Document and Entity Information
Document and Entity Information Document - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 30, 2019 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | KINSALE CAPITAL GROUP, INC. | |
Entity Central Index Key | 0001669162 | |
Entity File Number | 001-37848 | |
Entity Tax Identification Number | 98-0664337 | |
Entity Incorporation, State or Country Code | DE | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Address, Address Line One | 2221 Edward Holland Drive | |
Entity Address, Address Line Two | Suite 600 | |
Entity Address, City or Town | Richmond, | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 23230 | |
City Area Code | 804 | |
Local Phone Number | 289-1300 | |
Title of 12(b) Security | Common Stock, par value $0.01 | |
Trading Symbol | KNSL | |
Security Exchange Name | NASDAQ | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 21,370,825 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Fixed-maturity securities available for sale, at fair value (amortized cost: $577,183 in 2019; $514,237 in 2018) | $ 590,077 | $ 510,251 |
Equity securities, at fair value (cost: $56,447 in 2019 $56,051 in 2018) | 65,910 | 57,711 |
Total investments | 655,987 | 567,962 |
Cash and cash equivalents | 78,131 | 75,089 |
Investment income due and accrued | 3,972 | 3,783 |
Premiums receivable, net | 34,150 | 24,253 |
Reinsurance recoverables | 65,937 | 56,788 |
Ceded unearned premiums | 17,397 | 16,072 |
Deferred policy acquisition costs, net of ceding commissions | 18,652 | 14,801 |
Intangible assets | 3,538 | 3,538 |
Deferred income tax asset, net | 6,068 | 7,176 |
Other assets | 10,974 | 3,601 |
Total assets | 894,806 | 773,063 |
Liabilities | ||
Reserves for unpaid losses and loss adjustment expenses | 407,433 | 369,152 |
Unearned premiums | 157,752 | 128,250 |
Payable to reinsurers | 6,769 | 4,565 |
Accounts payable and accrued expenses | 7,655 | 7,090 |
Other liabilities | 7,290 | 20 |
Total liabilities | 586,899 | 509,077 |
Stockholders' Equity | ||
Common stock, $0.01 par value, 400,000,000 shares authorized, 21,356,399 and 21,241,504 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively | 214 | 212 |
Additional paid-in capital | 159,986 | 158,485 |
Retained earnings | 135,628 | 106,545 |
Accumulated other comprehensive income (loss) | 12,079 | (1,256) |
Total stockholders’ equity | 307,907 | 263,986 |
Total liabilities and stockholders’ equity | $ 894,806 | $ 773,063 |
Consolidated Balance Sheet (Una
Consolidated Balance Sheet (Unaudited) (Parentheticals) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Assets [Abstract] | ||
Fixed-maturity securities available-for-sale - amortized cost | $ 577,183 | $ 514,237 |
Equity securities - cost | $ 56,447 | $ 56,051 |
Stockholders' Equity | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock, shares issued (in shares) | 21,356,399 | 21,241,504 |
Common stock, shares outstanding (in shares) | 21,356,399 | 21,241,504 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues: | ||||
Gross written premiums | $ 94,947 | $ 69,981 | $ 179,573 | $ 133,828 |
Ceded written premiums | (12,260) | (9,090) | (23,819) | (17,846) |
Net written premiums | 82,687 | 60,891 | 155,754 | 115,982 |
Change in unearned premiums | (16,600) | (9,998) | (28,176) | (17,028) |
Net earned premiums | 66,087 | 50,893 | 127,578 | 98,954 |
Net investment income | 4,806 | 3,782 | 9,321 | 7,011 |
Net unrealized gains (losses) on equity securities | 1,909 | 94 | 7,804 | (1,185) |
Realized gains on investments | (235) | 174 | 45 | 286 |
Other income | 5 | 4 | 9 | 7 |
Total revenues | 72,572 | 54,947 | 144,757 | 105,073 |
Expenses: | ||||
Losses and loss adjustment expenses | 39,579 | 29,967 | 73,311 | 58,866 |
Underwriting, acquisition and insurance expenses | 16,437 | 12,519 | 32,053 | 24,917 |
Other expenses | 21 | 0 | 57 | 14 |
Total expenses | 56,037 | 42,486 | 105,421 | 83,797 |
Income before income taxes | 16,535 | 12,461 | 39,336 | 21,276 |
Total income tax expense | 2,768 | 2,349 | 6,849 | 3,877 |
Net income | 13,767 | 10,112 | 32,487 | 17,399 |
Other comprehensive income (loss): | ||||
Change in unrealized gains (losses) on available-for-sale investments, net of taxes of $1,743 and $3,544 in 2019 and $(270) and $(1,561) in 2018 | 6,555 | (1,016) | 13,335 | (5,872) |
Total comprehensive income | $ 20,322 | $ 9,096 | $ 45,822 | $ 11,527 |
Earnings per share: | ||||
Basic | $ 0.65 | $ 0.48 | $ 1.53 | $ 0.83 |
Diluted | $ 0.63 | $ 0.47 | $ 1.49 | $ 0.80 |
Weighted average shares outstanding | ||||
Basic | 21,210 | 21,070 | 21,190 | 21,058 |
Diluted | 21,832 | 21,666 | 21,803 | 21,648 |
Consolidated Statements of In_2
Consolidated Statements of Income and Comprehensive Income (Unaudited) (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent [Abstract] | ||||
Income taxes on change in unrealized gains (losses) on available-for-sale investments | $ 1,743 | $ (270) | $ 3,544 | $ (1,561) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income [Member] |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative Effect of New Accounting Principle in Period of Adoption | Accounting Standards Update 2016-01 [Member] | $ 0 | $ 6,490 | $ (6,490) | ||
Balance, shares at Dec. 31, 2017 | 21,036,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation (shares) | 36,000 | ||||
Balance, shares at Mar. 31, 2018 | 21,072,000 | ||||
Balance at Dec. 31, 2017 | $ 238,189 | $ 210 | $ 155,082 | 73,502 | 9,395 |
Balance (Accounting Standards Update 2016-01 [Member]) at Dec. 31, 2017 | 79,992 | 2,905 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Reclassification of tax effects resulting from the TCJA | 0 | ||||
Reclassification of tax effects resulting from the TCJA | Accounting Standards Update 2018-02 [Member] | (1,308) | 1,308 | |||
Issuance of stock under stock-based compensation plan | 545 | 0 | 545 | ||
Stock-based compensation | 158 | 158 | |||
Dividends declared | (1,473) | (1,473) | |||
Other comprehensive income (loss) | (4,856) | (4,856) | |||
Net income | 7,287 | 7,287 | |||
Balance at Mar. 31, 2018 | $ 239,850 | 210 | 155,785 | 84,498 | (643) |
Balance, shares at Dec. 31, 2017 | 21,036,000 | ||||
Balance, shares at Jun. 30, 2018 | 21,169,000 | ||||
Balance at Dec. 31, 2017 | $ 238,189 | 210 | 155,082 | 73,502 | 9,395 |
Balance (Accounting Standards Update 2016-01 [Member]) at Dec. 31, 2017 | 79,992 | 2,905 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Other comprehensive income (loss) | (5,872) | ||||
Net income | 17,399 | ||||
Balance at Jun. 30, 2018 | $ 247,945 | 211 | 156,264 | 93,129 | (1,659) |
Balance, shares at Mar. 31, 2018 | 21,072,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation (shares) | 97,000 | ||||
Balance, shares at Jun. 30, 2018 | 21,169,000 | ||||
Balance at Mar. 31, 2018 | $ 239,850 | 210 | 155,785 | 84,498 | (643) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of stock under stock-based compensation plan | 79 | 1 | 78 | ||
Stock-based compensation | 401 | 401 | |||
Dividends declared | (1,481) | (1,481) | |||
Other comprehensive income (loss) | (1,016) | (1,016) | |||
Net income | 10,112 | 10,112 | |||
Balance at Jun. 30, 2018 | $ 247,945 | 211 | 156,264 | 93,129 | (1,659) |
Balance, shares at Dec. 31, 2018 | 21,241,504 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation (shares) | 43,000 | ||||
Balance, shares at Mar. 31, 2019 | 21,285,000 | ||||
Balance at Dec. 31, 2018 | $ 263,986 | 212 | 158,485 | 106,545 | (1,256) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of stock under stock-based compensation plan | 598 | 1 | 597 | ||
Stock-based compensation | 507 | 507 | |||
Dividends declared | (1,702) | (1,702) | |||
Other comprehensive income (loss) | 6,780 | 6,780 | |||
Net income | 18,720 | 18,720 | |||
Balance at Mar. 31, 2019 | $ 288,889 | 213 | 159,589 | 123,563 | 5,524 |
Balance, shares at Dec. 31, 2018 | 21,241,504 | ||||
Balance, shares at Jun. 30, 2019 | 21,356,399 | ||||
Balance at Dec. 31, 2018 | $ 263,986 | 212 | 158,485 | 106,545 | (1,256) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Other comprehensive income (loss) | 13,335 | ||||
Net income | 32,487 | ||||
Balance at Jun. 30, 2019 | $ 307,907 | 214 | 159,986 | 135,628 | 12,079 |
Balance, shares at Mar. 31, 2019 | 21,285,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Shares Withheld for Tax Withholding Obligation | (7,000) | ||||
Stock-based compensation (shares) | 78,000 | ||||
Balance, shares at Jun. 30, 2019 | 21,356,399 | ||||
Balance at Mar. 31, 2019 | $ 288,889 | 213 | 159,589 | 123,563 | 5,524 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of stock under stock-based compensation plan | 394 | 1 | 393 | ||
Stock-based compensation | 621 | 621 | |||
Restricted shares withheld for taxes | (617) | (617) | |||
Dividends declared | (1,702) | 1,702 | |||
Other comprehensive income (loss) | 6,555 | ||||
Net income | 13,767 | 13,767 | |||
Balance at Jun. 30, 2019 | $ 307,907 | $ 214 | $ 159,986 | $ 135,628 | $ 12,079 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared, per share | $ 0.08 | $ 0.07 | $ 0.16 | $ 0.14 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Operating Activities | ||
Net cash provided by operating activities | $ 71,292 | $ 50,423 |
Investing Activities | ||
Purchase of property and equipment | (5,999) | (458) |
Purchases – fixed-maturity securities | (115,356) | (110,023) |
Purchases - equity securities | (3,593) | (7,199) |
Sales – fixed-maturity securities | 31,441 | 3,913 |
Sales - equity securities | 2,869 | 1,910 |
Maturities and calls – fixed-maturity securities | 25,699 | 61,681 |
Net cash used in investing activities | (64,939) | (50,176) |
Financing Activities | ||
Debt Issuance Costs | (284) | 0 |
Payroll taxes withheld and remitted on share-based payments | (617) | 0 |
Proceeds from stock options exercised | 991 | 624 |
Dividends paid | (3,401) | (2,948) |
Net cash used in financing activities | (3,311) | (2,324) |
Net change in cash and cash equivalents | 3,042 | (2,077) |
Cash and cash equivalents at beginning of year | 75,089 | 81,747 |
Cash and cash equivalents at end of period | $ 78,131 | $ 79,670 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of significant accounting policies Basis of presentation The accompanying condensed consolidated financial statements and notes have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and do not contain all of the information and footnotes required by U.S. GAAP for complete financial statements. For a more complete description of the Company’s business and accounting policies, these condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements of Kinsale Capital Group, Inc. and its wholly owned subsidiaries (the "Company") included in the Annual Report on Form 10-K for the year ended December 31, 2018. In the opinion of management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Such adjustments consist only of normal recurring items. All significant intercompany balances and transactions have been eliminated in consolidation. Interim results are not necessarily indicative of results of operations for the full year. Use of estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management periodically reviews its estimates and assumptions. Recently adopted accounting pronouncements ASU 2016-02, Leases (Topic 842) In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)" to improve the financial reporting of leasing transactions. Under this ASU, lessees will recognize a right-of-use ("ROU") asset and corresponding liability on the balance sheet for all leases, except for leases covering a period of 12 months or less. The lessee’s income statement treatment for leases will vary depending on the nature and classification of the lease. Effective January 1, 2019, the Company adopted this ASU and recorded a ROU asset and corresponding lease liability of approximately $0.9 million . The ROU and operating lease liability are included in "other assets" and "other liabilities," respectively, in the accompanying consolidated balance sheet. The Company elected the package of practical expedients permitted under the adoption of the new standard, which allowed the Company to account for existing leases under their current classification, as well as omit any new costs classified as initial direct costs, under the new standard. This election kept the existing agreements as operating leases. The Company also elected the practical expedient allowing an accounting policy election by class of underlying asset, to account for separate lease and nonlease components as a single lease component. In addition, the Company has implemented the necessary internal controls relating to the adoption of the standard. ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities In March 2017, the FASB issued ASU 2017-08, "Premium Amortization on Purchased Callable Debt Securities," which shortens the amortization period of the premium for certain callable debt securities, from the contractual maturity date to the earliest call date. Effective January 1, 2019, the Company adopted ASU 2017-08 using a modified retrospective approach. The adoption of ASU 2017-08 did not have a material impact on the Company's financial statements. Prospective accounting pronouncements ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) In June 2016, the FASB issued ASU 2016-13, "Financial Instruments – Credit Losses (Topic 326)" to provide more useful information about the expected credit losses on financial instruments. Current GAAP delays the recognition of credit losses until it is probable a loss has been incurred. The update will require a financial asset measured at amortized cost to be presented at the net amount expected to be collected by means of an allowance for credit losses that runs through net income. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses. However, the amendments would limit the amount of the allowance to the amount by which fair value is below amortized cost. The measurement of credit losses on available-for-sale securities is similar under current GAAP, but the update requires the use of the allowance account through which amounts can be reversed, rather than through an irreversible write-down. This ASU is effective for annual and interim reporting periods beginning after December 15, 2019. Early adoption is permitted beginning after December 15, 2018. Upon adoption, the update will be applied using the modified-retrospective approach, by which a cumulative-effect adjustment will be made to retained earnings as of the beginning of the first reporting period presented. The Company is currently evaluating the impact of the adoption on its consolidated financial statements. There are no other prospective accounting standards which, upon their effective date, would have a material impact on the Company's consolidated financial statements. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2019 | |
Investments [Abstract] | |
Investments | Investments Available-for-sale investments The following tables summarize the available-for-sale investments at June 30, 2019 and December 31, 2018 : June 30, 2019 Amortized Cost Gross Unrealized Holding Gains Gross Unrealized Holding Losses Estimated Fair Value (in thousands) Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ 110 $ 3 $ — $ 113 Obligations of states, municipalities and political subdivisions 125,619 6,344 (2 ) 131,961 Corporate and other securities 125,873 3,572 (229 ) 129,216 Commercial mortgage and asset-backed securities 175,355 2,995 (485 ) 177,865 Residential mortgage-backed securities 150,226 1,626 (930 ) 150,922 Total available-for-sale investments $ 577,183 $ 14,540 $ (1,646 ) $ 590,077 December 31, 2018 Amortized Cost Gross Unrealized Holding Gains Gross Unrealized Holding Losses Estimated Fair Value (in thousands) Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ 610 $ 2 $ (1 ) $ 611 Obligations of states, municipalities and political subdivisions 153,884 2,010 (1,294 ) 154,600 Corporate and other securities 97,889 264 (1,401 ) 96,752 Commercial mortgage and asset-backed securities 151,137 252 (1,522 ) 149,867 Residential mortgage-backed securities 110,717 354 (2,650 ) 108,421 Total available-for-sale investments $ 514,237 $ 2,882 $ (6,868 ) $ 510,251 Available-for-sale securities in a loss position The Company regularly reviews all its available-for-sale investments with unrealized losses to assess whether the decline in the securities’ fair value is deemed to be an other-than-temporary impairment ("OTTI"). The Company considers a number of factors in completing its OTTI review, including the length of time and the extent to which a security's fair value has been below cost and the financial condition of an issuer. In addition to specific issuer information, the Company also evaluates the current market and interest rate environment. Generally, a change in a security’s value caused by a change in the market or interest rate environment does not constitute an OTTI, but rather a temporary decline in fair value. For fixed-maturity securities, the Company also considers whether it intends to sell the security or if it is more likely than not that it will be required to sell the security before recovery and the ability to recover all amounts outstanding when contractually due. When assessing whether it intends to sell a fixed-maturity security or if it is likely to be required to sell a fixed-maturity security before recovery of its amortized cost, the Company evaluates facts and circumstances including, but not limited to, decisions to reposition the investment portfolio, potential sales of investments to meet cash flow needs and potential sales of investments to capitalize on favorable pricing. For fixed-maturity securities where a decline in fair value is considered to be other-than-temporary and the Company intends to sell the security, or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost, an impairment is recognized in net income based on the fair value of the security at the time of assessment, resulting in a new cost basis for the security. If the decline in fair value of a fixed-maturity security below its amortized cost is considered to be other-than-temporary based upon other considerations, the Company compares the estimated present value of the cash flows expected to be collected to the amortized cost of the security. The extent to which the estimated present value of the cash flows expected to be collected is less than the amortized cost of the security represents the credit-related portion of the OTTI, which is recognized in net income, resulting in a new cost basis for the security. Any remaining decline in fair value represents the noncredit portion of the OTTI, which is recognized in other comprehensive income. The following tables summarize gross unrealized losses and fair value for available-for-sale investments by length of time that the securities have continuously been in an unrealized loss position: June 30, 2019 Less than 12 Months 12 Months or Longer Total Estimated Fair Value Gross Unrealized Holding Losses Estimated Fair Value Gross Unrealized Holding Losses Estimated Fair Value Gross Unrealized Holding Losses (in thousands) Fixed maturities: Obligations of states, municipalities and political subdivisions $ — $ — $ 1,425 $ (2 ) $ 1,425 $ (2 ) Corporate and other securities 9,716 (29 ) 5,359 (200 ) 15,075 (229 ) Commercial mortgage and asset-backed securities 41,047 (195 ) 32,809 (290 ) 73,856 (485 ) Residential mortgage-backed securities 5,059 (8 ) 53,187 (922 ) 58,246 (930 ) Total available-for-sale investments $ 55,822 $ (232 ) $ 92,780 $ (1,414 ) $ 148,602 $ (1,646 ) At June 30, 2019 , the Company held 101 fixed-maturity securities in an unrealized loss position with a total estimated fair value of $148.6 million and gross unrealized losses of $1.6 million . Of these securities, 79 were in a continuous unrealized loss position for greater than one year. As discussed above, the Company regularly reviews all fixed-maturity securities within its investment portfolio to determine whether any other-than-temporary impairment has occurred. Based on the Company's review as of June 30, 2019, unrealized losses were caused by interest rate changes or other market factors and were not credit-specific issues. At June 30, 2019 , 85.9% of the Company’s fixed-maturity securities were rated "A-" or better and all of the Company’s fixed-maturity securities made expected coupon payments under the contractual terms of the securities. For the six months ended June 30, 2019 , the Company concluded that there were no other-than-temporary impairments from fixed-maturity securities with unrealized losses. December 31, 2018 Less than 12 Months 12 Months or Longer Total Estimated Fair Value Gross Unrealized Holding Losses Estimated Fair Value Gross Unrealized Holding Losses Estimated Fair Value Gross Unrealized Holding Losses (in thousands) Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ — $ — $ 499 $ (1 ) $ 499 $ (1 ) Obligations of states, municipalities and political subdivisions 42,718 (440 ) 34,326 (854 ) 77,044 (1,294 ) Corporate and other securities 62,045 (890 ) 12,092 (511 ) 74,137 (1,401 ) Commercial mortgage and asset-backed securities 93,247 (1,017 ) 25,746 (505 ) 118,993 (1,522 ) Residential mortgage-backed securities 24,571 (155 ) 55,638 (2,495 ) 80,209 (2,650 ) Total available-for-sale investments $ 222,581 $ (2,502 ) $ 128,301 $ (4,366 ) $ 350,882 $ (6,868 ) At December 31, 2018 , the Company held 317 fixed-maturity securities in an unrealized loss position with a total estimated fair value of $350.9 million and gross unrealized losses of $6.9 million . Of those securities, 158 were in a continuous unrealized loss position for greater than one year. Based on the Company's review as of December 31, 2018, unrealized losses were caused by interest rate changes or other market factors and were not credit-specific issues. At December 31, 2018 , 86.4% of the Company’s fixed-maturity securities were rated "A-" or better and all of the Company’s fixed-maturity securities made expected coupon payments under the contractual terms of the securities. For the year ended December 31, 2018 , the Company concluded that there were no other-than-temporary impairments from fixed-maturity securities with unrealized losses. Contractual maturities of available-for-sale fixed-maturity securities The amortized cost and estimated fair value of available-for-sale fixed-maturity securities at June 30, 2019 are summarized, by contractual maturity, as follows: June 30, 2019 Amortized Estimated Cost Fair Value (in thousands) Due in one year or less $ 3,914 $ 3,922 Due after one year through five years 95,702 98,079 Due after five years through ten years 50,116 52,709 Due after ten years 101,870 106,580 Commercial mortgage and asset-backed securities 175,355 177,865 Residential mortgage-backed securities 150,226 150,922 Total fixed maturities $ 577,183 $ 590,077 Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties, and the lenders may have the right to put the securities back to the borrower. Net investment income The following table presents the components of net investment income for the three and six months ended June 30, 2019 and 2018 : Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (in thousands) Interest: Taxable bonds $ 3,476 $ 2,239 $ 6,543 $ 4,000 Tax exempt municipal bonds 888 1,083 1,896 2,168 Cash equivalents and short-term investments 156 217 401 477 Dividends on equity securities 566 512 1,087 924 Gross investment income 5,086 4,051 9,927 7,569 Investment expenses (280 ) (269 ) (606 ) (558 ) Net investment income $ 4,806 $ 3,782 $ 9,321 $ 7,011 Realized investment gains and losses The following table presents realized investment gains and losses for the three and six months ended June 30, 2019 and 2018 : Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (in thousands) Fixed-maturity securities: Realized gains $ 25 $ 189 $ 396 $ 244 Realized losses — (4 ) (79 ) (4 ) Net realized gains from fixed-maturity securities 25 185 317 240 Equity securities: Realized gains 30 — 34 57 Realized losses (290 ) (11 ) (306 ) (11 ) Net realized (losses) gains from equity securities (260 ) (11 ) (272 ) 46 Net realized investment (losses) gains $ (235 ) $ 174 $ 45 $ 286 Change in net unrealized gains (losses) on fixed-maturity securities For the three and six months ended June 30, 2019 , the changes in net unrealized gains for fixed-maturity securities were $8.3 million and $16.9 million , respectively. For the three and six months ended June 30, 2018 , the changes in net unrealized losses for fixed-maturity securities were $1.3 million and $7.4 million , respectively. Insurance – statutory deposits The Company had invested assets with a carrying value of $6.9 million on deposit with state regulatory authorities at June 30, 2019 and December 31, 2018 . Payable for investments purchased The Company recorded a payable for investments purchased, not yet settled, of $5.5 million at June 30, 2019 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair value measurements Fair value is estimated for each class of financial instrument for which it is practical to estimate fair value. Fair value is defined as the price in the principal market that would be received for an asset to facilitate an orderly transaction between market participants on the measurement date. Market participants are assumed to be independent, knowledgeable, able and willing to transact an exchange and not acting under duress. Fair value hierarchy disclosures are based on the quality of inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Adjustments to transaction prices or quoted market prices may be required in illiquid or disorderly markets in order to estimate fair value. The three levels of the fair value hierarchy are defined as follows: Level 1 - Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities traded in active markets. Level 2 - Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and market-corroborated inputs. Level 3 - Inputs to the valuation methodology are unobservable for the asset or liability and are significant to the fair value measurement. Fair values of the Company's investment portfolio are estimated using unadjusted prices obtained by its investment manager from third party pricing services, where available. For securities where the Company is unable to obtain fair values from a pricing service or broker, fair values are estimated using information obtained from the Company's investment manager. Management performs several procedures to ascertain the reasonableness of investment values included in the condensed consolidated financial statements including 1) obtaining and reviewing internal control reports from the Company's investment manager that obtains fair values from third party pricing services, 2) discussing with the Company's investment manager its process for reviewing and validating pricing obtained from outside pricing services and 3) reviewing the security pricing received from the Company's investment manager and monitoring changes in unrealized gains and losses. The Company has evaluated the various types of securities in its investment portfolio to determine an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs. The following tables present the balances of assets measured at fair value on a recurring basis as of June 30, 2019 and December 31, 2018 , by level within the fair value hierarchy. June 30, 2019 Level 1 Level 2 Level 3 Total (in thousands) Assets Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ 113 $ — $ — $ 113 Obligations of states, municipalities and political subdivisions — 131,961 — 131,961 Corporate and other securities — 129,216 — 129,216 Commercial mortgage and asset-backed securities — 177,865 — 177,865 Residential mortgage-backed securities — 150,922 — 150,922 Total fixed maturities 113 589,964 — 590,077 Equity securities: Exchange traded funds 46,396 — — 46,396 Nonredeemable preferred stock — 19,514 — 19,514 Total equity securities 46,396 19,514 — 65,910 Total $ 46,509 $ 609,478 $ — $ 655,987 December 31, 2018 Level 1 Level 2 Level 3 Total (in thousands) Assets Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ 611 $ — $ — $ 611 Obligations of states, municipalities and political subdivisions — 154,600 — 154,600 Corporate and other securities — 96,752 — 96,752 Commercial mortgage and asset-backed securities — 149,867 — 149,867 Residential mortgage-backed securities — 108,421 — 108,421 Total fixed maturities 611 509,640 — 510,251 Equity securities: Exchange traded funds 38,987 — — 38,987 Nonredeemable preferred stock — 18,724 — 18,724 Total equity securities 38,987 18,724 — 57,711 Total $ 39,598 $ 528,364 $ — $ 567,962 There were no transfers into or out of Level 1 and Level 2 during the six months ended June 30, 2019 . There were no assets or liabilities measured at fair value on a nonrecurring basis as of June 30, 2019 or December 31, 2018 . Due to the relatively short-term nature of cash and cash equivalents, receivables and payables, their carrying amounts are reasonable estimates of fair value. |
Deferred Policy Acquisition Cos
Deferred Policy Acquisition Costs | 6 Months Ended |
Jun. 30, 2019 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |
Deferred Policy Acquisition Costs | Deferred policy acquisition costs The following table presents the amounts of policy acquisition costs deferred and amortized for the three and six months ended June 30, 2019 and 2018 : Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (in thousands) Balance, beginning of period $ 16,314 $ 12,768 $ 14,801 $ 11,775 Policy acquisition costs deferred: Direct commissions 13,880 10,298 26,243 19,675 Ceding commissions (3,258 ) (2,609 ) (6,514 ) (5,150 ) Other underwriting and policy acquisition costs 849 694 1,814 1,503 Policy acquisition costs deferred 11,471 8,383 21,543 16,028 Amortization of net policy acquisition costs (9,133 ) (7,028 ) (17,692 ) (13,680 ) Balance, end of period $ 18,652 $ 14,123 $ 18,652 $ 14,123 |
Underwriting, Acquisition and I
Underwriting, Acquisition and Insurance Expenses | 6 Months Ended |
Jun. 30, 2019 | |
Underwriting, Acquisition and Insurance Expenses [Abstract] | |
Underwriting, acquisition and insurance expenses | Underwriting, acquisition and insurance expenses Underwriting, acquisition and insurance expenses for the three and six months ended June 30, 2019 and 2018 consist of the following: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (in thousands) Underwriting, acquisition and insurance expenses incurred: Direct commissions $ 11,387 $ 8,756 $ 22,061 $ 17,135 Ceding commissions (3,114 ) (2,464 ) (6,052 ) (4,908 ) Other operating expenses 8,164 6,227 16,044 12,690 Total $ 16,437 $ 12,519 $ 32,053 $ 24,917 Other operating expenses within underwriting, acquisition and insurance expenses include salaries, bonus and employee benefits expenses of $7.1 million and $5.3 million for the three months ended June 30, 2019 and 2018 , respectively. Salaries, bonuses, and employee benefit expenses were $13.9 million and $10.3 million for the six months ended June 30, 2019 and 2018 , respectively. |
Stock-based Compensation
Stock-based Compensation | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Payment Arrangement [Text Block] | Stock-based compensation On July 27, 2016, the Kinsale Capital Group, Inc. 2016 Omnibus Incentive Plan (the "2016 Incentive Plan") became effective. The 2016 Incentive Plan, which is administered by the Compensation, Nominating and Corporate Governance Committee of the Company's Board of Directors, provides for grants of stock options, restricted stock, restricted stock units and other stock-based awards to officers, employees, directors, independent contractors and consultants. The number of shares of common stock available for issuance under the 2016 Incentive Plan may not exceed 2,073,832 . The total compensation cost that has been charged against income for share-based compensation arrangements was $1.1 million and $0.6 million for the six months ended June 30, 2019 and 2018, respectively. Restricted Stock Awards During the six months ended June 30, 2019, the Company granted restricted stock awards under the 2016 Incentive Plan. The restricted stock awards were valued on the date of grant and will vest over a period of 1 year to 4 years , corresponding to the anniversary date of the grants. The fair value of restricted stock awards was determined based on the closing trading price of the Company’s shares on the grant date or, if no shares were traded on the grant date, the last preceding date for which there was a sale of shares. Except for restrictions placed on the transferability of restricted stock, holders of unvested restricted stock have full stockholder’s rights, including voting rights and the right to receive dividends. Unvested shares of restricted stock awards and accrued dividends, if any, are forfeited upon the termination of service to or employment with the Company. A summary of all restricted stock activity under the equity compensation plans for the six months ended June 30, 2019 is as follows: For the Six Months Ended June 30, 2019 Number of Shares Weighted Average Grant Date Fair Value per Share Non-vested outstanding at the beginning of the period 92,465 $ 52.98 Granted 62,015 $ 80.59 Vested (27,628 ) $ 51.53 Forfeited (1,677 ) $ 53.60 Non-vested outstanding at the end of the period 125,175 $ 66.97 Employees and directors have the option to surrender shares to pay for withholding tax obligations resulting from any vesting of restricted shares. During the six months ended June 30, 2019 , restricted shares withheld for taxes in connection with the vesting of restricted shares totaled 7,365 . The fair value of restricted shares vested was $2.1 million during the six months ended June 30, 2019 . As of June 30, 2019 , the Company had $8.0 million of total unrecognized stock-based compensation expense expected to be charged to earnings over a weighted-average period of 3.4 years . Stock Options On July 27, 2016, the Board of Directors approved, and the Company granted, 1,036,916 stock options with an exercise price equal to the Initial Public Offering price of $16.00 per share and a weighted-average grant-date fair value of $2.71 per share. The options have a maximum contractual term of 10 years and vest in 4 equal annual installments following the date of the grant. The value of the options granted was estimated at the date of grant using the Black-Scholes pricing model using the following assumptions: Risk-free rate of return 1.26 % Dividend yield 1.25 % Expected share price volatility (1) 18.50 % Expected life in years (2) 6.3 years (1) Expected volatility was based on the Company’s competitors within the industry. (2) Expected life was calculated using the simplified method, which was an average of the contractual term of the option and its ordinary vesting period, as the Company did not have sufficient historical data for determining the expected term of our stock option awards. A summary of option activity as of June 30, 2019 , and changes during the period then ended is presented below: Number of Shares Weighted-average exercise price Weighted-average remaining years of contractual term Aggregate intrinsic value (in thousands) Outstanding at January 1, 2019 804,303 $ 16.00 Granted — — Forfeited (13,200 ) 16.00 Exercised (61,922 ) 16.00 Outstanding at June 30, 2019 729,181 $ 16.00 7.1 $ 55,039 Exercisable at June 30, 2019 278,015 $ 16.00 7.1 $ 20,985 The total intrinsic value of options exercised was $3.4 million and $1.4 million during the six months ended June 30, 2019 and 2018, respectively. As of June 30, 2019 , the Company had $0.7 million of total unrecognized stock-based compensation expense expected to be charged to earnings over a weighted-average period of 1.1 |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings per share The following represents a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations contained in the consolidated financial statements: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (in thousands, except per share data) Net income $ 13,767 $ 10,112 $ 32,487 $ 17,399 Weighted average common shares outstanding - basic 21,210 21,070 21,190 21,058 Effect of potential dilutive securities: Conversion of stock options 583 593 579 588 Conversion of restricted stock 39 3 34 2 Weighted average common shares outstanding - diluted 21,832 21,666 21,803 21,648 Earnings per common share: Basic $ 0.65 $ 0.48 $ 1.53 $ 0.83 Diluted $ 0.63 $ 0.47 $ 1.49 $ 0.80 There were approximately 55 thousand anti-dilutive stock awards for the three and six months ended June 30, 2019 and approximately 88 thousand anti-dilutive stock awards for the three and six months ended June 30, 2018. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Income taxes The Company uses the estimated annual effective tax rate method for calculating its tax provision in interim periods, which represents the Company's best estimate of the effective tax rate expected for the full year. The estimated annual effective tax rate typically differs from the U.S. statutory tax rate primarily as a result of tax-exempt investment income and any discrete items recognized during the period. The Company's effective tax rates were 16.7% and 17.4% for the three and six months ended June 30, 2019 , respectively. The Company's effective tax rates were 18.9% and 18.2% for the three and six months ended June 30, 2018, respectively. The decrease in the effective tax rates in the second |
Reserves for Unpaid Losses and
Reserves for Unpaid Losses and Loss Adjustment Expenses | 6 Months Ended |
Jun. 30, 2019 | |
Liability for Unpaid Claims and Claims Adjustment Expense, Activity in Liability [Abstract] | |
Reserves for Unpaid Losses and Loss Adjustment Expenses | Reserves for unpaid losses and loss adjustment expenses The following table presents a reconciliation of consolidated beginning and ending reserves for unpaid losses and loss adjustment expenses: June 30, 2019 2018 (in thousands) Net reserves for unpaid losses and loss adjustment expenses, beginning of year $ 313,763 $ 267,493 Incurred losses and loss adjustment expenses: Current year 81,127 62,389 Prior years (7,816 ) (3,523 ) Total net losses and loss adjustment expenses incurred 73,311 58,866 Payments: Current year 5,530 1,858 Prior years 36,100 33,309 Total payments 41,630 35,167 Net reserves for unpaid losses and loss adjustment expenses, end of period 345,444 291,192 Reinsurance recoverable on unpaid losses 61,989 53,373 Gross reserves for unpaid losses and loss adjustment expenses, end of period $ 407,433 $ 344,565 During the six months ended June 30, 2019 , the reserves for unpaid losses and loss adjustment expenses held at December 31, 2018 developed favorably by $7.8 million . The favorable development was primarily attributable to the 2017 through 2018 accident years by $14.1 million , which mostly resulted from reported losses emerging at a lower level than expected across most statutory lines of business. This favorable development was offset in part by adverse development from the 2011 through 2016 accident years of $6.2 million primarily related to a modest amount of conservatism added to our reserves for incurred but not yet reported ("IBNR") losses to provide for emergence of reported losses over a longer period of time. During the six months ended June 30, 2018 , the reserves for unpaid losses and loss adjustment expenses held at December 31, 2017 developed favorably by $3.5 million . The favorable development was primarily attributable to the 2015 through 2017 accident years of $6.3 million , which resulted from reported losses emerging at a lower level than expected. This favorable development was offset in part by adverse development from the 2011 through 2014 accident years of $2.8 million |
Reinsurance
Reinsurance | 6 Months Ended |
Jun. 30, 2019 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | Reinsurance The following table summarizes the effect of reinsurance on premiums written and earned for the three and six months ended June 30, 2019 and 2018 : Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (in thousands) Written: Direct $ 94,885 $ 69,981 $ 179,448 $ 133,828 Assumed 62 — 125 — Ceded (12,260 ) (9,090 ) (23,819 ) (17,846 ) Net written $ 82,687 $ 60,891 $ 155,754 $ 115,982 Earned: Direct $ 77,920 $ 59,603 $ 149,998 $ 116,196 Assumed 16 — 73 — Ceded (11,849 ) (8,710 ) (22,493 ) (17,242 ) Net earned $ 66,087 $ 50,893 $ 127,578 $ 98,954 Incurred losses and loss adjustment expenses were net of reinsurance (ceded incurred losses and loss adjustment expenses) of $9.4 million and $5.0 million for the three months ended June 30, 2019 and 2018 , respectively. Ceded incurred losses and loss adjustment expenses were $13.7 million and $7.9 million for the six months ended June 30, 2019 and 2018 , respectively. At June 30, 2019 , reinsurance recoverables on paid and unpaid losses were $3.9 million and $62.0 million , respectively. At December 31, 2018 , reinsurance recoverables on paid and unpaid losses were $1.4 million and $55.4 million |
Credit Agreement (Notes)
Credit Agreement (Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Credit Agreement [Text Block] | 11. Credit Agreement On May 28, 2019, the Company entered into a Credit Agreement (the “Credit Agreement”) that provided the Company with a $50 million senior unsecured revolving credit facility (the “Credit Facility”). The Credit Facility has a maturity of May 28, 2024 . Borrowings under the Credit Facility will be used to fund construction of the Company’s new headquarters and may also be used for working capital and general corporate purposes. Interest rates on borrowings are based on prevailing interest rates and the applicable margin, as described in the Credit Agreement. As of June 30, 2019, there were no outstanding balances under the Credit Facility. |
Other Comprehensive (Loss) Inco
Other Comprehensive (Loss) Income | 6 Months Ended |
Jun. 30, 2019 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Other Comprehensive Income | Other comprehensive income (loss) The following table summarizes the components of other comprehensive (loss) income for the three and six months ended June 30, 2019 and 2018 : Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (in thousands) Unrealized gains (losses) on fixed-maturity securities arising during the period, before income taxes: $ 8,323 $ (1,101 ) $ 17,196 $ (7,193 ) Income taxes (1,748 ) 232 (3,611 ) 1,511 Unrealized gains (losses) arising during the period, net of income taxes 6,575 (869 ) 13,585 (5,682 ) Less reclassification adjustment: Net realized gains on fixed-maturity securities, before income taxes 25 185 317 240 Income taxes (5 ) (38 ) (67 ) (50 ) Reclassification adjustment included in net income, net of income taxes 20 147 250 190 Other comprehensive income (loss) $ 6,555 $ (1,016 ) $ 13,335 $ (5,872 ) The sale of an available-for-sale fixed-maturity security results in amounts being reclassified from accumulated other comprehensive income to realized gains or losses in current period earnings. The related tax effect of the reclassification adjustment is recorded in income tax expense in current period earnings. See Note 2 for additional information. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation The accompanying condensed consolidated financial statements and notes have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and do not contain all of the information and footnotes required by U.S. GAAP for complete financial statements. For a more complete description of the Company’s business and accounting policies, these condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements of Kinsale Capital Group, Inc. and its wholly owned subsidiaries (the "Company") included in the Annual Report on Form 10-K for the year ended December 31, 2018. In the opinion of management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Such adjustments consist only of normal recurring items. All significant intercompany balances and transactions have been eliminated in consolidation. Interim results are not necessarily indicative of results of operations for the full year. |
Use of Estimates | Use of estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management periodically reviews its estimates and assumptions. |
Recently Adopted Accounting Pronouncements | Recently adopted accounting pronouncements ASU 2016-02, Leases (Topic 842) In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)" to improve the financial reporting of leasing transactions. Under this ASU, lessees will recognize a right-of-use ("ROU") asset and corresponding liability on the balance sheet for all leases, except for leases covering a period of 12 months or less. The lessee’s income statement treatment for leases will vary depending on the nature and classification of the lease. Effective January 1, 2019, the Company adopted this ASU and recorded a ROU asset and corresponding lease liability of approximately $0.9 million . The ROU and operating lease liability are included in "other assets" and "other liabilities," respectively, in the accompanying consolidated balance sheet. The Company elected the package of practical expedients permitted under the adoption of the new standard, which allowed the Company to account for existing leases under their current classification, as well as omit any new costs classified as initial direct costs, under the new standard. This election kept the existing agreements as operating leases. The Company also elected the practical expedient allowing an accounting policy election by class of underlying asset, to account for separate lease and nonlease components as a single lease component. In addition, the Company has implemented the necessary internal controls relating to the adoption of the standard. ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities |
Prospective Accounting Pronouncements | Prospective accounting pronouncements ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) In June 2016, the FASB issued ASU 2016-13, "Financial Instruments – Credit Losses (Topic 326)" to provide more useful information about the expected credit losses on financial instruments. Current GAAP delays the recognition of credit losses until it is probable a loss has been incurred. The update will require a financial asset measured at amortized cost to be presented at the net amount expected to be collected by means of an allowance for credit losses that runs through net income. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses. However, the amendments would limit the amount of the allowance to the amount by which fair value is below amortized cost. The measurement of credit losses on available-for-sale securities is similar under current GAAP, but the update requires the use of the allowance account through which amounts can be reversed, rather than through an irreversible write-down. This ASU is effective for annual and interim reporting periods beginning after December 15, 2019. Early adoption is permitted beginning after December 15, 2018. Upon adoption, the update will be applied using the modified-retrospective approach, by which a cumulative-effect adjustment will be made to retained earnings as of the beginning of the first reporting period presented. The Company is currently evaluating the impact of the adoption on its consolidated financial statements. There are no other prospective accounting standards which, upon their effective date, would have a material impact on the Company's consolidated financial statements. |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Investments [Abstract] | |
Available-for-sale Investments | The following tables summarize the available-for-sale investments at June 30, 2019 and December 31, 2018 : June 30, 2019 Amortized Cost Gross Unrealized Holding Gains Gross Unrealized Holding Losses Estimated Fair Value (in thousands) Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ 110 $ 3 $ — $ 113 Obligations of states, municipalities and political subdivisions 125,619 6,344 (2 ) 131,961 Corporate and other securities 125,873 3,572 (229 ) 129,216 Commercial mortgage and asset-backed securities 175,355 2,995 (485 ) 177,865 Residential mortgage-backed securities 150,226 1,626 (930 ) 150,922 Total available-for-sale investments $ 577,183 $ 14,540 $ (1,646 ) $ 590,077 December 31, 2018 Amortized Cost Gross Unrealized Holding Gains Gross Unrealized Holding Losses Estimated Fair Value (in thousands) Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ 610 $ 2 $ (1 ) $ 611 Obligations of states, municipalities and political subdivisions 153,884 2,010 (1,294 ) 154,600 Corporate and other securities 97,889 264 (1,401 ) 96,752 Commercial mortgage and asset-backed securities 151,137 252 (1,522 ) 149,867 Residential mortgage-backed securities 110,717 354 (2,650 ) 108,421 Total available-for-sale investments $ 514,237 $ 2,882 $ (6,868 ) $ 510,251 |
Available-for-sale Securities in an Unrealized Loss Position | December 31, 2018 Less than 12 Months 12 Months or Longer Total Estimated Fair Value Gross Unrealized Holding Losses Estimated Fair Value Gross Unrealized Holding Losses Estimated Fair Value Gross Unrealized Holding Losses (in thousands) Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ — $ — $ 499 $ (1 ) $ 499 $ (1 ) Obligations of states, municipalities and political subdivisions 42,718 (440 ) 34,326 (854 ) 77,044 (1,294 ) Corporate and other securities 62,045 (890 ) 12,092 (511 ) 74,137 (1,401 ) Commercial mortgage and asset-backed securities 93,247 (1,017 ) 25,746 (505 ) 118,993 (1,522 ) Residential mortgage-backed securities 24,571 (155 ) 55,638 (2,495 ) 80,209 (2,650 ) Total available-for-sale investments $ 222,581 $ (2,502 ) $ 128,301 $ (4,366 ) $ 350,882 $ (6,868 ) The following tables summarize gross unrealized losses and fair value for available-for-sale investments by length of time that the securities have continuously been in an unrealized loss position: June 30, 2019 Less than 12 Months 12 Months or Longer Total Estimated Fair Value Gross Unrealized Holding Losses Estimated Fair Value Gross Unrealized Holding Losses Estimated Fair Value Gross Unrealized Holding Losses (in thousands) Fixed maturities: Obligations of states, municipalities and political subdivisions $ — $ — $ 1,425 $ (2 ) $ 1,425 $ (2 ) Corporate and other securities 9,716 (29 ) 5,359 (200 ) 15,075 (229 ) Commercial mortgage and asset-backed securities 41,047 (195 ) 32,809 (290 ) 73,856 (485 ) Residential mortgage-backed securities 5,059 (8 ) 53,187 (922 ) 58,246 (930 ) Total available-for-sale investments $ 55,822 $ (232 ) $ 92,780 $ (1,414 ) $ 148,602 $ (1,646 ) |
Contractual Maturities of Available-for-sale Fixed Maturity Securities | The amortized cost and estimated fair value of available-for-sale fixed-maturity securities at June 30, 2019 are summarized, by contractual maturity, as follows: June 30, 2019 Amortized Estimated Cost Fair Value (in thousands) Due in one year or less $ 3,914 $ 3,922 Due after one year through five years 95,702 98,079 Due after five years through ten years 50,116 52,709 Due after ten years 101,870 106,580 Commercial mortgage and asset-backed securities 175,355 177,865 Residential mortgage-backed securities 150,226 150,922 Total fixed maturities $ 577,183 $ 590,077 |
Net Investment Income | The following table presents the components of net investment income for the three and six months ended June 30, 2019 and 2018 : Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (in thousands) Interest: Taxable bonds $ 3,476 $ 2,239 $ 6,543 $ 4,000 Tax exempt municipal bonds 888 1,083 1,896 2,168 Cash equivalents and short-term investments 156 217 401 477 Dividends on equity securities 566 512 1,087 924 Gross investment income 5,086 4,051 9,927 7,569 Investment expenses (280 ) (269 ) (606 ) (558 ) Net investment income $ 4,806 $ 3,782 $ 9,321 $ 7,011 |
Realized Gain (Loss) on Investments | The following table presents realized investment gains and losses for the three and six months ended June 30, 2019 and 2018 : Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (in thousands) Fixed-maturity securities: Realized gains $ 25 $ 189 $ 396 $ 244 Realized losses — (4 ) (79 ) (4 ) Net realized gains from fixed-maturity securities 25 185 317 240 Equity securities: Realized gains 30 — 34 57 Realized losses (290 ) (11 ) (306 ) (11 ) Net realized (losses) gains from equity securities (260 ) (11 ) (272 ) 46 Net realized investment (losses) gains $ (235 ) $ 174 $ 45 $ 286 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Assets Measured at Fair Value on a Recurring Basis | The following tables present the balances of assets measured at fair value on a recurring basis as of June 30, 2019 and December 31, 2018 , by level within the fair value hierarchy. June 30, 2019 Level 1 Level 2 Level 3 Total (in thousands) Assets Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ 113 $ — $ — $ 113 Obligations of states, municipalities and political subdivisions — 131,961 — 131,961 Corporate and other securities — 129,216 — 129,216 Commercial mortgage and asset-backed securities — 177,865 — 177,865 Residential mortgage-backed securities — 150,922 — 150,922 Total fixed maturities 113 589,964 — 590,077 Equity securities: Exchange traded funds 46,396 — — 46,396 Nonredeemable preferred stock — 19,514 — 19,514 Total equity securities 46,396 19,514 — 65,910 Total $ 46,509 $ 609,478 $ — $ 655,987 December 31, 2018 Level 1 Level 2 Level 3 Total (in thousands) Assets Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ 611 $ — $ — $ 611 Obligations of states, municipalities and political subdivisions — 154,600 — 154,600 Corporate and other securities — 96,752 — 96,752 Commercial mortgage and asset-backed securities — 149,867 — 149,867 Residential mortgage-backed securities — 108,421 — 108,421 Total fixed maturities 611 509,640 — 510,251 Equity securities: Exchange traded funds 38,987 — — 38,987 Nonredeemable preferred stock — 18,724 — 18,724 Total equity securities 38,987 18,724 — 57,711 Total $ 39,598 $ 528,364 $ — $ 567,962 |
Deferred Policy Acquisition C_2
Deferred Policy Acquisition Costs (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |
Deferred Policy Acquisition Costs | The following table presents the amounts of policy acquisition costs deferred and amortized for the three and six months ended June 30, 2019 and 2018 : Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (in thousands) Balance, beginning of period $ 16,314 $ 12,768 $ 14,801 $ 11,775 Policy acquisition costs deferred: Direct commissions 13,880 10,298 26,243 19,675 Ceding commissions (3,258 ) (2,609 ) (6,514 ) (5,150 ) Other underwriting and policy acquisition costs 849 694 1,814 1,503 Policy acquisition costs deferred 11,471 8,383 21,543 16,028 Amortization of net policy acquisition costs (9,133 ) (7,028 ) (17,692 ) (13,680 ) Balance, end of period $ 18,652 $ 14,123 $ 18,652 $ 14,123 |
Underwriting, Acquisition and_2
Underwriting, Acquisition and Insurance Expenses (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Underwriting, Acquisition and Insurance Expenses [Abstract] | |
Underwriting, acquisition and insurance expenses | Underwriting, acquisition and insurance expenses for the three and six months ended June 30, 2019 and 2018 consist of the following: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (in thousands) Underwriting, acquisition and insurance expenses incurred: Direct commissions $ 11,387 $ 8,756 $ 22,061 $ 17,135 Ceding commissions (3,114 ) (2,464 ) (6,052 ) (4,908 ) Other operating expenses 8,164 6,227 16,044 12,690 Total $ 16,437 $ 12,519 $ 32,053 $ 24,917 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Restricted Stock Activity | A summary of all restricted stock activity under the equity compensation plans for the six months ended June 30, 2019 is as follows: For the Six Months Ended June 30, 2019 Number of Shares Weighted Average Grant Date Fair Value per Share Non-vested outstanding at the beginning of the period 92,465 $ 52.98 Granted 62,015 $ 80.59 Vested (27,628 ) $ 51.53 Forfeited (1,677 ) $ 53.60 Non-vested outstanding at the end of the period 125,175 $ 66.97 |
Stock Options Valuation Assumptions | The value of the options granted was estimated at the date of grant using the Black-Scholes pricing model using the following assumptions: Risk-free rate of return 1.26 % Dividend yield 1.25 % Expected share price volatility (1) 18.50 % Expected life in years (2) 6.3 years |
Stock Options Activity | A summary of option activity as of June 30, 2019 , and changes during the period then ended is presented below: Number of Shares Weighted-average exercise price Weighted-average remaining years of contractual term Aggregate intrinsic value (in thousands) Outstanding at January 1, 2019 804,303 $ 16.00 Granted — — Forfeited (13,200 ) 16.00 Exercised (61,922 ) 16.00 Outstanding at June 30, 2019 729,181 $ 16.00 7.1 $ 55,039 Exercisable at June 30, 2019 278,015 $ 16.00 7.1 $ 20,985 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | The following represents a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations contained in the consolidated financial statements: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (in thousands, except per share data) Net income $ 13,767 $ 10,112 $ 32,487 $ 17,399 Weighted average common shares outstanding - basic 21,210 21,070 21,190 21,058 Effect of potential dilutive securities: Conversion of stock options 583 593 579 588 Conversion of restricted stock 39 3 34 2 Weighted average common shares outstanding - diluted 21,832 21,666 21,803 21,648 Earnings per common share: Basic $ 0.65 $ 0.48 $ 1.53 $ 0.83 Diluted $ 0.63 $ 0.47 $ 1.49 $ 0.80 |
Reserves for Unpaid Losses an_2
Reserves for Unpaid Losses and Loss Adjustment Expenses (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Liability for Unpaid Claims and Claims Adjustment Expense, Activity in Liability [Abstract] | |
Schedule of Unpaid Losses and Loss Adjustment Expenses | The following table presents a reconciliation of consolidated beginning and ending reserves for unpaid losses and loss adjustment expenses: June 30, 2019 2018 (in thousands) Net reserves for unpaid losses and loss adjustment expenses, beginning of year $ 313,763 $ 267,493 Incurred losses and loss adjustment expenses: Current year 81,127 62,389 Prior years (7,816 ) (3,523 ) Total net losses and loss adjustment expenses incurred 73,311 58,866 Payments: Current year 5,530 1,858 Prior years 36,100 33,309 Total payments 41,630 35,167 Net reserves for unpaid losses and loss adjustment expenses, end of period 345,444 291,192 Reinsurance recoverable on unpaid losses 61,989 53,373 Gross reserves for unpaid losses and loss adjustment expenses, end of period $ 407,433 $ 344,565 |
Reinsurance (Tables)
Reinsurance (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Reinsurance Disclosures [Abstract] | |
Effects of Reinsurance | The following table summarizes the effect of reinsurance on premiums written and earned for the three and six months ended June 30, 2019 and 2018 : Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (in thousands) Written: Direct $ 94,885 $ 69,981 $ 179,448 $ 133,828 Assumed 62 — 125 — Ceded (12,260 ) (9,090 ) (23,819 ) (17,846 ) Net written $ 82,687 $ 60,891 $ 155,754 $ 115,982 Earned: Direct $ 77,920 $ 59,603 $ 149,998 $ 116,196 Assumed 16 — 73 — Ceded (11,849 ) (8,710 ) (22,493 ) (17,242 ) Net earned $ 66,087 $ 50,893 $ 127,578 $ 98,954 |
Other Comprehensive (Loss) In_2
Other Comprehensive (Loss) Income (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Comprehensive Income (Loss) | The following table summarizes the components of other comprehensive (loss) income for the three and six months ended June 30, 2019 and 2018 : Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (in thousands) Unrealized gains (losses) on fixed-maturity securities arising during the period, before income taxes: $ 8,323 $ (1,101 ) $ 17,196 $ (7,193 ) Income taxes (1,748 ) 232 (3,611 ) 1,511 Unrealized gains (losses) arising during the period, net of income taxes 6,575 (869 ) 13,585 (5,682 ) Less reclassification adjustment: Net realized gains on fixed-maturity securities, before income taxes 25 185 317 240 Income taxes (5 ) (38 ) (67 ) (50 ) Reclassification adjustment included in net income, net of income taxes 20 147 250 190 Other comprehensive income (loss) $ 6,555 $ (1,016 ) $ 13,335 $ (5,872 ) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - Accounting Standards Update 2016-02 [Member] $ in Thousands | Jan. 01, 2019USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Operating Lease, Liability | $ 900 |
Operating Lease, Right-of-Use Asset | $ 900 |
Investments Investments (Availa
Investments Investments (Available for Sale) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 577,183 | $ 514,237 |
Gross Unrealized Holding Gains | 14,540 | 2,882 |
Gross Unrealized Holding Losses | 1,646 | 6,868 |
Estimated Fair Value | 590,077 | 510,251 |
U.S. Treasury securities and obligations of U.S. government agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 110 | 610 |
Gross Unrealized Holding Gains | 3 | 2 |
Gross Unrealized Holding Losses | 0 | 1 |
Estimated Fair Value | 113 | 611 |
Obligations of states, municipalities and political subdivisions | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 125,619 | 153,884 |
Gross Unrealized Holding Gains | 6,344 | 2,010 |
Gross Unrealized Holding Losses | 2 | 1,294 |
Estimated Fair Value | 131,961 | 154,600 |
Corporate and other securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 125,873 | 97,889 |
Gross Unrealized Holding Gains | 3,572 | 264 |
Gross Unrealized Holding Losses | 229 | 1,401 |
Estimated Fair Value | 129,216 | 96,752 |
Commercial mortgage and asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 175,355 | 151,137 |
Gross Unrealized Holding Gains | 2,995 | 252 |
Gross Unrealized Holding Losses | 485 | 1,522 |
Estimated Fair Value | 177,865 | 149,867 |
Residential mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 150,226 | 110,717 |
Gross Unrealized Holding Gains | 1,626 | 354 |
Gross Unrealized Holding Losses | 930 | 2,650 |
Estimated Fair Value | $ 150,922 | $ 108,421 |
Investments Available-for-Sale
Investments Available-for-Sale Securities in a Loss Position (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Estimated Fair Value | $ 55,822 | $ 222,581 |
Less than 12 months, gross unrealized holding losses | 232 | 2,502 |
12 Months or Longer, Estimated Fair Value | 92,780 | 128,301 |
12 Months or Longer, Gross Unrealized Holding Losses | 1,414 | 4,366 |
Total Estimated Fair Value | 148,602 | 350,882 |
Total Gross Unrealized Holding Losses | (1,646) | (6,868) |
U.S. Treasury securities and obligations of U.S. government agencies [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Estimated Fair Value | 0 | |
Less than 12 months, gross unrealized holding losses | 0 | |
12 Months or Longer, Estimated Fair Value | 499 | |
12 Months or Longer, Gross Unrealized Holding Losses | 1 | |
Total Estimated Fair Value | 499 | |
Total Gross Unrealized Holding Losses | (1) | |
Obligations of states, municipalities and political subdivisions [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Estimated Fair Value | 0 | 42,718 |
Less than 12 months, gross unrealized holding losses | 0 | 440 |
12 Months or Longer, Estimated Fair Value | 1,425 | 34,326 |
12 Months or Longer, Gross Unrealized Holding Losses | 2 | 854 |
Total Estimated Fair Value | 1,425 | 77,044 |
Total Gross Unrealized Holding Losses | (2) | (1,294) |
Corporate and other securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Estimated Fair Value | 9,716 | 62,045 |
Less than 12 months, gross unrealized holding losses | 29 | 890 |
12 Months or Longer, Estimated Fair Value | 5,359 | 12,092 |
12 Months or Longer, Gross Unrealized Holding Losses | 200 | 511 |
Total Estimated Fair Value | 15,075 | 74,137 |
Total Gross Unrealized Holding Losses | (229) | (1,401) |
Commercial mortgage and asset-backed securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Estimated Fair Value | 41,047 | 93,247 |
Less than 12 months, gross unrealized holding losses | 195 | 1,017 |
12 Months or Longer, Estimated Fair Value | 32,809 | 25,746 |
12 Months or Longer, Gross Unrealized Holding Losses | 290 | 505 |
Total Estimated Fair Value | 73,856 | 118,993 |
Total Gross Unrealized Holding Losses | (485) | (1,522) |
Residential mortgage-backed securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 Months, Estimated Fair Value | 5,059 | 24,571 |
Less than 12 months, gross unrealized holding losses | 8 | 155 |
12 Months or Longer, Estimated Fair Value | 53,187 | 55,638 |
12 Months or Longer, Gross Unrealized Holding Losses | 922 | 2,495 |
Total Estimated Fair Value | 58,246 | 80,209 |
Total Gross Unrealized Holding Losses | $ (930) | $ (2,650) |
Investments Available-for-Sal_2
Investments Available-for-Sale Securities in a Loss Position Narrative (Details) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019USD ($)Rate | Dec. 31, 2018USD ($)Rate | |
Debt Securities, Available-for-sale [Line Items] | ||
Number of available-for-sale securities in unrealized loss positions | 101 | 317 |
Total estimated fair value | $ 148,602 | $ 350,882 |
Total gross unrealized holding losses | $ 1,646 | $ 6,868 |
Number of available-for-sale securities in unrealized loss positions, greater than one year | 79 | 158 |
Other-than- temporary impairment losses | $ 0 | $ 0 |
Fixed maturities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale securities, percentage of securities with ratings of A minus or better | Rate | 85.90% | 86.40% |
Investments Contractual Maturit
Investments Contractual Maturities of Available-for-Sale Fixed Maturity Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Amortized Cost | ||
Due in one year or less, Amortized Cost | $ 3,914 | |
Due after one year through five years, Amortized Cost | 95,702 | |
Due after five years through ten years, Amortized Cost | 50,116 | |
Due after ten years, Amortized Cost | 101,870 | |
Total fixed maturities, Amortized Cost | 577,183 | $ 514,237 |
Estimated Fair Value | ||
Due in one year or less, Estimated Fair Value | 3,922 | |
Due after one year through five years, Estimated Fair Value | 98,079 | |
Due after five years through ten years, Estimated Fair Value | 52,709 | |
Due after ten years, Estimated Fair Value | 106,580 | |
Estimated Fair Value | 590,077 | 510,251 |
Commercial mortgage and asset-backed securities [Member] | ||
Amortized Cost | ||
Without single maturity date, Amortized Cost | 175,355 | |
Total fixed maturities, Amortized Cost | 175,355 | 151,137 |
Estimated Fair Value | ||
Without single maturity date, Estimated Fair Value | 177,865 | |
Estimated Fair Value | 177,865 | 149,867 |
Residential mortgage-backed securities [Member] | ||
Amortized Cost | ||
Without single maturity date, Amortized Cost | 150,226 | |
Total fixed maturities, Amortized Cost | 150,226 | 110,717 |
Estimated Fair Value | ||
Without single maturity date, Estimated Fair Value | 150,922 | |
Estimated Fair Value | $ 150,922 | $ 108,421 |
Investments Net Investment Inco
Investments Net Investment Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Components of Net Investment Income [Abstract] | ||||
Taxable bonds | $ 3,476 | $ 2,239 | $ 6,543 | $ 4,000 |
Tax exempt municipal bonds | 888 | 1,083 | 1,896 | 2,168 |
Cash equivalents and short-term investments | 156 | 217 | 401 | 477 |
Dividends on equity securities | 566 | 512 | 1,087 | 924 |
Gross investment income | 5,086 | 4,051 | 9,927 | 7,569 |
Investment expenses | (280) | (269) | (606) | (558) |
Net investment income | $ 4,806 | $ 3,782 | $ 9,321 | $ 7,011 |
Investments Realized Gains (Los
Investments Realized Gains (Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Debt and Equity Securities, Realized Gain (Loss) [Abstract] | ||||
Realized gains, fixed-maturity securities | $ 25 | $ 189 | $ 396 | $ 244 |
Realized losses, fixed-maturity securities | 0 | (4) | (79) | (4) |
Net realized gains, fixed-maturity securities | 25 | 185 | 317 | 240 |
Realized gains, equity securities | 30 | 0 | 34 | 57 |
Realized losses, equity securities | (290) | (11) | (306) | (11) |
Net realized (losses) gains, equity securities | (260) | (11) | (272) | 46 |
Net realized investment gains | $ (235) | $ 174 | $ 45 | $ 286 |
Investments Unrealized Gains (L
Investments Unrealized Gains (Losses) on Investments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Debt Securities, Available-for-sale [Line Items] | ||||
Change in unrealized gains (losses), fixed-maturity securities | $ 8.3 | $ (1.3) | $ 16.9 | $ (7.4) |
Investments Investment Narrativ
Investments Investment Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Investments, Debt and Equity Securities [Abstract] | ||
Assets on deposit with state regulatory authorities | $ 6.9 | $ 6.9 |
Payable for investments purchased | $ 5.5 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | $ 655,987 | $ 567,962 |
Level 1 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 46,509 | 39,598 |
Level 2 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 609,478 | 528,364 |
Level 3 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 0 | 0 |
Fixed maturities [Member] | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 590,077 | 510,251 |
Fixed maturities [Member] | Level 1 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 113 | 611 |
Fixed maturities [Member] | Level 2 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 589,964 | 509,640 |
Fixed maturities [Member] | Level 3 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 0 | 0 |
U.S. Treasury securities and obligations of U.S. government agencies [Member] | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 113 | 611 |
U.S. Treasury securities and obligations of U.S. government agencies [Member] | Level 1 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 113 | 611 |
U.S. Treasury securities and obligations of U.S. government agencies [Member] | Level 2 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 0 | 0 |
U.S. Treasury securities and obligations of U.S. government agencies [Member] | Level 3 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 0 | 0 |
Obligations of states, municipalities and political subdivisions [Member] | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 131,961 | 154,600 |
Obligations of states, municipalities and political subdivisions [Member] | Level 1 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 0 | 0 |
Obligations of states, municipalities and political subdivisions [Member] | Level 2 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 131,961 | 154,600 |
Obligations of states, municipalities and political subdivisions [Member] | Level 3 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 0 | 0 |
Corporate and other securities [Member] | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 129,216 | 96,752 |
Corporate and other securities [Member] | Level 1 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 0 | 0 |
Corporate and other securities [Member] | Level 2 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 129,216 | 96,752 |
Corporate and other securities [Member] | Level 3 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 0 | 0 |
Commercial mortgage and asset-backed securities [Member] | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 177,865 | 149,867 |
Commercial mortgage and asset-backed securities [Member] | Level 1 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 0 | 0 |
Commercial mortgage and asset-backed securities [Member] | Level 2 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 177,865 | 149,867 |
Commercial mortgage and asset-backed securities [Member] | Level 3 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 0 | 0 |
Residential mortgage-backed securities [Member] | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 150,922 | 108,421 |
Residential mortgage-backed securities [Member] | Level 1 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 0 | 0 |
Residential mortgage-backed securities [Member] | Level 2 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 150,922 | 108,421 |
Residential mortgage-backed securities [Member] | Level 3 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value - available for sale | 0 | 0 |
Equity securities [Member] | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 65,910 | 57,711 |
Equity securities [Member] | Level 1 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 46,396 | 38,987 |
Equity securities [Member] | Level 2 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 19,514 | 18,724 |
Equity securities [Member] | Level 3 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 0 | 0 |
Exchange traded funds [Member] | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 46,396 | 38,987 |
Exchange traded funds [Member] | Level 1 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 46,396 | 38,987 |
Exchange traded funds [Member] | Level 2 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 0 | 0 |
Exchange traded funds [Member] | Level 3 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 0 | 0 |
Nonredeemable preferred stock [Member] | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 19,514 | 18,724 |
Nonredeemable preferred stock [Member] | Level 1 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 0 | 0 |
Nonredeemable preferred stock [Member] | Level 2 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | 19,514 | 18,724 |
Nonredeemable preferred stock [Member] | Level 3 | ||
Fair Value of Investments Measured on Recurring Basis [Line Items] | ||
Fair value | $ 0 | $ 0 |
Fair Value Measurements Narrati
Fair Value Measurements Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Transfers from Level 1 to Level 2 | $ 0 | |
Transfers from Level 2 to Level 1 | 0 | |
Nonrecurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 0 | $ 0 |
Liabilities measured at fair value | $ 0 | $ 0 |
Deferred Policy Acquisition C_3
Deferred Policy Acquisition Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | ||||
Balance, beginning of period | $ 16,314 | $ 12,768 | $ 14,801 | $ 11,775 |
Policy acquisition costs deferred: | ||||
Direct commissions deferred | 13,880 | 10,298 | 26,243 | 19,675 |
Ceding commissions deferred | (3,258) | (2,609) | (6,514) | (5,150) |
Other underwriting and policy acquisition costs | 849 | 694 | 1,814 | 1,503 |
Policy acquisition costs deferred | 11,471 | 8,383 | 21,543 | 16,028 |
Amortization of net policy acquisition costs | (9,133) | (7,028) | (17,692) | (13,680) |
Balance, end of period | $ 18,652 | $ 14,123 | $ 18,652 | $ 14,123 |
Underwriting, Acquisition and_3
Underwriting, Acquisition and Insurance Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Underwriting, Acquisition and Insurance Expenses [Abstract] | ||||
Gross commissions | $ 11,387 | $ 8,756 | $ 22,061 | $ 17,135 |
Ceding commissions | (3,114) | (2,464) | (6,052) | (4,908) |
Other operating expenses | 8,164 | 6,227 | 16,044 | 12,690 |
Underwriting, acquisition, and insurance expenses | 16,437 | 12,519 | 32,053 | 24,917 |
Salaries, bonuses and employee benefits | $ 7,100 | $ 5,300 | $ 13,900 | $ 10,300 |
Stock-based Compensation Narrat
Stock-based Compensation Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 1.1 | $ 0.6 |
2016 Omnibus Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares available for issuance | 2,073,832 |
Stock-based Compensation Narr_2
Stock-based Compensation Narrative - Restricted Stock Awards (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019USD ($)shares | Jun. 30, 2019USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares Withheld for Tax Withholding Obligation | shares | 7,000 | |
Restricted stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair Value of restricted shares vested | $ | $ 2.1 | |
Shares Withheld for Tax Withholding Obligation | shares | 7,365 | |
Unrecognized stock-based compensation expense | $ | $ 8 | $ 8 |
Compensation cost not yet recognized, period | 3 years 4 months 24 days | |
Minimum [Member] | Restricted stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 1 year | |
Maximum [Member] | Restricted stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 4 years |
Stock-based Compensation Restri
Stock-based Compensation Restrictive Stock Awards (Details) - Restricted stock [Member] | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Nonvested Restricted Stock, Number of Shares [Roll Forward] | |
Nonvested outstanding at the beginning of the period, shares | shares | 92,465 |
Granted, shares | shares | 62,015 |
Vested, shares | shares | (27,628) |
Forfeited, shares | shares | (1,677) |
Nonvested outstanding at the end of the period, shares | shares | 125,175 |
Nonvested Restricted Stock, Weighted Average Grant Date Fair Value [Abstract] | |
Nonvested outstanding at the beginning of the period | $ / shares | $ 52.98 |
Granted | $ / shares | 80.59 |
Vested | $ / shares | 51.53 |
Forfeited | $ / shares | 53.60 |
Nonvested outstanding at the end of the period | $ / shares | $ 66.97 |
Stock-based Compensation Narr_3
Stock-based Compensation Narrative - Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions | Jul. 27, 2016 | Jun. 30, 2019 | Jun. 30, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Intrinsic value of options exercised | $ 3.4 | $ 1.4 | |
Weighted average exercise price, granted | $ 0 | ||
Compensation not yet recognized | $ 0.7 | ||
Stock option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average exercise price, granted | $ 16 | ||
Weighted average grant date fair value | $ 2.71 | ||
Contractual term | 10 years | ||
Vesting period | 4 years | ||
Compensation cost not yet recognized, period | 1 year 1 month 6 days |
Stock-based Compensation Stock
Stock-based Compensation Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 27, 2016 | Jun. 30, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding beginning of period, shares | 804,303 | |
Granted, shares | 0 | |
Forfeited, shares | (13,200) | |
Exercised, shares | (61,922) | |
Outstanding end of period, shares | 729,181 | |
Exercisable, shares | 278,015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Outstanding beginning of period | $ 16 | |
Granted | 0 | |
Forfeited | 16 | |
Exercised | 16 | |
Outstanding end of period | 16 | |
Exercisable end of period | $ 16 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Outstanding, weighted average remaining contractual term | 7 years 1 month 6 days | |
Exercisable, weighted average remaining contractual term | 7 years 1 month 6 days | |
Outstanding, aggregate intrinsic value | $ 55,039 | |
Exercisable, aggregate intrinsic value | $ 20,985 | |
Stock option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Risk-free rate of return | 1.26% | |
Dividend yield | 1.25% | |
Expected share price volatility | 18.50% | |
Expected life in years | 6 years 3 months 18 days | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Granted, shares | 1,036,916 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Granted | $ 16 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share, [Line Items] | ||||||
Net income | $ 13,767 | $ 18,720 | $ 10,112 | $ 7,287 | $ 32,487 | $ 17,399 |
Weighted Average Number of Shares Outstanding, Basic [Abstract] | ||||||
Weighted average shares outstanding - basic | 21,210 | 21,070 | 21,190 | 21,058 | ||
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | ||||||
Weighted average shares outstanding - diluted | 21,832 | 21,666 | 21,803 | 21,648 | ||
Earnings Per Share, Basic [Abstract] | ||||||
Earnings per share - basic | $ 0.65 | $ 0.48 | $ 1.53 | $ 0.83 | ||
Earnings Per Share, Diluted [Abstract] | ||||||
Earnings per share - diluted | $ 0.63 | $ 0.47 | $ 1.49 | $ 0.80 | ||
Stock option [Member] | ||||||
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | ||||||
Dilutive effect of shares issued under stock compensation arrangements | 583 | 593 | 579 | 588 | ||
Restricted stock [Member] | ||||||
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | ||||||
Dilutive effect of shares issued under stock compensation arrangements | 39 | 3 | 34 | 2 |
Earnings Per Share Narrative (D
Earnings Per Share Narrative (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Restricted stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities | 55,000 | 88,000 | 55,000 | 88,000 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019Rate | Jun. 30, 2018Rate | Jun. 30, 2019Rate | Jun. 30, 2018Rate | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 16.70% | 18.90% | 17.40% | 18.20% |
Reserves for Unpaid Losses an_3
Reserves for Unpaid Losses and Loss Adjustment Expenses (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Net reserves for unpaid losses and loss adjustment expenses, beginning of year | $ 313,763 | $ 267,493 |
Incurred losses and loss adjustment expenses: | ||
Current year | 81,127 | 62,389 |
Prior years | (7,816) | (3,523) |
Total net losses and loss adjustment expenses incurred | 73,311 | 58,866 |
Payments: | ||
Current year | 5,530 | 1,858 |
Prior years | 36,100 | 33,309 |
Total payments | 41,630 | 35,167 |
Net reserves for unpaid losses and loss adjustment expenses, end of period | 345,444 | 291,192 |
Reinsurance recoverable on unpaid losses | 61,989 | 53,373 |
Gross reserves for unpaid losses and loss adjustment expenses, end of period | $ 407,433 | $ 344,565 |
Reserves for Unpaid Losses an_4
Reserves for Unpaid Losses and Loss Adjustment Expenses Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Claims Development [Line Items] | ||
Adverse (favorable) development on prior year loss reserves | $ (7,816) | $ (3,523) |
Accident Year 2017-2018 [Member] | ||
Claims Development [Line Items] | ||
Adverse (favorable) development on prior year loss reserves | (14,100) | |
Accident Year 2011-2016 [Member] | ||
Claims Development [Line Items] | ||
Adverse (favorable) development on prior year loss reserves | $ 6,200 | |
Accident Year 2015-2017 [Member] | ||
Claims Development [Line Items] | ||
Adverse (favorable) development on prior year loss reserves | (6,300) | |
Accident Year 2011-2014 [Member] | ||
Claims Development [Line Items] | ||
Adverse (favorable) development on prior year loss reserves | $ 2,800 |
Reinsurance (Details)
Reinsurance (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Premiums Written, Net [Abstract] | |||||
Direct written premiums | $ 94,885 | $ 69,981 | $ 179,448 | $ 133,828 | |
Assumed Premiums Written | 62 | 0 | 125 | 0 | |
Ceded written premiums | (12,260) | (9,090) | (23,819) | (17,846) | |
Net written premiums | 82,687 | 60,891 | 155,754 | 115,982 | |
Premiums Earned, Net [Abstract] | |||||
Direct earned premiums | 77,920 | 59,603 | 149,998 | 116,196 | |
Assumed Premiums Earned | 16 | 0 | 73 | 0 | |
Ceded earned premiums | (11,849) | (8,710) | (22,493) | (17,242) | |
Net earned premiums | 66,087 | 50,893 | 127,578 | 98,954 | |
Ceded incurred losses and loss adjustment expenses | 9,400 | $ 5,000 | 13,700 | $ 7,900 | |
Reinsurance recoverables on paid losses | 3,900 | 3,900 | $ 1,400 | ||
Reinsurance recoverables on unpaid losses | $ 62,000 | $ 62,000 | $ 55,400 |
Credit Agreement (Details)
Credit Agreement (Details) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Debt Disclosure [Abstract] | |
Current Borrowing Capacity | $ 50,000,000 |
Maturity Date | May 28, 2024 |
Long-term Line of Credit | $ 0 |
Other Comprehensive (Loss) In_3
Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||
Unrealized gains (losses) arising during the period, before income taxes | $ 8,323 | $ (1,101) | $ 17,196 | $ (7,193) | ||
Income Taxes | (1,748) | 232 | (3,611) | 1,511 | ||
Unrealized gains (losses) arising during the period, net of income tax | 6,575 | (869) | 13,585 | (5,682) | ||
Less reclassification adjustment [Abstract] | ||||||
Net realized investment gains on fixed-maturity securities, before income taxes | 25 | 185 | 317 | 240 | ||
Income taxes | (5) | (38) | (67) | (50) | ||
Reclassification adjustment included in net income, net of income taxes | 20 | 147 | 250 | 190 | ||
Other comprehensive income (loss) | $ 6,555 | $ 6,780 | $ (1,016) | $ (4,856) | $ 13,335 | $ (5,872) |