66,622 |
Property and Casualty | |||
Segment Reporting Information | |||
Service and fee income | 391,702 | 392,478 | 375,603 |
Property and Casualty | Reciprocal Exchanges | |||
Segment Reporting Information | |||
Service and fee income | 6,311 | 5,755 | 5,751 |
Property and Casualty | NGHC | |||
Segment Reporting Information | |||
Service and fee income | 385,391 | 386,723 | 369,852 |
Property and Casualty | Commission revenue | |||
Segment Reporting Information | |||
Service and fee income | 60,103 | 87,486 | 93,235 |
Property and Casualty | Finance and processing fees | |||
Segment Reporting Information | |||
Service and fee income | 129,327 | 128,302 | 121,058 |
Property and Casualty | Group health administrative fees | |||
Segment Reporting Information | |||
Service and fee income | 0 | 0 | 0 |
Property and Casualty | Installment fees | |||
Segment Reporting Information | |||
Service and fee income | 104,915 | 97,997 | 92,785 |
Property and Casualty | Late payment fees | |||
Segment Reporting Information | |||
Service and fee income | 32,377 | 34,210 | 33,765 |
Property and Casualty | Other service and fee income | |||
Segment Reporting Information | |||
Service and fee income | 64,980 | 44,483 | 34,760 |
Accident and Health | |||
Segment Reporting Information | |||
Service and fee income | 368,672 | 249,487 | 185,980 |
Accident and Health | Reciprocal Exchanges | |||
Segment Reporting Information | |||
Service and fee income | 0 | 0 | 0 |
Accident and Health | NGHC | |||
Segment Reporting Information | |||
Service and fee income | 368,672 | 249,487 | 185,980 |
Accident and Health | Commission revenue | |||
Segment Reporting Information | |||
Service and fee income | 124,578 | 83,476 | 70,086 |
Accident and Health | Finance and processing fees | |||
Segment Reporting Information | |||
Service and fee income | 9,546 | 6,197 | 4,535 |
Accident and Health | Group health administrative fees | |||
Segment Reporting Information | |||
Service and fee income | 124,523 | 100,951 | 79,411 |
Accident and Health | Installment fees | |||
Segment Reporting Information | |||
Service and fee income | 0 | 0 | 0 |
Accident and Health | Late payment fees | |||
Segment Reporting Information | |||
Service and fee income | 59 | 309 | 86 |
Accident and Health | Other service and fee income | |||
Segment Reporting Information | |||
Service and fee income | $ 109,966 | $ 58,554 | $ 31,862 |
Segment Information - Gross Pre
Segment Information - Gross Premium Written (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information | |||
Total Gross Premium Written | $ 5,634,547 | $ 5,583,080 | $ 5,416,839 |
NGHC | |||
Segment Reporting Information | |||
Total Gross Premium Written | 5,260,946 | 5,135,633 | 4,967,916 |
Property and Casualty | Reciprocal Exchanges | |||
Segment Reporting Information | |||
Total Gross Premium Written | 373,601 | 447,447 | 448,923 |
Property and Casualty | NGHC | |||
Segment Reporting Information | |||
Total Gross Premium Written | 4,484,030 | 4,367,016 | 4,269,807 |
Property and Casualty | Personal Auto | Reciprocal Exchanges | |||
Segment Reporting Information | |||
Total Gross Premium Written | 131,286 | 152,688 | 153,129 |
Property and Casualty | Personal Auto | NGHC | |||
Segment Reporting Information | |||
Total Gross Premium Written | 2,817,396 | 2,721,202 | 2,637,176 |
Property and Casualty | Homeowners | Reciprocal Exchanges | |||
Segment Reporting Information | |||
Total Gross Premium Written | 238,972 | 290,972 | 291,907 |
Property and Casualty | Homeowners | NGHC | |||
Segment Reporting Information | |||
Total Gross Premium Written | 751,918 | 718,819 | 688,006 |
Property and Casualty | RV/Packaged | NGHC | |||
Segment Reporting Information | |||
Total Gross Premium Written | 215,138 | 212,746 | 208,394 |
Property and Casualty | Small Business Auto | NGHC | |||
Segment Reporting Information | |||
Total Gross Premium Written | 251,328 | 315,569 | 319,299 |
Property and Casualty | Lender-placed Insurance | NGHC | |||
Segment Reporting Information | |||
Total Gross Premium Written | 402,768 | 342,267 | 363,056 |
Property and Casualty | Other | Reciprocal Exchanges | |||
Segment Reporting Information | |||
Total Gross Premium Written | 3,343 | 3,787 | 3,887 |
Property and Casualty | Other | NGHC | |||
Segment Reporting Information | |||
Total Gross Premium Written | 45,482 | 56,413 | 53,876 |
Accident and Health | NGHC | |||
Segment Reporting Information | |||
Total Gross Premium Written | 776,916 | 768,617 | 698,109 |
Accident and Health | Group | NGHC | |||
Segment Reporting Information | |||
Total Gross Premium Written | 366,847 | 288,549 | 239,729 |
Accident and Health | Individual | NGHC | |||
Segment Reporting Information | |||
Total Gross Premium Written | 410,069 | 340,731 | 308,122 |
Accident and Health | International | NGHC | |||
Segment Reporting Information | |||
Total Gross Premium Written | $ 0 | $ 139,337 | $ 150,258 |
Segment Information - Net Premi
Segment Information - Net Premium Written (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information | |||
Total Net Premium Written | $ 4,620,844 | $ 4,224,621 | $ 3,827,713 |
NGHC | |||
Segment Reporting Information | |||
Total Net Premium Written | 4,419,628 | 3,990,149 | 3,644,148 |
Property and Casualty | Reciprocal Exchanges | |||
Segment Reporting Information | |||
Total Net Premium Written | 201,216 | 234,472 | 183,565 |
Property and Casualty | NGHC | |||
Segment Reporting Information | |||
Total Net Premium Written | 3,733,247 | 3,329,543 | 3,017,609 |
Property and Casualty | Personal Auto | Reciprocal Exchanges | |||
Segment Reporting Information | |||
Total Net Premium Written | 91,182 | 134,958 | 61,759 |
Property and Casualty | Personal Auto | NGHC | |||
Segment Reporting Information | |||
Total Net Premium Written | 2,475,384 | 2,260,385 | 2,016,858 |
Property and Casualty | Homeowners | Reciprocal Exchanges | |||
Segment Reporting Information | |||
Total Net Premium Written | 108,624 | 98,009 | 120,875 |
Property and Casualty | Homeowners | NGHC | |||
Segment Reporting Information | |||
Total Net Premium Written | 521,331 | 404,278 | 331,120 |
Property and Casualty | RV/Packaged | NGHC | |||
Segment Reporting Information | |||
Total Net Premium Written | 209,479 | 198,737 | 206,740 |
Property and Casualty | Small Business Auto | NGHC | |||
Segment Reporting Information | |||
Total Net Premium Written | 192,859 | 249,067 | 233,456 |
Property and Casualty | Lender-placed Insurance | NGHC | |||
Segment Reporting Information | |||
Total Net Premium Written | 314,642 | 198,171 | 202,069 |
Property and Casualty | Other | Reciprocal Exchanges | |||
Segment Reporting Information | |||
Total Net Premium Written | 1,410 | 1,505 | 931 |
Property and Casualty | Other | NGHC | |||
Segment Reporting Information | |||
Total Net Premium Written | 19,552 | 18,905 | 27,366 |
Accident and Health | NGHC | |||
Segment Reporting Information | |||
Total Net Premium Written | 686,381 | 660,606 | 626,539 |
Accident and Health | Group | NGHC | |||
Segment Reporting Information | |||
Total Net Premium Written | 284,189 | 231,388 | 197,386 |
Accident and Health | Individual | NGHC | |||
Segment Reporting Information | |||
Total Net Premium Written | 402,192 | 340,049 | 308,065 |
Accident and Health | International | NGHC | |||
Segment Reporting Information | |||
Total Net Premium Written | $ 0 | $ 89,169 | $ 121,088 |
Segment Information - Net Earne
Segment Information - Net Earned Premium (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information | |||
Net earned premium | $ 4,494,620 | $ 4,118,042 | $ 3,732,202 |
NGHC | |||
Segment Reporting Information | |||
Net earned premium | 4,273,371 | 3,907,811 | 3,545,441 |
Property and Casualty | Reciprocal Exchanges | |||
Segment Reporting Information | |||
Net earned premium | 221,249 | 210,231 | 186,761 |
Property and Casualty | NGHC | |||
Segment Reporting Information | |||
Net earned premium | 3,587,904 | 3,244,792 | 2,929,028 |
Property and Casualty | Personal Auto | Reciprocal Exchanges | |||
Segment Reporting Information | |||
Net earned premium | 111,353 | 106,549 | 59,923 |
Property and Casualty | Personal Auto | NGHC | |||
Segment Reporting Information | |||
Net earned premium | 2,403,879 | 2,190,748 | 1,927,667 |
Property and Casualty | Homeowners | Reciprocal Exchanges | |||
Segment Reporting Information | |||
Net earned premium | 108,629 | 101,964 | 125,806 |
Property and Casualty | Homeowners | NGHC | |||
Segment Reporting Information | |||
Net earned premium | 452,739 | 405,306 | 329,850 |
Property and Casualty | RV/Packaged | NGHC | |||
Segment Reporting Information | |||
Net earned premium | 200,854 | 195,639 | 197,258 |
Property and Casualty | Small Business Auto | NGHC | |||
Segment Reporting Information | |||
Net earned premium | 216,888 | 252,359 | 237,587 |
Property and Casualty | Lender-placed Insurance | NGHC | |||
Segment Reporting Information | |||
Net earned premium | 293,353 | 182,231 | 215,811 |
Property and Casualty | Other | Reciprocal Exchanges | |||
Segment Reporting Information | |||
Net earned premium | 1,267 | 1,718 | 1,032 |
Property and Casualty | Other | NGHC | |||
Segment Reporting Information | |||
Net earned premium | 20,191 | 18,509 | 20,855 |
Accident and Health | NGHC | |||
Segment Reporting Information | |||
Net earned premium | 685,467 | 663,019 | 616,413 |
Accident and Health | Group | NGHC | |||
Segment Reporting Information | |||
Net earned premium | 284,197 | 231,398 | 197,406 |
Accident and Health | Individual | NGHC | |||
Segment Reporting Information | |||
Net earned premium | 401,270 | 340,251 | 307,952 |
Accident and Health | International | NGHC | |||
Segment Reporting Information | |||
Net earned premium | $ 0 | $ 91,370 | $ 111,055 |
Segment Information - Fee Incom
Segment Information - Fee Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information | |||
Service and fee income | $ 760,374 | $ 641,965 | $ 561,583 |
Ceding commission income | 152,457 | 238,453 | 224,697 |
Fee Income | 912,831 | 880,418 | 786,280 |
NGHC | |||
Segment Reporting Information | |||
Fee Income | 864,226 | 811,162 | 723,780 |
Property and Casualty | Reciprocal Exchanges | |||
Segment Reporting Information | |||
Service and fee income | 6,311 | 5,755 | 5,751 |
Ceding commission income | 42,294 | 63,501 | 56,749 |
Fee Income | 48,605 | 69,256 | 62,500 |
Property and Casualty | NGHC | |||
Segment Reporting Information | |||
Service and fee income | 385,391 | 386,723 | 369,852 |
Ceding commission income | 110,377 | 164,013 | 160,945 |
Fee Income | 495,768 | 550,736 | 530,797 |
Accident and Health | NGHC | |||
Segment Reporting Information | |||
Service and fee income | 368,672 | 249,487 | 185,980 |
Ceding commission income | (214) | 10,939 | 7,003 |
Fee Income | 368,458 | 260,426 | 192,983 |
Accident and Health | Group | NGHC | |||
Segment Reporting Information | |||
Service and fee income | 172,526 | 134,206 | 104,504 |
Accident and Health | Individual | NGHC | |||
Segment Reporting Information | |||
Service and fee income | 11,062 | 9,650 | 9,304 |
Accident and Health | Third Party Fee | NGHC | |||
Segment Reporting Information | |||
Service and fee income | $ 185,084 | $ 105,631 | $ 72,172 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenues | $ 1,451,810 | $ 1,443,009 | $ 1,329,132 | $ 1,328,334 | $ 1,369,105 | $ 1,308,172 | $ 1,269,652 | $ 1,232,665 | $ 5,552,285 | $ 5,179,594 | $ 4,607,971 |
Total expenses | 1,289,303 | 1,298,712 | 1,104,012 | 1,199,589 | 1,248,792 | 1,231,186 | 1,170,353 | 1,124,820 | 4,891,616 | 4,775,151 | 4,386,963 |
Provision for income taxes | 30,354 | 27,428 | 50,507 | 28,172 | 15,519 | 16,747 | 22,241 | 22,506 | 136,461 | 77,013 | 53,484 |
Net income | 132,153 | 116,869 | 174,613 | 100,573 | 104,794 | 60,239 | 77,058 | 85,339 | 524,208 | 327,430 | 167,524 |
Net income attributable to NGHC | 136,029 | 109,969 | 166,574 | 100,759 | 107,281 | 71,154 | 77,876 | 91,758 | 513,331 | 348,069 | 207,354 |
Net income attributable to NGHC common stockholders | $ 127,104 | $ 102,094 | $ 157,649 | $ 92,884 | $ 98,356 | $ 63,279 | $ 68,951 | $ 83,883 | $ 479,731 | $ 314,469 | $ 174,862 |
Basic EPS (in dollars per share) | $ 1.12 | $ 0.90 | $ 1.39 | $ 0.82 | $ 0.87 | $ 0.56 | $ 0.61 | $ 0.74 | $ 4.23 | $ 2.78 | $ 1.62 |
Diluted EPS (in dollars per share) | $ 1.10 | $ 0.88 | $ 1.37 | $ 0.80 | $ 0.85 | $ 0.54 | $ 0.60 | $ 0.72 | $ 4.14 | $ 2.73 | $ 1.59 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 04, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2018 |
Subsequent Event | |||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||||
7.50% Non-Cumulative Preferred Stock, Series A | Preferred Stock | |||||||
Subsequent Event | |||||||
Dividend rate per year | 7.50% | 7.50% | 7.50% | ||||
Preferred stock, par value (in dollars per share) | $ 0.01 | ||||||
Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series B | Preferred Stock | |||||||
Subsequent Event | |||||||
Dividend rate per year | 7.50% | 7.50% | 7.50% | ||||
Preferred stock, par value (in dollars per share) | $ 0.01 | ||||||
Preferred stock Series D | Preferred Stock | |||||||
Subsequent Event | |||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | ||||||
Depositary Shares, Representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series C | Preferred Stock | |||||||
Subsequent Event | |||||||
Dividend rate per year | 7.50% | 7.50% | 7.50% | ||||
Preferred stock, par value (in dollars per share) | $ 0.01 | ||||||
6.75% Notes | Senior Notes | |||||||
Subsequent Event | |||||||
Interest rate on debt | 6.75% | ||||||
7.625% Notes | Senior Notes | |||||||
Subsequent Event | |||||||
Interest rate on debt | 7.625% | ||||||
Subsequent Event | |||||||
Subsequent Event | |||||||
Settlement for initial transfer of ceded business | $ 988,144 | ||||||
NGHC | Allstate | Subsequent Event | |||||||
Subsequent Event | |||||||
Acquisition, share price, cash (in dollars per share) | $ 32 | ||||||
Acquisition share price, closing dividend (in dollars per share) | 2.50 | ||||||
Acquisition, share price (in dollars per share) | 34.50 | ||||||
Common stock conversion to cash (in dollars per share) | 34.50 | ||||||
RSU conversion to cash (in dollars per share) | $ 34.50 |
Schedule I - Summary of Inves_2
Schedule I - Summary of Investments Other than Investments in Related Parties (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Investments, excluding Equity Investments In Unconsolidated Subsidiaries | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | |
Cost | $ 4,490,429 |
Value | 4,737,344 |
Amount at which shown in the Balance Sheet | 4,737,344 |
Total Debt Securities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | |
Cost | 4,234,213 |
Value | 4,497,130 |
Amount at which shown in the Balance Sheet | 4,497,130 |
U.S. government and government agencies and authorities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | |
Cost | 52,004 |
Value | 55,208 |
Amount at which shown in the Balance Sheet | 55,208 |
States, municipalities and political subdivisions | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | |
Cost | 304,688 |
Value | 322,441 |
Amount at which shown in the Balance Sheet | 322,441 |
Foreign governments | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | |
Cost | 1,765 |
Value | 1,884 |
Amount at which shown in the Balance Sheet | 1,884 |
Public utilities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | |
Cost | 56,998 |
Value | 61,608 |
Amount at which shown in the Balance Sheet | 61,608 |
All other corporate bonds | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | |
Cost | 3,818,758 |
Value | 4,055,989 |
Amount at which shown in the Balance Sheet | 4,055,989 |
Total Equity Securities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | |
Cost | 18,911 |
Value | 2,909 |
Amount at which shown in the Balance Sheet | 2,909 |
Industrial, miscellaneous and all other | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | |
Cost | 18,911 |
Value | 2,909 |
Amount at which shown in the Balance Sheet | 2,909 |
Other investments | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | |
Cost | 46,219 |
Value | 46,219 |
Amount at which shown in the Balance Sheet | 46,219 |
Other Short-term Investments | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | |
Cost | 191,086 |
Value | 191,086 |
Amount at which shown in the Balance Sheet | $ 191,086 |
Schedule II - Condensed Finan_2
Schedule II - Condensed Financial Information of Registrant - Balance Sheets - Parent Company Only (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Investments: | ||||
Debt securities, available-for-sale, amortized cost | $ 4,234,213 | $ 4,376,691 | ||
Debt securities, available-for-sale at fair value | 4,497,130 | 4,476,358 | ||
Short-term investments | 191,086 | 67,353 | ||
Total investments | 4,969,271 | 4,854,998 | ||
Cash and cash equivalents | 662,772 | 135,942 | ||
Accrued investment income | 27,803 | 30,927 | ||
Prepaid and other assets | 69,092 | 94,642 | ||
Total assets | 10,127,894 | 9,756,534 | ||
Liabilities: | ||||
Accounts payable, accrued expenses and other liabilities | 377,662 | 315,366 | ||
Debt | 676,810 | 686,006 | ||
Total liabilities | 6,911,896 | 7,139,040 | ||
Stockholders’ equity: | ||||
Total stockholders’ equity | 3,215,998 | 2,617,494 | $ 2,200,871 | $ 1,953,425 |
Total liabilities and stockholders’ equity | 10,127,894 | 9,756,534 | ||
Parent Company | ||||
Investments: | ||||
Debt securities, available-for-sale, amortized cost | 0 | 95,527 | ||
Debt securities, available-for-sale at fair value | 0 | 98,187 | ||
Short-term investments | 0 | 4,807 | ||
Equity investment in subsidiaries | 3,289,136 | 2,937,575 | ||
Total investments | 3,289,136 | 3,040,569 | ||
Cash and cash equivalents | 403,631 | 852 | ||
Accrued investment income | 0 | 835 | ||
Property and equipment, net | 142,042 | 158,670 | ||
Prepaid and other assets | 10,874 | 26,658 | ||
Total assets | 3,845,683 | 3,227,584 | ||
Liabilities: | ||||
Accounts payable, accrued expenses and other liabilities | 44,927 | 26,071 | ||
Debt | 584,758 | 584,019 | ||
Total liabilities | 629,685 | 610,090 | ||
Stockholders’ equity: | ||||
Total stockholders’ equity | 3,215,998 | 2,617,494 | ||
Total liabilities and stockholders’ equity | $ 3,845,683 | $ 3,227,584 |
Schedule II - Condensed Finan_3
Schedule II - Condensed Financial Information of Registrant - Statements of Comprehensive Income - Parent Company Only (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues: | |||||||||||
Service and fee income | $ 760,374 | $ 641,965 | $ 561,583 | ||||||||
Investment income | 118,257 | 141,233 | 119,034 | ||||||||
Total revenues | $ 1,451,810 | $ 1,443,009 | $ 1,329,132 | $ 1,328,334 | $ 1,369,105 | $ 1,308,172 | $ 1,269,652 | $ 1,232,665 | 5,552,285 | 5,179,594 | 4,607,971 |
Expenses: | |||||||||||
Interest expense | 33,772 | 51,544 | 51,425 | ||||||||
Total expenses | 1,289,303 | 1,298,712 | 1,104,012 | 1,199,589 | 1,248,792 | 1,231,186 | 1,170,353 | 1,124,820 | 4,891,616 | 4,775,151 | 4,386,963 |
Income before provision (benefit) for income taxes | 660,669 | 404,443 | 221,008 | ||||||||
Benefit for income taxes | 30,354 | 27,428 | 50,507 | 28,172 | 15,519 | 16,747 | 22,241 | 22,506 | 136,461 | 77,013 | 53,484 |
Net income attributable to NGHC | 136,029 | 109,969 | 166,574 | 100,759 | 107,281 | 71,154 | 77,876 | 91,758 | 513,331 | 348,069 | 207,354 |
Dividends on preferred stock | (33,600) | (33,600) | (32,492) | ||||||||
Net income attributable to NGHC common stockholders | $ 127,104 | $ 102,094 | $ 157,649 | $ 92,884 | $ 98,356 | $ 63,279 | $ 68,951 | $ 83,883 | 479,731 | 314,469 | 174,862 |
Comprehensive income attributable to NGHC | 641,986 | 474,747 | 163,300 | ||||||||
Parent Company | |||||||||||
Revenues: | |||||||||||
Service and fee income | 53,005 | 48,781 | 44,932 | ||||||||
Investment income | 2,200 | 3,929 | 1,205 | ||||||||
Net gain (loss) on investments | 7,094 | 1,026 | (1,571) | ||||||||
Equity in undistributed net income of subsidiaries | 513,023 | 365,932 | 232,101 | ||||||||
Total revenues | 575,322 | 419,668 | 276,667 | ||||||||
Expenses: | |||||||||||
Interest expense | 35,618 | 38,670 | 39,380 | ||||||||
Other expense, net | 30,906 | 38,499 | 30,847 | ||||||||
Total expenses | 66,524 | 77,169 | 70,227 | ||||||||
Income before provision (benefit) for income taxes | 508,798 | 342,499 | 206,440 | ||||||||
Benefit for income taxes | (4,533) | (5,570) | (914) | ||||||||
Net income attributable to NGHC | 513,331 | 348,069 | 207,354 | ||||||||
Dividends on preferred stock | (33,600) | (33,600) | (32,492) | ||||||||
Net income attributable to NGHC common stockholders | 479,731 | 314,469 | 174,862 | ||||||||
Other comprehensive income (loss), net of tax | 128,655 | 126,678 | (44,054) | ||||||||
Comprehensive income attributable to NGHC | $ 641,986 | $ 474,747 | $ 163,300 |
Schedule II - Condensed Finan_4
Schedule II - Condensed Financial Information of Registrant - Statements of Cash Flows - Parent Company Only (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Condensed Financial Statements, Captions | |||||||||||
Net income | $ 132,153 | $ 116,869 | $ 174,613 | $ 100,573 | $ 104,794 | $ 60,239 | $ 77,058 | $ 85,339 | $ 524,208 | $ 327,430 | $ 167,524 |
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||
Net (gain) loss on investments | (26,577) | (13,473) | 29,545 | ||||||||
Depreciation and amortization | 80,694 | 96,279 | 86,346 | ||||||||
Stock-based compensation expense | 12,421 | 10,996 | 9,020 | ||||||||
Changes in assets and liabilities: | |||||||||||
Accrued investment income | 3,123 | (5,553) | (7,568) | ||||||||
Prepaid expenses and other assets | 25,818 | 58,086 | (17,785) | ||||||||
Net cash provided by operating activities | 600,070 | 521,611 | 598,133 | ||||||||
Cash flows from investing activities: | |||||||||||
Debt securities, available-for-sale | (1,002,485) | (2,140,359) | (1,802,668) | ||||||||
Short-term investments | (1,959,084) | (2,773,361) | (2,919,422) | ||||||||
Property and equipment | (39,974) | (91,664) | (102,390) | ||||||||
Sale of debt securities, available-for-sale | 509,902 | 974,474 | 1,010,339 | ||||||||
Maturity of debt securities, available-for-sale | 645,401 | 347,948 | 314,685 | ||||||||
Sale of short-term investments | 1,838,450 | 3,066,577 | 2,610,788 | ||||||||
Net cash provided by (used in) investing activities | 14,188 | (498,251) | (790,774) | ||||||||
Cash flows from financing activities: | |||||||||||
Common stock repurchased | (8,482) | 0 | 0 | ||||||||
Payments of debt issuance costs | 0 | (1,134) | 0 | ||||||||
Issuance of common stock — employee share options | 2,635 | 594 | 1,978 | ||||||||
Taxes paid related to net share settlement of equity awards | (3,678) | (3,734) | (3,024) | ||||||||
Net cash (used in) provided by financing activities | (78,954) | (89,361) | 73,463 | ||||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash | 535,304 | (69,120) | (123,901) | ||||||||
Cash, cash equivalents, and restricted cash at beginning of the year | 164,463 | 233,583 | 164,463 | 233,583 | 357,484 | ||||||
Cash, cash equivalents, and restricted cash at end of the year | 699,767 | 164,463 | 699,767 | 164,463 | 233,583 | ||||||
Parent Company | |||||||||||
Condensed Financial Statements, Captions | |||||||||||
Net income | 513,331 | 348,069 | 207,354 | ||||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||
Net (gain) loss on investments | (7,094) | (1,026) | 1,571 | ||||||||
Depreciation and amortization | 26,244 | 23,280 | 20,668 | ||||||||
Net amortization of premium net of discount on debt securities | 700 | 233 | 581 | ||||||||
Stock-based compensation expense | 12,421 | 10,996 | 9,020 | ||||||||
Equity in undistributed net income of subsidiaries | (513,023) | (365,932) | (232,101) | ||||||||
Changes in assets and liabilities: | |||||||||||
Accrued investment income | 835 | (108) | (500) | ||||||||
Prepaid expenses and other assets | 15,499 | 4,927 | 23,334 | ||||||||
Accounts payable, accrued expenses and other liabilities | 301,328 | (1,728) | 8,993 | ||||||||
Net cash provided by operating activities | 350,241 | 18,711 | 38,920 | ||||||||
Cash flows from investing activities: | |||||||||||
Debt securities, available-for-sale | (6,986) | (46,832) | (70,308) | ||||||||
Short-term investments | (389,372) | (284,875) | (342,137) | ||||||||
Property and equipment | (9,840) | (75,673) | (73,563) | ||||||||
Sale of debt securities, available-for-sale | 91,301 | 20,723 | 16,052 | ||||||||
Maturity of debt securities, available-for-sale | 16,813 | 10,218 | 2,208 | ||||||||
Sale of short-term investments | 394,296 | 397,945 | 225,395 | ||||||||
Distributions received from subsidiaries | 102,150 | 50,825 | 130,772 | ||||||||
Contributions and acquisition of subsidiaries | (80,000) | (17,091) | (9,875) | ||||||||
Net cash provided by (used in) investing activities | 118,362 | 55,240 | (121,456) | ||||||||
Cash flows from financing activities: | |||||||||||
Common stock repurchased | (8,482) | 0 | 0 | ||||||||
Payments of debt issuance costs | 0 | (1,134) | 0 | ||||||||
Repayments of debt and return of capital | 0 | (20,000) | (30,000) | ||||||||
Issuances of common and preferred stock, net of fees | 0 | 0 | 162,120 | ||||||||
Issuance of common stock — employee share options | 2,635 | 594 | 1,978 | ||||||||
Taxes paid related to net share settlement of equity awards | (3,678) | (3,734) | (3,024) | ||||||||
Dividends paid to common and preferred shareholders | (56,299) | (52,781) | (48,611) | ||||||||
Net cash (used in) provided by financing activities | (65,824) | (77,055) | 82,463 | ||||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash | 402,779 | (3,104) | (73) | ||||||||
Cash, cash equivalents, and restricted cash at beginning of the year | $ 852 | $ 3,956 | 852 | 3,956 | 4,029 | ||||||
Cash, cash equivalents, and restricted cash at end of the year | $ 403,631 | $ 852 | $ 403,631 | $ 852 | $ 3,956 |
Schedule III - Supplementary _2
Schedule III - Supplementary Insurance Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Supplementary Insurance Information, by Segment | |||
Deferred Acquisition Costs | $ 285,905 | $ 263,523 | $ 251,408 |
Unpaid Loss and Loss Adjustment Expense Reserves | 2,889,098 | 2,886,414 | 2,957,159 |
Unearned Premiums | 2,183,706 | 2,219,219 | 2,156,837 |
Net Earned Premium | 4,494,620 | 4,118,042 | 3,732,202 |
Net Investment Income | 118,257 | 141,233 | 119,034 |
Loss and Loss Adjustment Expense Incurred | 2,824,082 | 2,854,468 | 2,662,226 |
Deferred Acquisition Costs Amortization | 635,813 | 577,357 | 510,793 |
Other Operating Expenses | 354,756 | 250,010 | 224,473 |
Net Written Premium | 4,620,844 | 4,224,621 | 3,827,713 |
Operating Segments | Property and Casualty | |||
Supplementary Insurance Information, by Segment | |||
Deferred Acquisition Costs | 259,163 | 239,293 | 226,188 |
Unpaid Loss and Loss Adjustment Expense Reserves | 2,708,171 | 2,734,540 | 2,685,879 |
Unearned Premiums | 2,173,399 | 2,210,851 | 2,120,283 |
Net Earned Premium | 3,809,153 | 3,455,023 | 3,115,789 |
Net Investment Income | 0 | 0 | 0 |
Loss and Loss Adjustment Expense Incurred | 2,505,189 | 2,543,788 | 2,340,881 |
Deferred Acquisition Costs Amortization | 613,905 | 539,816 | 495,009 |
Other Operating Expenses | 67,381 | 65,203 | 55,531 |
Net Written Premium | 3,934,463 | 3,564,015 | 3,201,174 |
Operating Segments | Accident and Health | |||
Supplementary Insurance Information, by Segment | |||
Deferred Acquisition Costs | 26,742 | 24,230 | 25,220 |
Unpaid Loss and Loss Adjustment Expense Reserves | 180,927 | 151,874 | 271,280 |
Unearned Premiums | 10,307 | 8,368 | 36,554 |
Net Earned Premium | 685,467 | 663,019 | 616,413 |
Net Investment Income | 0 | 0 | 0 |
Loss and Loss Adjustment Expense Incurred | 318,893 | 310,680 | 321,345 |
Deferred Acquisition Costs Amortization | 21,908 | 37,541 | 15,784 |
Other Operating Expenses | 287,375 | 184,807 | 168,942 |
Net Written Premium | 686,381 | 660,606 | 626,539 |
Corporate and Other | |||
Supplementary Insurance Information, by Segment | |||
Deferred Acquisition Costs | 0 | 0 | 0 |
Unpaid Loss and Loss Adjustment Expense Reserves | 0 | 0 | 0 |
Unearned Premiums | 0 | 0 | 0 |
Net Earned Premium | 0 | 0 | 0 |
Net Investment Income | 118,257 | 141,233 | 119,034 |
Loss and Loss Adjustment Expense Incurred | 0 | 0 | 0 |
Deferred Acquisition Costs Amortization | 0 | 0 | 0 |
Other Operating Expenses | 0 | 0 | 0 |
Net Written Premium | $ 0 | $ 0 | $ 0 |
Schedule IV - Reinsurance (Deta
Schedule IV - Reinsurance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract] | |||
Gross Amount | $ 5,613,630 | $ 5,486,835 | $ 5,049,512 |
Ceded to Other Companies | (1,175,440) | (1,449,365) | (1,440,575) |
Assumed from Other Companies | 56,430 | 80,572 | 123,265 |
Net Premium | $ 4,494,620 | $ 4,118,042 | $ 3,732,202 |
Percent of Amount Assumed to Net | 1.30% | 2.00% | 3.30% |
Schedule VI - Supplemental In_2
Schedule VI - Supplemental Information Concerning Property-Casualty Insurance Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
SEC Schedule, 12-18, Supplemental Information, Property-Casualty Insurance Underwriters | |||
Losses and Loss Adjustment Expenses Incurred Related to Current Year | $ 2,819,891 | $ 2,849,304 | $ 2,696,260 |
Losses and Loss Adjustment Expenses Incurred Related to Prior Years | 4,191 | 5,164 | (34,034) |
Paid Losses and Loss Adjustment Expenses | 2,708,118 | 2,756,563 | 2,515,237 |
Property and Casualty | |||
SEC Schedule, 12-18, Supplemental Information, Property-Casualty Insurance Underwriters | |||
Losses and Loss Adjustment Expenses Incurred Related to Current Year | 2,477,177 | 2,493,268 | 2,343,938 |
Losses and Loss Adjustment Expenses Incurred Related to Prior Years | 28,012 | 50,520 | (3,057) |
Paid Losses and Loss Adjustment Expenses | 2,407,847 | 2,427,676 | 2,209,570 |
Accident and Health | |||
SEC Schedule, 12-18, Supplemental Information, Property-Casualty Insurance Underwriters | |||
Losses and Loss Adjustment Expenses Incurred Related to Current Year | 342,714 | 356,036 | 352,322 |
Losses and Loss Adjustment Expenses Incurred Related to Prior Years | (23,821) | (45,356) | (30,977) |
Paid Losses and Loss Adjustment Expenses | $ 300,271 | $ 328,887 | $ 305,667 |