Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Jan. 31, 2014 | Jun. 30, 2013 | |
Document and Entity Information [Abstract] | ' | ' | ' |
Entity Registrant Name | 'Old Republic International Corporation | ' | ' |
Entity Central Index Key | '0000074260 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Amendment Flag | 'false | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 260,468,822 | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Public Float | ' | ' | $3,046,777,352 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Millions, unless otherwise specified | ||||
Available for sale: | ' | ' | ||
Fixed maturity securities (at fair value) (amortized cost: $8,477.3 and $7,993.1) | $8,712.30 | $8,566.20 | ||
Equity securities (at fair value) (adjusted cost: $632.0 and $452.1) | 1,004.20 | 739.7 | ||
Short-term investments (at fair value which approximates cost) | 1,124.80 | 1,264.90 | ||
Miscellaneous investments | 21.6 | 29.6 | ||
Total | 10,863.10 | 10,600.50 | ||
Other investments | 5.3 | 8.2 | ||
Total investments | 10,868.50 | 10,608.80 | ||
Other Assets: | ' | ' | ||
Cash | 153.3 | 101.2 | ||
Securities and indebtedness of related parties | 18 | 12.7 | ||
Accrued investment income | 87.2 | 90.4 | ||
Accounts and notes receivable | 1,190.50 | 1,134.70 | ||
Federal income tax recoverable: Current | 114.7 | 71.9 | ||
Federal income tax recoverable: Deferred | 48.4 | 148.1 | ||
Reinsurance balances and funds held | 189.2 | 201.6 | ||
Reinsurance recoverable: Paid losses | 64.9 | 103.7 | ||
Reinsurance recoverable: Policy and claim reserves | 3,150.80 | 3,133.30 | ||
Deferred policy acquisition costs | 192.6 | 165.5 | ||
Sundry assets | 455.7 | 454.2 | ||
Total Other Assets | 5,665.90 | 5,618 | ||
Total Assets | 16,534.40 | 16,226.80 | ||
Liabilities: | ' | ' | ||
Losses, claims, and settlement expenses | 9,433.50 | 9,303.30 | ||
Unearned premiums | 1,487.80 | 1,364.40 | ||
Other policyholders' benefits and funds | 207.8 | 201.8 | ||
Total policy liabilities and accruals | 11,129.20 | 10,869.60 | ||
Commissions, expenses, fees, and taxes | 409.8 | 511.1 | ||
Reinsurance balances and funds | 441.9 | 437.9 | ||
Debt | 569.2 | 572.9 | ||
Sundry liabilities | 209 | 238.8 | ||
Commitments and contingent liabilities | ' | ' | ||
Total Liabilities | 12,759.40 | 12,630.60 | ||
Preferred Stock | 0 | [1] | 0 | [1] |
Common Shareholders' Equity: | ' | ' | ||
Common stock | ' | 259.4 | [1] | |
Additional paid-in capital | ' | 660.9 | ||
Retained earnings | ' | 2,222.30 | ||
Accumulated other comprehensive income (loss) | ' | 481.7 | ||
Unallocated ESSOP shares (at cost) | ' | -28.2 | ||
Total Common Shareholders' Equity | 3,775 | 3,596.20 | ||
Total Liabilities, Preferred Stock and Common Shareholders' Equity | $16,534.40 | $16,226.80 | ||
[1] | At December 31, 2013 and 2012, there were 75,000,000 shares of $0.01 par value preferred stock authorized, of which no shares were outstanding. As of the same dates, there were 500,000,000 shares of common stock, $1.00 par value, authorized, of which 260,462,217 and 259,490,089 were issued as of December 31, 2013 and 2012, respectively. At December 31, 2013 and 2012, there were 100,000,000 shares of Class B Common Stock, $1.00 par value, authorized, of which no shares were issued. |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, except Share data, unless otherwise specified | ||
Available-for-sale Debt Securities, Amortized Cost Basis | $8,477.30 | $7,993.10 |
Available-for-sale Equity Securities, Amortized Cost Basis | $632 | $452.10 |
Preferred Stock, Par or Stated Value Per Share | $0.01 | $0.01 |
Preferred Stock, Shares Authorized | 75,000,000 | 75,000,000 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $1 | $1 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Shares, Issued | 260,462,217 | 259,490,089 |
Common Class B [Member] | ' | ' |
Common Stock, Par or Stated Value Per Share | $1 | $1 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares, Issued | 0 | 0 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenues: | ' | ' | ' |
Net premiums earned | $4,456.60 | $4,043.80 | $3,695.50 |
Title, escrow, and other fees | 429 | 427.1 | 354.5 |
Total premiums and fees | 4,885.60 | 4,471 | 4,050.10 |
Net investment income | 318.7 | 336.5 | 364.6 |
Other income | 90.1 | 114.5 | 115.2 |
Total operating revenues | 5,294.50 | 4,922.20 | 4,529.90 |
Realized investment gains (losses): | ' | ' | ' |
From sales | 148.1 | 48.1 | 165.8 |
From impairments | 0 | -0.2 | -50.2 |
Total realized investment gains (losses) | 148.1 | 47.8 | 115.5 |
Total revenues | 5,442.70 | 4,970.10 | 4,645.50 |
Benefits, Claims and Expenses: | ' | ' | ' |
Benefits, claims and settlement expenses | 2,223 | 2,747.40 | 2,748.70 |
Dividends to policyholders | 15.2 | 17.9 | 15.6 |
Underwriting, acquisition, and other expenses | 2,509.70 | 2,297.10 | 2,054.30 |
Interest and other charges | 21.6 | 36.2 | 63.4 |
Total expenses | 4,769.70 | 5,098.70 | 4,882.20 |
Income (loss) before income taxes (credits) | 672.9 | -128.5 | -236.7 |
Income Taxes (Credits): | ' | ' | ' |
Current | 79 | 2.4 | -36.7 |
Deferred | 146 | -62.3 | -59.4 |
Total | 225 | -59.8 | -96.1 |
Net Income (Loss) | $447.80 | ($68.60) | ($140.50) |
Net Income (Loss) Per Share: | ' | ' | ' |
Net income (loss) per share: basic (in dollars per share) | $1.74 | ($0.27) | ($0.55) |
Net income (loss) per share: diluted (in dollars per share) | $1.57 | ($0.27) | ($0.55) |
Average shares outstanding: Basic (in shares) | 257,443,999 | 255,812,888 | 255,045,210 |
Average shares outstanding: Diluted (in shares) | 293,684,035 | 255,812,888 | 255,045,210 |
Dividends Per Common Share: | ' | ' | ' |
Cash: (in dollars per share) | $0.72 | $0.71 | $0.70 |
Consolidated_Statements_of_Pre
Consolidated Statements of Preferred Stock and Common Shareholders' Equity (USD $) | Total | Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Unallocated ESSOP Shares [Member] |
In Millions, unless otherwise specified | |||||||
Beginning Balance at Dec. 31, 2010 | ' | $0 | $259.20 | $649.60 | $2,791.40 | $459.10 | ($38) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Dividend reinvestment plan | ' | ' | 0 | 0.8 | ' | ' | ' |
Net issuance of shares under stock based compensation plans | ' | ' | 0 | 0 | ' | ' | ' |
Conversion of senior debentures | ' | ' | 0 | 0 | ' | ' | ' |
Stock based compensation | ' | ' | ' | 3.4 | ' | ' | ' |
ESSOP shares released | ' | ' | ' | 1 | ' | ' | 4.8 |
Acquisition of non-controlling interest | ' | ' | ' | 2.7 | ' | ' | ' |
Net income (loss) | -140.5 | ' | ' | ' | -140.5 | ' | ' |
Dividends on common stock: cash | ' | ' | ' | ' | -178.4 | ' | ' |
Net unrealized gains (losses) on securities, net of tax | 7.5 | ' | ' | ' | ' | 7.5 | ' |
Net adjustment related to defined benefit pension plans, net of tax | -36.2 | ' | ' | ' | ' | -36.2 | ' |
Foreign currency translation and other adjustments | -14.3 | ' | ' | ' | ' | -14.3 | ' |
Ending Balance at Dec. 31, 2011 | ' | 0 | 259.3 | 657.9 | 2,472.40 | 416 | -33.2 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Dividend reinvestment plan | ' | ' | 0 | 0.8 | ' | ' | ' |
Net issuance of shares under stock based compensation plans | ' | ' | 0 | -0.6 | ' | ' | ' |
Conversion of senior debentures | ' | ' | 0 | 0 | ' | ' | ' |
Stock based compensation | ' | ' | ' | 2.5 | ' | ' | ' |
ESSOP shares released | ' | ' | ' | 0.3 | ' | ' | 5 |
Acquisition of non-controlling interest | ' | ' | ' | 0 | ' | ' | ' |
Net income (loss) | -68.6 | ' | ' | ' | -68.6 | ' | ' |
Dividends on common stock: cash | ' | ' | ' | ' | -181.5 | ' | ' |
Net unrealized gains (losses) on securities, net of tax | 73.8 | ' | ' | ' | ' | 73.8 | ' |
Net adjustment related to defined benefit pension plans, net of tax | -12.6 | ' | ' | ' | ' | -12.6 | ' |
Foreign currency translation and other adjustments | 4.4 | ' | ' | ' | ' | 4.4 | ' |
Ending Balance at Dec. 31, 2012 | 3,596.20 | 0 | 259.4 | 660.9 | 2,222.30 | 481.7 | -28.2 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Dividend reinvestment plan | ' | ' | 0 | 0.8 | ' | ' | ' |
Net issuance of shares under stock based compensation plans | ' | ' | 0.9 | 9.5 | ' | ' | ' |
Conversion of senior debentures | ' | ' | 0 | 0 | ' | ' | ' |
Stock based compensation | ' | ' | ' | 0 | ' | ' | ' |
ESSOP shares released | ' | ' | ' | 2.6 | ' | ' | 5.2 |
Acquisition of non-controlling interest | ' | ' | ' | 0 | ' | ' | ' |
Net income (loss) | 447.8 | ' | ' | ' | 447.8 | ' | ' |
Dividends on common stock: cash | ' | ' | ' | ' | -184.8 | ' | ' |
Net unrealized gains (losses) on securities, net of tax | -166.2 | ' | ' | ' | ' | -166.2 | ' |
Net adjustment related to defined benefit pension plans, net of tax | 72.6 | ' | ' | ' | ' | 72.6 | ' |
Foreign currency translation and other adjustments | -9.9 | ' | ' | ' | ' | -9.9 | ' |
Ending Balance at Dec. 31, 2013 | $3,775 | $0 | $260.40 | $673.90 | $2,485.30 | $378.20 | ($23) |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities: | ' | ' | ' |
Net income (loss) | $447.80 | ($68.60) | ($140.50) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ' | ' | ' |
Deferred policy acquisition costs | -27.9 | 32.5 | 32.7 |
Premiums and other receivables | -55.9 | -105.6 | -16.1 |
Unpaid claims and related items | 141.2 | 578.2 | 9.3 |
Unearned premiums and other policyholders' liabilities | 102.9 | 52.7 | 23.1 |
Income taxes | 103.7 | -60.7 | -88.5 |
Prepaid federal income taxes | 0 | 1 | 101.9 |
Reinsurance balances and funds | 55.5 | 51.7 | -12.4 |
Realized investment (gains) losses | -148.1 | -47.8 | -115.5 |
Accounts payable, accrued expenses and other | 67.3 | 98.6 | 111.2 |
Total | 686.7 | 532 | -94.9 |
Fixed maturity securities: | ' | ' | ' |
Maturities and early calls | 1,387.40 | 1,080.30 | 926.8 |
Sales | 194.8 | 406.1 | 1,769.50 |
Sales of: | ' | ' | ' |
Equity securities | 172.5 | 71.1 | 86.6 |
Other - net | 29.3 | 28.3 | 31.2 |
Sale of a business | 0 | 5.8 | 0 |
Purchases of: | ' | ' | ' |
Fixed maturity securities | -2,120.80 | -1,598.30 | -2,409.60 |
Equity securities | -209.5 | -169.8 | -65 |
Other - net | -44.6 | -37.8 | -50.8 |
Purchase of a business | -5.1 | 0 | 0 |
Net decrease (increase) in short-term investments | 139.1 | 211.5 | -476 |
Other - net | -0.4 | -1 | 0 |
Total | -457.6 | -3.7 | -187.1 |
Cash flows from financing activities: | ' | ' | ' |
Issuance of debentures and notes | 0 | 0 | 537 |
Issuance of common shares | 11.8 | 1 | 1.2 |
Redemption of debentures and notes | -3.6 | -339.8 | -112.1 |
Dividends on common shares | -184.8 | -181.5 | -178.4 |
Other - net | -0.3 | 0.2 | 0.1 |
Total | -176.9 | -520 | 247.8 |
Increase (decrease) in cash: | 52 | 8.1 | -34.2 |
Cash, beginning of year | 101.2 | 93 | 127.3 |
Cash, end of year | 153.3 | 101.2 | 93 |
Supplemental cash flow information: | ' | ' | ' |
Cash paid (received) during the period for: Interest | 21.3 | 35 | 42 |
Cash paid (received) during the period for: Income taxes | $122.30 | $1.60 | ($6.90) |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income Statement (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Statement of Other Comprehensive Income [Abstract] | ' | ' | ' |
Net Income (Loss) As Reported | $447.80 | ($68.60) | ($140.50) |
Unrealized gains (loses) on securities before reclassifications | -107 | 161.3 | 126.6 |
Amounts reclassified as realized investment gains from sales in the statements of income | -148.1 | -47.8 | -115.5 |
Pretax unrealized gains (losses) on securities | -255.2 | 113.4 | 11.1 |
Deferred income taxes (credits) | -89 | 39.5 | 3.5 |
Net unrealized gains (losses) on securities, net of tax | -166.2 | 73.8 | 7.5 |
Net pension adjustment before reclassifications | 104.7 | -29.9 | -61.8 |
Amounts reclassified as underwriting, acquisition, and other expenses in the statements of income | 7 | 10.4 | 5.9 |
Net adjustment related to defined benefit pension plans | 111.7 | -19.4 | -55.8 |
Deferred income taxes (credits) | 39.1 | -6.8 | -19.5 |
Net adjustment related to defined benefit pension plans, net of tax | 72.6 | -12.6 | -36.2 |
Foreign currency translation and other adjustments | -9.9 | 4.4 | -14.3 |
Net adjustments | -103.5 | 65.6 | -43 |
Comprehensive Income (Loss) | $344.30 | ($3) | ($183.50) |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | |||||||||||||||||||||||
Significant Accounting Policies | ' | |||||||||||||||||||||||
Summary of Significant Accounting Policies - The significant accounting policies employed by Old Republic International Corporation and its subsidiaries are set forth in the following summary. | ||||||||||||||||||||||||
(a) Accounting Principles - The Company's insurance subsidiaries are managed pursuant to the laws and regulations of the various states in which they operate. As a result, the subsidiaries operate their business in the context of such laws and regulation, and maintain their accounts in conformity with accounting practices prescribed or permitted by various states' insurance regulatory authorities. Federal income taxes and dividends to shareholders are based on financial statements and reports complying with such practices. The statutory accounting requirements vary from the Financial Accounting Standards Board's ("FASB") Accounting Standards Codification ("ASC") of accounting principles generally accepted in the United States of America ("GAAP") in the following major respects: (1) the costs of selling insurance policies are charged to operations immediately, while the related premiums are taken into income over the terms of the policies; (2) investments in fixed maturity securities designated as available for sale are generally carried at amortized cost rather than their estimated fair value; (3) certain assets classified as "non-admitted assets" are excluded from the balance sheet through a direct charge to earned surplus; (4) changes in allowed deferred income tax assets or liabilities are recorded directly in earned surplus and not through the income statement; (5) mortgage guaranty contingency reserves intended to provide for future catastrophic losses are established as a liability through a charge to earned surplus whereas, GAAP does not allow provisions for future catastrophic losses; (6) title insurance premium reserves, which are intended to cover losses that will be reported at a future date are based on statutory formulas, and changes therein are charged in the income statement against each year's premiums written; (7) certain required formula-derived reserves for general insurance in particular are established for claim reserves in excess of amounts considered adequate by the Company as well as for credits taken relative to reinsurance placed with other insurance companies not licensed in the respective states, all of which are charged directly against earned surplus; (8) surplus notes are classified as equity; and (9) mortgage guaranty deferred payment obligations ("DPO") retained are claim reserves classified as an admissible asset and as a component of policyholder surplus pursuant to a permitted practice of the NCDOI. In consolidating the statutory financial statements of its insurance subsidiaries, the Company has therefore made necessary adjustments to conform their accounts with GAAP. The following table reflects a summary of all such adjustments: | ||||||||||||||||||||||||
Shareholders' Equity | Net Income (Loss) | |||||||||||||||||||||||
December 31, | Years Ended December 31, | |||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2011 | ||||||||||||||||||||
Statutory totals of insurance | ||||||||||||||||||||||||
company subsidiaries (a): | ||||||||||||||||||||||||
General | $ | 3,127.90 | $ | 2,905.90 | $ | 314.4 | $ | 225.5 | $ | 292.5 | ||||||||||||||
Title | 428.6 | 358.1 | 88.7 | 70.3 | 46.7 | |||||||||||||||||||
RFIG Run-off | 456.5 | 149.2 | 125.2 | (285.0 | ) | (422.6 | ) | |||||||||||||||||
Life & Accident | 67 | 71.9 | 3.6 | 3 | 4.8 | |||||||||||||||||||
Sub-total | 4,080.00 | 3,485.10 | 531.9 | 13.8 | (78.6 | ) | ||||||||||||||||||
GAAP totals of non-insurance company | ||||||||||||||||||||||||
subsidiaries and consolidation adjustments | 29.4 | (111.6 | ) | 23.2 | (64.2 | ) | (38.7 | ) | ||||||||||||||||
Unadjusted totals | 4,109.70 | 3,374.00 | 555.1 | (50.4 | ) | (117.4 | ) | |||||||||||||||||
Adjustments to conform to GAAP statements: | ||||||||||||||||||||||||
Deferred policy acquisition costs | 159.1 | 161.7 | 0.9 | (33.3 | ) | (30.6 | ) | |||||||||||||||||
Fair value of fixed maturity securities | 220.9 | 552.7 | — | — | — | |||||||||||||||||||
Non-admitted assets | 73.3 | 78.2 | — | — | — | |||||||||||||||||||
Deferred income taxes | (49.8 | ) | (113.9 | ) | (79.5 | ) | 35.7 | 73.4 | ||||||||||||||||
Mortgage contingency and DPO reserves | (479.0 | ) | (296.9 | ) | — | — | — | |||||||||||||||||
Title unearned premiums | 432.6 | 390.4 | 42.1 | 30 | 14.6 | |||||||||||||||||||
Loss reserves | (432.7 | ) | (360.7 | ) | (71.8 | ) | (70.4 | ) | (49.6 | ) | ||||||||||||||
Surplus notes | (277.5 | ) | (202.5 | ) | — | — | — | |||||||||||||||||
Sundry adjustments | 17.9 | 13 | 0.9 | 19.4 | (30.9 | ) | ||||||||||||||||||
Total adjustments | (334.8 | ) | 222.3 | (107.3 | ) | (18.2 | ) | (23.1 | ) | |||||||||||||||
Consolidated GAAP totals | $ | 3,775.00 | $ | 3,596.20 | $ | 447.8 | $ | (68.6 | ) | $ | (140.5 | ) | ||||||||||||
(a) | The insurance laws of the respective states in which the Company’s insurance subsidiaries are incorporated prescribe minimum capital and surplus requirements for the lines of business they are licensed to write. For domestic property and casualty and life and accident insurance companies the National Association of Insurance Commissioners also prescribes risk-based capital ("RBC") requirements. The RBC is a measure of statutory capital in relationship to a formula-driven definition of risk relative to a company’s balance sheet and mix of business. The combined RBC ratio of our primary General insurance subsidiaries was 695% and 680% of the company action level RBC at December 31, 2013 and 2012, respectively. The minimum capital requirements for the Company’s Title Insurance subsidiaries are established by statute in the respective states of domicile. The minimum regulatory capital requirements are not significant in relationship to the recorded statutory capital of the Company’s Title and Life & Accident insurance subsidiaries. At December 31, 2013 and 2012 each of the Company’s General, Title, and Life and Accident insurance subsidiaries exceeded the minimum statutory capital and surplus requirements. Refer to Note 1(s) - Regulatory Matters for a discussion regarding the RFIG Run-off group. | |||||||||||||||||||||||
The preparation of financial statements in conformity with either statutory practices or 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 financial statements, and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates. | ||||||||||||||||||||||||
(b) Consolidation Practices - The consolidated financial statements include the accounts of the Company and those of all of its majority owned insurance underwriting and service subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. | ||||||||||||||||||||||||
(c) Statement Presentation - Amounts shown in the consolidated financial statements and applicable notes are stated (except as otherwise indicated and as to share data) in millions, which amounts may not add to totals shown due to truncation. Necessary reclassifications are made in prior periods' financial statements whenever appropriate to conform to the most current presentation. | ||||||||||||||||||||||||
In 2013, Old Republic adopted guidance requiring additional disclosures of amounts reclassified out of accumulated other comprehensive income. Such requirements are reflected in the presentation of the Consolidated Statements of Comprehensive Income. | ||||||||||||||||||||||||
(d) Investments - The Company may classify its invested assets in terms of those assets relative to which it either (1) has the positive intent and ability to hold until maturity, (2) has available for sale or (3) has the intention of trading. As of December 31, 2013 and 2012, substantially all the Company's invested assets were classified as "available for sale." | ||||||||||||||||||||||||
Fixed maturity securities classified as "available for sale" and other preferred and common stocks (equity securities) are included at fair value with changes in such values, net of deferred income taxes, reflected directly in shareholders' equity. Fair values for fixed maturity securities and equity securities are based on quoted market prices or estimates using values obtained from independent pricing services as applicable. | ||||||||||||||||||||||||
The Company reviews the status and fair value changes of each of its investments on at least a quarterly basis during the year, and estimates of other-than-temporary impairments ("OTTI") in the portfolio's value are evaluated and established at each quarterly balance sheet date. In reviewing investments for OTTI, the Company, in addition to a security's market price history, considers the totality of such factors as the issuer's operating results, financial condition and liquidity, its ability to access capital markets, credit rating trends, most current audit opinion, industry and securities markets conditions, and analyst expectations to reach its conclusions. Sudden fair value declines caused by such adverse developments as newly emerged or imminent bankruptcy filings, issuer default on significant obligations, or reports of financial accounting developments that bring into question the validity of previously reported earnings or financial condition, are recognized as realized losses as soon as credible publicly available information emerges to confirm such developments. Absent issuer-specific circumstances that would result in a contrary conclusion, any equity security with an unrealized investment loss amounting to a 20% or greater decline for a six month period is considered OTTI. In the event the Company's estimate of OTTI is insufficient at any point in time, future periods' net income (loss) would be adversely affected by the recognition of additional realized or impairment losses, but its financial position would not necessarily be affected adversely inasmuch as such losses, or a portion of them, could have been recognized previously as unrealized losses in shareholders' equity. The Company recognized $-, $.2 and $50.2 of OTTI adjustments for the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||||||||||||||||||
The amortized cost and estimated fair values by type and contractual maturity of fixed maturity securities are shown in the following tables. Expected maturities will differ from contractual maturities since borrowers may have the right to call or repay obligations with or without call or prepayment penalties. | ||||||||||||||||||||||||
Amortized | Gross | Gross | Estimated | |||||||||||||||||||||
Cost | Unrealized | Unrealized | Fair | |||||||||||||||||||||
Gains | Losses | Value | ||||||||||||||||||||||
Fixed Maturity Securities by Type: | ||||||||||||||||||||||||
December 31, 2013: | ||||||||||||||||||||||||
U.S. & Canadian Governments | $ | 1,133.00 | $ | 36.7 | $ | 8.7 | $ | 1,161.10 | ||||||||||||||||
Tax-exempt | 168.1 | 3.7 | 0.5 | 171.3 | ||||||||||||||||||||
Corporate | 7,176.00 | 268.1 | 64.3 | 7,379.80 | ||||||||||||||||||||
$ | 8,477.30 | $ | 308.7 | $ | 73.6 | $ | 8,712.30 | |||||||||||||||||
December 31, 2012: | ||||||||||||||||||||||||
U.S. & Canadian Governments | $ | 1,151.20 | $ | 65.9 | $ | 0.3 | $ | 1,216.80 | ||||||||||||||||
Tax-exempt | 380.8 | 11.4 | 0.1 | 392.2 | ||||||||||||||||||||
Corporate | 6,461.00 | 502.1 | 6 | 6,957.10 | ||||||||||||||||||||
$ | 7,993.10 | $ | 579.5 | $ | 6.5 | $ | 8,566.20 | |||||||||||||||||
Amortized | Estimated | |||||||||||||||||||||||
Cost | Fair | |||||||||||||||||||||||
Value | ||||||||||||||||||||||||
Fixed Maturity Securities Stratified by Contractual Maturity at December 31, 2013: | ||||||||||||||||||||||||
Due in one year or less | $ | 785.5 | $ | 796.5 | ||||||||||||||||||||
Due after one year through five years | 3,957.00 | 4,145.80 | ||||||||||||||||||||||
Due after five years through ten years | 3,544.20 | 3,579.40 | ||||||||||||||||||||||
Due after ten years | 190.4 | 190.5 | ||||||||||||||||||||||
$ | 8,477.30 | $ | 8,712.30 | |||||||||||||||||||||
Bonds and other investments with a statutory carrying value of $551.2 as of December 31, 2013 were on deposit with governmental authorities by the Company's insurance subsidiaries to comply with insurance laws. | ||||||||||||||||||||||||
A summary of the Company's equity securities reflecting reported adjusted cost, net of OTTI adjustments totaling $- and $131.3 at December 31, 2013 and 2012, respectively, follows: | ||||||||||||||||||||||||
Equity Securities: | Adjusted | Gross | Gross | Estimated | ||||||||||||||||||||
Cost | Unrealized | Unrealized | Fair | |||||||||||||||||||||
Gains | Losses | Value | ||||||||||||||||||||||
December 31, 2013 | $ | 632 | $ | 372.7 | $ | 0.5 | $ | 1,004.20 | ||||||||||||||||
December 31, 2012 | $ | 452.1 | $ | 290.5 | $ | 2.9 | $ | 739.7 | ||||||||||||||||
The following table reflects the Company's gross unrealized losses and fair value, aggregated by category and length of time that individual securities have been in an unrealized loss position. Fair value and issuer's adjusted cost comparisons follow: | ||||||||||||||||||||||||
12 Months or Less | Greater than 12 Months | Total | ||||||||||||||||||||||
Fair | Unrealized Losses | Fair | Unrealized Losses | Fair | Unrealized Losses | |||||||||||||||||||
Value | Value | Value | ||||||||||||||||||||||
December 31, 2013: | ||||||||||||||||||||||||
Fixed Maturity Securities: | ||||||||||||||||||||||||
U.S. & Canadian Governments | $ | 301.7 | $ | 8.7 | $ | — | $ | — | $ | 301.7 | $ | 8.7 | ||||||||||||
Tax-exempt | 10 | 0.5 | — | — | 10 | 0.5 | ||||||||||||||||||
Corporate | 2,312.20 | 60.2 | 47.7 | 4.1 | 2,360.00 | 64.3 | ||||||||||||||||||
Subtotal | 2,624.00 | 69.4 | 47.7 | 4.1 | 2,671.80 | 73.6 | ||||||||||||||||||
Equity Securities | 31 | 0.5 | — | — | 31 | 0.5 | ||||||||||||||||||
Total | $ | 2,655.00 | $ | 70 | $ | 47.7 | $ | 4.1 | $ | 2,702.80 | $ | 74.2 | ||||||||||||
December 31, 2012: | ||||||||||||||||||||||||
Fixed Maturity Securities: | ||||||||||||||||||||||||
U.S. & Canadian Governments | $ | 60.3 | $ | 0.3 | $ | — | $ | — | $ | 60.3 | $ | 0.3 | ||||||||||||
Tax-exempt | 3.7 | 0.1 | — | — | 3.7 | 0.1 | ||||||||||||||||||
Corporate | 348.4 | 4.3 | 10.2 | 1.7 | 358.6 | 6 | ||||||||||||||||||
Subtotal | 412.6 | 4.8 | 10.2 | 1.7 | 422.8 | 6.5 | ||||||||||||||||||
Equity Securities | 78.9 | 2.9 | — | — | 78.9 | 2.9 | ||||||||||||||||||
Total | $ | 491.5 | $ | 7.8 | $ | 10.2 | $ | 1.7 | $ | 501.8 | $ | 9.5 | ||||||||||||
At December 31, 2013, the Company held 558 fixed maturity and 5 equity securities in an unrealized loss position, representing 30.8% as to fixed maturities and 7.2% as to equity securities of the total number of such issues it held. At December 31, 2012, the Company held 102 fixed maturity and 14 equity securities in an unrealized loss position, representing 5.7% as to fixed maturities and 21.9% as to equity securities of the total number of such issues it held. Of the securities in an unrealized loss position, 10 and 4 fixed maturity securities and 0 and 1 equity security, had been in a continuous unrealized loss position for more than 12 months as of December 31, 2013 and 2012. The unrealized losses on these securities are primarily attributable to an increase in the interest rate environment. As part of its assessment of other-than-temporary impairments, the Company considers its intent to continue to hold, and the likelihood that it will not be required to sell investment securities in an unrealized loss position until cost recovery, principally on the basis of its asset and liability maturity matching procedures. | ||||||||||||||||||||||||
Fair Value Measurements - Fair value is defined as the estimated price that is likely to be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (an exit price) at the measurement date. A fair value hierarchy is established that prioritizes the sources ("inputs") used to measure fair value into three broad levels: inputs based on quoted market prices in active markets (Level 1); observable inputs based on corroboration with available market data (Level 2); and unobservable inputs based on uncorroborated market data or a reporting entity's own assumptions (Level 3). Following is a description of the valuation methodologies and general classification used for financial instruments measured at fair value. | ||||||||||||||||||||||||
The Company uses quoted values and other data provided by nationally recognized independent pricing sources as inputs into its quarterly process for determining fair values of its fixed maturity and equity securities. To validate the techniques or models used by pricing sources, the Company's review process includes, but is not limited to: (i) initial and ongoing evaluation of methodologies used by outside parties to calculate fair value; and (ii) comparing other sources including the fair value estimates to its knowledge of the current market and to independent fair value estimates provided by the investment custodian. The independent pricing source obtains market quotations and actual transaction prices for securities that have quoted prices in active markets and uses its own proprietary method for determining the fair value of securities that are not actively traded. In general, these methods involve the use of "matrix pricing" in which the independent pricing source uses observable market inputs including, but not limited to, investment yields, credit risks and spreads, benchmarking of like securities, broker-dealer quotes, reported trades and sector groupings to determine a reasonable fair value. | ||||||||||||||||||||||||
Level 1 securities include U.S. and Canadian Treasury notes, publicly traded common stocks, the quoted net asset value ("NAV") mutual funds, and most short-term investments in highly liquid money market instruments. Level 2 securities generally include corporate bonds, municipal bonds, certain U.S. and Canadian government agency securities. Securities classified within Level 3 include non-publicly traded bonds, short-term investments, and equity securities. There were no significant changes in the fair value of assets measured with the use of significant unobservable inputs as of December 31, 2013 and December 31, 2012. | ||||||||||||||||||||||||
The following tables show a summary of assets measured at fair value segregated among the various input levels described above: | ||||||||||||||||||||||||
Fair Value Measurements | ||||||||||||||||||||||||
As of December 31, 2013: | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Available for sale: | ||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||
U.S. & Canadian Governments | $ | 478.9 | $ | 682.2 | $ | — | $ | 1,161.10 | ||||||||||||||||
Tax-exempt | — | 171.3 | — | 171.3 | ||||||||||||||||||||
Corporate | — | 7,369.30 | 10.5 | 7,379.80 | ||||||||||||||||||||
Equity securities | 1,003.40 | — | 0.7 | 1,004.20 | ||||||||||||||||||||
Short-term investments | $ | 1,120.50 | $ | — | $ | 4.2 | $ | 1,124.80 | ||||||||||||||||
As of December 31, 2012: | ||||||||||||||||||||||||
Available for sale: | ||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||
U.S. & Canadian Governments | $ | 570.9 | $ | 645.9 | $ | — | $ | 1,216.80 | ||||||||||||||||
Tax-exempt | — | 392.2 | — | 392.2 | ||||||||||||||||||||
Corporate | — | 6,926.30 | 30.7 | 6,957.10 | ||||||||||||||||||||
Equity securities | 736.9 | — | 2.7 | 739.7 | ||||||||||||||||||||
Short-term investments | $ | 1,260.20 | $ | — | $ | 4.6 | $ | 1,264.90 | ||||||||||||||||
There were no transfers between Levels 1, 2 or 3 during 2013. Level 3 securities with a fair value of $20.2 were disposed of during 2013. | ||||||||||||||||||||||||
Investment income is reported net of allocated expenses and includes appropriate adjustments for amortization of premium and accretion of discount on fixed maturity securities acquired at other than par value. Dividends on equity securities are credited to income on the ex-dividend date. Realized investment gains and losses, which result from sales or write-downs of securities, are reflected as revenues in the income statement and are determined on the basis of amortized value at date of sale for fixed maturity securities, and cost in regard to equity securities; such bases apply to the specific securities sold. Unrealized investment gains and losses, net of any deferred income taxes, are recorded directly as a component of accumulated other comprehensive income in shareholders' equity. At December 31, 2013, the Company and its subsidiaries had no non-income producing fixed maturity securities. | ||||||||||||||||||||||||
The following table reflects the composition of net investment income, net realized gains or losses, and the net change in unrealized investment gains or losses for each of the years shown. | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Investment income from: | ||||||||||||||||||||||||
Fixed maturity securities | $ | 298.7 | $ | 321 | $ | 353.2 | ||||||||||||||||||
Equity securities | 21.2 | 13.1 | 11.3 | |||||||||||||||||||||
Short-term investments | 1.1 | 1.9 | 1.5 | |||||||||||||||||||||
Other sources | 2.6 | 5.4 | 4.7 | |||||||||||||||||||||
Gross investment income | 323.7 | 341.6 | 370.9 | |||||||||||||||||||||
Investment expenses (a) | 4.9 | 5.1 | 6.2 | |||||||||||||||||||||
Net investment income | $ | 318.7 | $ | 336.5 | $ | 364.6 | ||||||||||||||||||
Realized gains (losses) on: | ||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||
Gains | $ | 9.9 | $ | 32.7 | $ | 143.9 | ||||||||||||||||||
Losses | (8.2 | ) | — | (1.2 | ) | |||||||||||||||||||
Net | 1.7 | 32.7 | 142.6 | |||||||||||||||||||||
Equity securities & other long-term investments | 146.3 | 15.1 | (27.0 | ) | ||||||||||||||||||||
Total | 148.1 | 47.8 | 115.5 | |||||||||||||||||||||
Income taxes (credits)(b) | 51.8 | 16.7 | 37.5 | |||||||||||||||||||||
Net realized gains (losses) | $ | 96.2 | $ | 31.1 | $ | 78 | ||||||||||||||||||
Changes in unrealized investment gains (losses) on: | ||||||||||||||||||||||||
Fixed maturity securities | $ | (337.9 | ) | $ | 64.9 | $ | 46.3 | |||||||||||||||||
Less: Deferred income taxes (credits) | (117.9 | ) | 22.6 | 16 | ||||||||||||||||||||
(219.9 | ) | 42.2 | 30.3 | |||||||||||||||||||||
Equity securities & other long-term investments | 82.6 | 48.4 | (35.2 | ) | ||||||||||||||||||||
Less: Deferred income taxes (credits) | 28.9 | 16.8 | (12.4 | ) | ||||||||||||||||||||
53.7 | 31.5 | (22.7 | ) | |||||||||||||||||||||
Net changes in unrealized investment gains (losses) | $ | (166.2 | ) | $ | 73.8 | $ | 7.5 | |||||||||||||||||
__________ | ||||||||||||||||||||||||
(a) | Investment expenses consist of personnel costs and investment management and custody service fees, as well as interest incurred on funds held of $1.7, $2.0 and $1.9 for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||||||||||||
(b) | Reflects primarily the combination of fully taxable realized investment gains or losses and judgments about the recoverability of deferred tax assets. | |||||||||||||||||||||||
(e) Revenue Recognition - Pursuant to GAAP applicable to the insurance industry, revenues are recognized as follows: | ||||||||||||||||||||||||
Substantially all general insurance premiums pertain to annual policies and are reflected in income on a pro-rata basis in general association with the related benefits, claims, and expenses. Earned but unbilled premiums are generally taken into income on the billing date, while adjustments for retrospective premiums, commissions and similar charges or credits are accrued on the basis of periodic evaluations of current underwriting experience and contractual obligations. | ||||||||||||||||||||||||
Title premium and fee revenues stemming from the Company's direct operations (which include branch offices of its title insurers and wholly owned agency subsidiaries) represent 28% of 2013, 32% of 2012 and 33% of 2011 consolidated title business revenues. Such premiums are generally recognized as income at the escrow closing date which approximates the policy effective date. Fee income related to escrow and other closing services is recognized when the related services have been performed and completed. The remaining title premium and fee revenues are produced by independent title agents and underwritten title companies. Rather than making estimates that could be subject to significant variance from actual premium and fee production, the Company recognizes revenues from those sources upon receipt. Such receipts can reflect a three to four month lag relative to the effective date of the underlying title policy, and are offset concurrently by production expenses and claim reserve provisions. | ||||||||||||||||||||||||
The Company's mortgage guaranty premiums principally stem from monthly installments paid on long-duration, guaranteed renewable insurance policies. Substantially all such premiums are written and earned in the month coverage is effective. With respect to relatively few annual or single premium policies, earned premiums are largely recognized on a pro-rata basis over the terms of the policies. Recognition of normal or catastrophic claim costs, however, occurs only upon an instance of default, defined as the occurrence of two or more consecutively missed monthly payments. Accordingly, GAAP revenue recognition for insured loans is not appropriately matched to the risk exposure and the consequent recognition of both normal and most significantly, future catastrophic loss occurrences for which current reserve provisions are not permitted. As a result, mortgage guaranty GAAP earnings for any individual year or series of years may be materially adversely affected, particularly by cyclical catastrophic loss events such as the mortgage insurance industry has experienced since mid year 2007. Reported GAAP earnings and financial condition form, in part, the basis for significant judgments and strategic evaluations made by management, analysts, investors, and other users of the financial statements issued by mortgage guaranty companies. The risk exists that such judgments and evaluations are at least partially based on GAAP financial information that does not match revenues and expenses and is therefore not reflective of the long-term normal and catastrophic risk exposures assumed by mortgage guaranty insurers at any point in time. | ||||||||||||||||||||||||
(f) Deferred Policy Acquisition Costs - Various insurance subsidiaries of the Company defer certain costs which vary with and are directly related to the production of business. Deferred costs consist principally of commissions, premium taxes, marketing, and policy issuance expenses. Effective January 1, 2012, the Company adopted a prospective application of new GAAP authoritative guidance related to the deferral of costs for acquiring or renewing insurance contracts. The guidance identifies those direct costs that relate to the successful acquisition of new or renewal insurance contracts that should be capitalized. The adoption of the guidance resulted in 2012 pretax charges of $37.9 to General Insurance results. | ||||||||||||||||||||||||
With respect to most coverages, deferred acquisition costs are amortized on the same basis as the related premiums are earned or, alternatively, over the periods during which premiums will be paid. To the extent that future revenues on existing policies are not adequate to cover related costs and expenses, deferred policy acquisition costs are charged to earnings. During 2011, $29.1 of previously deferred mortgage guaranty acquisition costs were written-off as they were no longer deemed recoverable in future run-off periods. | ||||||||||||||||||||||||
The following table shows a reconciliation of deferred acquisition costs between succeeding balance sheet dates. | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Deferred, beginning of year | $ | 165.5 | $ | 197.6 | $ | 230.6 | ||||||||||||||||||
Acquisition costs deferred: | ||||||||||||||||||||||||
Commissions - net of reinsurance | 222.7 | 180.8 | 139 | |||||||||||||||||||||
Premium taxes | 93.8 | 86.8 | 77.7 | |||||||||||||||||||||
Salaries and other marketing expenses | 42.5 | 43.3 | 121.8 | |||||||||||||||||||||
Sub-total | 359.1 | 311 | 338.4 | |||||||||||||||||||||
Amortization charged to income | (331.9 | ) | (343.2 | ) | (371.7 | ) | ||||||||||||||||||
Change for the year | 27.1 | (32.1 | ) | (33.3 | ) | |||||||||||||||||||
Deferred, end of year | $ | 192.6 | $ | 165.5 | $ | 197.6 | ||||||||||||||||||
(g) Unearned Premiums - Unearned premium reserves are generally calculated by application of pro-rata factors to premiums in force. At December 31, 2013 and 2012, unearned premiums consisted of the following: | ||||||||||||||||||||||||
As of December 31: | 2013 | 2012 | ||||||||||||||||||||||
General Insurance Group | $ | 1,458.90 | $ | 1,323.80 | ||||||||||||||||||||
RFIG Run-off Business | 28.9 | 40.5 | ||||||||||||||||||||||
Total | $ | 1,487.80 | $ | 1,364.40 | ||||||||||||||||||||
(h) Losses, Claims and Settlement Expenses - The establishment of claim reserves by the Company's insurance subsidiaries is a reasonably complex and dynamic process influenced by a large variety of factors. These factors principally include past experience applicable to the anticipated costs of various types of claims, continually evolving and changing legal theories emanating from the judicial system, recurring accounting, statistical, and actuarial studies, the professional experience and expertise of the Company's claim departments' personnel or attorneys and independent claim adjusters, ongoing changes in claim frequency or severity patterns such as those caused by natural disasters, illnesses, accidents, work‑related injuries, and changes in general and industry-specific economic conditions. Consequently, the reserves established are a reflection of the opinions of a large number of persons, of the application and interpretation of historical precedent and trends, of expectations as to future developments, and of management's judgment in interpreting all such factors. At any point in time, the Company is exposed to possibly higher or lower than anticipated claim costs due to all of these factors, and to the evolution, interpretation, and expansion of tort law, as well as the effects of unexpected jury verdicts. | ||||||||||||||||||||||||
All reserves are therefore based on estimates which are periodically reviewed and evaluated in the light of emerging claim experience and changing circumstances. The resulting changes in estimates are recorded in operations of the periods during which they are made. Return and additional premiums and policyholders' dividends, all of which tend to be affected by development of claims in future years, may offset, in whole or in part, developed claim redundancies or deficiencies for certain coverages such as workers' compensation, portions of which are written under loss sensitive programs that provide for such adjustments. The Company believes that its overall reserving practices have been consistently applied over many years, and that its aggregate net reserves have generally resulted in reasonable approximations of the ultimate net costs of claims incurred. However, no representation is made nor is any guaranty given that ultimate net claim and related costs will not develop in future years to be greater or lower than currently established reserve estimates. | ||||||||||||||||||||||||
General Insurance reserves are established to provide for the ultimate expected cost of settling unpaid losses and claims reported at each balance sheet date. Such reserves are based on continually evolving assessments of the facts available to the Company during the settlement process which may stretch over long periods of time. Long-term disability-type workers' compensation reserves are discounted to present value based on interest rates ranging from 3.5% to 4.0%. Losses and claims incurred but not reported ("IBNR"), as well as expenses required to settle losses and claims are established on the basis of a large number of formulas that take into account various criteria, including historical cost experience and anticipated costs of servicing reinsured and other risks. As applicable, estimates of possible recoveries from salvage or subrogation opportunities are considered in the establishment of such reserves. Overall claim and claim expense reserves incorporate amounts covering net estimates of unusual claims such as those emanating from asbestosis and environmental ("A&E") exposures as discussed below. Such reserves can affect claim costs and related loss ratios for such insurance coverages as general liability, commercial automobile (truck), workers' compensation, and property. | ||||||||||||||||||||||||
Early in 2001, the Federal Department of Labor revised the Federal Black Lung Program regulations. The revisions basically require a reevaluation of previously settled, denied, or new occupational disease claims in the context of newly devised, more lenient standards when such claims are resubmitted. Following a number of challenges and appeals by the insurance and coal mining industries, the revised regulations were, for the most part, upheld in June, 2002 and are to be applied prospectively. Since the final quarter of 2001 black lung claims filed or refiled pursuant to these revised regulations have increased, though the volume of new claim reports has abated in recent years. In March 2010, federal regulations were revised once again as part of the Patient Protection and Affordability Act that reinstates two provisions that potentially benefit claimants. In response to this most recent legislation and similar to the 2001 change, black lung claims filed or refiled have again increased.The vast majority of claims filed to date against Old Republic pertain to business underwritten through loss sensitive programs that permit the charge of additional or refund of return premiums to wholly or partially offset changes in estimated claim costs, or to business underwritten as a service carrier on behalf of various industry-wide involuntary market (i.e. assigned risk) pools. A much smaller portion pertains to business produced on a traditional risk transfer basis. The Company has established applicable reserves for claims as they have been reported and for claims not as yet reported on the basis of its historical experience as well as assumptions relative to the effect of the revised regulations. Inasmuch as a variety of challenges are likely as the revised regulations are implemented through the actual claim settlement process, the potential impact on reserves, gross and net of reinsurance or retrospective premium adjustments, resulting from such regulations cannot be estimated with reasonable certainty. | ||||||||||||||||||||||||
Old Republic's reserve estimates also include provisions for indemnity and settlement costs for various asbestosis and environmental impairment ("A&E") claims that have been filed in the normal course of business against a number of its insurance subsidiaries. Many such claims relate to policies incepting prior to 1985, including many issued during a short period between 1981 and 1982 pursuant to an agency agreement canceled in 1982. Over the years, the Company's property and liability insurance subsidiaries have typically issued general liability insurance policies with face amounts ranging between $1.0 and $2.0 and rarely exceeding $10.0. Such policies have, in turn, been subject to reinsurance cessions which have typically reduced the subsidiaries' net retentions to $.5 or less as to each claim. Old Republic's exposure to A&E claims cannot, however, be calculated by conventional insurance reserving methods for a variety of reasons, including: a) the absence of statistically valid data inasmuch as such claims generally involve long reporting delays and very often uncertainty as to the number and identity of insureds against whom such claims have arisen or will arise; and b) the litigation history of such or similar claims for insurance industry members which has produced inconsistent court decisions with regard to such questions as when an alleged loss occurred, which policies provide coverage, how a loss is to be allocated among potentially responsible insureds and/or their insurance carriers, how policy coverage exclusions are to be interpreted, what types of environmental impairment or toxic tort claims are covered, when the insurer's duty to defend is triggered, how policy limits are to be calculated, and whether clean-up costs constitute property damage. Over time, the Executive Branch and/or the Congress of the United States have proposed or considered changes in the legislation and rules affecting the determination of liability for environmental and asbestosis claims. As of December 31, 2013, however, there is no solid evidence to suggest that possible future changes might mitigate or reduce some or all of these claim exposures. Because of the above issues and uncertainties, estimation of reserves for losses and allocated loss adjustment expenses for A&E claims in particular is much more difficult or impossible to quantify with a high degree of precision. Accordingly, no representation can be made that the Company's reserves for such claims and related costs will not prove to be overstated or understated in the future. At December 31, 2013 and 2012, Old Republic's aggregate indemnity and loss adjustment expense reserves specifically identified with A&E exposures amounted to $159.7 and $147.1 gross, respectively, and $121.3 and $119.4 net of reinsurance, respectively. Old Republic's average five year survival ratios stood at 5.5 years (gross) and 7.8 years (net of reinsurance) as of December 31, 2013 and 4.7 years (gross) and 7.6 years (net of reinsurance) as of December 31, 2012. The survival ratios are presented on a pro forma basis (unaudited) as if PMA had been consolidated with ORI for all periods. Fluctuations in this ratio between years can be caused by the inconsistent pay out patterns associated with these types of claims. | ||||||||||||||||||||||||
Title insurance and related escrow services loss and loss adjustment expense reserves are established as point estimates to cover the projected settlement costs of known as well as IBNR losses related to premium and escrow service revenues of each reporting period. Reserves for known claims are based on an assessment of the facts available to the Company during the settlement process. The point estimates covering all claim reserves inherently take into account IBNR claims based on past experience and evaluations of such variables as changing trends in the types of policies issued, changes in real estate markets and interest rate environments, and changing levels of loan refinancing, all of which can have a bearing on the emergence, number, and ultimate cost of claims. | ||||||||||||||||||||||||
RFIG Run-off mortgage guaranty insurance reserves for unpaid claims and claim adjustment expenses are recognized only upon an instance of default, defined as an insured mortgage loan for which two or more consecutive monthly payments have been missed. Loss reserves are based on statistical calculations that take into account the number of reported insured mortgage loan defaults as of each balance sheet date, as well as experience-based estimates of loan defaults that have occurred but have not as yet been reported. Further, the loss reserve estimating process takes into account a large number of variables including trends in claim severity, potential salvage recoveries, expected cure rates for reported loan delinquencies at various stages of default, the level of coverage rescissions and claims denials due to material misrepresentation in key underwriting information or non-compliance with prescribed underwriting guidelines, and management judgments relative to future employment levels, housing market activity, and mortgage loan interest costs, demand, and extensions. | ||||||||||||||||||||||||
The Company has the legal right to rescind mortgage insurance coverage unilaterally as expressly stated in its policy. Moreover, two federal courts that have recently considered that policy wording have each affirmed that right (See First Tennessee Bank N.A. v. Republic Mortg. Ins. Co., Case No. 2:10-cv-02513-JPM-cgc (W.D. Tenn., Feb. 25, 2011) and JPMorgan Chase Bank N.A. v. Republic Mortg. Ins. Co., Civil Action No. 10-06141 (SRC) (D. NJ, May 4, 2011), each decision citing supporting state law legal precedent). RMIC's mortgage insurance policy provides that the insured represents that all statements made and information provided to it in an application for coverage for a loan, without regard to who made the statements or provided the information, have been made and presented for and on behalf of the insured; and that such statements and information are neither false nor misleading in any material respect, nor omit any fact necessary to make such statements and information not false or misleading in any material respect. According to the policy, if any of those representations are materially false or misleading with respect to a loan, the Company has the right to cancel or rescind coverage for that loan retroactively to commencement of the coverage. Whenever the Company determines that an application contains a material misrepresentation, it either advises the insured in writing of its findings prior to rescinding coverage or exercises its unilateral right to rescind coverage for that loan, stating the reasons for that action in writing and returning the applicable premium. The rescission of coverage in instances of materially faulty representations or warranties provided in applications for insurance is a necessary and prevailing practice throughout the insurance industry. In the case of mortgage guaranty insurance, rescissions have occurred regularly over the years but have been generally immaterial. Since 2008, however, the Company has experienced a much greater incidence of rescissions due to increased levels of observed fraud and misrepresentations in insurance applications pertaining to business underwritten between 2004 and the first half of 2008. As a result, the Company has incorporated certain assumptions regarding the expected levels of coverage rescissions and claim denials in its reserving methodology since 2008. Such estimates, which are evaluated at each balance sheet date, take into account observed as well as historical trends in rescission and denial rates. The table below shows the estimated effects of coverage rescissions and claim denials on loss reserves and settled and incurred losses. | ||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||
Estimated reduction in beginning reserve | $ | 174.9 | $ | 313.2 | $ | 710.3 | ||||||||||||||||||
Total incurred claims and settlement expenses reduced | ||||||||||||||||||||||||
(increased) by changes in estimated rescissions: | ||||||||||||||||||||||||
Current year | 80.5 | 111.7 | 223.1 | |||||||||||||||||||||
Prior year | 71.9 | 12.2 | (340.8 | ) | ||||||||||||||||||||
Sub-total | 152.5 | 124 | (117.6 | ) | ||||||||||||||||||||
Estimated rescission reduction in settled claims | (212.2 | ) | (262.3 | ) | (279.5 | ) | ||||||||||||||||||
Estimated reduction in ending reserve | $ | 115.2 | $ | 174.9 | $ | 313.2 | ||||||||||||||||||
As above-noted, the estimated reduction in ending loss reserves reflects, in large measure, a variety of judgments relative to the level of expected coverage rescissions and claim denials on loans that are in default as of each balance sheet date. The provision for insured events of the current year resulted from actual and anticipated rescissions and claim denials attributable to newly reported delinquencies in each respective year. The provision for insured events of prior years resulted from actual rescission and claim denial activity or revisions in assumptions regarding expected rescission or claim denial rates on outstanding prior year delinquencies. The trends since 2010 reflect a continuing reduction in the level of actual and anticipated rescission and claim denial rates on total outstanding delinquencies. Claims not paid by virtue of rescission or denial represent the Company's estimated contractual risk, before consideration of the impacts of any reinsurance and deductibles or aggregate loss limits, on cases that are settled by the issuance of a rescission or denial notification. Variances between the estimated rescission and actual claim denial rate are reflected in the periods during which they occur. | ||||||||||||||||||||||||
Although the insured has no right under the policy to appeal a Company claim decision, the insured may, at any time, contest in writing the Company's findings or action with respect to a loan or a claim. In such cases, the Company considers any additional information supplied by the insured. This consideration may lead to further investigation, retraction or confirmation of the initial determination. If the Company concludes that it will reinstate coverage, it advises the insured in writing that it will do so immediately upon receipt of the premium previously returned. Reserves are not adjusted for potential reversals of rescissions or adverse rulings for loans under dispute since such reversals of claim rescissions and denials have historically been immaterial to the reserve estimation process. | ||||||||||||||||||||||||
There is currently a single instance in which the Company seeks to recover from an insured for previously paid claims. In its counterclaim in the pending arbitration with Countrywide, RMIC is seeking to rescind a June 2006 amendment to a mortgage insurance policy that it contends was fraudulently induced by Countrywide (Countrywide Fin'l Corp. v. Republic Mortg. Ins. Co., Case No. 72 195 Y 0011510 (AAA). The Countrywide parties are Countrywide Financial Corporation, Countrywide Home Loans, Inc., Bank of America, N.A., in its own capacity and as successor by merger of BAC Home Loan Servicing L.P.). The amendment made coverage for a loan immediately incontestable for borrower misrepresentation. The Company seeks a declaration that the amendment is null and void and to recover the claim amounts totaling at least $26.6 that it paid notwithstanding the existence of borrower misrepresentations that otherwise would have supported a rescission of coverage for those loans. The Company does not anticipate recoveries from previously paid claims in its reserving process until such time as a recovery is deemed probable and the amount can be reasonably estimated. | ||||||||||||||||||||||||
In addition to the above reserve elements, the Company establishes reserves for loss settlement costs that are not directly related to individual claims. Such reserves are based on prior years' cost experience and trends, and are intended to cover the unallocated costs of claim departments' administration of known and IBNR claims. | ||||||||||||||||||||||||
The following table shows an analysis of changes in aggregate reserves for the Company's losses, claims and settlement expenses for each of the years shown. | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Gross reserves at beginning of year | $ | 9,303.30 | $ | 8,786.60 | $ | 8,814.60 | ||||||||||||||||||
Less: reinsurance losses recoverable | 2,847.00 | 2,908.10 | 2,945.30 | |||||||||||||||||||||
Net reserves at beginning of year: | ||||||||||||||||||||||||
General Insurance | 4,048.90 | 3,874.90 | 3,888.00 | |||||||||||||||||||||
Title Insurance | 396.4 | 332 | 298 | |||||||||||||||||||||
RFIG Run-off | 1,994.80 | 1,654.00 | 1,663.10 | |||||||||||||||||||||
Other | 15.9 | 17.4 | 20 | |||||||||||||||||||||
Sub-total | 6,456.20 | 5,878.50 | 5,869.30 | |||||||||||||||||||||
Incurred claims and claim adjustment expenses: | ||||||||||||||||||||||||
Provisions for insured events of the current year: | ||||||||||||||||||||||||
General Insurance | 1,857.90 | 1,729.60 | 1,575.30 | |||||||||||||||||||||
Title Insurance | 137.2 | 120.9 | 105.7 | |||||||||||||||||||||
RFIG Run-off (a) | 487.5 | 762.2 | 887.1 | |||||||||||||||||||||
Other | 41 | 40.3 | 40.2 | |||||||||||||||||||||
Sub-total | 2,523.70 | 2,653.10 | 2,608.50 | |||||||||||||||||||||
Change in provision for insured events of prior years: | ||||||||||||||||||||||||
General Insurance | (23.7 | ) | (51.5 | ) | (130.9 | ) | ||||||||||||||||||
Title Insurance | (3.1 | ) | — | — | ||||||||||||||||||||
RFIG Run-off (a) | (269.7 | ) | 148.2 | 254.8 | ||||||||||||||||||||
Other | (2.5 | ) | (1.5 | ) | (1.2 | ) | ||||||||||||||||||
Sub-total | (299.1 | ) | 95.1 | 122.6 | ||||||||||||||||||||
Total incurred claims and claim adjustment expenses (a) | 2,224.50 | 2,748.20 | 2,731.10 | |||||||||||||||||||||
Payments: | ||||||||||||||||||||||||
Claims and claim adjustment expenses attributable to | ||||||||||||||||||||||||
insured events of the current year: | ||||||||||||||||||||||||
General Insurance | 620.8 | 587.8 | 569.8 | |||||||||||||||||||||
Title Insurance | 6 | 3 | 7.9 | |||||||||||||||||||||
RFIG Run-off (b) | 39.4 | 46.6 | 100.5 | |||||||||||||||||||||
Other | 29.5 | 30.6 | 30.7 | |||||||||||||||||||||
Sub-total | 695.9 | 668.1 | 709.2 | |||||||||||||||||||||
Claims and claim adjustment expenses attributable to | ||||||||||||||||||||||||
insured events of prior years: | ||||||||||||||||||||||||
General Insurance | 928.2 | 916.1 | 887.6 | |||||||||||||||||||||
Title Insurance | 52.8 | 53.4 | 63.6 | |||||||||||||||||||||
RFIG Run-off (b) | 398.9 | 523 | 1,050.50 | |||||||||||||||||||||
Other | 8 | 9.6 | 10.7 | |||||||||||||||||||||
Sub-total | 1,388.00 | 1,502.30 | 2,012.60 | |||||||||||||||||||||
Total payments (b) | 2,083.90 | 2,170.50 | 2,721.90 | |||||||||||||||||||||
Amount of reserves for unpaid claims and claim adjustment expenses | ||||||||||||||||||||||||
at the end of each year, net of reinsurance losses recoverable: (c) | ||||||||||||||||||||||||
General Insurance | 4,334.10 | 4,048.90 | 3,874.90 | |||||||||||||||||||||
Title Insurance | 471.5 | 396.4 | 332 | |||||||||||||||||||||
RFIG Run-off | 1,774.20 | 1,994.80 | 1,654.00 | |||||||||||||||||||||
Other | 16.8 | 15.9 | 17.4 | |||||||||||||||||||||
Sub-total | 6,596.80 | 6,456.20 | 5,878.50 | |||||||||||||||||||||
Reinsurance losses recoverable | 2,836.70 | 2,847.00 | 2,908.10 | |||||||||||||||||||||
Gross reserves at end of year | $ | 9,433.50 | $ | 9,303.30 | $ | 8,786.60 | ||||||||||||||||||
__________ | ||||||||||||||||||||||||
As noted elsewhere in this report, in 2012 Old Republic's CCI insurance coverage was combined with the MI business within the overall RFIG Run-off Business. Prior periods' segmented information for the General Insurance and RFIG Run-off Business segments has therefore been reclassified to provide necessary consistency in period-to-period operating comparisons. | ||||||||||||||||||||||||
Excluding the reclassification of CCI from the General Insurance to the RFIG Run-off Business segment, certain elements shown in the preceding table would have been as follows: | ||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||
Change in provision for incurred events of prior years: | ||||||||||||||||||||||||
General Insurance | $ | (40.4 | ) | $ | (19.8 | ) | $ | (149.2 | ) | |||||||||||||||
RFIG Run-off (a) | (253.0 | ) | 116.5 | 273.2 | ||||||||||||||||||||
Payment of claim and claim adjustment expenses attributable to | ||||||||||||||||||||||||
incurred events of the current and prior years: | ||||||||||||||||||||||||
General Insurance | 1,597.50 | 1,577.90 | 1,551.10 | |||||||||||||||||||||
RFIG Run-off (b) | $ | 389.8 | $ | 495.7 | $ | 1,057.40 | ||||||||||||||||||
(a) | In common with all other insurance lines, RFIG Run-off mortgage guaranty settled and incurred claim and claim adjustment expenses include only those costs actually or expected to be paid by the Company. As previously noted, changes in mortgage guaranty aggregate case, IBNR, and loss adjustment expense reserves shown below and entering into the determination of incurred claim costs, take into account, among a large number of variables, claim cost reductions for anticipated coverage rescissions and claims denials. | |||||||||||||||||||||||
The RFIG Run-off mortgage guaranty provision for insured events of the current year was reduced by an estimated $80.5, $111.7 and $223.1, respectively, for 2013, 2012 and 2011. The provision for insured events of prior years in 2013, 2012 and 2011 was reduced (increased) by an estimated $71.9, $12.2 and $(340.8), respectively. These changes were offset to varying degrees by differences between actual claim settlements relative to expected experience and by subsequent revisions of assumptions in regards to claim frequency, severity or levels of associated claim settlement costs which result from consideration of underlying trends and expectations. | ||||||||||||||||||||||||
The following table reflects the changes in net reserves between succeeding balance sheet dates. | ||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||
Net reserve increase(decrease): | ||||||||||||||||||||||||
General Insurance | $ | 285.1 | $ | 174 | $ | (13.1 | ) | |||||||||||||||||
Title Insurance | 75.1 | 64.3 | 34 | |||||||||||||||||||||
RFIG Run-off | (220.6 | ) | 340.7 | (9.0 | ) | |||||||||||||||||||
Other | 0.9 | (1.5 | ) | (2.6 | ) | |||||||||||||||||||
Total | $ | 140.6 | $ | 577.6 | $ | 9.2 | ||||||||||||||||||
(b) | Rescissions reduced the Company's settled losses by an estimated $212.2, $262.3, and $279.5 for 2013, 2012, and 2011, respectively. 2013 and 2012 RFIG Run-off Business claim and claim adjustment expense payments reflect the retention of the DPO within claim reserves which amounted to $551.5 and $299.5 as of the respective year-ends. | |||||||||||||||||||||||
(c) | Year end net IBNR reserves for each segment were as follows: | |||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||
General Insurance | $ | 2,118.40 | $ | 1,947.00 | $ | 1,878.20 | ||||||||||||||||||
Title Insurance | 407.1 | 336.9 | 262.5 | |||||||||||||||||||||
RFIG Run-off | 121.3 | 147.5 | 94.8 | |||||||||||||||||||||
Other | 4 | 4.6 | 4.6 | |||||||||||||||||||||
Total | $ | 2,651.00 | $ | 2,436.10 | $ | 2,240.40 | ||||||||||||||||||
For the three most recent calendar years, the above table indicates that the one-year development of consolidated reserves at the beginning of each year produced a favorable development of 4.6% for 2013 and unfavorable developments of (1.6)% and (2.1)% for 2012, and 2011, respectively, with average favorable annual developments of .3%. The Company believes that the factors most responsible, in varying and continually changing degrees, for reserve redundancies or deficiencies include, as to mortgage guaranty and the CCI coverage, differences in originally estimated salvage and subrogation recoveries, sales and prices of homes that can impact claim costs upon the disposition of foreclosed properties, changes in regional or local economic conditions and employment levels, greater numbers of coverage rescissions and claims denials due to material misrepresentation in key underwriting information or non-compliance with prescribed underwriting guidelines, the extent of loan refinancing activity that can reduce the period of time over which a policy remains at risk, and lower than expected frequencies of claims incurred but not reported. As to many general insurance coverages, changes in reserve adequacy or deficiency result from the effect of reserve discounts applicable to workers' compensation claims, higher than expected severity of litigated claims in particular, governmental or judicially imposed retroactive conditions in the settlement of claims such as noted above in regard to black lung disease claims, greater than anticipated inflation rates applicable to repairs and the medical portion of claims in particular, and higher than expected claims incurred but not reported due to the slower and highly volatile emergence patterns applicable to certain types of claims such as those stemming from litigated, assumed reinsurance, or the A&E types of claims noted above. | ||||||||||||||||||||||||
(i) Reinsurance - The cost of reinsurance is recognized over the terms of reinsurance contracts. Amounts recoverable from reinsurers for loss and loss adjustment expenses are estimated in a manner consistent with the claim liability associated with the reinsured business. The Company evaluates the financial condition of its reinsurers on a regular basis. Allowances are established for amounts deemed uncollectible and are included in the Company's net claim and claim expense reserves. | ||||||||||||||||||||||||
(j) Income Taxes - The Company and most of its subsidiaries file a consolidated tax return and provide for income taxes payable currently. Deferred income taxes included in the accompanying consolidated financial statements will not necessarily become payable or recoverable in the future. The Company uses the asset and liability method of calculating deferred income taxes. This method results in the establishment of deferred tax assets and liabilities, calculated at currently enacted tax rates that are applied to the cumulative temporary differences between financial statement and tax bases of assets and liabilities. | ||||||||||||||||||||||||
The provision for combined current and deferred income taxes (credits) reflected in the consolidated statements of income does not bear the usual relationship to income before income taxes (credits) as the result of permanent and other differences between pretax income or loss and taxable income or loss determined under existing tax regulations. The more significant differences, their effect on the statutory income tax rate (credit), and the resulting effective income tax rates (credits) are summarized below: | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Statutory tax rate (credit) | 35 | % | (35.0 | )% | (35.0 | )% | ||||||||||||||||||
Tax rate increases (decreases): | ||||||||||||||||||||||||
Tax-exempt interest | (.4 | ) | (4.1 | ) | (5.4 | ) | ||||||||||||||||||
Dividends received exclusion | (.6 | ) | (2.1 | ) | (1.0 | ) | ||||||||||||||||||
Valuation allowance (see below) | — | (2.0 | ) | (.6 | ) | |||||||||||||||||||
Goodwill impairment | — | 0.4 | 1.6 | |||||||||||||||||||||
Foreign income (loss) reattribution | (.2 | ) | (3.5 | ) | 1 | |||||||||||||||||||
Sale of subsidiary | — | (1.3 | ) | — | ||||||||||||||||||||
Other items - net | (.4 | ) | 1 | (1.2 | ) | |||||||||||||||||||
Effective tax rate (credit) | 33.4 | % | (46.6 | )% | (40.6 | )% | ||||||||||||||||||
The tax effects of temporary differences that give rise to significant portions of the Company's net deferred tax assets (liabilities) are as follows at the dates shown: | ||||||||||||||||||||||||
December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Deferred Tax Assets: | ||||||||||||||||||||||||
Losses, claims, and settlement expenses | $ | 286.9 | $ | 272.4 | $ | 231.7 | ||||||||||||||||||
Pension and deferred compensation plans | 51.3 | 90.8 | 85.8 | |||||||||||||||||||||
Impairment losses on investments | 3.2 | 49.2 | 52.9 | |||||||||||||||||||||
Net operating loss carryforward | 43.7 | 91 | 77.2 | |||||||||||||||||||||
AMT credit carryforward | 9.6 | 25.5 | 29.7 | |||||||||||||||||||||
Other temporary differences | 50.5 | 67.7 | 50.1 | |||||||||||||||||||||
Total deferred tax assets before valuation allowance | 445.3 | 596.8 | 527.7 | |||||||||||||||||||||
Valuation allowance | (9.6 | ) | (9.6 | ) | (12.2 | ) | ||||||||||||||||||
Total deferred tax assets | 435.7 | 587.2 | 515.4 | |||||||||||||||||||||
Deferred Tax Liabilities: | ||||||||||||||||||||||||
Unearned premium reserves | 42.7 | 35.3 | 29.3 | |||||||||||||||||||||
Deferred policy acquisition costs | 63.1 | 52.5 | 63.9 | |||||||||||||||||||||
Mortgage guaranty insurers' contingency reserves | 20.1 | — | 0.4 | |||||||||||||||||||||
Amortization of fixed maturity securities | 4.9 | 6.9 | 7.2 | |||||||||||||||||||||
Net unrealized investment gains | 220.5 | 309.7 | 273 | |||||||||||||||||||||
Title plants and records | 4.9 | 5 | 5 | |||||||||||||||||||||
Other temporary differences | 30.6 | 29.6 | 19.7 | |||||||||||||||||||||
Total deferred tax liabilities | 387.1 | 439.2 | 398.7 | |||||||||||||||||||||
Net deferred tax assets (liabilities) | $ | 48.4 | $ | 148.1 | $ | 116.7 | ||||||||||||||||||
At December 31, 2013, the Company had a net operating loss ("NOL") carryforward of $124.8 which will expire in years 2020 through 2029, and a $9.6 alternative minimum tax ("AMT") credit carryforward which does not expire. The NOL carryforward is subject to the limitations set by Section 382 of the Internal Revenue Code and is available to reduce future years' taxable income. | ||||||||||||||||||||||||
A valuation allowance was established against deferred tax assets as of December 31, 2013, 2012 and 2011 related to certain NOL and tax credit carryforwards which the Company did not expect to realize. In valuing the deferred tax assets, the Company considered certain factors including primarily the scheduled reversals of certain deferred tax liabilities, estimates of future taxable income, the impact of available carryback and carryforward periods, as well as the availability of certain tax planning strategies. The Company estimates that all remaining deferred tax assets at year end 2013 will more likely than not be fully realized. | ||||||||||||||||||||||||
Pursuant to special provisions of the Internal Revenue Code pertaining to mortgage guaranty insurers, a contingency reserve (established in accordance with insurance regulations designed to protect policyholders against extraordinary volumes of claims) is deductible from gross income. The deduction is allowed only to the extent that U.S. government non-interest bearing tax and loss bonds are purchased and held in an amount equal to the tax benefit attributable to such deduction. For Federal income tax purposes, amounts deducted from the contingency reserve are taken into gross statutory taxable income in the period in which they are released. Contingency reserves may be released when incurred losses exceed thresholds established under state law or regulation, upon special request and approval by state insurance regulators, or in any event, upon the expiration of ten years. For 2013 tax purposes, the Company recognized a contingency reserve deduction of $57.6. Consequently, $20.1 of U.S. Treasury Tax and Loss Bonds will be acquired during the first quarter 2014. | ||||||||||||||||||||||||
Tax positions taken or expected to be taken in a tax return by the Company are recognized in the financial statements when it is more likely than not that the position would be sustained upon examination by tax authorities. To the best of management's knowledge there are no tax uncertainties that are expected to result in significant increases or decreases to unrecognized tax benefits within the next twelve month period. The Company views its income tax exposures as primarily consisting of timing differences whereby the ultimate deductibility of a taxable amount is highly certain but the timing of its deductibility is uncertain. Such differences relate principally to the timing of deductions for loss and premium reserves. As in prior examinations, the Internal Revenue Service (IRS) could assert that claim reserve deductions were overstated thereby reducing the Company's statutory taxable income in any particular year. The Company believes that it establishes its reserves fairly and consistently at each balance sheet date, and that it would succeed in defending its tax position in these regards. Because of the impact of deferred tax accounting, the possible accelerated payment of tax to the IRS would not necessarily affect the annual effective tax rate. During 2013, the IRS completed an examination of the Company's consolidated Federal income tax returns for the years 2005 through 2010, which produced no material change to the Company's net income. The Company classifies interest and penalties as income tax expense in the consolidated statement of income. | ||||||||||||||||||||||||
(k) Property and Equipment - Property and equipment is generally depreciated or amortized over the estimated useful lives of the assets, (2 to 27 years), substantially by the straight-line method. Depreciation and amortization expenses related to property and equipment were $23.8, $23.9 and $21.9 in 2013, 2012, and 2011, respectively. Expenditures for maintenance and repairs are charged to income as incurred, and expenditures for major renewals and additions are capitalized. | ||||||||||||||||||||||||
(l) Title Plants and Records - Title plants and records are carried at original cost or appraised value at the date of purchase. Such values represent the cost of producing or acquiring interests in title records and indexes and the appraised value of purchased subsidiaries' title records and indexes at dates of acquisition. The cost of maintaining, updating, and operating title records is charged to income as incurred. Title records and indexes are ordinarily not amortized unless events or circumstances indicate that the carrying amount of the capitalized costs may not be recoverable. | ||||||||||||||||||||||||
(m) Goodwill and Intangible Assets - The following table presents the components of the Company's goodwill balance: | ||||||||||||||||||||||||
General | Title | RFIG Run-off | Other | Total | ||||||||||||||||||||
January 1, 2012 | $ | 117.5 | $ | 44.3 | $ | — | $ | 0.1 | $ | 162 | ||||||||||||||
Acquisitions | — | — | — | — | — | |||||||||||||||||||
Impairments | (1.3 | ) | — | — | — | (1.3 | ) | |||||||||||||||||
December 31, 2012 | 116.2 | 44.3 | — | 0.1 | 160.7 | |||||||||||||||||||
Acquisitions | — | — | — | — | — | |||||||||||||||||||
Impairments | — | — | — | — | — | |||||||||||||||||||
December 31, 2013 | $ | 116.2 | $ | 44.3 | $ | — | $ | 0.1 | $ | 160.7 | ||||||||||||||
Goodwill resulting from business combinations is not amortizable against operations but must be tested annually for possible impairment of its continued value. Intangible assets with definitive lives are amortized against future operating results; whereas indefinite-lived intangibles are tested annually for impairment. During 2011, RFIG's historical mortgage guaranty goodwill balance of $10.7 was impaired in its entirety. | ||||||||||||||||||||||||
There are no significant goodwill balances within reporting units with estimated fair values not significantly in excess of their carrying values. | ||||||||||||||||||||||||
(n) Employee Benefit Plans - Prior to December 31, 2012, the Company had four separate pension plans covering a portion of its work force. The four plans were the Old Republic International Salaried Employees Retirement Plan (the Old Republic Plan), the Bituminous Casualty Corporation Retirement Income Plan (the Bituminous Plan), the Old Republic National Title Group Pension Plan (the Title Plan), and the PMA Capital Corporation Pension Plan (the PMA Plan). Effective December 31, 2012, the Bituminous Plan and the Title Plan were merged into the Old Republic Plan. Effective December 31, 2013, The PMA Plan was merged into the Old Republic Plan. | ||||||||||||||||||||||||
The plans are defined benefit plans pursuant to which pension payments are based primarily on years of service and employee compensation near retirement. It is the Company's policy to fund the plans' costs as they accrue. The Old Republic Plan has been closed to new participants since December 31, 2004; the PMA Plan was frozen as of December 31, 2005. The benefit levels in the Old Republic Plan were similarly frozen as of December 31, 2013. The benefit curtailment triggered a revaluation of the plan as of September 30, 2013. The impact of the curtailment resulted in increased operating expenses of $.6, a reduction of the pension obligation liability of $26.6, and a resulting increase to other comprehensive income of $17.7, net of tax. Under the terms of the freeze, the plans remain closed to new participants and eligible employees retain all of the vested rights as of the effective date of the freeze, but additional benefits do not accrue thereafter. | ||||||||||||||||||||||||
Pursuant to GAAP, the funded status of pension and other postretirement plans must be recognized in the consolidated balance sheet. The funded status is measured as the difference between the fair value of plan assets and the projected benefit obligations on a plan-by-plan basis. The funded status of an overfunded benefit plan is recognized as a net pension asset while the underfunded status of a benefit plan is recognized as a net pension liability; offsetting entries are reflected as a component of shareholders' equity in accumulated other comprehensive income, net of deferred taxes. Changes in the status of the plans are recognized in the period in which they occur. All plan assets and liabilities are measured as of December 31 of the years presented. The effects of these measurements and the changes in the projected benefit obligation ("PBO") are reflected below. | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Projected benefit obligation at beginning of year | $ | 525.7 | $ | 477.8 | $ | 425.2 | ||||||||||||||||||
Increases (decreases) during the year attributable to: | ||||||||||||||||||||||||
Service cost | 9.5 | 9.4 | 8.7 | |||||||||||||||||||||
Interest cost | 21.6 | 21.8 | 22.7 | |||||||||||||||||||||
Plan curtailments | (26.6 | ) | — | — | ||||||||||||||||||||
Actuarial (gains) losses | (32.8 | ) | 31.5 | 36.7 | ||||||||||||||||||||
Benefits paid | (18.1 | ) | (15.0 | ) | (15.5 | ) | ||||||||||||||||||
Net increase (decrease) for the year | (46.4 | ) | 47.8 | 52.6 | ||||||||||||||||||||
Projected benefit obligation at end of year | $ | 479.3 | $ | 525.7 | $ | 477.8 | ||||||||||||||||||
Accumulated benefit obligation at end of year | $ | 479.3 | $ | 495.4 | $ | 443.4 | ||||||||||||||||||
The changes in the fair value of net assets available for plan benefits are as follows: | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Fair value of net assets available for plan benefits | ||||||||||||||||||||||||
At beginning of the year | $ | 352.3 | $ | 315.4 | $ | 297.1 | ||||||||||||||||||
Increases (decreases) during the year attributable to: | ||||||||||||||||||||||||
Actual return on plan assets | 61.9 | 25.8 | 0.2 | |||||||||||||||||||||
Sponsor contributions | 12.7 | 26 | 33.6 | |||||||||||||||||||||
Benefits paid | (18.1 | ) | (15.0 | ) | (15.5 | ) | ||||||||||||||||||
Net increase (decrease) for year | 56.5 | 36.8 | 18.3 | |||||||||||||||||||||
Fair value of net assets available for plan benefits | ||||||||||||||||||||||||
At end of the year | $ | 408.8 | $ | 352.3 | $ | 315.4 | ||||||||||||||||||
Each of the plans had accumulated and projected benefit obligations in excess of plan assets at December 31, 2013, 2012 and 2011. The Company expects to make cash contributions of approximately $26.0 in calendar year 2014. | ||||||||||||||||||||||||
The components of aggregate annual net periodic pension costs consisted of the following: | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Service cost | $ | 9.5 | $ | 9.4 | $ | 8.7 | ||||||||||||||||||
Interest cost | 21.6 | 21.8 | 22.7 | |||||||||||||||||||||
Curtailment loss recognized | 0.6 | — | — | |||||||||||||||||||||
Expected return on plan assets | (26.7 | ) | (25.1 | ) | (23.7 | ) | ||||||||||||||||||
Recognized loss | 8.8 | 10 | 6 | |||||||||||||||||||||
Prior service costs | 0.1 | 0.1 | 0.1 | |||||||||||||||||||||
Net cost | $ | 14.1 | $ | 16.3 | $ | 13.9 | ||||||||||||||||||
The pretax pension costs recognized in other comprehensive income consist of the following: | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Amounts arising during the period: | ||||||||||||||||||||||||
Net recognized gain (loss) | $ | 68 | $ | (30.8 | ) | $ | (60.2 | ) | ||||||||||||||||
Plan curtailment | 26.6 | — | — | |||||||||||||||||||||
Reclassification adjustment to components of net periodic pension cost: | ||||||||||||||||||||||||
Net recognized loss | 8.8 | 10 | 6 | |||||||||||||||||||||
Net prior service cost | 0.1 | 0.1 | 0.1 | |||||||||||||||||||||
Curtailment loss recognized | 0.6 | — | — | |||||||||||||||||||||
Net pretax pension (costs) or gains recognized | $ | 104.3 | $ | (20.6 | ) | $ | (54.0 | ) | ||||||||||||||||
The amounts included in accumulated other comprehensive income that have not yet been recognized as components of net periodic pension cost consist of the following: | ||||||||||||||||||||||||
As of December 31: | 2013 | 2012 | ||||||||||||||||||||||
Net recognized loss | $ | (48.3 | ) | $ | (151.9 | ) | ||||||||||||||||||
Net prior service cost | — | (.7 | ) | |||||||||||||||||||||
Total | $ | (48.3 | ) | $ | (152.7 | ) | ||||||||||||||||||
The amounts included in accumulated other comprehensive income that will be recognized as components of net periodic pension cost during 2014 are not expected to be material. | ||||||||||||||||||||||||
The projected benefit obligations and net periodic benefit costs for the plans were determined using the following weighted-average assumptions: | ||||||||||||||||||||||||
Projected Benefit Obligation | Net Periodic Benefit Cost | |||||||||||||||||||||||
As of December 31: | 2013 | 2012 | 2013 | 2012 | 2011 | |||||||||||||||||||
Settlement discount rates | 5 | % | 4.17 | % | 4.17 | % | 4.66 | % | 5.46 | % | ||||||||||||||
Rates of compensation increase | N/A | 3.22 | % | 3.22 | % | 4.25 | % | 4.25 | % | |||||||||||||||
Long-term rates of return on plans' assets | N/A | N/A | 7.56 | % | 7.81 | % | 7.94 | % | ||||||||||||||||
The assumed settlement discount rates were determined by matching the current estimate of each Plan's projected cash outflows against spot rate yields on a portfolio of high quality bonds as of the measurement date. To develop the expected long-term rate of return on assets assumption, historical returns and the future return expectations for each asset class, as well as the target asset allocation of the pension portfolios were considered. The investment policy of the Plans takes into account the matching of assets and liabilities, appropriate risk aversion, liquidity needs, the preservation of capital, and the attainment of modest growth. The weighted-average asset allocations of the Plans were as follows: | ||||||||||||||||||||||||
Investment Policy Asset | ||||||||||||||||||||||||
As of December 31: | 2013 | 2012 | Allocation % Range Target | |||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||
Common shares of Company stock | 12 | % | 8.3 | % | ||||||||||||||||||||
Other | 50.9 | 48.5 | ||||||||||||||||||||||
Sub-total | 62.9 | 56.8 | 30% to 70% | |||||||||||||||||||||
Fixed maturity securities | 29.5 | 35.2 | 30% to 70% | |||||||||||||||||||||
Other | 7.6 | 8 | 1% to 20% | |||||||||||||||||||||
Total | 100 | % | 100 | % | ||||||||||||||||||||
Quoted values and other data provided by the respective investment custodians are used as inputs for determining fair value of the Plan's debt and equity securities. The custodians are understood to obtain market quotations and actual transaction prices for securities that have quoted prices in active markets and use their own proprietary method for determining the fair value of securities that are not actively traded. In general, these methods involve the use of "matrix pricing" in which the investment custodian uses observable inputs, including, but not limited to, investment yields, credit risks and spreads, benchmarking of like securities, broker-dealer quotes, reported trades and sector groupings to determine a reasonable fair value. | ||||||||||||||||||||||||
The following tables present a summary of the Plans' assets segregated among the various input levels described in Note 1(d). | ||||||||||||||||||||||||
Fair Value Measurements | ||||||||||||||||||||||||
As of December 31, 2013: | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||
Common shares of Company stock | $ | 48.8 | $ | — | $ | — | $ | 48.8 | ||||||||||||||||
Other | 189.1 | 18.9 | — | 208.1 | ||||||||||||||||||||
Sub-total | 238 | 18.9 | — | 256.9 | ||||||||||||||||||||
Fixed maturity securities | 10.5 | 109.9 | — | 120.4 | ||||||||||||||||||||
Other | 16.5 | 7.3 | 7.4 | 31.3 | ||||||||||||||||||||
Total | $ | 265.1 | $ | 136.3 | $ | 7.4 | $ | 408.8 | ||||||||||||||||
As of December 31, 2012: | ||||||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||
Common shares of Company stock | $ | 29 | $ | — | $ | — | $ | 29 | ||||||||||||||||
Other | 154 | 16.9 | — | 171 | ||||||||||||||||||||
Sub-total | 183.1 | 16.9 | — | 200.1 | ||||||||||||||||||||
Fixed maturity securities | 1.5 | 122.5 | — | 124 | ||||||||||||||||||||
Other | 10.6 | 9.3 | 8.1 | 28.1 | ||||||||||||||||||||
Total | $ | 195.3 | $ | 148.8 | $ | 8.1 | $ | 352.3 | ||||||||||||||||
Level 1 assets include U.S. Treasury notes, publicly traded common stocks, mutual funds and certain short-term investments. Level 2 assets generally include corporate and government agency bonds, common collective trusts, and a limited partnership investment. Level 3 assets primarily consist of an immediate participation guaranteed fund. | ||||||||||||||||||||||||
The benefits expected to be paid as of December 31, 2013 for the next 10 years are as follows: 2014: $20.6; 2015: $22.8; 2016: $24.2; 2017 $25.1; 2018: $26.4 and for the five years after 2018: $148.5. | ||||||||||||||||||||||||
The Company has a number of profit sharing and other incentive compensation programs for the benefit of a substantial number of its employees. The costs related to such programs are summarized below: | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Employees Savings and Stock Ownership Plan "ESSOP" | $ | 7.8 | $ | 5.3 | $ | 5.9 | ||||||||||||||||||
Other profit sharing plans | 12.1 | 12.9 | 13.4 | |||||||||||||||||||||
Cash and deferred incentive compensation | $ | 21.6 | $ | 20.5 | $ | 19.5 | ||||||||||||||||||
A majority of the Company's employees participate in the ESSOP. Current Company contributions are provided in the form of Old Republic common stock. Dividends on shares are allocated to participants as earnings, and likewise invested in Company stock; dividends on unallocated shares are used to pay debt service costs. The Company's annual contributions are based on a formula that takes the growth in net operating income per share over consecutive five year periods into account. As of December 31, 2013, there were 14,009,007 Old Republic common shares owned by the ESSOP, of which 10,911,379 were allocated to employees' account balances. There are no repurchase obligations in existence. See Note 3(b). | ||||||||||||||||||||||||
(o) Escrow Funds - Segregated cash deposit accounts and the offsetting liabilities for escrow deposits in connection with Title Insurance Group real estate transactions in the same amounts ($1,043.9 and $878.1 at December 31, 2013 and 2012, respectively) are not included as assets or liabilities in the accompanying consolidated balance sheets as the escrow funds are not available for regular operations. | ||||||||||||||||||||||||
(p) Earnings Per Share - Consolidated basic earnings per share excludes the dilutive effect of common stock equivalents and is computed by dividing income (loss) available to common stockholders by the weighted-average number of common shares actually outstanding for the year. Diluted earnings per share are similarly calculated with the inclusion of dilutive common stock equivalents. The following table provides a reconciliation of net income (loss) and the number of shares used in basic and diluted earnings per share calculations. | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||
Net income (loss) | $ | 447.8 | $ | (68.6 | ) | $ | (140.5 | ) | ||||||||||||||||
Numerator for basic earnings per share - | ||||||||||||||||||||||||
income (loss) available to common stockholders | 447.8 | (68.6 | ) | (140.5 | ) | |||||||||||||||||||
Adjustment for interest expense incurred on | ||||||||||||||||||||||||
assumed conversion of convertible notes | 14.6 | — | — | |||||||||||||||||||||
Numerator for diluted earnings per share - | ||||||||||||||||||||||||
income (loss) available to common stockholders | ||||||||||||||||||||||||
after assumed conversion of convertible notes | $ | 462.4 | $ | (68.6 | ) | $ | (140.5 | ) | ||||||||||||||||
Denominator: | ||||||||||||||||||||||||
Denominator for basic earnings per share - | ||||||||||||||||||||||||
weighted-average shares (a) | 257,443,999 | 255,812,888 | 255,045,210 | |||||||||||||||||||||
Effect of dilutive securities - stock based compensation awards | 784,080 | — | — | |||||||||||||||||||||
Effect of dilutive securities - convertible senior notes | 35,455,956 | — | — | |||||||||||||||||||||
Denominator for diluted earnings per share - | ||||||||||||||||||||||||
adjusted weighted-average shares | ||||||||||||||||||||||||
and assumed conversion of convertible notes (a) | 293,684,035 | 255,812,888 | 255,045,210 | |||||||||||||||||||||
Earnings per share: Basic | $ | 1.74 | $ | (.27 | ) | $ | (.55 | ) | ||||||||||||||||
Diluted | $ | 1.57 | $ | (.27 | ) | $ | (.55 | ) | ||||||||||||||||
Anti-dilutive common stock equivalents | ||||||||||||||||||||||||
excluded from earning per share computations: | ||||||||||||||||||||||||
Stock based compensation awards | 7,563,456 | 14,543,835 | 16,007,624 | |||||||||||||||||||||
Convertible senior notes | — | 35,409,303 | 56,464,160 | |||||||||||||||||||||
Total | 7,563,456 | 49,953,138 | 72,471,784 | |||||||||||||||||||||
__________ | ||||||||||||||||||||||||
(a) In calculating earnings per share, pertinent accounting rules require that common shares owned by the Company's Employee Savings and Stock Ownership Plan that are as yet unallocated to participants in the plan be excluded from the calculation. Such shares are issued and outstanding, and have the same voting and other rights applicable to all other common shares. | ||||||||||||||||||||||||
(q) Concentration of Credit Risk - The Company is not exposed to material concentrations of credit risks as to any one issuer of investment securities. | ||||||||||||||||||||||||
(r) Stock Based Compensation - As periodically amended, the Company has had a stock option plan in effect for certain eligible key employees since 1978. Under the current plan amended in 2010, the maximum number of common shares available for 2010 and future years' grants has been set at 14.5 million through 2016. The exercise price of stock options is equal to the closing market price of the Company's common stock on the date of grant, and the contractual life of the grant is generally ten years from the date of the grant. Options granted may be exercised to the extent of 10% of the number of shares covered thereby as of December 31st of the year of the grant and, cumulatively, to the extent of an additional 15%, 20%, 25% and 30% on and after the second through fifth calendar years, respectively. Options granted to employees who meet certain retirement eligibility provisions are fully expensed on the date of grant. | ||||||||||||||||||||||||
The following table presents the stock based compensation expense and income tax benefit recognized in the financial statements: | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Stock based compensation expense | $ | 1.6 | $ | 1.7 | $ | 3 | ||||||||||||||||||
Income tax benefit | $ | 0.5 | $ | 0.6 | $ | 1 | ||||||||||||||||||
The fair value of each stock option award is estimated on the date of grant using the Black-Scholes-Merton Model. The following table presents the assumptions used in the Black-Scholes Model for the awards granted during the periods presented. Expected volatilities are based on the historical experience of Old Republic's common stock. The expected term of stock options represents the period of time that stock options granted are assumed to be outstanding. The Company uses historical data to estimate the effect of stock option exercise and employee departure behavior; groups of employees that have similar historical behavior are considered separately for valuation purposes. The risk-free rate of return for periods within the contractual term of the share option is based on the U.S. Treasury rate in effect at the time of the grant. | ||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||
Expected volatility | 0.33 | 0.32 | 0.31 | |||||||||||||||||||||
Expected dividends | 5.99 | % | 6.88 | % | 5.95 | % | ||||||||||||||||||
Expected term (in years) | 7 | 7 | 7 | |||||||||||||||||||||
Risk-free rate | 1.19 | % | 1.74 | % | 2.73 | % | ||||||||||||||||||
A summary of stock option activity under the plan as of December 31, 2013, 2012 and 2011, and changes in outstanding options during the years then ended is presented below: | ||||||||||||||||||||||||
As of and for the Years Ended December 31, | ||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||
Shares | Weighted | Shares | Weighted | Shares | Weighted | |||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||
Exercise | Exercise | Exercise | ||||||||||||||||||||||
Price | Price | Price | ||||||||||||||||||||||
Outstanding at beginning of year | 14,293,149 | $ | 16.75 | 15,679,915 | $ | 17.25 | 16,560,483 | $ | 17.39 | |||||||||||||||
Granted | 922,500 | 12.57 | 974,500 | 10.8 | 1,064,500 | 12.33 | ||||||||||||||||||
Exercised | 897,909 | 12.22 | 14,850 | 10.48 | 31,113 | 12.22 | ||||||||||||||||||
Forfeited and expired | 1,510,468 | 15.01 | 2,346,416 | 17.66 | 1,913,955 | 15.85 | ||||||||||||||||||
Outstanding at end of year | 12,807,272 | 16.97 | 14,293,149 | 16.75 | 15,679,915 | 17.25 | ||||||||||||||||||
Exercisable at end of year | 10,582,298 | $ | 18.03 | 12,032,624 | $ | 17.74 | 13,262,682 | $ | 18.21 | |||||||||||||||
Weighted average fair value of | ||||||||||||||||||||||||
options granted during the year (a) | $ | 1.94 | per share | $ | 1.46 | per share | $ | 1.99 | per share | |||||||||||||||
__________ | ||||||||||||||||||||||||
(a) Based on the Black-Scholes option pricing model and the assumptions outlined above. | ||||||||||||||||||||||||
A summary of stock options outstanding and exercisable at December 31, 2013 follows: | ||||||||||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||||||
Weighted - Average | Weighted | |||||||||||||||||||||||
Average | ||||||||||||||||||||||||
Exercise | ||||||||||||||||||||||||
Ranges of Exercise Prices | Year(s) | Number | Remaining | Exercise | Number | Price | ||||||||||||||||||
Of | Out- | Contractual | Price | Exercisable | ||||||||||||||||||||
Grant | Standing | Life | ||||||||||||||||||||||
$19.32 | to | $20.02 | 2004 | 1,850,852 | 0.25 | $ | 19.33 | 1,850,852 | $ | 19.33 | ||||||||||||||
$18.41 | to | $20.87 | 2005 | 1,572,059 | 1.25 | 18.45 | 1,572,059 | 18.45 | ||||||||||||||||
$21.36 | to | $22.35 | 2006 | 2,089,525 | 2.25 | 22 | 2,089,525 | 22 | ||||||||||||||||
$21.78 | to | $23.16 | 2007 | 1,971,475 | 3.25 | 21.78 | 1,971,475 | 21.78 | ||||||||||||||||
$7.73 | to | $12.95 | 2008 | 1,048,370 | 4.25 | 12.93 | 1,048,370 | 12.93 | ||||||||||||||||
$10.48 | 2009 | 698,133 | 5.25 | 10.48 | 698,133 | 10.48 | ||||||||||||||||||
$12.08 | 2010 | 690,225 | 6.25 | 12.08 | 490,234 | 12.08 | ||||||||||||||||||
$10.51 | to | $14.31 | 2010 | (a) | 67,745 | 0.25 | 12.96 | 67,745 | 12.96 | |||||||||||||||
$12.33 | 2011 | 945,413 | 7.25 | 12.33 | 442,146 | 12.33 | ||||||||||||||||||
$10.80 | 2012 | 953,475 | 8.25 | 10.8 | 246,711 | 10.8 | ||||||||||||||||||
$12.57 | 2013 | 920,000 | 9.25 | 12.57 | 105,048 | 12.57 | ||||||||||||||||||
Total | 12,807,272 | $ | 16.97 | 10,582,298 | $ | 18.03 | ||||||||||||||||||
__________ | ||||||||||||||||||||||||
(a) Represents the replacement options issued pursuant to the PMA merger. | ||||||||||||||||||||||||
Pursuant to the Company's self-imposed limits, the maximum number of options available for future issuance as of December 31, 2013, is 10,877,713 shares. | ||||||||||||||||||||||||
As of December 31, 2013, there was $1.6 of total unrecognized compensation cost related to nonvested stock-based compensation arrangements granted under the plan. That cost is expected to be recognized over a weighted average period of approximately 3 years. | ||||||||||||||||||||||||
The cash received from stock option exercises, the total intrinsic value of stock options exercised, and the actual tax benefit realized for the tax deductions from option exercises are as follows: | ||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||
Cash received from stock option exercise | $ | 10.9 | $ | 0.1 | $ | 0.3 | ||||||||||||||||||
Intrinsic value of stock options exercised | 2.9 | — | — | |||||||||||||||||||||
Actual tax benefit realized for tax deductions | $ | 1.1 | $ | — | $ | — | ||||||||||||||||||
from stock options exercised | ||||||||||||||||||||||||
At December 31, 2013, the Company had restricted common stock issued to certain employees which are expected to vest over the next 3 years. During the vesting period, restricted shares are nontransferable and subject to forfeiture, but are entitled to all of the other rights of outstanding shares. Compensation expense for the restricted stock award is recognized over the vesting period of the award and was immaterial for the years ended December 31, 2013, 2012 and 2011. | ||||||||||||||||||||||||
(s) Regulatory Matters - The material increases in mortgage guaranty insurance claims and loss payments that began in 2007 gradually depleted RMIC's statutory capital base and forced it to discontinue writing new business. The insurance laws of 16 jurisdictions, including RMIC and RMICNC’s domiciliary state of North Carolina, require a mortgage insurer to maintain a minimum amount of statutory capital relative to risk in force (or a similar measure) in order to continue to write new business. The formulations currently allow for a maximum risk-to-capital ratio of 25 to 1, or alternatively stated, a “minimum policyholder position” (“MPP”) of one-twenty-fifth of the total risk in force. The failure to maintain the prescribed minimum capital level in a particular state generally requires a mortgage insurer to immediately stop writing new business until it reestablishes the required level of capital or receives a waiver of the requirement from a state's insurance regulatory authority. RMIC breached the minimum capital requirement during the third quarter of 2010. RMIC had previously requested and, subsequently received waivers or forbearance of the minimum policyholder position requirements from the regulatory authorities in substantially all affected states. Following several brief extensions, the waiver from its domiciliary state of North Carolina expired on August 31, 2011, and RMIC and its sister company, RMICNC, discontinued writing new business in all states and limited themselves to servicing the run-off of their existing business. | ||||||||||||||||||||||||
During 2012 the NCDOI issued several orders the ultimate effects of which were: | ||||||||||||||||||||||||
• To place RMIC and RMICNC under NCDOI supervision which,among other considerations, requires written approval of the NCDOI Commissioner or its appointed representative for supervision of certain activities and transactions, including the incurrence of any debt or other liabilities, lending of its funds, and termination or entry into new contracts of insurance or reinsurance; | ||||||||||||||||||||||||
• To approve a Corrective Plan submitted by RMIC pursuant to which all settled claims are to be paid in cash for 60% of the settled amount, with the remaining 40% retained in claim reserves as a DPO until a future payment of all or a portion of this 40% is approved by the NCDOI; and | ||||||||||||||||||||||||
• To execute the DPO-based run-off plan under Old Republic's ownership and NCDOI supervision of RMIC and RMICNC to effect a most economically sound realization of ultimate benefits to policyholders during a sufficiently long future period. | ||||||||||||||||||||||||
RMIC's evaluation of the potential long-term performance of the run-off book of business is based on various modeling techniques. Of necessity the resulting models take into account actual premium and paid claim experience of prior periods, together with a large number of assumptions and judgments about future outcomes that are highly sensitive to a wide range of estimates. Many of these estimates and underlying assumptions relate to matters over which the Company has no control, including: 1) The conflicted interests, as well as the varying mortgage servicing and foreclosure practices of a large number of insured lending institutions; 2) General economic and industry-specific trends and events; and 3) The evolving or future social and economic policies of the U.S. Government vis-à-vis such critical sectors as the banking, mortgage lending, and housing industries, as well as its policies for resolving the insolvencies and assigning a possible future role to Fannie Mae and Freddie Mac. These matters notwithstanding, RMIC's analysis did not indicate that the establishment of a premium deficiency was warranted as of December 31, 2013 or 2012. | ||||||||||||||||||||||||
The indicated positive outcome of the standard model notwithstanding, it is possible that MI operating results could nevertheless be negative in the near term. As long as the run-off under NCDOI supervision remains in place, however, the statutory DPO accounting treatment should mitigate the adverse effect of operating losses on the statutory capital balance. In these circumstances, RMIC's and RMICNC's statutory solvency would be retained and the risk of a regulatory receivership action would be averted. In management's opinion, the DPO Plan under NCDOI supervision should be continued for a sufficiently long period of time to achieve the objectives contemplated by the above referenced NCDOI orders. As of December 31, 2013, the total statutory capital, inclusive of accumulated DPO reserve funds of $551.5 held in RFIG's mortgage insurance subsidiaries was approximately $518.2, which was $161.5 above the required MPP of $356.6. As of the same date, RFIG's consolidated GAAP capitalization amounted to $(13.8) (or a negative capital contribution of approximately 5 cents per Old Republic common share). | ||||||||||||||||||||||||
On October 24, 2013 the Company announced that its RMICC mortgage guaranty subsidiary expects to raise new funds in the capital markets. Substantially all of this capital would be added to the equity resources of RMICC's three mortgage insurance subsidiaries. The addition of capital should permit these carriers to at once support existing policies in-force, pay off heretofore deferred claim payment obligations with agreed-upon interest, exit their current state of supervision under North Carolina insurance regulations, and resume the underwriting of new business beginning in 2014. While the interest charge on outstanding deferred payment obligations has not been agreed upon, it could be material to the Company's results of operations when it is recorded following approval of the NCDOI and the successful completion of the capital raise. In connection with such a transaction, it is expected that Old Republic would contribute up to $50.0 of this new capital. Upon the successful closing of this transaction, RMICC would be deconsolidated and Old Republic's continuing interest in RMICC and the mortgage guaranty business would consist of a non-controlling equity interest in RMICC. Completion of the transaction cannot be assured and is subject to market conditions and other factors. Moreover, the addition of all new funds to RMICC and its subsidiaries will be contingent on the receipt of certain regulatory approvals. The most essential of these will be required from the North Carolina Department of Insurance, and from Fannie Mae and Freddie Mac with any necessary assent of their FHFA Conservator. |
Debt
Debt | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Debt Disclosure [Abstract] | ' | ||||||||||||||||||||
Debt | ' | ||||||||||||||||||||
Debt - Consolidated debt of Old Republic and its subsidiaries is summarized below: | |||||||||||||||||||||
December 31: | 2013 | 2012 | |||||||||||||||||||
Carrying | Fair | Carrying | Fair | ||||||||||||||||||
Amount | Value | Amount | Value | ||||||||||||||||||
3.75% Convertible Senior Notes due 2018 | $ | 550 | $ | 684.1 | $ | 550 | $ | 568.5 | |||||||||||||
ESSOP debt with an average yield of 3.69% | |||||||||||||||||||||
and 3.74%, respectively | 18 | 18 | 20.8 | 20.8 | |||||||||||||||||
Other miscellaneous debt | 1.2 | 1.2 | 2 | 2 | |||||||||||||||||
Total debt | $ | 569.2 | $ | 703.4 | $ | 572.9 | $ | 591.5 | |||||||||||||
The Company completed a public offering of $550.0 aggregate principal amount of Convertible Senior Notes in early March, 2011. The notes bear interest at a rate of 3.75% per year, mature on March 15, 2018, and are convertible at any time prior to maturity by the holder into 64.3407 shares (subject to periodic adjustment under certain circumstances) of common stock per one thousand dollar note. | |||||||||||||||||||||
Scheduled maturities of the above debt at year end are as follows: 2014: $4.2; 2015: $3.3; 2016: $3.5; 2017: $3.9; and 2018: $554.2. During 2013, 2012 and 2011, $23.1, $34.6 and $51.1, respectively, of interest expense on debt was charged to consolidated operations. | |||||||||||||||||||||
Old Republic's 3.75% Convertible Senior Notes ("the Notes") contain provisions defining certain events of default, among them a court ordered proceeding due to the insolvency of a Significant Subsidiary. The Notes define Significant Subsidiary in accordance with the paragraph (w) of Rule 1-02 of the SEC's Regulation S-X. The Company's flagship mortgage guaranty insurance carrier, RMIC qualifies as a Significant Subsidiary for purposes of the Notes. If RMIC were to become statutorily impaired, its insolvency could trigger a receivership proceeding which, in turn could ultimately result in an event of default. If this were to occur, the outstanding principal of the Notes could become immediately due and payable. Management believes the Final Order by the North Carolina Department of Insurance to RMIC has precluded such an event of default from occurring in the foreseeable future. Moreover, RMIC is expected to be increasingly less significant as its run-off book extinguishes itself. As noted in Note 1(s), while Old Republic believes that it will have access to the capital markets to recapitalize RMICC's subsidiaries or otherwise mitigate an event of default under the Notes, there is no assurance that it would be able to do so under stressful capital market conditions. | |||||||||||||||||||||
At December 31, 2013, the Company had sufficient liquid resources available to redeem a substantial portion of the 3.75% Notes. Management continues to explore the Company's options to address possibly greater liquidity needs in the circumstance that an event of default was to occur at a future date. These potential plans include completion of the previously announced recapitalization of the Company's mortgage guaranty subsidiary, RMIC Companies, Inc., which would result in the deconsolidation of RMIC thus preventing an event of default. Other plans include an amendment to the 3.75% Notes, removing RMIC from the definition of a Significant Subsidiary, an additional capital raise through issuance of new straight or convertible debt, or the utilization of intra system dividend and financing capacity. While Management is confident that an event of default can be stemmed, there is no assurance that its impact could be addressed through execution of these plans. | |||||||||||||||||||||
Fair Value Measurements - The Company utilizes indicative market prices, which incorporate recent actual market transactions and current bid/ask quotations to estimate the fair value of outstanding debt securities that are classified within Level 2 of the fair value hierarchy as presented below. The Company uses an internally generated interest yield market matrix table, which incorporates maturity, coupon rate, credit quality, structure and current market conditions to estimate the fair value of its outstanding debt securities that are classified within Level 3. | |||||||||||||||||||||
The following table shows a summary of financial liabilities disclosed, but not carried, at fair value, segregated among the various input levels described in Note 1(d) above: | |||||||||||||||||||||
Carrying | Fair | ||||||||||||||||||||
Value | Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||
Financial Liabilities: | |||||||||||||||||||||
Debt: | |||||||||||||||||||||
December 31, 2013 | $ | 569.2 | $ | 703.4 | $ | — | $ | 684.1 | $ | 19.2 | |||||||||||
December 31, 2012 | $ | 572.9 | $ | 591.5 | $ | — | $ | 568.5 | $ | 22.9 | |||||||||||
Shareholders_Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2013 | |
Shareholders' Equity [Abstract] | ' |
Stockholders' Equity | ' |
Shareholders' Equity | |
(a) Preferred Stock - At December 31, 2013, there were 75,000,000 shares of preferred stock authorized. The Company has designated two series of preferred stock: 10,000,000 shares of Series A Junior Participating Preferred Stock (Series A) and 1,500,000 shares of Series G-3 Convertible Preferred Stock (Series G). No shares of either series has been issued or is outstanding. The Series A Stock, if and when issued, shall pay a dividend of the greater of $1.00 or 100 times (subject to adjustment) the aggregate per share amount (payable in kind) of all non-cash dividend or other distributions, other than a dividend payable in shares of common stock declared on the common stock of the Company. Each share of Series A stock shall have 100 votes on each matter submitted to a vote of the shareholders. The Series G stock, if and when issued, shall have a floating rate dividend based on the prime rate of interest and is convertible into common stock at any time, after being held six months, into .95 shares of common stock. Series G shares are redeemable at the Company's sole option five years after issuance. Each share of Series G Stock shall have one vote on each matter submitted to a vote of the shareholders. | |
(b) Common Stock - At December 31, 2013, there were 500,000,000 shares of common stock authorized. At the same date, there were 100,000,000 shares of Class "B" common stock authorized, though none were issued or outstanding. Class "B" common shares have the same rights as common shares except for being entitled to 1/10th of a vote per share. During 2008, the Company issued 5,488,475 shares to the ESSOP for consideration of $50.0. The ESSOP's common stock purchases were financed by a $30.0 bank loan and by $20.0 of pre-fundings from ESSOP participating subsidiaries. Common stock held by the ESSOP is classified as a charge to the common shareholders' equity account until it is allocated to participating employees' accounts contemporaneously with the repayment of the ESSOP debt incurred for its acquisition. Such unallocated shares are not considered outstanding for purposes of calculating earnings per share. Dividends on unallocated shares are used to pay debt service costs. Dividends on allocated shares are credited to participants' accounts. | |
(c) Cash Dividend Restrictions - The payment of cash dividends by the Company is principally dependent upon the amount of its insurance subsidiaries' statutory policyholders' surplus available for dividend distribution. The insurance subsidiaries' ability to pay cash dividends to the Company is in turn generally restricted by law or subject to approval of the insurance regulatory authorities of the states in which they are domiciled. These authorities recognize only statutory accounting practices for determining financial position, results of operations, and the ability of an insurer to pay dividends to its shareholders. Based on year end 2013 data, the maximum amount of dividends payable to the Company by its insurance and a small number of non-insurance company subsidiaries during 2014 without the prior approval of appropriate regulatory authorities is approximately $427.2. Cash dividends declared during 2013, 2012 and 2011 to the Company by its subsidiaries amounted to $205.3, $195.0 and $177.1, respectively. |
Commitments_and_Contingent_Lia
Commitments and Contingent Liabilities | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||||||||||||
Commitments and Contingent Liabilities | ' | |||||||||||||
Commitments and Contingent Liabilities: | ||||||||||||||
(a) Reinsurance and Retention Limits - In order to maintain premium production within their capacity and to limit maximum losses for which they might become liable under policies they've underwritten, Old Republic's insurance subsidiaries, as is the common practice in the insurance industry, may cede all or a portion of their premiums and related liabilities on certain classes of business to other insurers and reinsurers. Although the ceding of insurance does not ordinarily discharge an insurer from liability to a policyholder, it is industry practice to establish the reinsured part of risks as the liability of the reinsurer. Old Republic also employs retrospective premium and a large variety of risk-sharing procedures and arrangements for parts of its business in order to reduce underwriting losses for which it might become liable under insurance policies it issues. To the extent that any reinsurance companies, assured or producer might be unable to meet their obligations under existing reinsurance, retrospective insurance and production agreements, Old Republic would be liable for the defaulted amounts. As deemed necessary, reinsurance ceded to other companies is secured by letters of credit, cash, and/or securities. | ||||||||||||||
Except as noted in the following paragraph, reinsurance protection on property and liability coverages generally limits the net loss on most individual claims to a maximum of: $5.2 for workers' compensation; $3.5 for commercial auto liability; $3.5 for general liability; $8.0 for executive protection (directors & officers and errors & omissions); $2.0 for aviation; and $4.0 for property coverages. Title insurance risk assumptions are generally limited to a maximum of $500.0 as to any one policy. The vast majority of title policies issued, however, carry exposures of less than $1.0. Roughly 10% of the mortgage guaranty traditional primary insurance in force is subject to lender sponsored captive reinsurance arrangements structured primarily on an excess of loss basis. All bulk and other insurance risk in force is retained. Exclusive of reinsurance, the average direct primary mortgage guaranty exposure is (in whole dollars) $38,697 per insured loan. | ||||||||||||||
Since January 1, 2005, the Company has had maximum reinsurance coverage of up to $200.0 for its workers' compensation exposures. Pursuant to regulatory requirements, however, all workers' compensation primary insurers such as the Company remain liable for unlimited amounts in excess of reinsured limits. Other than the substantial concentration of workers' compensation losses caused by the September 11, 2001 terrorist attack on America, to the best of the Company's knowledge there had not been a similar accumulation of claims in a single location from a single occurrence prior to that event. Nevertheless, the possibility continues to exist that non-reinsured losses could, depending on a wide range of severity and frequency assumptions, aggregate several hundred million dollars to an insurer such as the Company. Such aggregation of losses could occur in the event of a catastrophe such as an earthquake that could lead to the death or injury of a large number of persons concentrated in a single facility such as a high rise building. | ||||||||||||||
As a result of the September 11, 2001 terrorist attack on America, the reinsurance industry eliminated coverage from substantially all contracts for claims arising from acts of terrorism. Primary insurers like the Company thus became fully exposed to such claims. Late in 2002, the Terrorism Risk Insurance Act of 2002 (the "TRIA") was signed into law, immediately establishing a temporary federal reinsurance program administered by the Secretary of the Treasury. The program applied to insured commercial property and casualty losses resulting from an act of terrorism, as defined in the TRIA. Congress extended and modified the program in late 2005 through the Terrorism Risk Insurance Revision and Extension Act of 2005 (the "TRIREA"). TRIREA expired on December 31, 2007. Congress enacted a revised program in December 2007 through the Terrorism Risk Insurance Program Reauthorization Act of 2007 (the "TRIPRA"), a seven year extension through December 2014. The TRIA automatically voided all policy exclusions which were in effect for terrorism related losses and obligated insurers to offer terrorism coverage with most commercial property and casualty insurance lines. The TRIREA revised the definition of "property and casualty insurance" to exclude commercial automobile, burglary and theft, surety, professional liability and farm owner's multi-peril insurance. TRIPRA did not make any further changes to the definition of property and casualty insurance, however, it does include domestic acts of terrorism within the scope of the program. Although insurers are permitted to charge an additional premium for terrorism coverage, insureds may reject the coverage. Under TRIPRA, the program's protection is not triggered for losses arising from an act of terrorism until the industry first suffers losses of $100 billion in the aggregate during any one year. Once the program trigger is met, the program will pay 85% of an insurer's terrorism losses that exceed an individual insurer's deductible. The insurer's deductible is 20% of direct earned premium on property and casualty insurance. Insurers may reinsure that portion of the risk they retain under the program. Effective January 1, 2008, the Company reinsured limits of $198.0 excess of $2.0 for claims arising from certain acts of terrorism for casualty clash coverage and catastrophe workers' compensation liability insurance coverage. | ||||||||||||||
Reinsurance ceded by the Company's insurance subsidiaries in the ordinary course of business is typically placed on an excess of loss basis. Under excess of loss reinsurance agreements, the companies are generally reimbursed for losses exceeding contractually agreed‑upon levels. Quota share reinsurance is most often effected between the Company's insurance subsidiaries and industry-wide assigned risk plans or captive insurers owned by assureds. Under quota share reinsurance, the Company remits to the assuming entity an agreed-upon percentage of premiums written and is reimbursed for underwriting expenses and proportionately related claims costs. | ||||||||||||||
Reinsurance recoverable asset balances represent amounts due from or credited by assuming reinsurers for paid and unpaid claims and premium reserves. Such reinsurance balances are recoverable from non-admitted foreign and certain other reinsurers such as captive insurance companies owned by assureds, as well as similar balances or credits arising from policies that are retrospectively rated or subject to assureds' high deductible retentions, are substantially collateralized by letters of credit, securities, and other financial instruments. Old Republic evaluates on a regular basis the financial condition of its assuming reinsurers and assureds who purchase its retrospectively rated or self-insured deductible policies. Estimates of unrecoverable amounts totaling $21.2 at both December 31, 2013 and 2012 are included in the Company's net claim and claim expense reserves since reinsurance, retrospectively rated, and self-insured deductible policies and contracts do not relieve Old Republic from its direct obligations to assureds or their beneficiaries. | ||||||||||||||
At December 31, 2013, the Company's General Insurance Group's ten largest reinsurers represented approximately 59% of the total consolidated reinsurance recoverable on paid and unpaid losses, with Munich Re America, Inc. the largest reinsurer representing 27.7% of the total recoverable balance. Of the balances due from these ten reinsurers, 84.5% was recoverable from A or better rated reinsurance companies, 3.2% from a B+ rated reinsurance company, 6.0% from an industry-wide insurance assigned risk pool, and 6.3% from foreign unrated companies. The RFIG Run-off mortgage guaranty operation's total claims exposure to its largest reinsurer, AAMBG Reinsurance, Inc., was $10.5, which represented .4% of total consolidated reinsured liabilities as of December 31, 2013. | ||||||||||||||
Property and liability insurance companies are required to annualize certain policy premiums in their regulatory financial statements though such premiums may not be contractually due nor ultimately collectible. The annualization process relies on a large number of estimates, and has the effect of increasing direct, ceded, and net premiums written, and of grossing up corresponding balance sheet premium balances and liabilities such as unearned premium reserves. The accrual of these estimates has no effect on net premiums earned or GAAP net income. | ||||||||||||||
The following information relates to reinsurance and related data for the General Insurance and RFIG Run-off Groups for the three years ended December 31, 2013. Reinsurance transactions of the Title Insurance Group and small life and accident insurance operation are not material. | ||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||
General Insurance Group (a) | ||||||||||||||
Written premiums: | Direct | $ | 3,348.10 | $ | 3,043.40 | $ | 2,763.00 | |||||||
Assumed | 28.8 | 19.9 | 6.1 | |||||||||||
Ceded | $ | 775.8 | $ | 696.5 | $ | 631.5 | ||||||||
Earned premiums: | Direct | $ | 3,235.70 | $ | 2,949.90 | $ | 2,716.20 | |||||||
Assumed | 24.1 | 17.9 | 8.9 | |||||||||||
Ceded | $ | 746.1 | $ | 643.4 | $ | 615.8 | ||||||||
Claims ceded | $ | 469.5 | $ | 410.6 | $ | 427 | ||||||||
RFIG Run-off Business (a) | ||||||||||||||
Written premiums: | Direct | $ | 314.3 | $ | 409.2 | $ | 544.4 | |||||||
Assumed | — | — | — | |||||||||||
Ceded | $ | 9.9 | $ | 19.3 | $ | 23.2 | ||||||||
Earned premiums: | Direct | $ | 326.4 | $ | 429.8 | $ | 526.4 | |||||||
Assumed | — | — | 0.1 | |||||||||||
Ceded | $ | 9.9 | $ | 19.3 | $ | 23.2 | ||||||||
Claims ceded | $ | 3.4 | $ | 24.2 | $ | 42.2 | ||||||||
Mortgage Guaranty Insurance in force as of December 31: | ||||||||||||||
Direct | $ | 43,994.50 | $ | 56,413.70 | $ | 70,520.90 | ||||||||
Assumed | — | — | 446 | |||||||||||
Ceded | $ | 460.4 | $ | 886.1 | $ | 1,452.70 | ||||||||
__________ | ||||||||||||||
(a) As previously noted, consumer credit indemnity coverages are reported within the RFIG Run-off segment and have been excluded from the General Insurance Group for all periods presented to conform with segment classifications adopted in 2012. See Note 6. | ||||||||||||||
(b) Leases - Some of the Company's subsidiaries maintain their offices in leased premises. Some of these leases provide for the payment of real estate taxes, insurance, and other operating expenses. Rental expenses for operating leases amounted to $49.7, $52.6 and $56.0 in 2013, 2012 and 2011, respectively. These expenses relate primarily to building leases of the Company. A number of the Company's subsidiaries also lease other equipment for use in their businesses. At December 31, 2013, aggregate minimum rental commitments (net of expected sub-lease receipts) under noncancellable operating leases are summarized as follows: 2014: $52.4; 2015: $41.6; 2016: $33.1; 2017: $27.3; 2018: $20.0; 2019 and after: $38.9. | ||||||||||||||
(c) General - In the normal course of business, the Company and its subsidiaries are subject to various contingent liabilities, including possible income tax assessments resulting from tax law interpretations or issues raised by taxing or regulatory authorities in their regular examinations, catastrophic claim occurrences not indemnified by reinsurers such as noted at 4(a) above, or failure to collect all amounts on its investments or balances due from assureds and reinsurers. The Company does not have a basis for anticipating any significant losses or costs that could result from any known or existing contingencies. | ||||||||||||||
From time to time, in order to assure possible liquidity needs, the Company may guaranty the timely payment of principal and/or interest on certain intercompany balances, debt, or other securities held by some of its insurance, non-insurance, and ESSOP affiliates. At December 31, 2013, the aggregate principal amount of such guaranties was $154.0. | ||||||||||||||
(d) Legal Proceedings - Legal proceedings against the Company and its subsidiaries routinely arise in the normal course of business and usually pertain to claim matters related to insurance policies and contracts issued by its insurance subsidiaries. Other, non-routine legal proceedings which may prove to be material to the Company or a subsidiary are discussed below. | ||||||||||||||
A purported class action lawsuit is pending against the Company's principal title insurance subsidiary, Old Republic National Title Insurance Company ("ORNTIC"), in a federal district court in Pennsylvania (Markocki et al. v. ORNTIC, U.S. District Court, Eastern District, Pennsylvania, filed June 8, 2006). The plaintiffs allege that ORNTIC failed to give consumers reissue and/or refinance credits on the premiums charged for title insurance covering mortgage refinancing transactions, as required by filed rate schedules. The suit also alleges violations of the federal Real Estate Settlement Procedures Act ("RESPA"). A class has been certified in the suit. ORNTIC is challenging the certification based on more recent case precedents. | ||||||||||||||
On December 19, 2008, Old Republic Insurance Company and Republic Insured Credit Services, Inc., ("Old Republic") filed suit against Countrywide Bank FSB, Countrywide Home Loans, Inc. ("Countrywide") and Bank of New York Mellon, BNY Mellon Trust of Delaware ("BNYM") in the Circuit Court, Cook County, Illinois (Old Republic Insurance Company, et al. v. Countrywide Bank FSB, et al.) seeking rescission of various credit indemnity policies issued to insure home equity loans and home equity lines of credit which Countrywide had securitized or held for its own account, a declaratory judgment and money damages based upon material misrepresentations either by Countrywide as to the credit characteristics of the loans or by the borrowers in their loan applications. Countrywide filed a counterclaim alleging a breach of contract, bad faith and seeking a declaratory judgment challenging the factual and procedural bases that Old Republic had relied upon to deny or rescind coverage for individual defaulted loans under those policies, as well as unspecified compensatory and punitive damages. The Court ruled that Countrywide does not have standing to counterclaim with respect to the policies insuring the securitized loans because those policies were issued to BNYM. In response, Countrywide and BNYM jointly filed a motion asking the Court to allow an amended counterclaim in which BNYM would raise substantially similar allegations as those raised by Countrywide and make substantially similar requests but with respect to the policies issued to BNYM. The Court dismissed their motion. | ||||||||||||||
On November 3, 2010, Bank of America, N.A. ("B of A") filed suit against Old Republic Insurance Company ("ORIC") in the U.S. District Court for the Western District of North Carolina (Bank of America, N.A. v. Old Republic Insurance Company) alleging breach of contract, breach of the duty of good faith and fair dealing and bad faith with respect to ORIC's handling of certain claims under a policy of credit indemnity insurance issued to B of A. The policy is not related to those issued to Countrywide, which are the subject of the above-noted separate litigation. The B of A suit seeks a declaratory judgment with respect to the interpretation of certain policy terms, B of A's compliance with certain terms and conditions of the policy, and the propriety of certain positions and procedures taken by ORIC in response to claims filed by B of A. The suit also seeks unspecified money damages, pre and post judgment interest and punitive damages. On January 23, 2012, ORIC filed a counterclaim seeking damages based on B of A's alleged interference with ORIC's subrogation rights. | ||||||||||||||
On December 31, 2009, two of the Company's mortgage insurance subsidiaries, Republic Mortgage Insurance Company and Republic Mortgage Insurance Company of North Carolina (together "RMIC") filed a Complaint for Declaratory Judgment in the Supreme Court of the State of New York, County of New York, against Countrywide Financial Corporation, Countrywide Home Loans, Inc., The Bank of New York Mellon Trust Company, N.A., BAC Home Loans Servicing, LP, and Bank of America N.A. as successor in interest to Countrywide Bank, N.A. (together 'Countrywide")(Republic Mortgage Insurance Company, et al v. Countrywide Financial Corporation, et al). The suit relates to five mortgage insurance master policies (the “Policies”) issued by RMIC to Countrywide or to the Bank of New York Mellon Trust Company as co-trustee for trusts containing securitized mortgage loans that were originated or purchased by Countrywide. RMIC has rescinded its mortgage insurance coverage on over 1,500 of the loans originally covered under the Policies based upon material misrepresentations of the borrowers in their loan applications or the negligence of Countrywide in its loan underwriting practices or procedures. Each of the coverage rescissions occurred after a borrower had defaulted and RMIC reviewed the claim and loan file submitted by Countrywide. The suit seeks the Court's review and interpretation of the Policies' incontestability provisions and its validation of RMIC's investigation procedures with respect to the claims and underlying loan files. | ||||||||||||||
On January 29, 2010, in response to RMIC's suit, Countrywide served RMIC with a demand for arbitration under the arbitration clauses of the same Policies. The demand raises largely the same issues as those raised in RMIC's suit against Countrywide, but from Countrywide's perspective, as well as Countrywide's and RMIC's compliance with the terms, provisions and conditions of the Policies. The demand includes a prayer for punitive, compensatory and consequential damages. RMIC filed a motion to stay the arbitration, and Countrywide filed a motion to dismiss RMIC's lawsuit and to compel the arbitration. On July 26, 2010, the Court granted Countrywide's motion, ordering the matters be submitted to arbitration and dismissing the lawsuit. The arbitration is proceeding. | ||||||||||||||
On December 30, 2011 and on January 4, 2013, purported class action suits alleging RESPA violations were filed in the Federal District Court, for the Eastern District of Pennsylvania targeting RMIC, other mortgage guaranty insurance companies, PNC Financial Services Group (as successor to National City Bank) and HSBC Bank USA, N.A., and their wholly-owned captive insurance subsidiaries. (White, Hightower, et al. v. PNC Financial Services Group (as successor to National City Bank) et al.), (Ba, Chip, et al. v. HSBC Bank USA, N.A., et al.). The lawsuits are two of twelve against various lenders, their captive reinsurers and the mortgage insurers, filed by the same law firms, all of which were substantially identical in alleging that the mortgage guaranty insurers had reinsurance arrangements with the defendant banks' captive insurance subsidiaries under which payments were made in violation of the anti-kickback and fee splitting prohibitions of Sections 8(a) and 8(b) of RESPA. Ten of the twelve suits have been dismissed. The remaining suits seek unspecified damages, costs, fees and the return of the allegedly improper payments. A class has not been certified in either suit and RMIC has filed motions to dismiss the cases. | ||||||||||||||
On September 26, 2012 a purported national class action suit was filed against Old Republic Home Protection Company in the Superior Court of California for Riverside County. (Friedman v. Old Republic Home Protection Company, Inc.). The suit alleged that the Company operates in breach of its home warranty contracts, in breach of implied covenants of good faith and fair dealing, in violation of various provisions of the California Civil Code and Business and Professions Code and is guilty of false advertising. The stated class period was from November 24, 2004 through the present. The suit sought declaratory relief, injunctive relief, restitution, damages, costs and attorneys' fees in unspecified amounts. The firm representing the plaintiff had previously filed similar suits against the Company, which were unsuccessful. The Company succeeded in having the case removed to the U.S. District Court for the Central District of California on October 24, 2012, and on December 2, 2013 the Court granted the Company's motions to dismiss the Complaint. The Plaintiff was allowed to prepare a third amended complaint on one remaining claim. | ||||||||||||||
PNC Bank, N.A., in its own right and as successor-in-interest to National City Corporation, filed suit against RMIC on October 10, 2012 in the United States District Court for the Western District of Pennsylvania disputing RMIC's denials and rescissions of its mortgage guaranty insurance coverage on an unspecified number of mortgage loans. It filed an amended complaint on January 30, 2013 identifying 248 disputed coverage denials or rescissions (PNC Bank, N.A. v. Republic Mortgage Insurance Company). The suit sought certain declaratory relief, actual money damages and unspecified compensatory, consequential and punitive damages. In late December, 2013 the suit was settled with RMIC's reinstatement of coverage on certain loans and PNC Bank's payment of the corresponding premiums due. | ||||||||||||||
On May 16, 2013, Bank of America, N.A. ("B of A") filed a demand for arbitration with the American Arbitration Association against both Republic Mortgage Insurance Company and Republic Mortgage Insurance Company of North Carolina (together, "RMIC") under the arbitration provisions of the RMIC Master Policy of mortgage guaranty insurance issued to B of A. The demand relates to RMIC's denials of certain claims and rescissions of coverage as to other claims. B of A alleges RMIC's actions were in breach of contract, in breach of RMIC's duty of good faith and fair dealing and in bad faith. The allegations are substantially similar to those raised by B of A's affiliates, Countrywide Financial Corporation and Countrywide Home Loans, Inc. in their arbitration demand against RMIC. B of A is a plaintiff in that proceeding as well, in its capacity as successor in interest to Countrywide Bank, N.A. B of A's demand requests a declaratory judgment with respect to the interpretation of certain policy provisions, B of A's compliance with certain terms and conditions of the policy, and the propriety of certain coverage positions and claims administration procedures of RMIC. The demand also seeks unspecified money damages, punitive, compensatory and consequential damages, interest, attorneys' fees and costs. | ||||||||||||||
Under GAAP, an estimated loss is accrued only if the loss is probable and reasonably estimable. The Company and its subsidiaries have defended and intend to continue defending vigorously against each of the aforementioned actions. The Company does not believe it probable that any of these actions will have a material adverse effect on its consolidated financial position, results of operations, or cash flows, though there can be no assurance in those regards. The Company is unable to make a reasonable estimate or range of estimates of any potential liability under these lawsuits, the counterclaim, and the arbitration, all of which seek unquantified damages, attorneys' fees, and expenses. It is also unclear what effect, if any, the run-off operations of RMIC and depletion of its capital will have in the actions against it. |
Consolidated_Quarterly_Results
Consolidated Quarterly Results - Unaudited | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | |||||||||||||||
Consolidated Quarterly Results - Unaudited | ' | |||||||||||||||
Consolidated Quarterly Results - Unaudited - Old Republic's consolidated quarterly operating data for the two years ended December 31, 2013 is presented below. In management's opinion, however, quarterly operating data for insurance enterprises such as the Company is not indicative of results to be achieved in succeeding quarters or years. The long-term nature of the insurance business, seasonal and cyclical factors affecting premium production, the fortuitous nature and, at times, delayed emergence of claims, and changes in yields on invested assets are some of the factors necessitating a review of operating results, changes in shareholders' equity, and cash flows for periods of several years to obtain a proper indicator of performance trends. The data below should be read in conjunction with the "Management Analysis of Financial Position and Results of Operations". | ||||||||||||||||
In management's opinion, all adjustments consisting of normal recurring adjustments necessary for a fair statement of quarterly results have been reflected in the data which follows. | ||||||||||||||||
1st | 2nd | 3rd | 4th | |||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
Year Ended December 31, 2013: | ||||||||||||||||
Operating Summary: | ||||||||||||||||
Net premiums, fees, and other income | $ | 1,186.00 | $ | 1,245.40 | $ | 1,295.50 | $ | 1,248.50 | ||||||||
Net investment income and realized gains (losses) | 83.8 | 215.9 | 83.7 | 83 | ||||||||||||
Total revenues | 1,269.90 | 1,461.50 | 1,379.50 | 1,331.60 | ||||||||||||
Benefits, claims, and expenses | 1,185.40 | 1,165.20 | 1,229.70 | 1,189.30 | ||||||||||||
Net income (loss) | $ | 56.2 | $ | 193.9 | $ | 102.9 | $ | 94.7 | ||||||||
Net income (loss) per share: Basic | $ | 0.22 | $ | 0.76 | $ | 0.4 | $ | 0.37 | ||||||||
Diluted | $ | 0.21 | $ | 0.67 | $ | 0.36 | $ | 0.33 | ||||||||
Average shares outstanding: | ||||||||||||||||
Basic | 256,279,364 | 256,749,748 | 257,098,894 | 257,706,005 | ||||||||||||
Diluted | 292,081,785 | 292,842,386 | 293,444,269 | 294,396,055 | ||||||||||||
Year Ended December 31, 2012: | ||||||||||||||||
Operating Summary: | ||||||||||||||||
Net premiums, fees, and other income | $ | 1,069.10 | $ | 1,116.80 | $ | 1,204.00 | $ | 1,195.30 | ||||||||
Net investment income and realized gains (losses) | 88.7 | 107 | 100.6 | 87.8 | ||||||||||||
Total revenues | 1,158.00 | 1,223.90 | 1,304.80 | 1,283.20 | ||||||||||||
Benefits, claims, and expenses | 1,160.70 | 1,282.20 | 1,335.90 | 1,319.70 | ||||||||||||
Net income (loss) | $ | 0.4 | $ | (34.0 | ) | $ | (14.8 | ) | $ | (20.2 | ) | |||||
Net income (loss) per share: Basic | $ | — | $ | (.13 | ) | $ | (.06 | ) | $ | (.08 | ) | |||||
Diluted | $ | — | $ | (.13 | ) | $ | (.06 | ) | $ | (.08 | ) | |||||
Average shares outstanding: | ||||||||||||||||
Basic | 255,473,634 | 255,747,273 | 255,921,356 | 256,086,431 | ||||||||||||
Diluted | 255,779,449 | 255,747,273 | 255,921,356 | 256,086,431 | ||||||||||||
Information_About_Segments_of_
Information About Segments of Business | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||
Information About Segments of Business | ' | ||||||||||||
Information About Segments of Business - The Company is engaged in the single business of insurance underwriting. It conducts its' operations through a number of regulated insurance company subsidiaries organized into three major segments, namely its' General Insurance Group (property and liability insurance), Title Insurance Group and the Republic Financial Indemnity Group Run-off Business. The results of a small life & accident insurance business are included with those of its holding company parent and minor corporate services operations. Each of the Company's segments underwrites and services only those insurance coverages which may be written by it pursuant to state insurance regulations and corporate charter provisions. | |||||||||||||
In late March of 2012, Old Republic combined its General Insurance Group's CCI division with its MI line within a business denoted as the Republic Financial Indemnity Group, Inc. (RFIG) run-off segment. The two operations, which offer similar insurance coverages, have been in run-off operating mode since 2008 (CCI) and August 2011 (MI), and are inactive from new business production standpoints. The combination has affected the manner in which segmented information is presented. The operating results of the combined coverages are therefore shown as a single run-off book of business within the Company's consolidated operations. Segment results exclude net realized investment gains or losses and other-than-temporary impairments as these are aggregated in the consolidated totals. The contributions of Old Republic's insurance industry segments to consolidated totals are shown in the following table. | |||||||||||||
The Company does not derive over 10% of its consolidated revenues from any one customer. Revenues and assets connected with foreign operations are not significant in relation to consolidated totals. | |||||||||||||
The General Insurance Group provides property and liability insurance primarily to commercial clients. Old Republic does not have a meaningful participation in personal lines of insurance. Workers' compensation is the largest type of coverage underwritten by the General Insurance Group, accounting for 35.8% of the Group's direct premiums written in 2013. The remaining premiums written by the General Insurance Group are derived largely from a wide variety of coverages, including commercial automobile (principally trucking), general liability, general aviation, directors and officers indemnity, fidelity and surety indemnities, and home and auto warranties. | |||||||||||||
The title insurance business consists primarily of the issuance of policies to real estate purchasers and investors based upon searches of the public records which contain information concerning interests in real property. The policy insures against losses arising out of defects, loans and encumbrances affecting the insured title and not excluded or excepted from the coverage of the policy. | |||||||||||||
Private mortgage insurance produced by the RFIG Run-off Business protects mortgage lenders and investors from default related losses on residential mortgage loans made primarily to homebuyers who make down payments of less than 20% of the home's purchase price. The RFIG Run-off mortgage guaranty operations insures only first mortgage loans, primarily on residential properties having one-to-four family dwelling units. CCI policies provide limited indemnity coverage to lenders and other financial intermediaries. The coverage is for the risk of non-payment of loan balances by individual buyers and borrowers. | |||||||||||||
The accounting policies of the segments parallel those described in the summary of significant accounting policies pertinent thereto. | |||||||||||||
Segment Reporting | |||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | ||||||||||
General Insurance: | |||||||||||||
Including CCI run-off business: | |||||||||||||
Net premiums earned | $ | 2,543.50 | $ | 2,366.90 | $ | 2,167.70 | |||||||
Net investment income and other income | 336.6 | 375.1 | 379.3 | ||||||||||
Total revenues before realized gains or losses | $ | 2,880.10 | $ | 2,742.00 | $ | 2,547.10 | |||||||
Income (loss) before taxes (credits) and | |||||||||||||
realized investment gains or losses (a) | $ | 272 | $ | 186 | $ | 304.3 | |||||||
Income tax expense (credits) on above | $ | 85.2 | $ | 51.1 | $ | 94.5 | |||||||
All CCI run-off business: | |||||||||||||
Net premiums earned | $ | 29.8 | $ | 42.4 | $ | 58.3 | |||||||
Net investment income and other income | 0.4 | 0.1 | 0.1 | ||||||||||
Total revenues before realized gains or losses | $ | 30.2 | $ | 42.6 | $ | 58.4 | |||||||
Income (loss) before taxes (credits) and | |||||||||||||
realized investment gains or losses | $ | (16.2 | ) | $ | (74.9 | ) | $ | (49.6 | ) | ||||
Income tax expense (credits) on above | $ | (5.6 | ) | $ | (26.2 | ) | $ | (17.3 | ) | ||||
Total excluding all CCI run-off business: | |||||||||||||
Net premiums earned | $ | 2,513.70 | $ | 2,324.40 | $ | 2,109.40 | |||||||
Net investment income and other income | 336.2 | 374.9 | 379.2 | ||||||||||
Total revenues before realized gains or losses | $ | 2,849.90 | $ | 2,699.40 | $ | 2,488.60 | |||||||
Income (loss) before taxes (credits) and | |||||||||||||
realized investment gains or losses (a) | $ | 288.3 | $ | 261 | $ | 353.9 | |||||||
Income tax expense (credits) on above | $ | 90.9 | $ | 77.4 | $ | 111.8 | |||||||
Title Insurance: | |||||||||||||
Net premiums earned | $ | 1,567.10 | $ | 1,250.20 | $ | 1,007.90 | |||||||
Title, escrow and other fees | 429 | 427.1 | 354.5 | ||||||||||
Sub-total | 1,996.10 | 1,677.40 | 1,362.40 | ||||||||||
Net investment income and other income | 29.5 | 29.6 | 29.3 | ||||||||||
Total revenues before realized gains or losses | $ | 2,025.60 | $ | 1,707.10 | $ | 1,391.80 | |||||||
Income (loss) before taxes (credits) and | |||||||||||||
realized investment gains or losses (a) | $ | 124.3 | $ | 73.8 | $ | 36.2 | |||||||
Income tax expense (credits) on above | $ | 44 | $ | 26.5 | $ | 11.5 | |||||||
RFIG Run-off Business: | |||||||||||||
Excluding CCI run-off business: | |||||||||||||
Net premiums earned | $ | 286.7 | $ | 368 | $ | 444.9 | |||||||
Net investment income and other income | 36.4 | 36.6 | 61.2 | ||||||||||
Total revenues before realized gains or losses | $ | 323.1 | $ | 404.6 | $ | 506.1 | |||||||
Income (loss) before taxes (credits) and | |||||||||||||
realized investment gains or losses (a)(c) | $ | 126.3 | $ | (433.6 | ) | $ | (678.1 | ) | |||||
Income tax expense (credits) on above | $ | 44.2 | $ | (151.5 | ) | $ | (234.3 | ) | |||||
All CCI run-off business: | |||||||||||||
Net premiums earned | $ | 29.8 | $ | 42.4 | $ | 58.3 | |||||||
Net investment income and other income | 0.4 | 0.1 | 0.1 | ||||||||||
Total revenues before realized gains or losses | $ | 30.2 | $ | 42.6 | $ | 58.4 | |||||||
Income (loss) before taxes (credits) and | |||||||||||||
realized investment gains or losses | $ | (16.2 | ) | $ | (74.9 | ) | $ | (49.6 | ) | ||||
Income tax expense (credits) on above | $ | (5.6 | ) | $ | (26.2 | ) | $ | (17.3 | ) | ||||
Total RFIG run-off MI and CCI business: | |||||||||||||
Net premiums earned | $ | 316.5 | $ | 410.5 | $ | 503.2 | |||||||
Net investment income and other income | 36.8 | 36.7 | 61.3 | ||||||||||
Total revenues before realized gains or losses | $ | 353.4 | $ | 447.3 | $ | 564.6 | |||||||
Income (loss) before taxes (credits) and | |||||||||||||
realized investment gains or losses (a)(c) | $ | 110 | $ | (508.6 | ) | $ | (727.8 | ) | |||||
Income tax expense (credits) on above | $ | 38.5 | $ | (177.8 | ) | $ | (251.6 | ) | |||||
Segment Reporting (Continued) | |||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | ||||||||||
Consolidated Revenues: | |||||||||||||
Total revenues of above Company segments | $ | 5,228.90 | $ | 4,853.80 | $ | 4,445.10 | |||||||
Other sources (b) | 123.3 | 126.4 | 143.7 | ||||||||||
Consolidated net realized investment gains (losses) | 148.1 | 47.8 | 115.5 | ||||||||||
Consolidation elimination adjustments | (57.7 | ) | (58.0 | ) | (58.8 | ) | |||||||
Consolidated revenues | $ | 5,442.70 | $ | 4,970.10 | $ | 4,645.50 | |||||||
Consolidated Income (Loss) Before Taxes (Credits): | |||||||||||||
Total income (loss) before income taxes (credits) | |||||||||||||
and realized investment gains or losses of | |||||||||||||
above Company segments | $ | 522.7 | $ | (173.6 | ) | $ | (337.5 | ) | |||||
Other sources - net (b) | 2.1 | (2.7 | ) | (14.6 | ) | ||||||||
Consolidated net realized investment gains (losses) | 148.1 | 47.8 | 115.5 | ||||||||||
Consolidated income (loss) before income taxes (credits) | $ | 672.9 | $ | (128.5 | ) | $ | (236.7 | ) | |||||
Consolidated Income Tax Expense (Credits): | |||||||||||||
Total income tax expense (credits) | |||||||||||||
for above Company segments | $ | 173.5 | $ | (73.8 | ) | $ | (128.2 | ) | |||||
Other sources - net (b) | (.3 | ) | (2.8 | ) | (5.4 | ) | |||||||
Income tax expense (credits) on | |||||||||||||
consolidated net realized investment gains (losses) | 51.8 | 16.7 | 37.5 | ||||||||||
Consolidated income tax expense (credits) | $ | 225 | $ | (59.8 | ) | $ | (96.1 | ) | |||||
December 31: | 2013 | 2012 | |||||||||||
Consolidated Assets: | |||||||||||||
General Insurance | $ | 13,276.60 | $ | 12,770.20 | |||||||||
Title Insurance | 1,185.50 | 1,076.50 | |||||||||||
RFIG Run-off Business | 1,822.30 | 2,051.10 | |||||||||||
Total assets for above company segments | 16,284.50 | 15,897.90 | |||||||||||
Other assets (b) | 549.8 | 626.2 | |||||||||||
Consolidation elimination adjustments | (299.9 | ) | (297.3 | ) | |||||||||
Consolidated assets | $ | 16,534.40 | $ | 16,226.80 | |||||||||
__________ | |||||||||||||
In the above tables, net premiums earned on a GAAP basis differ slightly from statutory amounts due to certain differences in calculations of unearned premium reserves under each accounting method. | |||||||||||||
(a) | Income (loss) before taxes (credits) is reported net of interest charges on intercompany financing arrangements with Old Republic's holding company parent for the following segments: General - $28.9, $28.1 and $25.0 for the years ended December 31, 2013, 2012, and 2011, respectively; Title - $7.9, $8.0 and $5.3 for the years ended December 31, 2013, 2012, and 2011, respectively; RFIG Run-off - $-, $2.1 and $8.0 for the years ended December 31, 2013, 2012, and 2011, respectively. | ||||||||||||
(b) | Represents amounts for Old Republic's holding company parent, minor corporate services subsidiaries, and a small life and accident insurance operation. | ||||||||||||
(c) | Income (loss) before taxes (credits) for 2011 includes an accrual of employment severance and similar costs ($10.7), elimination of previously deferred acquisition costs ($29.1) no longer deemed recoverable in future run-off periods, and a write-off of the historical goodwill balance of ($10.7). | ||||||||||||
General Insurance results for 2012 reflect a pretax charge of $37.9 related to previously deferred acquisition costs . The charge stemmed from new accounting guidance issued by the FASB which became effective as of January 1, 2012. |
Transactions_with_Affiliates
Transactions with Affiliates | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Transactions with Affiliates [Abstract] | ' | ||||||||||||||||||||||||
Transactions with Affiliates | ' | ||||||||||||||||||||||||
Transactions with Affiliates: | |||||||||||||||||||||||||
The Company is affiliated with a policyholder owned mutual insurer, American Business & Mercantile Insurance Mutual, Inc. ("AB&M" or "the Mutual") whose formation it sponsored in 1981. The Mutual is managed through a service agreement with several Old Republic subsidiaries. AB&M's underwriting operations are limited to certain types of coverages not provided by Old Republic, and to a small amount of intercompany reinsurance placements. The following table shows certain unaudited information reflective of such business: | |||||||||||||||||||||||||
Assumed from Old Republic | Ceded to Old Republic | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | 2013 | 2012 | 2011 | |||||||||||||||||||
Premiums earned | $ | 2.3 | $ | 1 | $ | 0.5 | $ | 0.6 | $ | 0.4 | $ | 0.4 | |||||||||||||
Commissions and fees | 0.6 | 0.3 | — | — | — | — | |||||||||||||||||||
Losses and loss expenses | 4.3 | 1 | 0.4 | 1.5 | 0.4 | 0.4 | |||||||||||||||||||
Loss and loss expense reserves | 8.7 | 4.9 | 4.6 | 3.7 | 2.5 | 2.3 | |||||||||||||||||||
Unearned premiums | $ | 1.6 | $ | 0.6 | $ | 0.3 | $ | 0.1 | $ | 0.1 | $ | — | |||||||||||||
As of December 31, 2013 and 2012, the Mutual's statutory capital included surplus notes due to Old Republic of $10.5 out of total statutory capital of $35.0 and $27.4, respectively. AB&M's accounts are not consolidated with Old Republic's since it is owned by its policyholders and, in any event, their inclusion would not have a significant effect on Old Republic's consolidated financial statements. |
Schedule_I_Summary_of_Investme
Schedule I - Summary of Investments - Other Than Investments in Related Parties | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Schedule I - Summary of Investments - Other Than Investments in Related Parties [Abstract] | ' | ||||||||||||
Schedule I - Summary of Investments, Other than Investments in Related Parties | ' | ||||||||||||
OLD REPUBLIC INTERNATIONAL CORPORATION AND SUBSIDIARIES | |||||||||||||
SCHEDULE I - SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES | |||||||||||||
As of December 31, 2013 | |||||||||||||
($ in Millions) | |||||||||||||
Column A | Column B | Column C | Column D | ||||||||||
Type of investment | Cost (1) | Fair | Amount at | ||||||||||
Value | which shown | ||||||||||||
in balance | |||||||||||||
sheet | |||||||||||||
Available for sale: | |||||||||||||
Fixed maturity securities: | |||||||||||||
United States Government and | |||||||||||||
government agencies and authorities | $ | 1,004.60 | $ | 1,028.60 | $ | 1,028.60 | |||||||
States, municipalities and political subdivisions | 168.1 | 171.3 | 171.3 | ||||||||||
Foreign government | 128.4 | 132.5 | 132.5 | ||||||||||
Corporate, industrial and all other | 7,176.00 | 7,379.80 | 7,379.80 | ||||||||||
8,477.30 | $ | 8,712.30 | 8,712.30 | ||||||||||
Equity securities: | |||||||||||||
Non-redeemable preferred stocks | 0.6 | $ | 0.7 | 0.7 | |||||||||
Common stocks: | |||||||||||||
Banks, trusts and insurance companies | 31.8 | 223.5 | 223.5 | ||||||||||
Industrial, miscellaneous and all other | 435.9 | 540.1 | 540.1 | ||||||||||
Indexed mutual funds | 163.6 | 239.8 | 239.8 | ||||||||||
632 | $ | 1,004.20 | 1,004.20 | ||||||||||
Short-term investments | 1,124.80 | 1,124.80 | |||||||||||
Miscellaneous investments | 21.6 | 21.6 | |||||||||||
Total | 10,255.90 | 10,863.10 | |||||||||||
Other investments | 5.3 | 5.3 | |||||||||||
Total Investments | $ | 10,261.20 | $ | 10,868.50 | |||||||||
__________ | |||||||||||||
-1 | Represents original cost of equity securities, and as to fixed maturities, original cost reduced by repayments and adjusted for amortization of premium or accrual of discount. |
Schedule_II_Condensed_Financia
Schedule II - Condensed Financial Information of Registrant | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Balance Sheets [Abstract] | ' | |||||||||||
Condensed Financial Information of Registrant | ' | |||||||||||
OLD REPUBLIC INTERNATIONAL CORPORATION AND SUBSIDIARIES | ||||||||||||
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT | ||||||||||||
BALANCE SHEETS | ||||||||||||
OLD REPUBLIC INTERNATIONAL CORPORATION (PARENT COMPANY) | ||||||||||||
($ in Millions) | ||||||||||||
December 31, | ||||||||||||
2013 | 2012 | |||||||||||
Assets: | ||||||||||||
Bonds and notes | $ | 10.5 | $ | 55.8 | ||||||||
Short-term investments | 138 | 159.4 | ||||||||||
Cash | 20.1 | — | ||||||||||
Investments in, and indebtedness of related parties | 4,308.50 | 4,121.50 | ||||||||||
Other assets | 87.4 | 114.2 | ||||||||||
Total Assets | $ | 4,564.60 | $ | 4,451.10 | ||||||||
Liabilities and Common Shareholders' Equity: | ||||||||||||
Liabilities: | ||||||||||||
Accounts payable and accrued expenses | $ | 131.6 | $ | 187.2 | ||||||||
Debt and debt equivalents | 568 | 570.8 | ||||||||||
Indebtedness to affiliates and subsidiaries | 89.8 | 96.8 | ||||||||||
Commitments and contingent liabilities | ||||||||||||
Total Liabilities | 789.6 | 854.9 | ||||||||||
Common Shareholders' Equity: | ||||||||||||
Common stock | 260.4 | 259.4 | ||||||||||
Additional paid-in capital | 673.9 | 660.9 | ||||||||||
Retained earnings | 2,485.30 | 2,222.30 | ||||||||||
Accumulated other comprehensive income (loss) | 378.2 | 481.7 | ||||||||||
Unallocated ESSOP shares (at cost) | (23.0 | ) | (28.2 | ) | ||||||||
Total Common Shareholders' Equity | 3,775.00 | 3,596.20 | ||||||||||
Total Liabilities and Common Shareholders' Equity | $ | 4,564.60 | $ | 4,451.10 | ||||||||
OLD REPUBLIC INTERNATIONAL CORPORATION AND SUBSIDIARIES | ||||||||||||
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT | ||||||||||||
STATEMENTS OF INCOME | ||||||||||||
OLD REPUBLIC INTERNATIONAL CORPORATION (PARENT COMPANY) | ||||||||||||
($ in Millions) | ||||||||||||
Years Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Revenues: | ||||||||||||
Investment income from subsidiaries | $ | 38.1 | $ | 39.9 | $ | 40.1 | ||||||
Real estate and other income | 4.4 | 4.4 | 4.1 | |||||||||
Other investment income | 0.8 | 0.5 | 0.6 | |||||||||
Total revenues | 43.3 | 44.9 | 44.9 | |||||||||
Expenses: | ||||||||||||
Interest - subsidiaries | 1.3 | 0.5 | 0.6 | |||||||||
Interest - other | 23.1 | 33.8 | 47.6 | |||||||||
Real estate and other expenses | 4.3 | 3.8 | 3.8 | |||||||||
General expenses, taxes and fees | 11.6 | 11.2 | 12.3 | |||||||||
Total expenses | 40.5 | 49.4 | 64.5 | |||||||||
Revenues, net of expenses | 2.7 | (4.4 | ) | (19.5 | ) | |||||||
Federal income taxes (credits) | 0.3 | (3.3 | ) | (7.2 | ) | |||||||
Income (loss) before equity in earnings (losses) of subsidiaries | 2.4 | (1.0 | ) | (12.2 | ) | |||||||
Equity in Earnings (Losses) of Subsidiaries: | ||||||||||||
Dividends received | 205.3 | 211.5 | 177.1 | |||||||||
Earnings (losses) in excess of dividends | 240.1 | (279.1 | ) | (305.3 | ) | |||||||
Net Income (Loss) | $ | 447.8 | $ | (68.6 | ) | $ | (140.5 | ) | ||||
OLD REPUBLIC INTERNATIONAL CORPORATION AND SUBSIDIARIES | ||||||||||||
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT | ||||||||||||
STATEMENTS OF CASH FLOWS | ||||||||||||
OLD REPUBLIC INTERNATIONAL CORPORATION (PARENT COMPANY) | ||||||||||||
($ in Millions) | ||||||||||||
Years Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income (loss) | $ | 447.8 | $ | (68.6 | ) | $ | (140.5 | ) | ||||
Adjustments to reconcile net income (loss) to | ||||||||||||
net cash provided by operating activities: | ||||||||||||
Accounts receivable | (.7 | ) | 0.2 | (.1 | ) | |||||||
Income taxes - net | 24.5 | (83.8 | ) | 55.9 | ||||||||
Excess of equity in net (income) loss | ||||||||||||
of subsidiaries over cash dividends received | (240.1 | ) | 262.6 | 305.3 | ||||||||
Accounts payable, accrued expenses and other | (2.0 | ) | 6.4 | 10.9 | ||||||||
Total | 229.5 | 116.7 | 231.5 | |||||||||
Cash flows from investing activities: | ||||||||||||
Fixed maturity securities: | ||||||||||||
Maturities and early calls | 10 | — | — | |||||||||
Purchases of: | ||||||||||||
Fixed assets for company use | (2.3 | ) | (1.4 | ) | (4.3 | ) | ||||||
Net repayment (issuance) of notes to related parties | (87.4 | ) | 380 | (564.4 | ) | |||||||
Net decrease (increase) in short-term investments | 21.4 | (44.4 | ) | (18.6 | ) | |||||||
Total | (58.3 | ) | 334 | (587.4 | ) | |||||||
Cash flows from financing activities: | ||||||||||||
Issuance of debentures and notes | — | — | 537 | |||||||||
Net receipt (repayment) of notes and loans from related parties | 25 | 49 | (1.5 | ) | ||||||||
Issuance of common shares | 11.8 | 1 | 1.2 | |||||||||
Redemption of debentures and notes | (2.7 | ) | (318.7 | ) | (2.3 | ) | ||||||
Dividends on common shares | (184.8 | ) | (181.5 | ) | (178.4 | ) | ||||||
Other - net | (.4 | ) | (.6 | ) | (.1 | ) | ||||||
Total | (151.1 | ) | (450.8 | ) | 355.8 | |||||||
Increase (decrease) in cash | 20 | — | — | |||||||||
Cash, beginning of year | — | — | — | |||||||||
Cash, end of year | $ | 20.1 | $ | — | $ | — | ||||||
OLD REPUBLIC INTERNATIONAL CORPORATION AND SUBSIDIARIES | ||||||||||||
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT | ||||||||||||
NOTES TO CONDENSED FINANCIAL STATEMENTS | ||||||||||||
($ in Millions) | ||||||||||||
Note 1 - Summary of Significant Accounting Policies | ||||||||||||
Old Republic International Corporation's ("the Company" or "Old Republic") condensed financial statements are presented in accordance with the Financial Accounting Standards Board's ("FASB") Accounting Standards Codification ("ASC") of accounting principles generally accepted in the United States of America ("GAAP") and should be read in conjunction with the consolidated financial statements and notes thereto of Old Republic International Corporation and Subsidiaries included in its Annual Report on Form 10-K. | ||||||||||||
Note 2 - Investments in Consolidated Subsidiaries | ||||||||||||
Old Republic International Corporation's investments in consolidated subsidiaries are reflected in the condensed financial statements in accordance with the equity method of accounting. Undistributed earnings in excess of dividends received are recorded as separate line items in the condensed statements of income. | ||||||||||||
Note 3 - Debt | ||||||||||||
The Company completed a public offering of $550.0 aggregate principal amount of Convertible Senior Notes in early March, 2011. The notes bear interest at a rate of 3.75% per year, mature on March 15, 2018, and are convertible at any time prior to maturity by the holder into 64.3407 shares (subject to periodic adjustment under certain circumstances) of common stock per one thousand dollar note. | ||||||||||||
In 2008, the Company secured a ten year $30.0 bank loan to enable its Employees Savings and Stock Ownership Plan ("ESSOP") to purchase Old Republic common stock. Principal amounts of $18.0 and $20.8 were outstanding as of December 31, 2013 and 2012, respectively. The average yield of the ESSOP bank loan was 3.69% and 3.74% at December 31, 2013 and 2012, respectively. | ||||||||||||
Old Republic's 3.75% Convertible Senior Notes ("the Notes") contain provisions defining certain events of default, among them a court ordered proceeding due to the insolvency of a Significant Subsidiary. The Notes define Significant Subsidiary in accordance with the paragraph (w) of Rule 1-02 of the SEC's Regulation S-X. The Company's flagship mortgage guaranty insurance carrier, Republic Mortgage Insurance Company, ("RMIC") qualifies as a Significant Subsidiary for purposes of the Notes. If RMIC were to become statutorily impaired, its insolvency could trigger a receivership proceeding which, in turn could ultimately result in an event of default. If this were to occur, the outstanding principal of the Notes could become immediately due and payable. Management believes the Final Order by the North Carolina Department of Insurance to RMIC has precluded such an event of default from occurring in the foreseeable future. Moreover, RMIC is expected to be increasingly less significant as its run-off book extinguishes itself. | ||||||||||||
At December 31, 2013, the Company had sufficient liquid resources available to redeem a substantial portion of the 3.75% Notes. Management continues to explore the Company's options to address possibly greater liquidity needs in the circumstance that an event of default was to occur at a future date. These potential plans include completion of the previously announced recapitalization of the Company's mortgage guaranty subsidiary, RMIC Companies, Inc., which would result in the deconsolidation of RMIC thus preventing an event of default. In connection with such a transaction, it is expected that Old Republic would contribute up to $50.0 of this new capital. Other plans include an amendment to the 3.75% Notes removing RMIC from the definition of a Significant Subsidiary, an additional capital raise through issuance of new straight or convertible debt, or the utilization of intra system dividend and financing capacity. While Management is confident that an event of default can be stemmed, there is no assurance that its impact could be addressed through execution of these plans. |
Schedule_III_Supplementary_Ins
Schedule III - Supplementary Insurance Information | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Schedule III - Supplementary Insurance Information [Abstract] | ' | ||||||||||||||||||||
Schedule III - Supplementary Insurance Information | ' | ||||||||||||||||||||
OLD REPUBLIC INTERNATIONAL CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION | |||||||||||||||||||||
For the Years Ended December 31, 2013, 2012 and 2011 | |||||||||||||||||||||
($ in Millions) | |||||||||||||||||||||
Column A | Column B | Column C | Column D | Column E | Column F | ||||||||||||||||
Segment | Deferred | Losses, | Unearned | Other | Premium | ||||||||||||||||
Policy | Claims and | Premiums | Policyholders' | Revenue | |||||||||||||||||
Acquisition | Settlement | Benefits and | |||||||||||||||||||
Costs | Expenses | Funds | |||||||||||||||||||
Year Ended December 31, 2013: | |||||||||||||||||||||
Insurance Underwriting: | |||||||||||||||||||||
General Insurance Group | $ | 170.4 | $ | 4,334.10 | $ | 1,174.20 | $ | 116.9 | $ | 2,513.70 | |||||||||||
Title Insurance Group | — | 471.5 | — | 6.5 | 1,567.10 | ||||||||||||||||
RFIG Run-off Business | — | 1,774.20 | 28.8 | — | 316.5 | ||||||||||||||||
Corporate & Other (1) | 22.2 | 16.8 | — | 54.8 | 59.3 | ||||||||||||||||
Reinsurance Recoverable (2) | — | 2,836.70 | 284.7 | 29.3 | — | ||||||||||||||||
Consolidated | $ | 192.6 | $ | 9,433.50 | $ | 1,487.80 | $ | 207.8 | $ | 4,456.60 | |||||||||||
Year Ended December 31, 2012: | |||||||||||||||||||||
Insurance Underwriting: | |||||||||||||||||||||
General Insurance Group | $ | 139.4 | $ | 4,048.90 | $ | 1,068.80 | $ | 107.7 | $ | 2,324.40 | |||||||||||
Title Insurance Group | — | 396.4 | — | 7 | 1,250.20 | ||||||||||||||||
RFIG Run-off Business | — | 1,994.80 | 40.5 | — | 410.5 | ||||||||||||||||
Corporate & Other (1) | 26 | 15.9 | — | 55.7 | 58.6 | ||||||||||||||||
Reinsurance Recoverable (2) | — | 2,847.00 | 255.1 | 31.2 | — | ||||||||||||||||
Consolidated | $ | 165.5 | $ | 9,303.30 | $ | 1,364.40 | $ | 201.8 | $ | 4,043.80 | |||||||||||
Year Ended December 31, 2011: | |||||||||||||||||||||
Insurance Underwriting: | |||||||||||||||||||||
General Insurance Group | $ | 168.6 | $ | 3,874.90 | $ | 1,009.20 | $ | 96.9 | $ | 2,109.40 | |||||||||||
Title Insurance Group | — | 332 | — | 6.1 | 1,007.90 | ||||||||||||||||
RFIG Run-off Business | — | 1,654.00 | 57.6 | — | 503.2 | ||||||||||||||||
Corporate & Other (1) | 29 | 17.4 | — | 56.9 | 74.9 | ||||||||||||||||
Reinsurance Recoverable (2) | — | 2,908.10 | 201.9 | 33 | — | ||||||||||||||||
Consolidated | $ | 197.6 | $ | 8,786.60 | $ | 1,268.80 | $ | 193.1 | $ | 3,695.50 | |||||||||||
__________ | |||||||||||||||||||||
-1 | Represents amounts for Old Republic's holding company parent, minor corporate services subsidiaries, a small life & accident insurance operation and consolidation elimination adjustments. | ||||||||||||||||||||
(2) In accordance with GAAP, reinsured losses and unearned premiums are to be reported as assets. Assets and liabilities were, as a result, increased by corresponding amounts of approximately $3.1 billion at December 31, 2013, 2012 and 2011. This accounting treatment does not have any effect on the Company's results of operations. | |||||||||||||||||||||
OLD REPUBLIC INTERNATIONAL CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION | |||||||||||||||||||||
For the Years Ended December 31, 2013, 2012 and 2011 | |||||||||||||||||||||
($ in Millions) | |||||||||||||||||||||
Column A | Column G | Column H | Column I | Column J | Column K | ||||||||||||||||
Segment | Net | Benefits, | Amortization | Other | Premiums | ||||||||||||||||
Investment | Claims, | of Deferred | Operating | Written | |||||||||||||||||
Income | Losses and | Policy | Expenses | ||||||||||||||||||
Settlement | Acquisition | ||||||||||||||||||||
Expenses | Costs | ||||||||||||||||||||
Year Ended December 31, 2013: | |||||||||||||||||||||
Insurance Underwriting: | |||||||||||||||||||||
General Insurance Group | $ | 249.6 | $ | 1,849.40 | $ | 315.4 | $ | 396.3 | $ | 2,601.10 | |||||||||||
Title Insurance Group | 26.6 | 134 | — | 1,767.20 | 1,567.10 | ||||||||||||||||
RFIG Run-off Business | 36.8 | 217.7 | — | 25.5 | 304.3 | ||||||||||||||||
Corporate & Other (1) | 5.6 | 37 | 16.4 | 9.9 | 61 | ||||||||||||||||
Reinsurance Recoverable (2) | — | — | — | — | — | ||||||||||||||||
Consolidated | $ | 318.7 | $ | 2,238.30 | $ | 331.9 | $ | 2,199.40 | $ | 4,533.60 | |||||||||||
Year Ended December 31, 2012: | |||||||||||||||||||||
Insurance Underwriting: | |||||||||||||||||||||
General Insurance Group | $ | 264.9 | $ | 1,696.00 | $ | 327.9 | $ | 414.4 | $ | 2,366.90 | |||||||||||
Title Insurance Group | 27.3 | 120.8 | — | 1,512.30 | 1,250.20 | ||||||||||||||||
RFIG Run-off Business | 36.3 | 910.4 | — | 45.4 | 389.8 | ||||||||||||||||
Corporate & Other (1) | 7.9 | 38 | 15.3 | 17.8 | 58.5 | ||||||||||||||||
Reinsurance Recoverable (2) | — | — | — | — | — | ||||||||||||||||
Consolidated | $ | 336.5 | $ | 2,765.30 | $ | 343.2 | $ | 1,990.10 | $ | 4,065.50 | |||||||||||
Year Ended December 31, 2011: | |||||||||||||||||||||
Insurance Underwriting: | |||||||||||||||||||||
General Insurance Group | $ | 270.5 | $ | 1,460.00 | $ | 296.7 | $ | 374.6 | $ | 2,137.60 | |||||||||||
Title Insurance Group | 27.3 | 105.7 | — | 1,249.80 | 1,007.90 | ||||||||||||||||
RFIG Run-off Business | 59.3 | 1,160.10 | 52.3 | 83.2 | 521.2 | ||||||||||||||||
Corporate & Other (1) | 7.4 | 38.5 | 22.7 | 38.2 | 75.1 | ||||||||||||||||
Reinsurance Recoverable (2) | — | — | — | — | — | ||||||||||||||||
Consolidated | $ | 364.6 | $ | 2,764.30 | $ | 371.8 | $ | 1,745.90 | $ | 3,742.00 | |||||||||||
__________ | |||||||||||||||||||||
-1 | Represents amounts for Old Republic's holding company parent, minor corporate services subsidiaries, a small life & accident insurance operation and consolidation elimination adjustments. | ||||||||||||||||||||
-2 | In accordance with GAAP, reinsured losses and unearned premiums are to be reported as assets. Assets and liabilities were, as a result, increased by corresponding amounts of approximately $3.1 billion at December 31, 2013, 2012 and 2011. This accounting treatment does not have any effect on the Company's results of operations. |
Schedule_IV_Reinsurance
Schedule IV - Reinsurance | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||
Schedule IV - Reinsurance [Abstract] | ' | ||||||||||||||||||
Schedule IV - Reinsurance | ' | ||||||||||||||||||
OLD REPUBLIC INTERNATIONAL CORPORATION AND SUBSIDIARIES | |||||||||||||||||||
SCHEDULE IV - REINSURANCE | |||||||||||||||||||
For the years ended December 31, 2013, 2012 and 2011 | |||||||||||||||||||
($ in Millions) | |||||||||||||||||||
Column A | Column B | Column C | Column D | Column E | Column F | ||||||||||||||
Gross | Ceded | Assumed | Net | Percentage | |||||||||||||||
amount | to other | from other | amount | of amount | |||||||||||||||
companies | companies | assumed | |||||||||||||||||
to net | |||||||||||||||||||
Year Ended December 31, 2013: | |||||||||||||||||||
Life insurance in force | $ | 7,950.90 | $ | 3,946.90 | $ | — | $ | 4,004.00 | — | % | |||||||||
Premium Revenues: | |||||||||||||||||||
General Insurance | $ | 3,235.70 | $ | 746.1 | $ | 24.1 | $ | 2,513.70 | 1 | % | |||||||||
Title Insurance | 1,564.40 | — | 2.7 | 1,567.10 | 0.2 | ||||||||||||||
RFIG Run-off | 326.4 | 9.9 | — | 316.5 | — | ||||||||||||||
Life and Health Insurance: | |||||||||||||||||||
Life insurance | 21.2 | 8.1 | — | 13.1 | — | ||||||||||||||
Accident and health insurance | 56.6 | 10.4 | — | 46.1 | — | ||||||||||||||
Total Life & Health Insurance | 77.9 | 18.5 | — | 59.3 | — | ||||||||||||||
Consolidating adjustments | — | — | — | — | — | ||||||||||||||
Consolidated | $ | 5,204.50 | $ | 774.8 | $ | 26.9 | $ | 4,456.60 | 0.6 | % | |||||||||
Year Ended December 31, 2012: | |||||||||||||||||||
Life insurance in force | $ | 9,375.20 | $ | 4,853.00 | $ | — | $ | 4,522.10 | — | % | |||||||||
Premium Revenues: | |||||||||||||||||||
General Insurance | $ | 2,949.90 | $ | 643.4 | $ | 17.9 | $ | 2,324.40 | 0.8 | % | |||||||||
Title Insurance | 1,248.60 | — | 1.6 | 1,250.20 | 0.1 | ||||||||||||||
RFIG Run-off | 429.8 | 19.3 | — | 410.5 | — | ||||||||||||||
Life and Health Insurance: | |||||||||||||||||||
Life insurance | 23.5 | 10.2 | — | 13.3 | — | ||||||||||||||
Accident and health insurance | 56.4 | 11.1 | — | 45.2 | — | ||||||||||||||
Total Life & Health Insurance | 79.9 | 21.3 | — | 58.6 | — | ||||||||||||||
Consolidating adjustments | — | — | — | — | — | ||||||||||||||
Consolidated | $ | 4,708.40 | $ | 684.2 | $ | 19.6 | $ | 4,043.80 | 0.5 | % | |||||||||
Year Ended December 31, 2011: | |||||||||||||||||||
Life insurance in force | $ | 10,201.40 | $ | 5,312.10 | $ | — | $ | 4,889.20 | — | % | |||||||||
Premium Revenues: | |||||||||||||||||||
General Insurance | $ | 2,716.20 | $ | 615.8 | $ | 8.9 | $ | 2,109.40 | 0.4 | % | |||||||||
Title Insurance | 1,005.50 | 0.1 | 2.5 | 1,007.90 | 0.3 | ||||||||||||||
RFIG Run-off | 526.4 | 23.2 | 0.1 | 503.2 | — | ||||||||||||||
Life and Health Insurance: | |||||||||||||||||||
Life insurance | 25.7 | 10.4 | — | 15.2 | — | ||||||||||||||
Accident and health insurance | 71.7 | 12.1 | — | 59.6 | — | ||||||||||||||
Total Life & Health Insurance | 97.4 | 22.5 | — | 74.9 | — | ||||||||||||||
Consolidating adjustments | — | — | — | — | — | ||||||||||||||
Consolidated | $ | 4,345.70 | $ | 661.7 | $ | 11.6 | $ | 3,695.50 | 0.3 | % | |||||||||
Schedule_V_Valuation_and_Quali
Schedule V - Valuation and Qualifying Accounts | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Schedule V - Valuation and Qualifying Accounts [Abstract] | ' | ||||||||||||||||||||
Schedule V - Valuation and Qualifying Accounts | ' | ||||||||||||||||||||
OLD REPUBLIC INTERNATIONAL CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||
SCHEDULE V - VALUATION AND QUALIFYING ACCOUNTS | |||||||||||||||||||||
For the years ended December 31, 2013, 2012 and 2011 | |||||||||||||||||||||
($ in Millions) | |||||||||||||||||||||
Column A | Column B | Column C | Column D | Column E | |||||||||||||||||
Additions | |||||||||||||||||||||
Description | Balance at | Charged to | Charged | Deductions - | Balance at | ||||||||||||||||
Beginning of | Costs and | to Other | Describe | End of | |||||||||||||||||
Period | Expenses | Accounts - | Period | ||||||||||||||||||
Describe | |||||||||||||||||||||
Year Ended December 31, 2013: | |||||||||||||||||||||
Deducted from Asset Accounts: | |||||||||||||||||||||
Reserve for unrecoverable | |||||||||||||||||||||
reinsurance | $ | 21.2 | $ | — | $ | — | $ | — | $ | 21.2 | |||||||||||
Deferred tax asset valuation | |||||||||||||||||||||
Allowance (1) | $ | 9.6 | $ | — | $ | — | $ | — | $ | 9.6 | |||||||||||
Year Ended December 31, 2012: | |||||||||||||||||||||
Deducted from Asset Accounts: | |||||||||||||||||||||
Reserve for unrecoverable | |||||||||||||||||||||
reinsurance | $ | 28.2 | $ | — | $ | — | $ | (7.0 | ) | $ | 21.2 | ||||||||||
Deferred tax asset valuation | |||||||||||||||||||||
Allowance (1) | $ | 12.2 | $ | — | $ | — | $ | (2.5 | ) | $ | 9.6 | ||||||||||
Year Ended December 31, 2011: | |||||||||||||||||||||
Deducted from Asset Accounts: | |||||||||||||||||||||
Reserve for unrecoverable | |||||||||||||||||||||
reinsurance | $ | 28.2 | $ | — | $ | — | $ | — | $ | 28.2 | |||||||||||
Deferred tax asset valuation | |||||||||||||||||||||
Allowance (1) | $ | 13.5 | $ | — | $ | — | $ | (1.3 | ) | $ | 12.2 | ||||||||||
__________ | |||||||||||||||||||||
-1 | A valuation allowance was established against deferred tax assets as of December 31, 2013, 2012 and 2011 related to certain net operating loss and tax credit carryforwards which the Company did not expect to realize. In valuing the deferred tax assets, the Company considered certain factors including primarily the scheduled reversals of certain deferred tax liabilities, estimates of future taxable income, the impact of available carryback and carryforward periods, as well as the availability of certain tax planning strategies. The Company estimates that all remaining deferred tax assets at year end 2013 will more likely than not be fully realized. |
Schedule_VI_Supplemental_Infor
Schedule VI - Supplemental Information Concerning Property-Casualty Insurance Operations | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Schedule VI - Supplemental Information Concerning Property-Casualty Insurance Operations [Abstract] | ' | ||||||||||||||||
Schedule VI - Supplemental Information Concerning Property-Casualty Insurance Operations | ' | ||||||||||||||||
OLD REPUBLIC INTERNATIONAL CORPORATION AND SUBSIDIARIES | |||||||||||||||||
SCHEDULE VI - SUPPLEMENTAL INFORMATION CONCERNING | |||||||||||||||||
PROPERTY-CASUALTY INSURANCE OPERATIONS | |||||||||||||||||
For the years ended December 31, 2013, 2012 and 2011 | |||||||||||||||||
($ in Millions) | |||||||||||||||||
Column A | Column B | Column C | Column D | Column E | |||||||||||||
Affiliation With Registrant (1) | Deferred | Reserves | Discount, | Unearned | |||||||||||||
Policy | for Unpaid | If Any, | Premiums (2) | ||||||||||||||
Acquisition | Claims | Deducted in | |||||||||||||||
Costs | and Claim | Column C | |||||||||||||||
Adjustment | |||||||||||||||||
Expenses (2) | |||||||||||||||||
Year Ended December 31: | |||||||||||||||||
2013 | $ | 170.4 | $ | 4,400.30 | $ | 241.4 | $ | 1,174.20 | |||||||||
2012 | 139.4 | 4,119.20 | 230.8 | 1,068.80 | |||||||||||||
2011 | 168.6 | 3,928.10 | 235.1 | 1,009.20 | |||||||||||||
Column A | Column F | Column G | Column H | ||||||||||||||
Net | Claims and Claim | ||||||||||||||||
Investment | Adjustment Expenses | ||||||||||||||||
Income | Incurred Related to | ||||||||||||||||
Affiliation With Registrant (1) | Earned | Current | Prior | ||||||||||||||
Premiums | Year | Years | |||||||||||||||
Year Ended December 31: | |||||||||||||||||
2013 | $ | 2,543.50 | $ | 250 | $ | 1,919.10 | $ | (40.4 | ) | ||||||||
2012 | 2,366.90 | 265 | 1,810.80 | (19.8 | ) | ||||||||||||
2011 | 2,167.70 | 270.5 | 1,678.50 | (149.2 | ) | ||||||||||||
Column A | Column I | Column J | Column K | ||||||||||||||
Affiliation With Registrant (1) | Amortization | Paid | Premiums | ||||||||||||||
of Deferred | Claims | Written | |||||||||||||||
Policy | and Claim | ||||||||||||||||
Acquisition | Adjustment | ||||||||||||||||
Costs | Expenses | ||||||||||||||||
Year Ended December 31: | |||||||||||||||||
2013 | $ | 315.4 | $ | 1,597.50 | $ | 2,630.30 | |||||||||||
2012 | 327.9 | 1,577.90 | 2,405.80 | ||||||||||||||
2011 | 298.9 | 1,551.10 | 2,220.70 | ||||||||||||||
__________ | |||||||||||||||||
-1 | Includes consolidated property-casualty entities. The amounts relating to the Company's unconsolidated property-casualty subsidiaries and the proportionate share of the registrant's and its subsidiaries' 50%-or-less owned property-casualty equity investees are immaterial and have, therefore, been omitted from this schedule. | ||||||||||||||||
-2 | See note (2) to Schedule III. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||
Concentration of Credit Risk [Abstract] | ' | |||||||||||||||||||||||
Accounting Principles | ' | |||||||||||||||||||||||
Accounting Principles - The Company's insurance subsidiaries are managed pursuant to the laws and regulations of the various states in which they operate. As a result, the subsidiaries operate their business in the context of such laws and regulation, and maintain their accounts in conformity with accounting practices prescribed or permitted by various states' insurance regulatory authorities. Federal income taxes and dividends to shareholders are based on financial statements and reports complying with such practices. The statutory accounting requirements vary from the Financial Accounting Standards Board's ("FASB") Accounting Standards Codification ("ASC") of accounting principles generally accepted in the United States of America ("GAAP") in the following major respects: (1) the costs of selling insurance policies are charged to operations immediately, while the related premiums are taken into income over the terms of the policies; (2) investments in fixed maturity securities designated as available for sale are generally carried at amortized cost rather than their estimated fair value; (3) certain assets classified as "non-admitted assets" are excluded from the balance sheet through a direct charge to earned surplus; (4) changes in allowed deferred income tax assets or liabilities are recorded directly in earned surplus and not through the income statement; (5) mortgage guaranty contingency reserves intended to provide for future catastrophic losses are established as a liability through a charge to earned surplus whereas, GAAP does not allow provisions for future catastrophic losses; (6) title insurance premium reserves, which are intended to cover losses that will be reported at a future date are based on statutory formulas, and changes therein are charged in the income statement against each year's premiums written; (7) certain required formula-derived reserves for general insurance in particular are established for claim reserves in excess of amounts considered adequate by the Company as well as for credits taken relative to reinsurance placed with other insurance companies not licensed in the respective states, all of which are charged directly against earned surplus; (8) surplus notes are classified as equity; and (9) mortgage guaranty deferred payment obligations ("DPO") retained are claim reserves classified as an admissible asset and as a component of policyholder surplus pursuant to a permitted practice of the NCDOI. In consolidating the statutory financial statements of its insurance subsidiaries, the Company has therefore made necessary adjustments to conform their accounts with GAAP. The following table reflects a summary of all such adjustments: | ||||||||||||||||||||||||
Shareholders' Equity | Net Income (Loss) | |||||||||||||||||||||||
December 31, | Years Ended December 31, | |||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2011 | ||||||||||||||||||||
Statutory totals of insurance | ||||||||||||||||||||||||
company subsidiaries (a): | ||||||||||||||||||||||||
General | $ | 3,127.90 | $ | 2,905.90 | $ | 314.4 | $ | 225.5 | $ | 292.5 | ||||||||||||||
Title | 428.6 | 358.1 | 88.7 | 70.3 | 46.7 | |||||||||||||||||||
RFIG Run-off | 456.5 | 149.2 | 125.2 | (285.0 | ) | (422.6 | ) | |||||||||||||||||
Life & Accident | 67 | 71.9 | 3.6 | 3 | 4.8 | |||||||||||||||||||
Sub-total | 4,080.00 | 3,485.10 | 531.9 | 13.8 | (78.6 | ) | ||||||||||||||||||
GAAP totals of non-insurance company | ||||||||||||||||||||||||
subsidiaries and consolidation adjustments | 29.4 | (111.6 | ) | 23.2 | (64.2 | ) | (38.7 | ) | ||||||||||||||||
Unadjusted totals | 4,109.70 | 3,374.00 | 555.1 | (50.4 | ) | (117.4 | ) | |||||||||||||||||
Adjustments to conform to GAAP statements: | ||||||||||||||||||||||||
Deferred policy acquisition costs | 159.1 | 161.7 | 0.9 | (33.3 | ) | (30.6 | ) | |||||||||||||||||
Fair value of fixed maturity securities | 220.9 | 552.7 | — | — | — | |||||||||||||||||||
Non-admitted assets | 73.3 | 78.2 | — | — | — | |||||||||||||||||||
Deferred income taxes | (49.8 | ) | (113.9 | ) | (79.5 | ) | 35.7 | 73.4 | ||||||||||||||||
Mortgage contingency and DPO reserves | (479.0 | ) | (296.9 | ) | — | — | — | |||||||||||||||||
Title unearned premiums | 432.6 | 390.4 | 42.1 | 30 | 14.6 | |||||||||||||||||||
Loss reserves | (432.7 | ) | (360.7 | ) | (71.8 | ) | (70.4 | ) | (49.6 | ) | ||||||||||||||
Surplus notes | (277.5 | ) | (202.5 | ) | — | — | — | |||||||||||||||||
Sundry adjustments | 17.9 | 13 | 0.9 | 19.4 | (30.9 | ) | ||||||||||||||||||
Total adjustments | (334.8 | ) | 222.3 | (107.3 | ) | (18.2 | ) | (23.1 | ) | |||||||||||||||
Consolidated GAAP totals | $ | 3,775.00 | $ | 3,596.20 | $ | 447.8 | $ | (68.6 | ) | $ | (140.5 | ) | ||||||||||||
(a) | The insurance laws of the respective states in which the Company’s insurance subsidiaries are incorporated prescribe minimum capital and surplus requirements for the lines of business they are licensed to write. For domestic property and casualty and life and accident insurance companies the National Association of Insurance Commissioners also prescribes risk-based capital ("RBC") requirements. The RBC is a measure of statutory capital in relationship to a formula-driven definition of risk relative to a company’s balance sheet and mix of business. The combined RBC ratio of our primary General insurance subsidiaries was 695% and 680% of the company action level RBC at December 31, 2013 and 2012, respectively. The minimum capital requirements for the Company’s Title Insurance subsidiaries are established by statute in the respective states of domicile. The minimum regulatory capital requirements are not significant in relationship to the recorded statutory capital of the Company’s Title and Life & Accident insurance subsidiaries. At December 31, 2013 and 2012 each of the Company’s General, Title, and Life and Accident insurance subsidiaries exceeded the minimum statutory capital and surplus requirements. Refer to Note 1(s) - Regulatory Matters for a discussion regarding the RFIG Run-off group. | |||||||||||||||||||||||
The preparation of financial statements in conformity with either statutory practices or 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 financial statements, and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates. | ||||||||||||||||||||||||
Consolidation Practices | ' | |||||||||||||||||||||||
Consolidation Practices - The consolidated financial statements include the accounts of the Company and those of all of its majority owned insurance underwriting and service subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. | ||||||||||||||||||||||||
Statement Presentation | ' | |||||||||||||||||||||||
Statement Presentation - Amounts shown in the consolidated financial statements and applicable notes are stated (except as otherwise indicated and as to share data) in millions, which amounts may not add to totals shown due to truncation. Necessary reclassifications are made in prior periods' financial statements whenever appropriate to conform to the most current presentation. | ||||||||||||||||||||||||
In 2013, Old Republic adopted guidance requiring additional disclosures of amounts reclassified out of accumulated other comprehensive income. Such requirements are reflected in the presentation of the Consolidated Statements of Comprehensive Income. | ||||||||||||||||||||||||
Investments | ' | |||||||||||||||||||||||
Investments - The Company may classify its invested assets in terms of those assets relative to which it either (1) has the positive intent and ability to hold until maturity, (2) has available for sale or (3) has the intention of trading. As of December 31, 2013 and 2012, substantially all the Company's invested assets were classified as "available for sale." | ||||||||||||||||||||||||
Fixed maturity securities classified as "available for sale" and other preferred and common stocks (equity securities) are included at fair value with changes in such values, net of deferred income taxes, reflected directly in shareholders' equity. Fair values for fixed maturity securities and equity securities are based on quoted market prices or estimates using values obtained from independent pricing services as applicable. | ||||||||||||||||||||||||
The Company reviews the status and fair value changes of each of its investments on at least a quarterly basis during the year, and estimates of other-than-temporary impairments ("OTTI") in the portfolio's value are evaluated and established at each quarterly balance sheet date. In reviewing investments for OTTI, the Company, in addition to a security's market price history, considers the totality of such factors as the issuer's operating results, financial condition and liquidity, its ability to access capital markets, credit rating trends, most current audit opinion, industry and securities markets conditions, and analyst expectations to reach its conclusions. Sudden fair value declines caused by such adverse developments as newly emerged or imminent bankruptcy filings, issuer default on significant obligations, or reports of financial accounting developments that bring into question the validity of previously reported earnings or financial condition, are recognized as realized losses as soon as credible publicly available information emerges to confirm such developments. Absent issuer-specific circumstances that would result in a contrary conclusion, any equity security with an unrealized investment loss amounting to a 20% or greater decline for a six month period is considered OTTI. In the event the Company's estimate of OTTI is insufficient at any point in time, future periods' net income (loss) would be adversely affected by the recognition of additional realized or impairment losses, but its financial position would not necessarily be affected adversely inasmuch as such losses, or a portion of them, could have been recognized previously as unrealized losses in shareholders' equity. The Company recognized $-, $.2 and $50.2 of OTTI adjustments for the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||||||||||||||||||
The amortized cost and estimated fair values by type and contractual maturity of fixed maturity securities are shown in the following tables. Expected maturities will differ from contractual maturities since borrowers may have the right to call or repay obligations with or without call or prepayment penalties. | ||||||||||||||||||||||||
Amortized | Gross | Gross | Estimated | |||||||||||||||||||||
Cost | Unrealized | Unrealized | Fair | |||||||||||||||||||||
Gains | Losses | Value | ||||||||||||||||||||||
Fixed Maturity Securities by Type: | ||||||||||||||||||||||||
December 31, 2013: | ||||||||||||||||||||||||
U.S. & Canadian Governments | $ | 1,133.00 | $ | 36.7 | $ | 8.7 | $ | 1,161.10 | ||||||||||||||||
Tax-exempt | 168.1 | 3.7 | 0.5 | 171.3 | ||||||||||||||||||||
Corporate | 7,176.00 | 268.1 | 64.3 | 7,379.80 | ||||||||||||||||||||
$ | 8,477.30 | $ | 308.7 | $ | 73.6 | $ | 8,712.30 | |||||||||||||||||
December 31, 2012: | ||||||||||||||||||||||||
U.S. & Canadian Governments | $ | 1,151.20 | $ | 65.9 | $ | 0.3 | $ | 1,216.80 | ||||||||||||||||
Tax-exempt | 380.8 | 11.4 | 0.1 | 392.2 | ||||||||||||||||||||
Corporate | 6,461.00 | 502.1 | 6 | 6,957.10 | ||||||||||||||||||||
$ | 7,993.10 | $ | 579.5 | $ | 6.5 | $ | 8,566.20 | |||||||||||||||||
Amortized | Estimated | |||||||||||||||||||||||
Cost | Fair | |||||||||||||||||||||||
Value | ||||||||||||||||||||||||
Fixed Maturity Securities Stratified by Contractual Maturity at December 31, 2013: | ||||||||||||||||||||||||
Due in one year or less | $ | 785.5 | $ | 796.5 | ||||||||||||||||||||
Due after one year through five years | 3,957.00 | 4,145.80 | ||||||||||||||||||||||
Due after five years through ten years | 3,544.20 | 3,579.40 | ||||||||||||||||||||||
Due after ten years | 190.4 | 190.5 | ||||||||||||||||||||||
$ | 8,477.30 | $ | 8,712.30 | |||||||||||||||||||||
Bonds and other investments with a statutory carrying value of $551.2 as of December 31, 2013 were on deposit with governmental authorities by the Company's insurance subsidiaries to comply with insurance laws. | ||||||||||||||||||||||||
A summary of the Company's equity securities reflecting reported adjusted cost, net of OTTI adjustments totaling $- and $131.3 at December 31, 2013 and 2012, respectively, follows: | ||||||||||||||||||||||||
Equity Securities: | Adjusted | Gross | Gross | Estimated | ||||||||||||||||||||
Cost | Unrealized | Unrealized | Fair | |||||||||||||||||||||
Gains | Losses | Value | ||||||||||||||||||||||
December 31, 2013 | $ | 632 | $ | 372.7 | $ | 0.5 | $ | 1,004.20 | ||||||||||||||||
December 31, 2012 | $ | 452.1 | $ | 290.5 | $ | 2.9 | $ | 739.7 | ||||||||||||||||
The following table reflects the Company's gross unrealized losses and fair value, aggregated by category and length of time that individual securities have been in an unrealized loss position. Fair value and issuer's adjusted cost comparisons follow: | ||||||||||||||||||||||||
12 Months or Less | Greater than 12 Months | Total | ||||||||||||||||||||||
Fair | Unrealized Losses | Fair | Unrealized Losses | Fair | Unrealized Losses | |||||||||||||||||||
Value | Value | Value | ||||||||||||||||||||||
December 31, 2013: | ||||||||||||||||||||||||
Fixed Maturity Securities: | ||||||||||||||||||||||||
U.S. & Canadian Governments | $ | 301.7 | $ | 8.7 | $ | — | $ | — | $ | 301.7 | $ | 8.7 | ||||||||||||
Tax-exempt | 10 | 0.5 | — | — | 10 | 0.5 | ||||||||||||||||||
Corporate | 2,312.20 | 60.2 | 47.7 | 4.1 | 2,360.00 | 64.3 | ||||||||||||||||||
Subtotal | 2,624.00 | 69.4 | 47.7 | 4.1 | 2,671.80 | 73.6 | ||||||||||||||||||
Equity Securities | 31 | 0.5 | — | — | 31 | 0.5 | ||||||||||||||||||
Total | $ | 2,655.00 | $ | 70 | $ | 47.7 | $ | 4.1 | $ | 2,702.80 | $ | 74.2 | ||||||||||||
December 31, 2012: | ||||||||||||||||||||||||
Fixed Maturity Securities: | ||||||||||||||||||||||||
U.S. & Canadian Governments | $ | 60.3 | $ | 0.3 | $ | — | $ | — | $ | 60.3 | $ | 0.3 | ||||||||||||
Tax-exempt | 3.7 | 0.1 | — | — | 3.7 | 0.1 | ||||||||||||||||||
Corporate | 348.4 | 4.3 | 10.2 | 1.7 | 358.6 | 6 | ||||||||||||||||||
Subtotal | 412.6 | 4.8 | 10.2 | 1.7 | 422.8 | 6.5 | ||||||||||||||||||
Equity Securities | 78.9 | 2.9 | — | — | 78.9 | 2.9 | ||||||||||||||||||
Total | $ | 491.5 | $ | 7.8 | $ | 10.2 | $ | 1.7 | $ | 501.8 | $ | 9.5 | ||||||||||||
At December 31, 2013, the Company held 558 fixed maturity and 5 equity securities in an unrealized loss position, representing 30.8% as to fixed maturities and 7.2% as to equity securities of the total number of such issues it held. At December 31, 2012, the Company held 102 fixed maturity and 14 equity securities in an unrealized loss position, representing 5.7% as to fixed maturities and 21.9% as to equity securities of the total number of such issues it held. Of the securities in an unrealized loss position, 10 and 4 fixed maturity securities and 0 and 1 equity security, had been in a continuous unrealized loss position for more than 12 months as of December 31, 2013 and 2012. The unrealized losses on these securities are primarily attributable to an increase in the interest rate environment. As part of its assessment of other-than-temporary impairments, the Company considers its intent to continue to hold, and the likelihood that it will not be required to sell investment securities in an unrealized loss position until cost recovery, principally on the basis of its asset and liability maturity matching procedures. | ||||||||||||||||||||||||
Fair Value Measurements - Fair value is defined as the estimated price that is likely to be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (an exit price) at the measurement date. A fair value hierarchy is established that prioritizes the sources ("inputs") used to measure fair value into three broad levels: inputs based on quoted market prices in active markets (Level 1); observable inputs based on corroboration with available market data (Level 2); and unobservable inputs based on uncorroborated market data or a reporting entity's own assumptions (Level 3). Following is a description of the valuation methodologies and general classification used for financial instruments measured at fair value. | ||||||||||||||||||||||||
The Company uses quoted values and other data provided by nationally recognized independent pricing sources as inputs into its quarterly process for determining fair values of its fixed maturity and equity securities. To validate the techniques or models used by pricing sources, the Company's review process includes, but is not limited to: (i) initial and ongoing evaluation of methodologies used by outside parties to calculate fair value; and (ii) comparing other sources including the fair value estimates to its knowledge of the current market and to independent fair value estimates provided by the investment custodian. The independent pricing source obtains market quotations and actual transaction prices for securities that have quoted prices in active markets and uses its own proprietary method for determining the fair value of securities that are not actively traded. In general, these methods involve the use of "matrix pricing" in which the independent pricing source uses observable market inputs including, but not limited to, investment yields, credit risks and spreads, benchmarking of like securities, broker-dealer quotes, reported trades and sector groupings to determine a reasonable fair value. | ||||||||||||||||||||||||
Level 1 securities include U.S. and Canadian Treasury notes, publicly traded common stocks, the quoted net asset value ("NAV") mutual funds, and most short-term investments in highly liquid money market instruments. Level 2 securities generally include corporate bonds, municipal bonds, certain U.S. and Canadian government agency securities. Securities classified within Level 3 include non-publicly traded bonds, short-term investments, and equity securities. There were no significant changes in the fair value of assets measured with the use of significant unobservable inputs as of December 31, 2013 and December 31, 2012. | ||||||||||||||||||||||||
The following tables show a summary of assets measured at fair value segregated among the various input levels described above: | ||||||||||||||||||||||||
Fair Value Measurements | ||||||||||||||||||||||||
As of December 31, 2013: | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Available for sale: | ||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||
U.S. & Canadian Governments | $ | 478.9 | $ | 682.2 | $ | — | $ | 1,161.10 | ||||||||||||||||
Tax-exempt | — | 171.3 | — | 171.3 | ||||||||||||||||||||
Corporate | — | 7,369.30 | 10.5 | 7,379.80 | ||||||||||||||||||||
Equity securities | 1,003.40 | — | 0.7 | 1,004.20 | ||||||||||||||||||||
Short-term investments | $ | 1,120.50 | $ | — | $ | 4.2 | $ | 1,124.80 | ||||||||||||||||
As of December 31, 2012: | ||||||||||||||||||||||||
Available for sale: | ||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||
U.S. & Canadian Governments | $ | 570.9 | $ | 645.9 | $ | — | $ | 1,216.80 | ||||||||||||||||
Tax-exempt | — | 392.2 | — | 392.2 | ||||||||||||||||||||
Corporate | — | 6,926.30 | 30.7 | 6,957.10 | ||||||||||||||||||||
Equity securities | 736.9 | — | 2.7 | 739.7 | ||||||||||||||||||||
Short-term investments | $ | 1,260.20 | $ | — | $ | 4.6 | $ | 1,264.90 | ||||||||||||||||
There were no transfers between Levels 1, 2 or 3 during 2013. Level 3 securities with a fair value of $20.2 were disposed of during 2013. | ||||||||||||||||||||||||
Investment income is reported net of allocated expenses and includes appropriate adjustments for amortization of premium and accretion of discount on fixed maturity securities acquired at other than par value. Dividends on equity securities are credited to income on the ex-dividend date. Realized investment gains and losses, which result from sales or write-downs of securities, are reflected as revenues in the income statement and are determined on the basis of amortized value at date of sale for fixed maturity securities, and cost in regard to equity securities; such bases apply to the specific securities sold. Unrealized investment gains and losses, net of any deferred income taxes, are recorded directly as a component of accumulated other comprehensive income in shareholders' equity. At December 31, 2013, the Company and its subsidiaries had no non-income producing fixed maturity securities. | ||||||||||||||||||||||||
The following table reflects the composition of net investment income, net realized gains or losses, and the net change in unrealized investment gains or losses for each of the years shown. | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Investment income from: | ||||||||||||||||||||||||
Fixed maturity securities | $ | 298.7 | $ | 321 | $ | 353.2 | ||||||||||||||||||
Equity securities | 21.2 | 13.1 | 11.3 | |||||||||||||||||||||
Short-term investments | 1.1 | 1.9 | 1.5 | |||||||||||||||||||||
Other sources | 2.6 | 5.4 | 4.7 | |||||||||||||||||||||
Gross investment income | 323.7 | 341.6 | 370.9 | |||||||||||||||||||||
Investment expenses (a) | 4.9 | 5.1 | 6.2 | |||||||||||||||||||||
Net investment income | $ | 318.7 | $ | 336.5 | $ | 364.6 | ||||||||||||||||||
Realized gains (losses) on: | ||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||
Gains | $ | 9.9 | $ | 32.7 | $ | 143.9 | ||||||||||||||||||
Losses | (8.2 | ) | — | (1.2 | ) | |||||||||||||||||||
Net | 1.7 | 32.7 | 142.6 | |||||||||||||||||||||
Equity securities & other long-term investments | 146.3 | 15.1 | (27.0 | ) | ||||||||||||||||||||
Total | 148.1 | 47.8 | 115.5 | |||||||||||||||||||||
Income taxes (credits)(b) | 51.8 | 16.7 | 37.5 | |||||||||||||||||||||
Net realized gains (losses) | $ | 96.2 | $ | 31.1 | $ | 78 | ||||||||||||||||||
Changes in unrealized investment gains (losses) on: | ||||||||||||||||||||||||
Fixed maturity securities | $ | (337.9 | ) | $ | 64.9 | $ | 46.3 | |||||||||||||||||
Less: Deferred income taxes (credits) | (117.9 | ) | 22.6 | 16 | ||||||||||||||||||||
(219.9 | ) | 42.2 | 30.3 | |||||||||||||||||||||
Equity securities & other long-term investments | 82.6 | 48.4 | (35.2 | ) | ||||||||||||||||||||
Less: Deferred income taxes (credits) | 28.9 | 16.8 | (12.4 | ) | ||||||||||||||||||||
53.7 | 31.5 | (22.7 | ) | |||||||||||||||||||||
Net changes in unrealized investment gains (losses) | $ | (166.2 | ) | $ | 73.8 | $ | 7.5 | |||||||||||||||||
__________ | ||||||||||||||||||||||||
(a) | Investment expenses consist of personnel costs and investment management and custody service fees, as well as interest incurred on funds held of $1.7, $2.0 and $1.9 for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||||||||||||
(b) | Reflects primarily the combination of fully taxable realized investment gains or losses and judgments about the recoverability of deferred tax assets. | |||||||||||||||||||||||
Revenue Recognition | ' | |||||||||||||||||||||||
Revenue Recognition - Pursuant to GAAP applicable to the insurance industry, revenues are recognized as follows: | ||||||||||||||||||||||||
Substantially all general insurance premiums pertain to annual policies and are reflected in income on a pro-rata basis in general association with the related benefits, claims, and expenses. Earned but unbilled premiums are generally taken into income on the billing date, while adjustments for retrospective premiums, commissions and similar charges or credits are accrued on the basis of periodic evaluations of current underwriting experience and contractual obligations. | ||||||||||||||||||||||||
Title premium and fee revenues stemming from the Company's direct operations (which include branch offices of its title insurers and wholly owned agency subsidiaries) represent 28% of 2013, 32% of 2012 and 33% of 2011 consolidated title business revenues. Such premiums are generally recognized as income at the escrow closing date which approximates the policy effective date. Fee income related to escrow and other closing services is recognized when the related services have been performed and completed. The remaining title premium and fee revenues are produced by independent title agents and underwritten title companies. Rather than making estimates that could be subject to significant variance from actual premium and fee production, the Company recognizes revenues from those sources upon receipt. Such receipts can reflect a three to four month lag relative to the effective date of the underlying title policy, and are offset concurrently by production expenses and claim reserve provisions. | ||||||||||||||||||||||||
The Company's mortgage guaranty premiums principally stem from monthly installments paid on long-duration, guaranteed renewable insurance policies. Substantially all such premiums are written and earned in the month coverage is effective. With respect to relatively few annual or single premium policies, earned premiums are largely recognized on a pro-rata basis over the terms of the policies. Recognition of normal or catastrophic claim costs, however, occurs only upon an instance of default, defined as the occurrence of two or more consecutively missed monthly payments. Accordingly, GAAP revenue recognition for insured loans is not appropriately matched to the risk exposure and the consequent recognition of both normal and most significantly, future catastrophic loss occurrences for which current reserve provisions are not permitted. As a result, mortgage guaranty GAAP earnings for any individual year or series of years may be materially adversely affected, particularly by cyclical catastrophic loss events such as the mortgage insurance industry has experienced since mid year 2007. Reported GAAP earnings and financial condition form, in part, the basis for significant judgments and strategic evaluations made by management, analysts, investors, and other users of the financial statements issued by mortgage guaranty companies. The risk exists that such judgments and evaluations are at least partially based on GAAP financial information that does not match revenues and expenses and is therefore not reflective of the long-term normal and catastrophic risk exposures assumed by mortgage guaranty insurers at any point in time. | ||||||||||||||||||||||||
Deferred Policy Acquisition Costs | ' | |||||||||||||||||||||||
Deferred Policy Acquisition Costs - Various insurance subsidiaries of the Company defer certain costs which vary with and are directly related to the production of business. Deferred costs consist principally of commissions, premium taxes, marketing, and policy issuance expenses. Effective January 1, 2012, the Company adopted a prospective application of new GAAP authoritative guidance related to the deferral of costs for acquiring or renewing insurance contracts. The guidance identifies those direct costs that relate to the successful acquisition of new or renewal insurance contracts that should be capitalized. The adoption of the guidance resulted in 2012 pretax charges of $37.9 to General Insurance results. | ||||||||||||||||||||||||
With respect to most coverages, deferred acquisition costs are amortized on the same basis as the related premiums are earned or, alternatively, over the periods during which premiums will be paid. To the extent that future revenues on existing policies are not adequate to cover related costs and expenses, deferred policy acquisition costs are charged to earnings. During 2011, $29.1 of previously deferred mortgage guaranty acquisition costs were written-off as they were no longer deemed recoverable in future run-off periods. | ||||||||||||||||||||||||
The following table shows a reconciliation of deferred acquisition costs between succeeding balance sheet dates. | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Deferred, beginning of year | $ | 165.5 | $ | 197.6 | $ | 230.6 | ||||||||||||||||||
Acquisition costs deferred: | ||||||||||||||||||||||||
Commissions - net of reinsurance | 222.7 | 180.8 | 139 | |||||||||||||||||||||
Premium taxes | 93.8 | 86.8 | 77.7 | |||||||||||||||||||||
Salaries and other marketing expenses | 42.5 | 43.3 | 121.8 | |||||||||||||||||||||
Sub-total | 359.1 | 311 | 338.4 | |||||||||||||||||||||
Amortization charged to income | (331.9 | ) | (343.2 | ) | (371.7 | ) | ||||||||||||||||||
Change for the year | 27.1 | (32.1 | ) | (33.3 | ) | |||||||||||||||||||
Deferred, end of year | $ | 192.6 | $ | 165.5 | $ | 197.6 | ||||||||||||||||||
Unearned Premiums | ' | |||||||||||||||||||||||
Unearned Premiums - Unearned premium reserves are generally calculated by application of pro-rata factors to premiums in force. At December 31, 2013 and 2012, unearned premiums consisted of the following: | ||||||||||||||||||||||||
As of December 31: | 2013 | 2012 | ||||||||||||||||||||||
General Insurance Group | $ | 1,458.90 | $ | 1,323.80 | ||||||||||||||||||||
RFIG Run-off Business | 28.9 | 40.5 | ||||||||||||||||||||||
Total | $ | 1,487.80 | $ | 1,364.40 | ||||||||||||||||||||
Losses, Claims and Settlement Expenses | ' | |||||||||||||||||||||||
Losses, Claims and Settlement Expenses - The establishment of claim reserves by the Company's insurance subsidiaries is a reasonably complex and dynamic process influenced by a large variety of factors. These factors principally include past experience applicable to the anticipated costs of various types of claims, continually evolving and changing legal theories emanating from the judicial system, recurring accounting, statistical, and actuarial studies, the professional experience and expertise of the Company's claim departments' personnel or attorneys and independent claim adjusters, ongoing changes in claim frequency or severity patterns such as those caused by natural disasters, illnesses, accidents, work‑related injuries, and changes in general and industry-specific economic conditions. Consequently, the reserves established are a reflection of the opinions of a large number of persons, of the application and interpretation of historical precedent and trends, of expectations as to future developments, and of management's judgment in interpreting all such factors. At any point in time, the Company is exposed to possibly higher or lower than anticipated claim costs due to all of these factors, and to the evolution, interpretation, and expansion of tort law, as well as the effects of unexpected jury verdicts. | ||||||||||||||||||||||||
All reserves are therefore based on estimates which are periodically reviewed and evaluated in the light of emerging claim experience and changing circumstances. The resulting changes in estimates are recorded in operations of the periods during which they are made. Return and additional premiums and policyholders' dividends, all of which tend to be affected by development of claims in future years, may offset, in whole or in part, developed claim redundancies or deficiencies for certain coverages such as workers' compensation, portions of which are written under loss sensitive programs that provide for such adjustments. The Company believes that its overall reserving practices have been consistently applied over many years, and that its aggregate net reserves have generally resulted in reasonable approximations of the ultimate net costs of claims incurred. However, no representation is made nor is any guaranty given that ultimate net claim and related costs will not develop in future years to be greater or lower than currently established reserve estimates. | ||||||||||||||||||||||||
General Insurance reserves are established to provide for the ultimate expected cost of settling unpaid losses and claims reported at each balance sheet date. Such reserves are based on continually evolving assessments of the facts available to the Company during the settlement process which may stretch over long periods of time. Long-term disability-type workers' compensation reserves are discounted to present value based on interest rates ranging from 3.5% to 4.0%. Losses and claims incurred but not reported ("IBNR"), as well as expenses required to settle losses and claims are established on the basis of a large number of formulas that take into account various criteria, including historical cost experience and anticipated costs of servicing reinsured and other risks. As applicable, estimates of possible recoveries from salvage or subrogation opportunities are considered in the establishment of such reserves. Overall claim and claim expense reserves incorporate amounts covering net estimates of unusual claims such as those emanating from asbestosis and environmental ("A&E") exposures as discussed below. Such reserves can affect claim costs and related loss ratios for such insurance coverages as general liability, commercial automobile (truck), workers' compensation, and property. | ||||||||||||||||||||||||
Early in 2001, the Federal Department of Labor revised the Federal Black Lung Program regulations. The revisions basically require a reevaluation of previously settled, denied, or new occupational disease claims in the context of newly devised, more lenient standards when such claims are resubmitted. Following a number of challenges and appeals by the insurance and coal mining industries, the revised regulations were, for the most part, upheld in June, 2002 and are to be applied prospectively. Since the final quarter of 2001 black lung claims filed or refiled pursuant to these revised regulations have increased, though the volume of new claim reports has abated in recent years. In March 2010, federal regulations were revised once again as part of the Patient Protection and Affordability Act that reinstates two provisions that potentially benefit claimants. In response to this most recent legislation and similar to the 2001 change, black lung claims filed or refiled have again increased.The vast majority of claims filed to date against Old Republic pertain to business underwritten through loss sensitive programs that permit the charge of additional or refund of return premiums to wholly or partially offset changes in estimated claim costs, or to business underwritten as a service carrier on behalf of various industry-wide involuntary market (i.e. assigned risk) pools. A much smaller portion pertains to business produced on a traditional risk transfer basis. The Company has established applicable reserves for claims as they have been reported and for claims not as yet reported on the basis of its historical experience as well as assumptions relative to the effect of the revised regulations. Inasmuch as a variety of challenges are likely as the revised regulations are implemented through the actual claim settlement process, the potential impact on reserves, gross and net of reinsurance or retrospective premium adjustments, resulting from such regulations cannot be estimated with reasonable certainty. | ||||||||||||||||||||||||
Old Republic's reserve estimates also include provisions for indemnity and settlement costs for various asbestosis and environmental impairment ("A&E") claims that have been filed in the normal course of business against a number of its insurance subsidiaries. Many such claims relate to policies incepting prior to 1985, including many issued during a short period between 1981 and 1982 pursuant to an agency agreement canceled in 1982. Over the years, the Company's property and liability insurance subsidiaries have typically issued general liability insurance policies with face amounts ranging between $1.0 and $2.0 and rarely exceeding $10.0. Such policies have, in turn, been subject to reinsurance cessions which have typically reduced the subsidiaries' net retentions to $.5 or less as to each claim. Old Republic's exposure to A&E claims cannot, however, be calculated by conventional insurance reserving methods for a variety of reasons, including: a) the absence of statistically valid data inasmuch as such claims generally involve long reporting delays and very often uncertainty as to the number and identity of insureds against whom such claims have arisen or will arise; and b) the litigation history of such or similar claims for insurance industry members which has produced inconsistent court decisions with regard to such questions as when an alleged loss occurred, which policies provide coverage, how a loss is to be allocated among potentially responsible insureds and/or their insurance carriers, how policy coverage exclusions are to be interpreted, what types of environmental impairment or toxic tort claims are covered, when the insurer's duty to defend is triggered, how policy limits are to be calculated, and whether clean-up costs constitute property damage. Over time, the Executive Branch and/or the Congress of the United States have proposed or considered changes in the legislation and rules affecting the determination of liability for environmental and asbestosis claims. As of December 31, 2013, however, there is no solid evidence to suggest that possible future changes might mitigate or reduce some or all of these claim exposures. Because of the above issues and uncertainties, estimation of reserves for losses and allocated loss adjustment expenses for A&E claims in particular is much more difficult or impossible to quantify with a high degree of precision. Accordingly, no representation can be made that the Company's reserves for such claims and related costs will not prove to be overstated or understated in the future. At December 31, 2013 and 2012, Old Republic's aggregate indemnity and loss adjustment expense reserves specifically identified with A&E exposures amounted to $159.7 and $147.1 gross, respectively, and $121.3 and $119.4 net of reinsurance, respectively. Old Republic's average five year survival ratios stood at 5.5 years (gross) and 7.8 years (net of reinsurance) as of December 31, 2013 and 4.7 years (gross) and 7.6 years (net of reinsurance) as of December 31, 2012. The survival ratios are presented on a pro forma basis (unaudited) as if PMA had been consolidated with ORI for all periods. Fluctuations in this ratio between years can be caused by the inconsistent pay out patterns associated with these types of claims. | ||||||||||||||||||||||||
Title insurance and related escrow services loss and loss adjustment expense reserves are established as point estimates to cover the projected settlement costs of known as well as IBNR losses related to premium and escrow service revenues of each reporting period. Reserves for known claims are based on an assessment of the facts available to the Company during the settlement process. The point estimates covering all claim reserves inherently take into account IBNR claims based on past experience and evaluations of such variables as changing trends in the types of policies issued, changes in real estate markets and interest rate environments, and changing levels of loan refinancing, all of which can have a bearing on the emergence, number, and ultimate cost of claims. | ||||||||||||||||||||||||
RFIG Run-off mortgage guaranty insurance reserves for unpaid claims and claim adjustment expenses are recognized only upon an instance of default, defined as an insured mortgage loan for which two or more consecutive monthly payments have been missed. Loss reserves are based on statistical calculations that take into account the number of reported insured mortgage loan defaults as of each balance sheet date, as well as experience-based estimates of loan defaults that have occurred but have not as yet been reported. Further, the loss reserve estimating process takes into account a large number of variables including trends in claim severity, potential salvage recoveries, expected cure rates for reported loan delinquencies at various stages of default, the level of coverage rescissions and claims denials due to material misrepresentation in key underwriting information or non-compliance with prescribed underwriting guidelines, and management judgments relative to future employment levels, housing market activity, and mortgage loan interest costs, demand, and extensions. | ||||||||||||||||||||||||
The Company has the legal right to rescind mortgage insurance coverage unilaterally as expressly stated in its policy. Moreover, two federal courts that have recently considered that policy wording have each affirmed that right (See First Tennessee Bank N.A. v. Republic Mortg. Ins. Co., Case No. 2:10-cv-02513-JPM-cgc (W.D. Tenn., Feb. 25, 2011) and JPMorgan Chase Bank N.A. v. Republic Mortg. Ins. Co., Civil Action No. 10-06141 (SRC) (D. NJ, May 4, 2011), each decision citing supporting state law legal precedent). RMIC's mortgage insurance policy provides that the insured represents that all statements made and information provided to it in an application for coverage for a loan, without regard to who made the statements or provided the information, have been made and presented for and on behalf of the insured; and that such statements and information are neither false nor misleading in any material respect, nor omit any fact necessary to make such statements and information not false or misleading in any material respect. According to the policy, if any of those representations are materially false or misleading with respect to a loan, the Company has the right to cancel or rescind coverage for that loan retroactively to commencement of the coverage. Whenever the Company determines that an application contains a material misrepresentation, it either advises the insured in writing of its findings prior to rescinding coverage or exercises its unilateral right to rescind coverage for that loan, stating the reasons for that action in writing and returning the applicable premium. The rescission of coverage in instances of materially faulty representations or warranties provided in applications for insurance is a necessary and prevailing practice throughout the insurance industry. In the case of mortgage guaranty insurance, rescissions have occurred regularly over the years but have been generally immaterial. Since 2008, however, the Company has experienced a much greater incidence of rescissions due to increased levels of observed fraud and misrepresentations in insurance applications pertaining to business underwritten between 2004 and the first half of 2008. As a result, the Company has incorporated certain assumptions regarding the expected levels of coverage rescissions and claim denials in its reserving methodology since 2008. Such estimates, which are evaluated at each balance sheet date, take into account observed as well as historical trends in rescission and denial rates. The table below shows the estimated effects of coverage rescissions and claim denials on loss reserves and settled and incurred losses. | ||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||
Estimated reduction in beginning reserve | $ | 174.9 | $ | 313.2 | $ | 710.3 | ||||||||||||||||||
Total incurred claims and settlement expenses reduced | ||||||||||||||||||||||||
(increased) by changes in estimated rescissions: | ||||||||||||||||||||||||
Current year | 80.5 | 111.7 | 223.1 | |||||||||||||||||||||
Prior year | 71.9 | 12.2 | (340.8 | ) | ||||||||||||||||||||
Sub-total | 152.5 | 124 | (117.6 | ) | ||||||||||||||||||||
Estimated rescission reduction in settled claims | (212.2 | ) | (262.3 | ) | (279.5 | ) | ||||||||||||||||||
Estimated reduction in ending reserve | $ | 115.2 | $ | 174.9 | $ | 313.2 | ||||||||||||||||||
As above-noted, the estimated reduction in ending loss reserves reflects, in large measure, a variety of judgments relative to the level of expected coverage rescissions and claim denials on loans that are in default as of each balance sheet date. The provision for insured events of the current year resulted from actual and anticipated rescissions and claim denials attributable to newly reported delinquencies in each respective year. The provision for insured events of prior years resulted from actual rescission and claim denial activity or revisions in assumptions regarding expected rescission or claim denial rates on outstanding prior year delinquencies. The trends since 2010 reflect a continuing reduction in the level of actual and anticipated rescission and claim denial rates on total outstanding delinquencies. Claims not paid by virtue of rescission or denial represent the Company's estimated contractual risk, before consideration of the impacts of any reinsurance and deductibles or aggregate loss limits, on cases that are settled by the issuance of a rescission or denial notification. Variances between the estimated rescission and actual claim denial rate are reflected in the periods during which they occur. | ||||||||||||||||||||||||
Although the insured has no right under the policy to appeal a Company claim decision, the insured may, at any time, contest in writing the Company's findings or action with respect to a loan or a claim. In such cases, the Company considers any additional information supplied by the insured. This consideration may lead to further investigation, retraction or confirmation of the initial determination. If the Company concludes that it will reinstate coverage, it advises the insured in writing that it will do so immediately upon receipt of the premium previously returned. Reserves are not adjusted for potential reversals of rescissions or adverse rulings for loans under dispute since such reversals of claim rescissions and denials have historically been immaterial to the reserve estimation process. | ||||||||||||||||||||||||
There is currently a single instance in which the Company seeks to recover from an insured for previously paid claims. In its counterclaim in the pending arbitration with Countrywide, RMIC is seeking to rescind a June 2006 amendment to a mortgage insurance policy that it contends was fraudulently induced by Countrywide (Countrywide Fin'l Corp. v. Republic Mortg. Ins. Co., Case No. 72 195 Y 0011510 (AAA). The Countrywide parties are Countrywide Financial Corporation, Countrywide Home Loans, Inc., Bank of America, N.A., in its own capacity and as successor by merger of BAC Home Loan Servicing L.P.). The amendment made coverage for a loan immediately incontestable for borrower misrepresentation. The Company seeks a declaration that the amendment is null and void and to recover the claim amounts totaling at least $26.6 that it paid notwithstanding the existence of borrower misrepresentations that otherwise would have supported a rescission of coverage for those loans. The Company does not anticipate recoveries from previously paid claims in its reserving process until such time as a recovery is deemed probable and the amount can be reasonably estimated. | ||||||||||||||||||||||||
In addition to the above reserve elements, the Company establishes reserves for loss settlement costs that are not directly related to individual claims. Such reserves are based on prior years' cost experience and trends, and are intended to cover the unallocated costs of claim departments' administration of known and IBNR claims. | ||||||||||||||||||||||||
The following table shows an analysis of changes in aggregate reserves for the Company's losses, claims and settlement expenses for each of the years shown. | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Gross reserves at beginning of year | $ | 9,303.30 | $ | 8,786.60 | $ | 8,814.60 | ||||||||||||||||||
Less: reinsurance losses recoverable | 2,847.00 | 2,908.10 | 2,945.30 | |||||||||||||||||||||
Net reserves at beginning of year: | ||||||||||||||||||||||||
General Insurance | 4,048.90 | 3,874.90 | 3,888.00 | |||||||||||||||||||||
Title Insurance | 396.4 | 332 | 298 | |||||||||||||||||||||
RFIG Run-off | 1,994.80 | 1,654.00 | 1,663.10 | |||||||||||||||||||||
Other | 15.9 | 17.4 | 20 | |||||||||||||||||||||
Sub-total | 6,456.20 | 5,878.50 | 5,869.30 | |||||||||||||||||||||
Incurred claims and claim adjustment expenses: | ||||||||||||||||||||||||
Provisions for insured events of the current year: | ||||||||||||||||||||||||
General Insurance | 1,857.90 | 1,729.60 | 1,575.30 | |||||||||||||||||||||
Title Insurance | 137.2 | 120.9 | 105.7 | |||||||||||||||||||||
RFIG Run-off (a) | 487.5 | 762.2 | 887.1 | |||||||||||||||||||||
Other | 41 | 40.3 | 40.2 | |||||||||||||||||||||
Sub-total | 2,523.70 | 2,653.10 | 2,608.50 | |||||||||||||||||||||
Change in provision for insured events of prior years: | ||||||||||||||||||||||||
General Insurance | (23.7 | ) | (51.5 | ) | (130.9 | ) | ||||||||||||||||||
Title Insurance | (3.1 | ) | — | — | ||||||||||||||||||||
RFIG Run-off (a) | (269.7 | ) | 148.2 | 254.8 | ||||||||||||||||||||
Other | (2.5 | ) | (1.5 | ) | (1.2 | ) | ||||||||||||||||||
Sub-total | (299.1 | ) | 95.1 | 122.6 | ||||||||||||||||||||
Total incurred claims and claim adjustment expenses (a) | 2,224.50 | 2,748.20 | 2,731.10 | |||||||||||||||||||||
Payments: | ||||||||||||||||||||||||
Claims and claim adjustment expenses attributable to | ||||||||||||||||||||||||
insured events of the current year: | ||||||||||||||||||||||||
General Insurance | 620.8 | 587.8 | 569.8 | |||||||||||||||||||||
Title Insurance | 6 | 3 | 7.9 | |||||||||||||||||||||
RFIG Run-off (b) | 39.4 | 46.6 | 100.5 | |||||||||||||||||||||
Other | 29.5 | 30.6 | 30.7 | |||||||||||||||||||||
Sub-total | 695.9 | 668.1 | 709.2 | |||||||||||||||||||||
Claims and claim adjustment expenses attributable to | ||||||||||||||||||||||||
insured events of prior years: | ||||||||||||||||||||||||
General Insurance | 928.2 | 916.1 | 887.6 | |||||||||||||||||||||
Title Insurance | 52.8 | 53.4 | 63.6 | |||||||||||||||||||||
RFIG Run-off (b) | 398.9 | 523 | 1,050.50 | |||||||||||||||||||||
Other | 8 | 9.6 | 10.7 | |||||||||||||||||||||
Sub-total | 1,388.00 | 1,502.30 | 2,012.60 | |||||||||||||||||||||
Total payments (b) | 2,083.90 | 2,170.50 | 2,721.90 | |||||||||||||||||||||
Amount of reserves for unpaid claims and claim adjustment expenses | ||||||||||||||||||||||||
at the end of each year, net of reinsurance losses recoverable: (c) | ||||||||||||||||||||||||
General Insurance | 4,334.10 | 4,048.90 | 3,874.90 | |||||||||||||||||||||
Title Insurance | 471.5 | 396.4 | 332 | |||||||||||||||||||||
RFIG Run-off | 1,774.20 | 1,994.80 | 1,654.00 | |||||||||||||||||||||
Other | 16.8 | 15.9 | 17.4 | |||||||||||||||||||||
Sub-total | 6,596.80 | 6,456.20 | 5,878.50 | |||||||||||||||||||||
Reinsurance losses recoverable | 2,836.70 | 2,847.00 | 2,908.10 | |||||||||||||||||||||
Gross reserves at end of year | $ | 9,433.50 | $ | 9,303.30 | $ | 8,786.60 | ||||||||||||||||||
__________ | ||||||||||||||||||||||||
As noted elsewhere in this report, in 2012 Old Republic's CCI insurance coverage was combined with the MI business within the overall RFIG Run-off Business. Prior periods' segmented information for the General Insurance and RFIG Run-off Business segments has therefore been reclassified to provide necessary consistency in period-to-period operating comparisons. | ||||||||||||||||||||||||
Excluding the reclassification of CCI from the General Insurance to the RFIG Run-off Business segment, certain elements shown in the preceding table would have been as follows: | ||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||
Change in provision for incurred events of prior years: | ||||||||||||||||||||||||
General Insurance | $ | (40.4 | ) | $ | (19.8 | ) | $ | (149.2 | ) | |||||||||||||||
RFIG Run-off (a) | (253.0 | ) | 116.5 | 273.2 | ||||||||||||||||||||
Payment of claim and claim adjustment expenses attributable to | ||||||||||||||||||||||||
incurred events of the current and prior years: | ||||||||||||||||||||||||
General Insurance | 1,597.50 | 1,577.90 | 1,551.10 | |||||||||||||||||||||
RFIG Run-off (b) | $ | 389.8 | $ | 495.7 | $ | 1,057.40 | ||||||||||||||||||
(a) | In common with all other insurance lines, RFIG Run-off mortgage guaranty settled and incurred claim and claim adjustment expenses include only those costs actually or expected to be paid by the Company. As previously noted, changes in mortgage guaranty aggregate case, IBNR, and loss adjustment expense reserves shown below and entering into the determination of incurred claim costs, take into account, among a large number of variables, claim cost reductions for anticipated coverage rescissions and claims denials. | |||||||||||||||||||||||
The RFIG Run-off mortgage guaranty provision for insured events of the current year was reduced by an estimated $80.5, $111.7 and $223.1, respectively, for 2013, 2012 and 2011. The provision for insured events of prior years in 2013, 2012 and 2011 was reduced (increased) by an estimated $71.9, $12.2 and $(340.8), respectively. These changes were offset to varying degrees by differences between actual claim settlements relative to expected experience and by subsequent revisions of assumptions in regards to claim frequency, severity or levels of associated claim settlement costs which result from consideration of underlying trends and expectations. | ||||||||||||||||||||||||
The following table reflects the changes in net reserves between succeeding balance sheet dates. | ||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||
Net reserve increase(decrease): | ||||||||||||||||||||||||
General Insurance | $ | 285.1 | $ | 174 | $ | (13.1 | ) | |||||||||||||||||
Title Insurance | 75.1 | 64.3 | 34 | |||||||||||||||||||||
RFIG Run-off | (220.6 | ) | 340.7 | (9.0 | ) | |||||||||||||||||||
Other | 0.9 | (1.5 | ) | (2.6 | ) | |||||||||||||||||||
Total | $ | 140.6 | $ | 577.6 | $ | 9.2 | ||||||||||||||||||
(b) | Rescissions reduced the Company's settled losses by an estimated $212.2, $262.3, and $279.5 for 2013, 2012, and 2011, respectively. 2013 and 2012 RFIG Run-off Business claim and claim adjustment expense payments reflect the retention of the DPO within claim reserves which amounted to $551.5 and $299.5 as of the respective year-ends. | |||||||||||||||||||||||
(c) | Year end net IBNR reserves for each segment were as follows: | |||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||
General Insurance | $ | 2,118.40 | $ | 1,947.00 | $ | 1,878.20 | ||||||||||||||||||
Title Insurance | 407.1 | 336.9 | 262.5 | |||||||||||||||||||||
RFIG Run-off | 121.3 | 147.5 | 94.8 | |||||||||||||||||||||
Other | 4 | 4.6 | 4.6 | |||||||||||||||||||||
Total | $ | 2,651.00 | $ | 2,436.10 | $ | 2,240.40 | ||||||||||||||||||
For the three most recent calendar years, the above table indicates that the one-year development of consolidated reserves at the beginning of each year produced a favorable development of 4.6% for 2013 and unfavorable developments of (1.6)% and (2.1)% for 2012, and 2011, respectively, with average favorable annual developments of .3%. The Company believes that the factors most responsible, in varying and continually changing degrees, for reserve redundancies or deficiencies include, as to mortgage guaranty and the CCI coverage, differences in originally estimated salvage and subrogation recoveries, sales and prices of homes that can impact claim costs upon the disposition of foreclosed properties, changes in regional or local economic conditions and employment levels, greater numbers of coverage rescissions and claims denials due to material misrepresentation in key underwriting information or non-compliance with prescribed underwriting guidelines, the extent of loan refinancing activity that can reduce the period of time over which a policy remains at risk, and lower than expected frequencies of claims incurred but not reported. As to many general insurance coverages, changes in reserve adequacy or deficiency result from the effect of reserve discounts applicable to workers' compensation claims, higher than expected severity of litigated claims in particular, governmental or judicially imposed retroactive conditions in the settlement of claims such as noted above in regard to black lung disease claims, greater than anticipated inflation rates applicable to repairs and the medical portion of claims in particular, and higher than expected claims incurred but not reported due to the slower and highly volatile emergence patterns applicable to certain types of claims such as those stemming from litigated, assumed reinsurance, or the A&E types of claims noted above. | ||||||||||||||||||||||||
Reinsurance | ' | |||||||||||||||||||||||
Reinsurance - The cost of reinsurance is recognized over the terms of reinsurance contracts. Amounts recoverable from reinsurers for loss and loss adjustment expenses are estimated in a manner consistent with the claim liability associated with the reinsured business. The Company evaluates the financial condition of its reinsurers on a regular basis. Allowances are established for amounts deemed uncollectible and are included in the Company's net claim and claim expense reserves. | ||||||||||||||||||||||||
Income Taxes | ' | |||||||||||||||||||||||
Income Taxes - The Company and most of its subsidiaries file a consolidated tax return and provide for income taxes payable currently. Deferred income taxes included in the accompanying consolidated financial statements will not necessarily become payable or recoverable in the future. The Company uses the asset and liability method of calculating deferred income taxes. This method results in the establishment of deferred tax assets and liabilities, calculated at currently enacted tax rates that are applied to the cumulative temporary differences between financial statement and tax bases of assets and liabilities. | ||||||||||||||||||||||||
The provision for combined current and deferred income taxes (credits) reflected in the consolidated statements of income does not bear the usual relationship to income before income taxes (credits) as the result of permanent and other differences between pretax income or loss and taxable income or loss determined under existing tax regulations. The more significant differences, their effect on the statutory income tax rate (credit), and the resulting effective income tax rates (credits) are summarized below: | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Statutory tax rate (credit) | 35 | % | (35.0 | )% | (35.0 | )% | ||||||||||||||||||
Tax rate increases (decreases): | ||||||||||||||||||||||||
Tax-exempt interest | (.4 | ) | (4.1 | ) | (5.4 | ) | ||||||||||||||||||
Dividends received exclusion | (.6 | ) | (2.1 | ) | (1.0 | ) | ||||||||||||||||||
Valuation allowance (see below) | — | (2.0 | ) | (.6 | ) | |||||||||||||||||||
Goodwill impairment | — | 0.4 | 1.6 | |||||||||||||||||||||
Foreign income (loss) reattribution | (.2 | ) | (3.5 | ) | 1 | |||||||||||||||||||
Sale of subsidiary | — | (1.3 | ) | — | ||||||||||||||||||||
Other items - net | (.4 | ) | 1 | (1.2 | ) | |||||||||||||||||||
Effective tax rate (credit) | 33.4 | % | (46.6 | )% | (40.6 | )% | ||||||||||||||||||
The tax effects of temporary differences that give rise to significant portions of the Company's net deferred tax assets (liabilities) are as follows at the dates shown: | ||||||||||||||||||||||||
December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Deferred Tax Assets: | ||||||||||||||||||||||||
Losses, claims, and settlement expenses | $ | 286.9 | $ | 272.4 | $ | 231.7 | ||||||||||||||||||
Pension and deferred compensation plans | 51.3 | 90.8 | 85.8 | |||||||||||||||||||||
Impairment losses on investments | 3.2 | 49.2 | 52.9 | |||||||||||||||||||||
Net operating loss carryforward | 43.7 | 91 | 77.2 | |||||||||||||||||||||
AMT credit carryforward | 9.6 | 25.5 | 29.7 | |||||||||||||||||||||
Other temporary differences | 50.5 | 67.7 | 50.1 | |||||||||||||||||||||
Total deferred tax assets before valuation allowance | 445.3 | 596.8 | 527.7 | |||||||||||||||||||||
Valuation allowance | (9.6 | ) | (9.6 | ) | (12.2 | ) | ||||||||||||||||||
Total deferred tax assets | 435.7 | 587.2 | 515.4 | |||||||||||||||||||||
Deferred Tax Liabilities: | ||||||||||||||||||||||||
Unearned premium reserves | 42.7 | 35.3 | 29.3 | |||||||||||||||||||||
Deferred policy acquisition costs | 63.1 | 52.5 | 63.9 | |||||||||||||||||||||
Mortgage guaranty insurers' contingency reserves | 20.1 | — | 0.4 | |||||||||||||||||||||
Amortization of fixed maturity securities | 4.9 | 6.9 | 7.2 | |||||||||||||||||||||
Net unrealized investment gains | 220.5 | 309.7 | 273 | |||||||||||||||||||||
Title plants and records | 4.9 | 5 | 5 | |||||||||||||||||||||
Other temporary differences | 30.6 | 29.6 | 19.7 | |||||||||||||||||||||
Total deferred tax liabilities | 387.1 | 439.2 | 398.7 | |||||||||||||||||||||
Net deferred tax assets (liabilities) | $ | 48.4 | $ | 148.1 | $ | 116.7 | ||||||||||||||||||
At December 31, 2013, the Company had a net operating loss ("NOL") carryforward of $124.8 which will expire in years 2020 through 2029, and a $9.6 alternative minimum tax ("AMT") credit carryforward which does not expire. The NOL carryforward is subject to the limitations set by Section 382 of the Internal Revenue Code and is available to reduce future years' taxable income. | ||||||||||||||||||||||||
A valuation allowance was established against deferred tax assets as of December 31, 2013, 2012 and 2011 related to certain NOL and tax credit carryforwards which the Company did not expect to realize. In valuing the deferred tax assets, the Company considered certain factors including primarily the scheduled reversals of certain deferred tax liabilities, estimates of future taxable income, the impact of available carryback and carryforward periods, as well as the availability of certain tax planning strategies. The Company estimates that all remaining deferred tax assets at year end 2013 will more likely than not be fully realized. | ||||||||||||||||||||||||
Pursuant to special provisions of the Internal Revenue Code pertaining to mortgage guaranty insurers, a contingency reserve (established in accordance with insurance regulations designed to protect policyholders against extraordinary volumes of claims) is deductible from gross income. The deduction is allowed only to the extent that U.S. government non-interest bearing tax and loss bonds are purchased and held in an amount equal to the tax benefit attributable to such deduction. For Federal income tax purposes, amounts deducted from the contingency reserve are taken into gross statutory taxable income in the period in which they are released. Contingency reserves may be released when incurred losses exceed thresholds established under state law or regulation, upon special request and approval by state insurance regulators, or in any event, upon the expiration of ten years. For 2013 tax purposes, the Company recognized a contingency reserve deduction of $57.6. Consequently, $20.1 of U.S. Treasury Tax and Loss Bonds will be acquired during the first quarter 2014. | ||||||||||||||||||||||||
Tax positions taken or expected to be taken in a tax return by the Company are recognized in the financial statements when it is more likely than not that the position would be sustained upon examination by tax authorities. To the best of management's knowledge there are no tax uncertainties that are expected to result in significant increases or decreases to unrecognized tax benefits within the next twelve month period. The Company views its income tax exposures as primarily consisting of timing differences whereby the ultimate deductibility of a taxable amount is highly certain but the timing of its deductibility is uncertain. Such differences relate principally to the timing of deductions for loss and premium reserves. As in prior examinations, the Internal Revenue Service (IRS) could assert that claim reserve deductions were overstated thereby reducing the Company's statutory taxable income in any particular year. The Company believes that it establishes its reserves fairly and consistently at each balance sheet date, and that it would succeed in defending its tax position in these regards. Because of the impact of deferred tax accounting, the possible accelerated payment of tax to the IRS would not necessarily affect the annual effective tax rate. During 2013, the IRS completed an examination of the Company's consolidated Federal income tax returns for the years 2005 through 2010, which produced no material change to the Company's net income. The Company classifies interest and penalties as income tax expense in the consolidated statement of income. | ||||||||||||||||||||||||
Property And Equipment | ' | |||||||||||||||||||||||
Property and Equipment - Property and equipment is generally depreciated or amortized over the estimated useful lives of the assets, (2 to 27 years), substantially by the straight-line method. Depreciation and amortization expenses related to property and equipment were $23.8, $23.9 and $21.9 in 2013, 2012, and 2011, respectively. Expenditures for maintenance and repairs are charged to income as incurred, and expenditures for major renewals and additions are capitalized. | ||||||||||||||||||||||||
Title Plants and Records | ' | |||||||||||||||||||||||
Title Plants and Records - Title plants and records are carried at original cost or appraised value at the date of purchase. Such values represent the cost of producing or acquiring interests in title records and indexes and the appraised value of purchased subsidiaries' title records and indexes at dates of acquisition. The cost of maintaining, updating, and operating title records is charged to income as incurred. Title records and indexes are ordinarily not amortized unless events or circumstances indicate that the carrying amount of the capitalized costs may not be recoverable. | ||||||||||||||||||||||||
Goodwill and Intangible Assets | ' | |||||||||||||||||||||||
Goodwill and Intangible Assets - The following table presents the components of the Company's goodwill balance: | ||||||||||||||||||||||||
General | Title | RFIG Run-off | Other | Total | ||||||||||||||||||||
January 1, 2012 | $ | 117.5 | $ | 44.3 | $ | — | $ | 0.1 | $ | 162 | ||||||||||||||
Acquisitions | — | — | — | — | — | |||||||||||||||||||
Impairments | (1.3 | ) | — | — | — | (1.3 | ) | |||||||||||||||||
December 31, 2012 | 116.2 | 44.3 | — | 0.1 | 160.7 | |||||||||||||||||||
Acquisitions | — | — | — | — | — | |||||||||||||||||||
Impairments | — | — | — | — | — | |||||||||||||||||||
December 31, 2013 | $ | 116.2 | $ | 44.3 | $ | — | $ | 0.1 | $ | 160.7 | ||||||||||||||
Goodwill resulting from business combinations is not amortizable against operations but must be tested annually for possible impairment of its continued value. Intangible assets with definitive lives are amortized against future operating results; whereas indefinite-lived intangibles are tested annually for impairment. During 2011, RFIG's historical mortgage guaranty goodwill balance of $10.7 was impaired in its entirety. | ||||||||||||||||||||||||
There are no significant goodwill balances within reporting units with estimated fair values not significantly in excess of their carrying values. | ||||||||||||||||||||||||
Employee Benefit Plans | ' | |||||||||||||||||||||||
Employee Benefit Plans - Prior to December 31, 2012, the Company had four separate pension plans covering a portion of its work force. The four plans were the Old Republic International Salaried Employees Retirement Plan (the Old Republic Plan), the Bituminous Casualty Corporation Retirement Income Plan (the Bituminous Plan), the Old Republic National Title Group Pension Plan (the Title Plan), and the PMA Capital Corporation Pension Plan (the PMA Plan). Effective December 31, 2012, the Bituminous Plan and the Title Plan were merged into the Old Republic Plan. Effective December 31, 2013, The PMA Plan was merged into the Old Republic Plan. | ||||||||||||||||||||||||
The plans are defined benefit plans pursuant to which pension payments are based primarily on years of service and employee compensation near retirement. It is the Company's policy to fund the plans' costs as they accrue. The Old Republic Plan has been closed to new participants since December 31, 2004; the PMA Plan was frozen as of December 31, 2005. The benefit levels in the Old Republic Plan were similarly frozen as of December 31, 2013. The benefit curtailment triggered a revaluation of the plan as of September 30, 2013. The impact of the curtailment resulted in increased operating expenses of $.6, a reduction of the pension obligation liability of $26.6, and a resulting increase to other comprehensive income of $17.7, net of tax. Under the terms of the freeze, the plans remain closed to new participants and eligible employees retain all of the vested rights as of the effective date of the freeze, but additional benefits do not accrue thereafter. | ||||||||||||||||||||||||
Pursuant to GAAP, the funded status of pension and other postretirement plans must be recognized in the consolidated balance sheet. The funded status is measured as the difference between the fair value of plan assets and the projected benefit obligations on a plan-by-plan basis. The funded status of an overfunded benefit plan is recognized as a net pension asset while the underfunded status of a benefit plan is recognized as a net pension liability; offsetting entries are reflected as a component of shareholders' equity in accumulated other comprehensive income, net of deferred taxes. Changes in the status of the plans are recognized in the period in which they occur. All plan assets and liabilities are measured as of December 31 of the years presented. The effects of these measurements and the changes in the projected benefit obligation ("PBO") are reflected below. | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Projected benefit obligation at beginning of year | $ | 525.7 | $ | 477.8 | $ | 425.2 | ||||||||||||||||||
Increases (decreases) during the year attributable to: | ||||||||||||||||||||||||
Service cost | 9.5 | 9.4 | 8.7 | |||||||||||||||||||||
Interest cost | 21.6 | 21.8 | 22.7 | |||||||||||||||||||||
Plan curtailments | (26.6 | ) | — | — | ||||||||||||||||||||
Actuarial (gains) losses | (32.8 | ) | 31.5 | 36.7 | ||||||||||||||||||||
Benefits paid | (18.1 | ) | (15.0 | ) | (15.5 | ) | ||||||||||||||||||
Net increase (decrease) for the year | (46.4 | ) | 47.8 | 52.6 | ||||||||||||||||||||
Projected benefit obligation at end of year | $ | 479.3 | $ | 525.7 | $ | 477.8 | ||||||||||||||||||
Accumulated benefit obligation at end of year | $ | 479.3 | $ | 495.4 | $ | 443.4 | ||||||||||||||||||
The changes in the fair value of net assets available for plan benefits are as follows: | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Fair value of net assets available for plan benefits | ||||||||||||||||||||||||
At beginning of the year | $ | 352.3 | $ | 315.4 | $ | 297.1 | ||||||||||||||||||
Increases (decreases) during the year attributable to: | ||||||||||||||||||||||||
Actual return on plan assets | 61.9 | 25.8 | 0.2 | |||||||||||||||||||||
Sponsor contributions | 12.7 | 26 | 33.6 | |||||||||||||||||||||
Benefits paid | (18.1 | ) | (15.0 | ) | (15.5 | ) | ||||||||||||||||||
Net increase (decrease) for year | 56.5 | 36.8 | 18.3 | |||||||||||||||||||||
Fair value of net assets available for plan benefits | ||||||||||||||||||||||||
At end of the year | $ | 408.8 | $ | 352.3 | $ | 315.4 | ||||||||||||||||||
Each of the plans had accumulated and projected benefit obligations in excess of plan assets at December 31, 2013, 2012 and 2011. The Company expects to make cash contributions of approximately $26.0 in calendar year 2014. | ||||||||||||||||||||||||
The components of aggregate annual net periodic pension costs consisted of the following: | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Service cost | $ | 9.5 | $ | 9.4 | $ | 8.7 | ||||||||||||||||||
Interest cost | 21.6 | 21.8 | 22.7 | |||||||||||||||||||||
Curtailment loss recognized | 0.6 | — | — | |||||||||||||||||||||
Expected return on plan assets | (26.7 | ) | (25.1 | ) | (23.7 | ) | ||||||||||||||||||
Recognized loss | 8.8 | 10 | 6 | |||||||||||||||||||||
Prior service costs | 0.1 | 0.1 | 0.1 | |||||||||||||||||||||
Net cost | $ | 14.1 | $ | 16.3 | $ | 13.9 | ||||||||||||||||||
The pretax pension costs recognized in other comprehensive income consist of the following: | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Amounts arising during the period: | ||||||||||||||||||||||||
Net recognized gain (loss) | $ | 68 | $ | (30.8 | ) | $ | (60.2 | ) | ||||||||||||||||
Plan curtailment | 26.6 | — | — | |||||||||||||||||||||
Reclassification adjustment to components of net periodic pension cost: | ||||||||||||||||||||||||
Net recognized loss | 8.8 | 10 | 6 | |||||||||||||||||||||
Net prior service cost | 0.1 | 0.1 | 0.1 | |||||||||||||||||||||
Curtailment loss recognized | 0.6 | — | — | |||||||||||||||||||||
Net pretax pension (costs) or gains recognized | $ | 104.3 | $ | (20.6 | ) | $ | (54.0 | ) | ||||||||||||||||
The amounts included in accumulated other comprehensive income that have not yet been recognized as components of net periodic pension cost consist of the following: | ||||||||||||||||||||||||
As of December 31: | 2013 | 2012 | ||||||||||||||||||||||
Net recognized loss | $ | (48.3 | ) | $ | (151.9 | ) | ||||||||||||||||||
Net prior service cost | — | (.7 | ) | |||||||||||||||||||||
Total | $ | (48.3 | ) | $ | (152.7 | ) | ||||||||||||||||||
The amounts included in accumulated other comprehensive income that will be recognized as components of net periodic pension cost during 2014 are not expected to be material. | ||||||||||||||||||||||||
The projected benefit obligations and net periodic benefit costs for the plans were determined using the following weighted-average assumptions: | ||||||||||||||||||||||||
Projected Benefit Obligation | Net Periodic Benefit Cost | |||||||||||||||||||||||
As of December 31: | 2013 | 2012 | 2013 | 2012 | 2011 | |||||||||||||||||||
Settlement discount rates | 5 | % | 4.17 | % | 4.17 | % | 4.66 | % | 5.46 | % | ||||||||||||||
Rates of compensation increase | N/A | 3.22 | % | 3.22 | % | 4.25 | % | 4.25 | % | |||||||||||||||
Long-term rates of return on plans' assets | N/A | N/A | 7.56 | % | 7.81 | % | 7.94 | % | ||||||||||||||||
The assumed settlement discount rates were determined by matching the current estimate of each Plan's projected cash outflows against spot rate yields on a portfolio of high quality bonds as of the measurement date. To develop the expected long-term rate of return on assets assumption, historical returns and the future return expectations for each asset class, as well as the target asset allocation of the pension portfolios were considered. The investment policy of the Plans takes into account the matching of assets and liabilities, appropriate risk aversion, liquidity needs, the preservation of capital, and the attainment of modest growth. The weighted-average asset allocations of the Plans were as follows: | ||||||||||||||||||||||||
Investment Policy Asset | ||||||||||||||||||||||||
As of December 31: | 2013 | 2012 | Allocation % Range Target | |||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||
Common shares of Company stock | 12 | % | 8.3 | % | ||||||||||||||||||||
Other | 50.9 | 48.5 | ||||||||||||||||||||||
Sub-total | 62.9 | 56.8 | 30% to 70% | |||||||||||||||||||||
Fixed maturity securities | 29.5 | 35.2 | 30% to 70% | |||||||||||||||||||||
Other | 7.6 | 8 | 1% to 20% | |||||||||||||||||||||
Total | 100 | % | 100 | % | ||||||||||||||||||||
Quoted values and other data provided by the respective investment custodians are used as inputs for determining fair value of the Plan's debt and equity securities. The custodians are understood to obtain market quotations and actual transaction prices for securities that have quoted prices in active markets and use their own proprietary method for determining the fair value of securities that are not actively traded. In general, these methods involve the use of "matrix pricing" in which the investment custodian uses observable inputs, including, but not limited to, investment yields, credit risks and spreads, benchmarking of like securities, broker-dealer quotes, reported trades and sector groupings to determine a reasonable fair value. | ||||||||||||||||||||||||
The following tables present a summary of the Plans' assets segregated among the various input levels described in Note 1(d). | ||||||||||||||||||||||||
Fair Value Measurements | ||||||||||||||||||||||||
As of December 31, 2013: | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||
Common shares of Company stock | $ | 48.8 | $ | — | $ | — | $ | 48.8 | ||||||||||||||||
Other | 189.1 | 18.9 | — | 208.1 | ||||||||||||||||||||
Sub-total | 238 | 18.9 | — | 256.9 | ||||||||||||||||||||
Fixed maturity securities | 10.5 | 109.9 | — | 120.4 | ||||||||||||||||||||
Other | 16.5 | 7.3 | 7.4 | 31.3 | ||||||||||||||||||||
Total | $ | 265.1 | $ | 136.3 | $ | 7.4 | $ | 408.8 | ||||||||||||||||
As of December 31, 2012: | ||||||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||
Common shares of Company stock | $ | 29 | $ | — | $ | — | $ | 29 | ||||||||||||||||
Other | 154 | 16.9 | — | 171 | ||||||||||||||||||||
Sub-total | 183.1 | 16.9 | — | 200.1 | ||||||||||||||||||||
Fixed maturity securities | 1.5 | 122.5 | — | 124 | ||||||||||||||||||||
Other | 10.6 | 9.3 | 8.1 | 28.1 | ||||||||||||||||||||
Total | $ | 195.3 | $ | 148.8 | $ | 8.1 | $ | 352.3 | ||||||||||||||||
Level 1 assets include U.S. Treasury notes, publicly traded common stocks, mutual funds and certain short-term investments. Level 2 assets generally include corporate and government agency bonds, common collective trusts, and a limited partnership investment. Level 3 assets primarily consist of an immediate participation guaranteed fund. | ||||||||||||||||||||||||
The benefits expected to be paid as of December 31, 2013 for the next 10 years are as follows: 2014: $20.6; 2015: $22.8; 2016: $24.2; 2017 $25.1; 2018: $26.4 and for the five years after 2018: $148.5. | ||||||||||||||||||||||||
The Company has a number of profit sharing and other incentive compensation programs for the benefit of a substantial number of its employees. The costs related to such programs are summarized below: | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Employees Savings and Stock Ownership Plan "ESSOP" | $ | 7.8 | $ | 5.3 | $ | 5.9 | ||||||||||||||||||
Other profit sharing plans | 12.1 | 12.9 | 13.4 | |||||||||||||||||||||
Cash and deferred incentive compensation | $ | 21.6 | $ | 20.5 | $ | 19.5 | ||||||||||||||||||
A majority of the Company's employees participate in the ESSOP. Current Company contributions are provided in the form of Old Republic common stock. Dividends on shares are allocated to participants as earnings, and likewise invested in Company stock; dividends on unallocated shares are used to pay debt service costs. The Company's annual contributions are based on a formula that takes the growth in net operating income per share over consecutive five year periods into account. As of December 31, 2013, there were 14,009,007 Old Republic common shares owned by the ESSOP, of which 10,911,379 were allocated to employees' account balances. There are no repurchase obligations in existence. See Note 3(b). | ||||||||||||||||||||||||
Escrow Funds | ' | |||||||||||||||||||||||
Escrow Funds - Segregated cash deposit accounts and the offsetting liabilities for escrow deposits in connection with Title Insurance Group real estate transactions in the same amounts ($1,043.9 and $878.1 at December 31, 2013 and 2012, respectively) are not included as assets or liabilities in the accompanying consolidated balance sheets as the escrow funds are not available for regular operations. | ||||||||||||||||||||||||
Earnings Per Share | ' | |||||||||||||||||||||||
Earnings Per Share - Consolidated basic earnings per share excludes the dilutive effect of common stock equivalents and is computed by dividing income (loss) available to common stockholders by the weighted-average number of common shares actually outstanding for the year. Diluted earnings per share are similarly calculated with the inclusion of dilutive common stock equivalents. The following table provides a reconciliation of net income (loss) and the number of shares used in basic and diluted earnings per share calculations. | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||
Net income (loss) | $ | 447.8 | $ | (68.6 | ) | $ | (140.5 | ) | ||||||||||||||||
Numerator for basic earnings per share - | ||||||||||||||||||||||||
income (loss) available to common stockholders | 447.8 | (68.6 | ) | (140.5 | ) | |||||||||||||||||||
Adjustment for interest expense incurred on | ||||||||||||||||||||||||
assumed conversion of convertible notes | 14.6 | — | — | |||||||||||||||||||||
Numerator for diluted earnings per share - | ||||||||||||||||||||||||
income (loss) available to common stockholders | ||||||||||||||||||||||||
after assumed conversion of convertible notes | $ | 462.4 | $ | (68.6 | ) | $ | (140.5 | ) | ||||||||||||||||
Denominator: | ||||||||||||||||||||||||
Denominator for basic earnings per share - | ||||||||||||||||||||||||
weighted-average shares (a) | 257,443,999 | 255,812,888 | 255,045,210 | |||||||||||||||||||||
Effect of dilutive securities - stock based compensation awards | 784,080 | — | — | |||||||||||||||||||||
Effect of dilutive securities - convertible senior notes | 35,455,956 | — | — | |||||||||||||||||||||
Denominator for diluted earnings per share - | ||||||||||||||||||||||||
adjusted weighted-average shares | ||||||||||||||||||||||||
and assumed conversion of convertible notes (a) | 293,684,035 | 255,812,888 | 255,045,210 | |||||||||||||||||||||
Earnings per share: Basic | $ | 1.74 | $ | (.27 | ) | $ | (.55 | ) | ||||||||||||||||
Diluted | $ | 1.57 | $ | (.27 | ) | $ | (.55 | ) | ||||||||||||||||
Anti-dilutive common stock equivalents | ||||||||||||||||||||||||
excluded from earning per share computations: | ||||||||||||||||||||||||
Stock based compensation awards | 7,563,456 | 14,543,835 | 16,007,624 | |||||||||||||||||||||
Convertible senior notes | — | 35,409,303 | 56,464,160 | |||||||||||||||||||||
Total | 7,563,456 | 49,953,138 | 72,471,784 | |||||||||||||||||||||
__________ | ||||||||||||||||||||||||
(a) In calculating earnings per share, pertinent accounting rules require that common shares owned by the Company's Employee Savings and Stock Ownership Plan that are as yet unallocated to participants in the plan be excluded from the calculation. Such shares are issued and outstanding, and have the same voting and other rights applicable to all other common shares. | ||||||||||||||||||||||||
Concentration of credit risk | ' | |||||||||||||||||||||||
Concentration of Credit Risk - The Company is not exposed to material concentrations of credit risks as to any one issuer of investment securities. | ||||||||||||||||||||||||
Stock Based Compensation | ' | |||||||||||||||||||||||
Stock Based Compensation - As periodically amended, the Company has had a stock option plan in effect for certain eligible key employees since 1978. Under the current plan amended in 2010, the maximum number of common shares available for 2010 and future years' grants has been set at 14.5 million through 2016. The exercise price of stock options is equal to the closing market price of the Company's common stock on the date of grant, and the contractual life of the grant is generally ten years from the date of the grant. Options granted may be exercised to the extent of 10% of the number of shares covered thereby as of December 31st of the year of the grant and, cumulatively, to the extent of an additional 15%, 20%, 25% and 30% on and after the second through fifth calendar years, respectively. Options granted to employees who meet certain retirement eligibility provisions are fully expensed on the date of grant. | ||||||||||||||||||||||||
The following table presents the stock based compensation expense and income tax benefit recognized in the financial statements: | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Stock based compensation expense | $ | 1.6 | $ | 1.7 | $ | 3 | ||||||||||||||||||
Income tax benefit | $ | 0.5 | $ | 0.6 | $ | 1 | ||||||||||||||||||
The fair value of each stock option award is estimated on the date of grant using the Black-Scholes-Merton Model. The following table presents the assumptions used in the Black-Scholes Model for the awards granted during the periods presented. Expected volatilities are based on the historical experience of Old Republic's common stock. The expected term of stock options represents the period of time that stock options granted are assumed to be outstanding. The Company uses historical data to estimate the effect of stock option exercise and employee departure behavior; groups of employees that have similar historical behavior are considered separately for valuation purposes. The risk-free rate of return for periods within the contractual term of the share option is based on the U.S. Treasury rate in effect at the time of the grant. | ||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||
Expected volatility | 0.33 | 0.32 | 0.31 | |||||||||||||||||||||
Expected dividends | 5.99 | % | 6.88 | % | 5.95 | % | ||||||||||||||||||
Expected term (in years) | 7 | 7 | 7 | |||||||||||||||||||||
Risk-free rate | 1.19 | % | 1.74 | % | 2.73 | % | ||||||||||||||||||
A summary of stock option activity under the plan as of December 31, 2013, 2012 and 2011, and changes in outstanding options during the years then ended is presented below: | ||||||||||||||||||||||||
As of and for the Years Ended December 31, | ||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||
Shares | Weighted | Shares | Weighted | Shares | Weighted | |||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||
Exercise | Exercise | Exercise | ||||||||||||||||||||||
Price | Price | Price | ||||||||||||||||||||||
Outstanding at beginning of year | 14,293,149 | $ | 16.75 | 15,679,915 | $ | 17.25 | 16,560,483 | $ | 17.39 | |||||||||||||||
Granted | 922,500 | 12.57 | 974,500 | 10.8 | 1,064,500 | 12.33 | ||||||||||||||||||
Exercised | 897,909 | 12.22 | 14,850 | 10.48 | 31,113 | 12.22 | ||||||||||||||||||
Forfeited and expired | 1,510,468 | 15.01 | 2,346,416 | 17.66 | 1,913,955 | 15.85 | ||||||||||||||||||
Outstanding at end of year | 12,807,272 | 16.97 | 14,293,149 | 16.75 | 15,679,915 | 17.25 | ||||||||||||||||||
Exercisable at end of year | 10,582,298 | $ | 18.03 | 12,032,624 | $ | 17.74 | 13,262,682 | $ | 18.21 | |||||||||||||||
Weighted average fair value of | ||||||||||||||||||||||||
options granted during the year (a) | $ | 1.94 | per share | $ | 1.46 | per share | $ | 1.99 | per share | |||||||||||||||
__________ | ||||||||||||||||||||||||
(a) Based on the Black-Scholes option pricing model and the assumptions outlined above. | ||||||||||||||||||||||||
A summary of stock options outstanding and exercisable at December 31, 2013 follows: | ||||||||||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||||||
Weighted - Average | Weighted | |||||||||||||||||||||||
Average | ||||||||||||||||||||||||
Exercise | ||||||||||||||||||||||||
Ranges of Exercise Prices | Year(s) | Number | Remaining | Exercise | Number | Price | ||||||||||||||||||
Of | Out- | Contractual | Price | Exercisable | ||||||||||||||||||||
Grant | Standing | Life | ||||||||||||||||||||||
$19.32 | to | $20.02 | 2004 | 1,850,852 | 0.25 | $ | 19.33 | 1,850,852 | $ | 19.33 | ||||||||||||||
$18.41 | to | $20.87 | 2005 | 1,572,059 | 1.25 | 18.45 | 1,572,059 | 18.45 | ||||||||||||||||
$21.36 | to | $22.35 | 2006 | 2,089,525 | 2.25 | 22 | 2,089,525 | 22 | ||||||||||||||||
$21.78 | to | $23.16 | 2007 | 1,971,475 | 3.25 | 21.78 | 1,971,475 | 21.78 | ||||||||||||||||
$7.73 | to | $12.95 | 2008 | 1,048,370 | 4.25 | 12.93 | 1,048,370 | 12.93 | ||||||||||||||||
$10.48 | 2009 | 698,133 | 5.25 | 10.48 | 698,133 | 10.48 | ||||||||||||||||||
$12.08 | 2010 | 690,225 | 6.25 | 12.08 | 490,234 | 12.08 | ||||||||||||||||||
$10.51 | to | $14.31 | 2010 | (a) | 67,745 | 0.25 | 12.96 | 67,745 | 12.96 | |||||||||||||||
$12.33 | 2011 | 945,413 | 7.25 | 12.33 | 442,146 | 12.33 | ||||||||||||||||||
$10.80 | 2012 | 953,475 | 8.25 | 10.8 | 246,711 | 10.8 | ||||||||||||||||||
$12.57 | 2013 | 920,000 | 9.25 | 12.57 | 105,048 | 12.57 | ||||||||||||||||||
Total | 12,807,272 | $ | 16.97 | 10,582,298 | $ | 18.03 | ||||||||||||||||||
__________ | ||||||||||||||||||||||||
(a) Represents the replacement options issued pursuant to the PMA merger. | ||||||||||||||||||||||||
Pursuant to the Company's self-imposed limits, the maximum number of options available for future issuance as of December 31, 2013, is 10,877,713 shares. | ||||||||||||||||||||||||
As of December 31, 2013, there was $1.6 of total unrecognized compensation cost related to nonvested stock-based compensation arrangements granted under the plan. That cost is expected to be recognized over a weighted average period of approximately 3 years. | ||||||||||||||||||||||||
The cash received from stock option exercises, the total intrinsic value of stock options exercised, and the actual tax benefit realized for the tax deductions from option exercises are as follows: | ||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||
Cash received from stock option exercise | $ | 10.9 | $ | 0.1 | $ | 0.3 | ||||||||||||||||||
Intrinsic value of stock options exercised | 2.9 | — | — | |||||||||||||||||||||
Actual tax benefit realized for tax deductions | $ | 1.1 | $ | — | $ | — | ||||||||||||||||||
from stock options exercised | ||||||||||||||||||||||||
At December 31, 2013, the Company had restricted common stock issued to certain employees which are expected to vest over the next 3 years. During the vesting period, restricted shares are nontransferable and subject to forfeiture, but are entitled to all of the other rights of outstanding shares. Compensation expense for the restricted stock award is recognized over the vesting period of the award and was immaterial for the years ended December 31, 2013, 2012 and 2011. | ||||||||||||||||||||||||
Regulatory Matters | ' | |||||||||||||||||||||||
Regulatory Matters - The material increases in mortgage guaranty insurance claims and loss payments that began in 2007 gradually depleted RMIC's statutory capital base and forced it to discontinue writing new business. The insurance laws of 16 jurisdictions, including RMIC and RMICNC’s domiciliary state of North Carolina, require a mortgage insurer to maintain a minimum amount of statutory capital relative to risk in force (or a similar measure) in order to continue to write new business. The formulations currently allow for a maximum risk-to-capital ratio of 25 to 1, or alternatively stated, a “minimum policyholder position” (“MPP”) of one-twenty-fifth of the total risk in force. The failure to maintain the prescribed minimum capital level in a particular state generally requires a mortgage insurer to immediately stop writing new business until it reestablishes the required level of capital or receives a waiver of the requirement from a state's insurance regulatory authority. RMIC breached the minimum capital requirement during the third quarter of 2010. RMIC had previously requested and, subsequently received waivers or forbearance of the minimum policyholder position requirements from the regulatory authorities in substantially all affected states. Following several brief extensions, the waiver from its domiciliary state of North Carolina expired on August 31, 2011, and RMIC and its sister company, RMICNC, discontinued writing new business in all states and limited themselves to servicing the run-off of their existing business. | ||||||||||||||||||||||||
During 2012 the NCDOI issued several orders the ultimate effects of which were: | ||||||||||||||||||||||||
• To place RMIC and RMICNC under NCDOI supervision which,among other considerations, requires written approval of the NCDOI Commissioner or its appointed representative for supervision of certain activities and transactions, including the incurrence of any debt or other liabilities, lending of its funds, and termination or entry into new contracts of insurance or reinsurance; | ||||||||||||||||||||||||
• To approve a Corrective Plan submitted by RMIC pursuant to which all settled claims are to be paid in cash for 60% of the settled amount, with the remaining 40% retained in claim reserves as a DPO until a future payment of all or a portion of this 40% is approved by the NCDOI; and | ||||||||||||||||||||||||
• To execute the DPO-based run-off plan under Old Republic's ownership and NCDOI supervision of RMIC and RMICNC to effect a most economically sound realization of ultimate benefits to policyholders during a sufficiently long future period. | ||||||||||||||||||||||||
RMIC's evaluation of the potential long-term performance of the run-off book of business is based on various modeling techniques. Of necessity the resulting models take into account actual premium and paid claim experience of prior periods, together with a large number of assumptions and judgments about future outcomes that are highly sensitive to a wide range of estimates. Many of these estimates and underlying assumptions relate to matters over which the Company has no control, including: 1) The conflicted interests, as well as the varying mortgage servicing and foreclosure practices of a large number of insured lending institutions; 2) General economic and industry-specific trends and events; and 3) The evolving or future social and economic policies of the U.S. Government vis-à-vis such critical sectors as the banking, mortgage lending, and housing industries, as well as its policies for resolving the insolvencies and assigning a possible future role to Fannie Mae and Freddie Mac. These matters notwithstanding, RMIC's analysis did not indicate that the establishment of a premium deficiency was warranted as of December 31, 2013 or 2012. | ||||||||||||||||||||||||
The indicated positive outcome of the standard model notwithstanding, it is possible that MI operating results could nevertheless be negative in the near term. As long as the run-off under NCDOI supervision remains in place, however, the statutory DPO accounting treatment should mitigate the adverse effect of operating losses on the statutory capital balance. In these circumstances, RMIC's and RMICNC's statutory solvency would be retained and the risk of a regulatory receivership action would be averted. In management's opinion, the DPO Plan under NCDOI supervision should be continued for a sufficiently long period of time to achieve the objectives contemplated by the above referenced NCDOI orders. As of December 31, 2013, the total statutory capital, inclusive of accumulated DPO reserve funds of $551.5 held in RFIG's mortgage insurance subsidiaries was approximately $518.2, which was $161.5 above the required MPP of $356.6. As of the same date, RFIG's consolidated GAAP capitalization amounted to $(13.8) (or a negative capital contribution of approximately 5 cents per Old Republic common share). | ||||||||||||||||||||||||
On October 24, 2013 the Company announced that its RMICC mortgage guaranty subsidiary expects to raise new funds in the capital markets. Substantially all of this capital would be added to the equity resources of RMICC's three mortgage insurance subsidiaries. The addition of capital should permit these carriers to at once support existing policies in-force, pay off heretofore deferred claim payment obligations with agreed-upon interest, exit their current state of supervision under North Carolina insurance regulations, and resume the underwriting of new business beginning in 2014. While the interest charge on outstanding deferred payment obligations has not been agreed upon, it could be material to the Company's results of operations when it is recorded following approval of the NCDOI and the successful completion of the capital raise. In connection with such a transaction, it is expected that Old Republic would contribute up to $50.0 of this new capital. Upon the successful closing of this transaction, RMICC would be deconsolidated and Old Republic's continuing interest in RMICC and the mortgage guaranty business would consist of a non-controlling equity interest in RMICC. Completion of the transaction cannot be assured and is subject to market conditions and other factors. Moreover, the addition of all new funds to RMICC and its subsidiaries will be contingent on the receipt of certain regulatory approvals. The most essential of these will be required from the North Carolina Department of Insurance, and from Fannie Mae and Freddie Mac with any necessary assent of their FHFA Conservator. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | |||||||||||||||||||||||
Consolidation, Subsidiary, Effects of Changes | ' | |||||||||||||||||||||||
In consolidating the statutory financial statements of its insurance subsidiaries, the Company has therefore made necessary adjustments to conform their accounts with GAAP. The following table reflects a summary of all such adjustments: | ||||||||||||||||||||||||
Shareholders' Equity | Net Income (Loss) | |||||||||||||||||||||||
December 31, | Years Ended December 31, | |||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2011 | ||||||||||||||||||||
Statutory totals of insurance | ||||||||||||||||||||||||
company subsidiaries (a): | ||||||||||||||||||||||||
General | $ | 3,127.90 | $ | 2,905.90 | $ | 314.4 | $ | 225.5 | $ | 292.5 | ||||||||||||||
Title | 428.6 | 358.1 | 88.7 | 70.3 | 46.7 | |||||||||||||||||||
RFIG Run-off | 456.5 | 149.2 | 125.2 | (285.0 | ) | (422.6 | ) | |||||||||||||||||
Life & Accident | 67 | 71.9 | 3.6 | 3 | 4.8 | |||||||||||||||||||
Sub-total | 4,080.00 | 3,485.10 | 531.9 | 13.8 | (78.6 | ) | ||||||||||||||||||
GAAP totals of non-insurance company | ||||||||||||||||||||||||
subsidiaries and consolidation adjustments | 29.4 | (111.6 | ) | 23.2 | (64.2 | ) | (38.7 | ) | ||||||||||||||||
Unadjusted totals | 4,109.70 | 3,374.00 | 555.1 | (50.4 | ) | (117.4 | ) | |||||||||||||||||
Adjustments to conform to GAAP statements: | ||||||||||||||||||||||||
Deferred policy acquisition costs | 159.1 | 161.7 | 0.9 | (33.3 | ) | (30.6 | ) | |||||||||||||||||
Fair value of fixed maturity securities | 220.9 | 552.7 | — | — | — | |||||||||||||||||||
Non-admitted assets | 73.3 | 78.2 | — | — | — | |||||||||||||||||||
Deferred income taxes | (49.8 | ) | (113.9 | ) | (79.5 | ) | 35.7 | 73.4 | ||||||||||||||||
Mortgage contingency and DPO reserves | (479.0 | ) | (296.9 | ) | — | — | — | |||||||||||||||||
Title unearned premiums | 432.6 | 390.4 | 42.1 | 30 | 14.6 | |||||||||||||||||||
Loss reserves | (432.7 | ) | (360.7 | ) | (71.8 | ) | (70.4 | ) | (49.6 | ) | ||||||||||||||
Surplus notes | (277.5 | ) | (202.5 | ) | — | — | — | |||||||||||||||||
Sundry adjustments | 17.9 | 13 | 0.9 | 19.4 | (30.9 | ) | ||||||||||||||||||
Total adjustments | (334.8 | ) | 222.3 | (107.3 | ) | (18.2 | ) | (23.1 | ) | |||||||||||||||
Consolidated GAAP totals | $ | 3,775.00 | $ | 3,596.20 | $ | 447.8 | $ | (68.6 | ) | $ | (140.5 | ) | ||||||||||||
(a) | The insurance laws of the respective states in which the Company’s insurance subsidiaries are incorporated prescribe minimum capital and surplus requirements for the lines of business they are licensed to write. For domestic property and casualty and life and accident insurance companies the National Association of Insurance Commissioners also prescribes risk-based capital ("RBC") requirements. The RBC is a measure of statutory capital in relationship to a formula-driven definition of risk relative to a company’s balance sheet and mix of business. The combined RBC ratio of our primary General insurance subsidiaries was 695% and 680% of the company action level RBC at December 31, 2013 and 2012, respectively. The minimum capital requirements for the Company’s Title Insurance subsidiaries are established by statute in the respective states of domicile. The minimum regulatory capital requirements are not significant in relationship to the recorded statutory capital of the Company’s Title and Life & Accident insurance subsidiaries. At December 31, 2013 and 2012 each of the Company’s General, Title, and Life and Accident insurance subsidiaries exceeded the minimum statutory capital and surplus requirements. Refer to Note 1(s) - Regulatory Matters for a discussion regarding the RFIG Run-off group. | |||||||||||||||||||||||
Amortized Cost and Estimated Fair Values Of Fixed Maturities | ' | |||||||||||||||||||||||
The amortized cost and estimated fair values by type and contractual maturity of fixed maturity securities are shown in the following tables. Expected maturities will differ from contractual maturities since borrowers may have the right to call or repay obligations with or without call or prepayment penalties. | ||||||||||||||||||||||||
Amortized | Gross | Gross | Estimated | |||||||||||||||||||||
Cost | Unrealized | Unrealized | Fair | |||||||||||||||||||||
Gains | Losses | Value | ||||||||||||||||||||||
Fixed Maturity Securities by Type: | ||||||||||||||||||||||||
December 31, 2013: | ||||||||||||||||||||||||
U.S. & Canadian Governments | $ | 1,133.00 | $ | 36.7 | $ | 8.7 | $ | 1,161.10 | ||||||||||||||||
Tax-exempt | 168.1 | 3.7 | 0.5 | 171.3 | ||||||||||||||||||||
Corporate | 7,176.00 | 268.1 | 64.3 | 7,379.80 | ||||||||||||||||||||
$ | 8,477.30 | $ | 308.7 | $ | 73.6 | $ | 8,712.30 | |||||||||||||||||
December 31, 2012: | ||||||||||||||||||||||||
U.S. & Canadian Governments | $ | 1,151.20 | $ | 65.9 | $ | 0.3 | $ | 1,216.80 | ||||||||||||||||
Tax-exempt | 380.8 | 11.4 | 0.1 | 392.2 | ||||||||||||||||||||
Corporate | 6,461.00 | 502.1 | 6 | 6,957.10 | ||||||||||||||||||||
$ | 7,993.10 | $ | 579.5 | $ | 6.5 | $ | 8,566.20 | |||||||||||||||||
Amortized Cost and Estimated Fair Values Of Fixed Maturities By Contractual Maturities | ' | |||||||||||||||||||||||
Amortized | Estimated | |||||||||||||||||||||||
Cost | Fair | |||||||||||||||||||||||
Value | ||||||||||||||||||||||||
Fixed Maturity Securities Stratified by Contractual Maturity at December 31, 2013: | ||||||||||||||||||||||||
Due in one year or less | $ | 785.5 | $ | 796.5 | ||||||||||||||||||||
Due after one year through five years | 3,957.00 | 4,145.80 | ||||||||||||||||||||||
Due after five years through ten years | 3,544.20 | 3,579.40 | ||||||||||||||||||||||
Due after ten years | 190.4 | 190.5 | ||||||||||||||||||||||
$ | 8,477.30 | $ | 8,712.30 | |||||||||||||||||||||
Equity Securities Reflecting Reported Adjusted Cost, Net Of OTTI | ' | |||||||||||||||||||||||
A summary of the Company's equity securities reflecting reported adjusted cost, net of OTTI adjustments totaling $- and $131.3 at December 31, 2013 and 2012, respectively, follows: | ||||||||||||||||||||||||
Equity Securities: | Adjusted | Gross | Gross | Estimated | ||||||||||||||||||||
Cost | Unrealized | Unrealized | Fair | |||||||||||||||||||||
Gains | Losses | Value | ||||||||||||||||||||||
December 31, 2013 | $ | 632 | $ | 372.7 | $ | 0.5 | $ | 1,004.20 | ||||||||||||||||
December 31, 2012 | $ | 452.1 | $ | 290.5 | $ | 2.9 | $ | 739.7 | ||||||||||||||||
Gross Unrealized Losses and Fair Value, Aggregated | ' | |||||||||||||||||||||||
The following table reflects the Company's gross unrealized losses and fair value, aggregated by category and length of time that individual securities have been in an unrealized loss position. Fair value and issuer's adjusted cost comparisons follow: | ||||||||||||||||||||||||
12 Months or Less | Greater than 12 Months | Total | ||||||||||||||||||||||
Fair | Unrealized Losses | Fair | Unrealized Losses | Fair | Unrealized Losses | |||||||||||||||||||
Value | Value | Value | ||||||||||||||||||||||
December 31, 2013: | ||||||||||||||||||||||||
Fixed Maturity Securities: | ||||||||||||||||||||||||
U.S. & Canadian Governments | $ | 301.7 | $ | 8.7 | $ | — | $ | — | $ | 301.7 | $ | 8.7 | ||||||||||||
Tax-exempt | 10 | 0.5 | — | — | 10 | 0.5 | ||||||||||||||||||
Corporate | 2,312.20 | 60.2 | 47.7 | 4.1 | 2,360.00 | 64.3 | ||||||||||||||||||
Subtotal | 2,624.00 | 69.4 | 47.7 | 4.1 | 2,671.80 | 73.6 | ||||||||||||||||||
Equity Securities | 31 | 0.5 | — | — | 31 | 0.5 | ||||||||||||||||||
Total | $ | 2,655.00 | $ | 70 | $ | 47.7 | $ | 4.1 | $ | 2,702.80 | $ | 74.2 | ||||||||||||
December 31, 2012: | ||||||||||||||||||||||||
Fixed Maturity Securities: | ||||||||||||||||||||||||
U.S. & Canadian Governments | $ | 60.3 | $ | 0.3 | $ | — | $ | — | $ | 60.3 | $ | 0.3 | ||||||||||||
Tax-exempt | 3.7 | 0.1 | — | — | 3.7 | 0.1 | ||||||||||||||||||
Corporate | 348.4 | 4.3 | 10.2 | 1.7 | 358.6 | 6 | ||||||||||||||||||
Subtotal | 412.6 | 4.8 | 10.2 | 1.7 | 422.8 | 6.5 | ||||||||||||||||||
Equity Securities | 78.9 | 2.9 | — | — | 78.9 | 2.9 | ||||||||||||||||||
Total | $ | 491.5 | $ | 7.8 | $ | 10.2 | $ | 1.7 | $ | 501.8 | $ | 9.5 | ||||||||||||
Fair Value, Assets Measured on Recurring Basis | ' | |||||||||||||||||||||||
The following tables show a summary of assets measured at fair value segregated among the various input levels described above: | ||||||||||||||||||||||||
Fair Value Measurements | ||||||||||||||||||||||||
As of December 31, 2013: | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Available for sale: | ||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||
U.S. & Canadian Governments | $ | 478.9 | $ | 682.2 | $ | — | $ | 1,161.10 | ||||||||||||||||
Tax-exempt | — | 171.3 | — | 171.3 | ||||||||||||||||||||
Corporate | — | 7,369.30 | 10.5 | 7,379.80 | ||||||||||||||||||||
Equity securities | 1,003.40 | — | 0.7 | 1,004.20 | ||||||||||||||||||||
Short-term investments | $ | 1,120.50 | $ | — | $ | 4.2 | $ | 1,124.80 | ||||||||||||||||
As of December 31, 2012: | ||||||||||||||||||||||||
Available for sale: | ||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||
U.S. & Canadian Governments | $ | 570.9 | $ | 645.9 | $ | — | $ | 1,216.80 | ||||||||||||||||
Tax-exempt | — | 392.2 | — | 392.2 | ||||||||||||||||||||
Corporate | — | 6,926.30 | 30.7 | 6,957.10 | ||||||||||||||||||||
Equity securities | 736.9 | — | 2.7 | 739.7 | ||||||||||||||||||||
Short-term investments | $ | 1,260.20 | $ | — | $ | 4.6 | $ | 1,264.90 | ||||||||||||||||
Investment Income | ' | |||||||||||||||||||||||
The following table reflects the composition of net investment income, net realized gains or losses, and the net change in unrealized investment gains or losses for each of the years shown. | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Investment income from: | ||||||||||||||||||||||||
Fixed maturity securities | $ | 298.7 | $ | 321 | $ | 353.2 | ||||||||||||||||||
Equity securities | 21.2 | 13.1 | 11.3 | |||||||||||||||||||||
Short-term investments | 1.1 | 1.9 | 1.5 | |||||||||||||||||||||
Other sources | 2.6 | 5.4 | 4.7 | |||||||||||||||||||||
Gross investment income | 323.7 | 341.6 | 370.9 | |||||||||||||||||||||
Investment expenses (a) | 4.9 | 5.1 | 6.2 | |||||||||||||||||||||
Net investment income | $ | 318.7 | $ | 336.5 | $ | 364.6 | ||||||||||||||||||
Realized gains (losses) on: | ||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||
Gains | $ | 9.9 | $ | 32.7 | $ | 143.9 | ||||||||||||||||||
Losses | (8.2 | ) | — | (1.2 | ) | |||||||||||||||||||
Net | 1.7 | 32.7 | 142.6 | |||||||||||||||||||||
Equity securities & other long-term investments | 146.3 | 15.1 | (27.0 | ) | ||||||||||||||||||||
Total | 148.1 | 47.8 | 115.5 | |||||||||||||||||||||
Income taxes (credits)(b) | 51.8 | 16.7 | 37.5 | |||||||||||||||||||||
Net realized gains (losses) | $ | 96.2 | $ | 31.1 | $ | 78 | ||||||||||||||||||
Changes in unrealized investment gains (losses) on: | ||||||||||||||||||||||||
Fixed maturity securities | $ | (337.9 | ) | $ | 64.9 | $ | 46.3 | |||||||||||||||||
Less: Deferred income taxes (credits) | (117.9 | ) | 22.6 | 16 | ||||||||||||||||||||
(219.9 | ) | 42.2 | 30.3 | |||||||||||||||||||||
Equity securities & other long-term investments | 82.6 | 48.4 | (35.2 | ) | ||||||||||||||||||||
Less: Deferred income taxes (credits) | 28.9 | 16.8 | (12.4 | ) | ||||||||||||||||||||
53.7 | 31.5 | (22.7 | ) | |||||||||||||||||||||
Net changes in unrealized investment gains (losses) | $ | (166.2 | ) | $ | 73.8 | $ | 7.5 | |||||||||||||||||
__________ | ||||||||||||||||||||||||
(a) | Investment expenses consist of personnel costs and investment management and custody service fees, as well as interest incurred on funds held of $1.7, $2.0 and $1.9 for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||||||||||||
(b) | Reflects primarily the combination of fully taxable realized investment gains or losses and judgments about the recoverability of deferred tax assets. | |||||||||||||||||||||||
Capitalization of Deferred Policy Acquisition Costs | ' | |||||||||||||||||||||||
The following table shows a reconciliation of deferred acquisition costs between succeeding balance sheet dates. | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Deferred, beginning of year | $ | 165.5 | $ | 197.6 | $ | 230.6 | ||||||||||||||||||
Acquisition costs deferred: | ||||||||||||||||||||||||
Commissions - net of reinsurance | 222.7 | 180.8 | 139 | |||||||||||||||||||||
Premium taxes | 93.8 | 86.8 | 77.7 | |||||||||||||||||||||
Salaries and other marketing expenses | 42.5 | 43.3 | 121.8 | |||||||||||||||||||||
Sub-total | 359.1 | 311 | 338.4 | |||||||||||||||||||||
Amortization charged to income | (331.9 | ) | (343.2 | ) | (371.7 | ) | ||||||||||||||||||
Change for the year | 27.1 | (32.1 | ) | (33.3 | ) | |||||||||||||||||||
Deferred, end of year | $ | 192.6 | $ | 165.5 | $ | 197.6 | ||||||||||||||||||
Unearned Premiums | ' | |||||||||||||||||||||||
At December 31, 2013 and 2012, unearned premiums consisted of the following: | ||||||||||||||||||||||||
As of December 31: | 2013 | 2012 | ||||||||||||||||||||||
General Insurance Group | $ | 1,458.90 | $ | 1,323.80 | ||||||||||||||||||||
RFIG Run-off Business | 28.9 | 40.5 | ||||||||||||||||||||||
Total | $ | 1,487.80 | $ | 1,364.40 | ||||||||||||||||||||
Schedule of Effects of Coverage Rescissions and Claim Denials on Loss Reserves | ' | |||||||||||||||||||||||
The table below shows the estimated effects of coverage rescissions and claim denials on loss reserves and settled and incurred losses. | ||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||
Estimated reduction in beginning reserve | $ | 174.9 | $ | 313.2 | $ | 710.3 | ||||||||||||||||||
Total incurred claims and settlement expenses reduced | ||||||||||||||||||||||||
(increased) by changes in estimated rescissions: | ||||||||||||||||||||||||
Current year | 80.5 | 111.7 | 223.1 | |||||||||||||||||||||
Prior year | 71.9 | 12.2 | (340.8 | ) | ||||||||||||||||||||
Sub-total | 152.5 | 124 | (117.6 | ) | ||||||||||||||||||||
Estimated rescission reduction in settled claims | (212.2 | ) | (262.3 | ) | (279.5 | ) | ||||||||||||||||||
Estimated reduction in ending reserve | $ | 115.2 | $ | 174.9 | $ | 313.2 | ||||||||||||||||||
Schedule of Changes in Aggregate Reserves for the Company's Losses, Claims and Settlement Expenses | ' | |||||||||||||||||||||||
The following table shows an analysis of changes in aggregate reserves for the Company's losses, claims and settlement expenses for each of the years shown. | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Gross reserves at beginning of year | $ | 9,303.30 | $ | 8,786.60 | $ | 8,814.60 | ||||||||||||||||||
Less: reinsurance losses recoverable | 2,847.00 | 2,908.10 | 2,945.30 | |||||||||||||||||||||
Net reserves at beginning of year: | ||||||||||||||||||||||||
General Insurance | 4,048.90 | 3,874.90 | 3,888.00 | |||||||||||||||||||||
Title Insurance | 396.4 | 332 | 298 | |||||||||||||||||||||
RFIG Run-off | 1,994.80 | 1,654.00 | 1,663.10 | |||||||||||||||||||||
Other | 15.9 | 17.4 | 20 | |||||||||||||||||||||
Sub-total | 6,456.20 | 5,878.50 | 5,869.30 | |||||||||||||||||||||
Incurred claims and claim adjustment expenses: | ||||||||||||||||||||||||
Provisions for insured events of the current year: | ||||||||||||||||||||||||
General Insurance | 1,857.90 | 1,729.60 | 1,575.30 | |||||||||||||||||||||
Title Insurance | 137.2 | 120.9 | 105.7 | |||||||||||||||||||||
RFIG Run-off (a) | 487.5 | 762.2 | 887.1 | |||||||||||||||||||||
Other | 41 | 40.3 | 40.2 | |||||||||||||||||||||
Sub-total | 2,523.70 | 2,653.10 | 2,608.50 | |||||||||||||||||||||
Change in provision for insured events of prior years: | ||||||||||||||||||||||||
General Insurance | (23.7 | ) | (51.5 | ) | (130.9 | ) | ||||||||||||||||||
Title Insurance | (3.1 | ) | — | — | ||||||||||||||||||||
RFIG Run-off (a) | (269.7 | ) | 148.2 | 254.8 | ||||||||||||||||||||
Other | (2.5 | ) | (1.5 | ) | (1.2 | ) | ||||||||||||||||||
Sub-total | (299.1 | ) | 95.1 | 122.6 | ||||||||||||||||||||
Total incurred claims and claim adjustment expenses (a) | 2,224.50 | 2,748.20 | 2,731.10 | |||||||||||||||||||||
Payments: | ||||||||||||||||||||||||
Claims and claim adjustment expenses attributable to | ||||||||||||||||||||||||
insured events of the current year: | ||||||||||||||||||||||||
General Insurance | 620.8 | 587.8 | 569.8 | |||||||||||||||||||||
Title Insurance | 6 | 3 | 7.9 | |||||||||||||||||||||
RFIG Run-off (b) | 39.4 | 46.6 | 100.5 | |||||||||||||||||||||
Other | 29.5 | 30.6 | 30.7 | |||||||||||||||||||||
Sub-total | 695.9 | 668.1 | 709.2 | |||||||||||||||||||||
Claims and claim adjustment expenses attributable to | ||||||||||||||||||||||||
insured events of prior years: | ||||||||||||||||||||||||
General Insurance | 928.2 | 916.1 | 887.6 | |||||||||||||||||||||
Title Insurance | 52.8 | 53.4 | 63.6 | |||||||||||||||||||||
RFIG Run-off (b) | 398.9 | 523 | 1,050.50 | |||||||||||||||||||||
Other | 8 | 9.6 | 10.7 | |||||||||||||||||||||
Sub-total | 1,388.00 | 1,502.30 | 2,012.60 | |||||||||||||||||||||
Total payments (b) | 2,083.90 | 2,170.50 | 2,721.90 | |||||||||||||||||||||
Amount of reserves for unpaid claims and claim adjustment expenses | ||||||||||||||||||||||||
at the end of each year, net of reinsurance losses recoverable: (c) | ||||||||||||||||||||||||
General Insurance | 4,334.10 | 4,048.90 | 3,874.90 | |||||||||||||||||||||
Title Insurance | 471.5 | 396.4 | 332 | |||||||||||||||||||||
RFIG Run-off | 1,774.20 | 1,994.80 | 1,654.00 | |||||||||||||||||||||
Other | 16.8 | 15.9 | 17.4 | |||||||||||||||||||||
Sub-total | 6,596.80 | 6,456.20 | 5,878.50 | |||||||||||||||||||||
Reinsurance losses recoverable | 2,836.70 | 2,847.00 | 2,908.10 | |||||||||||||||||||||
Gross reserves at end of year | $ | 9,433.50 | $ | 9,303.30 | $ | 8,786.60 | ||||||||||||||||||
__________ | ||||||||||||||||||||||||
As noted elsewhere in this report, in 2012 Old Republic's CCI insurance coverage was combined with the MI business within the overall RFIG Run-off Business. Prior periods' segmented information for the General Insurance and RFIG Run-off Business segments has therefore been reclassified to provide necessary consistency in period-to-period operating comparisons. | ||||||||||||||||||||||||
Excluding the reclassification of CCI from the General Insurance to the RFIG Run-off Business segment, certain elements shown in the preceding table would have been as follows: | ||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||
Change in provision for incurred events of prior years: | ||||||||||||||||||||||||
General Insurance | $ | (40.4 | ) | $ | (19.8 | ) | $ | (149.2 | ) | |||||||||||||||
RFIG Run-off (a) | (253.0 | ) | 116.5 | 273.2 | ||||||||||||||||||||
Payment of claim and claim adjustment expenses attributable to | ||||||||||||||||||||||||
incurred events of the current and prior years: | ||||||||||||||||||||||||
General Insurance | 1,597.50 | 1,577.90 | 1,551.10 | |||||||||||||||||||||
RFIG Run-off (b) | $ | 389.8 | $ | 495.7 | $ | 1,057.40 | ||||||||||||||||||
(a) | In common with all other insurance lines, RFIG Run-off mortgage guaranty settled and incurred claim and claim adjustment expenses include only those costs actually or expected to be paid by the Company. As previously noted, changes in mortgage guaranty aggregate case, IBNR, and loss adjustment expense reserves shown below and entering into the determination of incurred claim costs, take into account, among a large number of variables, claim cost reductions for anticipated coverage rescissions and claims denials. | |||||||||||||||||||||||
The RFIG Run-off mortgage guaranty provision for insured events of the current year was reduced by an estimated $80.5, $111.7 and $223.1, respectively, for 2013, 2012 and 2011. The provision for insured events of prior years in 2013, 2012 and 2011 was reduced (increased) by an estimated $71.9, $12.2 and $(340.8), respectively. These changes were offset to varying degrees by differences between actual claim settlements relative to expected experience and by subsequent revisions of assumptions in regards to claim frequency, severity or levels of associated claim settlement costs which result from consideration of underlying trends and expectations. | ||||||||||||||||||||||||
The following table reflects the changes in net reserves between succeeding balance sheet dates. | ||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||
Net reserve increase(decrease): | ||||||||||||||||||||||||
General Insurance | $ | 285.1 | $ | 174 | $ | (13.1 | ) | |||||||||||||||||
Title Insurance | 75.1 | 64.3 | 34 | |||||||||||||||||||||
RFIG Run-off | (220.6 | ) | 340.7 | (9.0 | ) | |||||||||||||||||||
Other | 0.9 | (1.5 | ) | (2.6 | ) | |||||||||||||||||||
Total | $ | 140.6 | $ | 577.6 | $ | 9.2 | ||||||||||||||||||
(b) | Rescissions reduced the Company's settled losses by an estimated $212.2, $262.3, and $279.5 for 2013, 2012, and 2011, respectively. 2013 and 2012 RFIG Run-off Business claim and claim adjustment expense payments reflect the retention of the DPO within claim reserves which amounted to $551.5 and $299.5 as of the respective year-ends. | |||||||||||||||||||||||
(c) | Year end net IBNR reserves for each segment were as follows: | |||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||
General Insurance | $ | 2,118.40 | $ | 1,947.00 | $ | 1,878.20 | ||||||||||||||||||
Title Insurance | 407.1 | 336.9 | 262.5 | |||||||||||||||||||||
RFIG Run-off | 121.3 | 147.5 | 94.8 | |||||||||||||||||||||
Other | 4 | 4.6 | 4.6 | |||||||||||||||||||||
Total | $ | 2,651.00 | $ | 2,436.10 | $ | 2,240.40 | ||||||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation | ' | |||||||||||||||||||||||
The more significant differences, their effect on the statutory income tax rate (credit), and the resulting effective income tax rates (credits) are summarized below: | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Statutory tax rate (credit) | 35 | % | (35.0 | )% | (35.0 | )% | ||||||||||||||||||
Tax rate increases (decreases): | ||||||||||||||||||||||||
Tax-exempt interest | (.4 | ) | (4.1 | ) | (5.4 | ) | ||||||||||||||||||
Dividends received exclusion | (.6 | ) | (2.1 | ) | (1.0 | ) | ||||||||||||||||||
Valuation allowance (see below) | — | (2.0 | ) | (.6 | ) | |||||||||||||||||||
Goodwill impairment | — | 0.4 | 1.6 | |||||||||||||||||||||
Foreign income (loss) reattribution | (.2 | ) | (3.5 | ) | 1 | |||||||||||||||||||
Sale of subsidiary | — | (1.3 | ) | — | ||||||||||||||||||||
Other items - net | (.4 | ) | 1 | (1.2 | ) | |||||||||||||||||||
Effective tax rate (credit) | 33.4 | % | (46.6 | )% | (40.6 | )% | ||||||||||||||||||
Schedule of Deferred Tax Assets and Liabilities | ' | |||||||||||||||||||||||
The tax effects of temporary differences that give rise to significant portions of the Company's net deferred tax assets (liabilities) are as follows at the dates shown: | ||||||||||||||||||||||||
December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Deferred Tax Assets: | ||||||||||||||||||||||||
Losses, claims, and settlement expenses | $ | 286.9 | $ | 272.4 | $ | 231.7 | ||||||||||||||||||
Pension and deferred compensation plans | 51.3 | 90.8 | 85.8 | |||||||||||||||||||||
Impairment losses on investments | 3.2 | 49.2 | 52.9 | |||||||||||||||||||||
Net operating loss carryforward | 43.7 | 91 | 77.2 | |||||||||||||||||||||
AMT credit carryforward | 9.6 | 25.5 | 29.7 | |||||||||||||||||||||
Other temporary differences | 50.5 | 67.7 | 50.1 | |||||||||||||||||||||
Total deferred tax assets before valuation allowance | 445.3 | 596.8 | 527.7 | |||||||||||||||||||||
Valuation allowance | (9.6 | ) | (9.6 | ) | (12.2 | ) | ||||||||||||||||||
Total deferred tax assets | 435.7 | 587.2 | 515.4 | |||||||||||||||||||||
Deferred Tax Liabilities: | ||||||||||||||||||||||||
Unearned premium reserves | 42.7 | 35.3 | 29.3 | |||||||||||||||||||||
Deferred policy acquisition costs | 63.1 | 52.5 | 63.9 | |||||||||||||||||||||
Mortgage guaranty insurers' contingency reserves | 20.1 | — | 0.4 | |||||||||||||||||||||
Amortization of fixed maturity securities | 4.9 | 6.9 | 7.2 | |||||||||||||||||||||
Net unrealized investment gains | 220.5 | 309.7 | 273 | |||||||||||||||||||||
Title plants and records | 4.9 | 5 | 5 | |||||||||||||||||||||
Other temporary differences | 30.6 | 29.6 | 19.7 | |||||||||||||||||||||
Total deferred tax liabilities | 387.1 | 439.2 | 398.7 | |||||||||||||||||||||
Net deferred tax assets (liabilities) | $ | 48.4 | $ | 148.1 | $ | 116.7 | ||||||||||||||||||
Schedule of Goodwill | ' | |||||||||||||||||||||||
The following table presents the components of the Company's goodwill balance: | ||||||||||||||||||||||||
General | Title | RFIG Run-off | Other | Total | ||||||||||||||||||||
January 1, 2012 | $ | 117.5 | $ | 44.3 | $ | — | $ | 0.1 | $ | 162 | ||||||||||||||
Acquisitions | — | — | — | — | — | |||||||||||||||||||
Impairments | (1.3 | ) | — | — | — | (1.3 | ) | |||||||||||||||||
December 31, 2012 | 116.2 | 44.3 | — | 0.1 | 160.7 | |||||||||||||||||||
Acquisitions | — | — | — | — | — | |||||||||||||||||||
Impairments | — | — | — | — | — | |||||||||||||||||||
December 31, 2013 | $ | 116.2 | $ | 44.3 | $ | — | $ | 0.1 | $ | 160.7 | ||||||||||||||
Schedule of Accumulated and Projected Benefit Obligations | ' | |||||||||||||||||||||||
The effects of these measurements and the changes in the projected benefit obligation ("PBO") are reflected below. | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Projected benefit obligation at beginning of year | $ | 525.7 | $ | 477.8 | $ | 425.2 | ||||||||||||||||||
Increases (decreases) during the year attributable to: | ||||||||||||||||||||||||
Service cost | 9.5 | 9.4 | 8.7 | |||||||||||||||||||||
Interest cost | 21.6 | 21.8 | 22.7 | |||||||||||||||||||||
Plan curtailments | (26.6 | ) | — | — | ||||||||||||||||||||
Actuarial (gains) losses | (32.8 | ) | 31.5 | 36.7 | ||||||||||||||||||||
Benefits paid | (18.1 | ) | (15.0 | ) | (15.5 | ) | ||||||||||||||||||
Net increase (decrease) for the year | (46.4 | ) | 47.8 | 52.6 | ||||||||||||||||||||
Projected benefit obligation at end of year | $ | 479.3 | $ | 525.7 | $ | 477.8 | ||||||||||||||||||
Accumulated benefit obligation at end of year | $ | 479.3 | $ | 495.4 | $ | 443.4 | ||||||||||||||||||
Schedule of Changes in Fair Value of Plan Assets | ' | |||||||||||||||||||||||
The changes in the fair value of net assets available for plan benefits are as follows: | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Fair value of net assets available for plan benefits | ||||||||||||||||||||||||
At beginning of the year | $ | 352.3 | $ | 315.4 | $ | 297.1 | ||||||||||||||||||
Increases (decreases) during the year attributable to: | ||||||||||||||||||||||||
Actual return on plan assets | 61.9 | 25.8 | 0.2 | |||||||||||||||||||||
Sponsor contributions | 12.7 | 26 | 33.6 | |||||||||||||||||||||
Benefits paid | (18.1 | ) | (15.0 | ) | (15.5 | ) | ||||||||||||||||||
Net increase (decrease) for year | 56.5 | 36.8 | 18.3 | |||||||||||||||||||||
Fair value of net assets available for plan benefits | ||||||||||||||||||||||||
At end of the year | $ | 408.8 | $ | 352.3 | $ | 315.4 | ||||||||||||||||||
Schedule of Net Benefit Costs | ' | |||||||||||||||||||||||
The components of aggregate annual net periodic pension costs consisted of the following: | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Service cost | $ | 9.5 | $ | 9.4 | $ | 8.7 | ||||||||||||||||||
Interest cost | 21.6 | 21.8 | 22.7 | |||||||||||||||||||||
Curtailment loss recognized | 0.6 | — | — | |||||||||||||||||||||
Expected return on plan assets | (26.7 | ) | (25.1 | ) | (23.7 | ) | ||||||||||||||||||
Recognized loss | 8.8 | 10 | 6 | |||||||||||||||||||||
Prior service costs | 0.1 | 0.1 | 0.1 | |||||||||||||||||||||
Net cost | $ | 14.1 | $ | 16.3 | $ | 13.9 | ||||||||||||||||||
Schedule of Defined Benefit Plan Amounts Recognized in Other Comprehensive Income (Loss) | ' | |||||||||||||||||||||||
The pretax pension costs recognized in other comprehensive income consist of the following: | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Amounts arising during the period: | ||||||||||||||||||||||||
Net recognized gain (loss) | $ | 68 | $ | (30.8 | ) | $ | (60.2 | ) | ||||||||||||||||
Plan curtailment | 26.6 | — | — | |||||||||||||||||||||
Reclassification adjustment to components of net periodic pension cost: | ||||||||||||||||||||||||
Net recognized loss | 8.8 | 10 | 6 | |||||||||||||||||||||
Net prior service cost | 0.1 | 0.1 | 0.1 | |||||||||||||||||||||
Curtailment loss recognized | 0.6 | — | — | |||||||||||||||||||||
Net pretax pension (costs) or gains recognized | $ | 104.3 | $ | (20.6 | ) | $ | (54.0 | ) | ||||||||||||||||
Schedule of Net Periodic Benefit Cost Not yet Recognized | ' | |||||||||||||||||||||||
The amounts included in accumulated other comprehensive income that have not yet been recognized as components of net periodic pension cost consist of the following: | ||||||||||||||||||||||||
As of December 31: | 2013 | 2012 | ||||||||||||||||||||||
Net recognized loss | $ | (48.3 | ) | $ | (151.9 | ) | ||||||||||||||||||
Net prior service cost | — | (.7 | ) | |||||||||||||||||||||
Total | $ | (48.3 | ) | $ | (152.7 | ) | ||||||||||||||||||
Schedule of Assumptions Used | ' | |||||||||||||||||||||||
The projected benefit obligations and net periodic benefit costs for the plans were determined using the following weighted-average assumptions: | ||||||||||||||||||||||||
Projected Benefit Obligation | Net Periodic Benefit Cost | |||||||||||||||||||||||
As of December 31: | 2013 | 2012 | 2013 | 2012 | 2011 | |||||||||||||||||||
Settlement discount rates | 5 | % | 4.17 | % | 4.17 | % | 4.66 | % | 5.46 | % | ||||||||||||||
Rates of compensation increase | N/A | 3.22 | % | 3.22 | % | 4.25 | % | 4.25 | % | |||||||||||||||
Long-term rates of return on plans' assets | N/A | N/A | 7.56 | % | 7.81 | % | 7.94 | % | ||||||||||||||||
Schedule of Weighted Average Asset Allocations Of Benefit Plans | ' | |||||||||||||||||||||||
The weighted-average asset allocations of the Plans were as follows: | ||||||||||||||||||||||||
Investment Policy Asset | ||||||||||||||||||||||||
As of December 31: | 2013 | 2012 | Allocation % Range Target | |||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||
Common shares of Company stock | 12 | % | 8.3 | % | ||||||||||||||||||||
Other | 50.9 | 48.5 | ||||||||||||||||||||||
Sub-total | 62.9 | 56.8 | 30% to 70% | |||||||||||||||||||||
Fixed maturity securities | 29.5 | 35.2 | 30% to 70% | |||||||||||||||||||||
Other | 7.6 | 8 | 1% to 20% | |||||||||||||||||||||
Total | 100 | % | 100 | % | ||||||||||||||||||||
Schedule of Allocation of Plan Assets | ' | |||||||||||||||||||||||
The following tables present a summary of the Plans' assets segregated among the various input levels described in Note 1(d). | ||||||||||||||||||||||||
Fair Value Measurements | ||||||||||||||||||||||||
As of December 31, 2013: | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||
Common shares of Company stock | $ | 48.8 | $ | — | $ | — | $ | 48.8 | ||||||||||||||||
Other | 189.1 | 18.9 | — | 208.1 | ||||||||||||||||||||
Sub-total | 238 | 18.9 | — | 256.9 | ||||||||||||||||||||
Fixed maturity securities | 10.5 | 109.9 | — | 120.4 | ||||||||||||||||||||
Other | 16.5 | 7.3 | 7.4 | 31.3 | ||||||||||||||||||||
Total | $ | 265.1 | $ | 136.3 | $ | 7.4 | $ | 408.8 | ||||||||||||||||
As of December 31, 2012: | ||||||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||
Common shares of Company stock | $ | 29 | $ | — | $ | — | $ | 29 | ||||||||||||||||
Other | 154 | 16.9 | — | 171 | ||||||||||||||||||||
Sub-total | 183.1 | 16.9 | — | 200.1 | ||||||||||||||||||||
Fixed maturity securities | 1.5 | 122.5 | — | 124 | ||||||||||||||||||||
Other | 10.6 | 9.3 | 8.1 | 28.1 | ||||||||||||||||||||
Total | $ | 195.3 | $ | 148.8 | $ | 8.1 | $ | 352.3 | ||||||||||||||||
Schedule of Profit Sharing and Other Incentive Compensation Programs | ' | |||||||||||||||||||||||
The Company has a number of profit sharing and other incentive compensation programs for the benefit of a substantial number of its employees. The costs related to such programs are summarized below: | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Employees Savings and Stock Ownership Plan "ESSOP" | $ | 7.8 | $ | 5.3 | $ | 5.9 | ||||||||||||||||||
Other profit sharing plans | 12.1 | 12.9 | 13.4 | |||||||||||||||||||||
Cash and deferred incentive compensation | $ | 21.6 | $ | 20.5 | $ | 19.5 | ||||||||||||||||||
Schedule of Calculation of Numerator and Denominator in Earnings Per Share | ' | |||||||||||||||||||||||
The following table provides a reconciliation of net income (loss) and the number of shares used in basic and diluted earnings per share calculations. | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||
Net income (loss) | $ | 447.8 | $ | (68.6 | ) | $ | (140.5 | ) | ||||||||||||||||
Numerator for basic earnings per share - | ||||||||||||||||||||||||
income (loss) available to common stockholders | 447.8 | (68.6 | ) | (140.5 | ) | |||||||||||||||||||
Adjustment for interest expense incurred on | ||||||||||||||||||||||||
assumed conversion of convertible notes | 14.6 | — | — | |||||||||||||||||||||
Numerator for diluted earnings per share - | ||||||||||||||||||||||||
income (loss) available to common stockholders | ||||||||||||||||||||||||
after assumed conversion of convertible notes | $ | 462.4 | $ | (68.6 | ) | $ | (140.5 | ) | ||||||||||||||||
Denominator: | ||||||||||||||||||||||||
Denominator for basic earnings per share - | ||||||||||||||||||||||||
weighted-average shares (a) | 257,443,999 | 255,812,888 | 255,045,210 | |||||||||||||||||||||
Effect of dilutive securities - stock based compensation awards | 784,080 | — | — | |||||||||||||||||||||
Effect of dilutive securities - convertible senior notes | 35,455,956 | — | — | |||||||||||||||||||||
Denominator for diluted earnings per share - | ||||||||||||||||||||||||
adjusted weighted-average shares | ||||||||||||||||||||||||
and assumed conversion of convertible notes (a) | 293,684,035 | 255,812,888 | 255,045,210 | |||||||||||||||||||||
Earnings per share: Basic | $ | 1.74 | $ | (.27 | ) | $ | (.55 | ) | ||||||||||||||||
Diluted | $ | 1.57 | $ | (.27 | ) | $ | (.55 | ) | ||||||||||||||||
Anti-dilutive common stock equivalents | ||||||||||||||||||||||||
excluded from earning per share computations: | ||||||||||||||||||||||||
Stock based compensation awards | 7,563,456 | 14,543,835 | 16,007,624 | |||||||||||||||||||||
Convertible senior notes | — | 35,409,303 | 56,464,160 | |||||||||||||||||||||
Total | 7,563,456 | 49,953,138 | 72,471,784 | |||||||||||||||||||||
__________ | ||||||||||||||||||||||||
(a) In calculating earnings per share, pertinent accounting rules require that common shares owned by the Company's Employee Savings and Stock Ownership Plan that are as yet unallocated to participants in the plan be excluded from the calculation. Such shares are issued and outstanding, and have the same voting and other rights applicable to all other common shares. | ||||||||||||||||||||||||
Schedule of Stock Based Compensation and Tax Benefit | ' | |||||||||||||||||||||||
The following table presents the stock based compensation expense and income tax benefit recognized in the financial statements: | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||||||||||||
Stock based compensation expense | $ | 1.6 | $ | 1.7 | $ | 3 | ||||||||||||||||||
Income tax benefit | $ | 0.5 | $ | 0.6 | $ | 1 | ||||||||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | ' | |||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||
Expected volatility | 0.33 | 0.32 | 0.31 | |||||||||||||||||||||
Expected dividends | 5.99 | % | 6.88 | % | 5.95 | % | ||||||||||||||||||
Expected term (in years) | 7 | 7 | 7 | |||||||||||||||||||||
Risk-free rate | 1.19 | % | 1.74 | % | 2.73 | % | ||||||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity | ' | |||||||||||||||||||||||
A summary of stock option activity under the plan as of December 31, 2013, 2012 and 2011, and changes in outstanding options during the years then ended is presented below: | ||||||||||||||||||||||||
As of and for the Years Ended December 31, | ||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||
Shares | Weighted | Shares | Weighted | Shares | Weighted | |||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||
Exercise | Exercise | Exercise | ||||||||||||||||||||||
Price | Price | Price | ||||||||||||||||||||||
Outstanding at beginning of year | 14,293,149 | $ | 16.75 | 15,679,915 | $ | 17.25 | 16,560,483 | $ | 17.39 | |||||||||||||||
Granted | 922,500 | 12.57 | 974,500 | 10.8 | 1,064,500 | 12.33 | ||||||||||||||||||
Exercised | 897,909 | 12.22 | 14,850 | 10.48 | 31,113 | 12.22 | ||||||||||||||||||
Forfeited and expired | 1,510,468 | 15.01 | 2,346,416 | 17.66 | 1,913,955 | 15.85 | ||||||||||||||||||
Outstanding at end of year | 12,807,272 | 16.97 | 14,293,149 | 16.75 | 15,679,915 | 17.25 | ||||||||||||||||||
Exercisable at end of year | 10,582,298 | $ | 18.03 | 12,032,624 | $ | 17.74 | 13,262,682 | $ | 18.21 | |||||||||||||||
Weighted average fair value of | ||||||||||||||||||||||||
options granted during the year (a) | $ | 1.94 | per share | $ | 1.46 | per share | $ | 1.99 | per share | |||||||||||||||
__________ | ||||||||||||||||||||||||
(a) Based on the Black-Scholes option pricing model and the assumptions outlined above. | ||||||||||||||||||||||||
Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding | ' | |||||||||||||||||||||||
A summary of stock options outstanding and exercisable at December 31, 2013 follows: | ||||||||||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||||||
Weighted - Average | Weighted | |||||||||||||||||||||||
Average | ||||||||||||||||||||||||
Exercise | ||||||||||||||||||||||||
Ranges of Exercise Prices | Year(s) | Number | Remaining | Exercise | Number | Price | ||||||||||||||||||
Of | Out- | Contractual | Price | Exercisable | ||||||||||||||||||||
Grant | Standing | Life | ||||||||||||||||||||||
$19.32 | to | $20.02 | 2004 | 1,850,852 | 0.25 | $ | 19.33 | 1,850,852 | $ | 19.33 | ||||||||||||||
$18.41 | to | $20.87 | 2005 | 1,572,059 | 1.25 | 18.45 | 1,572,059 | 18.45 | ||||||||||||||||
$21.36 | to | $22.35 | 2006 | 2,089,525 | 2.25 | 22 | 2,089,525 | 22 | ||||||||||||||||
$21.78 | to | $23.16 | 2007 | 1,971,475 | 3.25 | 21.78 | 1,971,475 | 21.78 | ||||||||||||||||
$7.73 | to | $12.95 | 2008 | 1,048,370 | 4.25 | 12.93 | 1,048,370 | 12.93 | ||||||||||||||||
$10.48 | 2009 | 698,133 | 5.25 | 10.48 | 698,133 | 10.48 | ||||||||||||||||||
$12.08 | 2010 | 690,225 | 6.25 | 12.08 | 490,234 | 12.08 | ||||||||||||||||||
$10.51 | to | $14.31 | 2010 | (a) | 67,745 | 0.25 | 12.96 | 67,745 | 12.96 | |||||||||||||||
$12.33 | 2011 | 945,413 | 7.25 | 12.33 | 442,146 | 12.33 | ||||||||||||||||||
$10.80 | 2012 | 953,475 | 8.25 | 10.8 | 246,711 | 10.8 | ||||||||||||||||||
$12.57 | 2013 | 920,000 | 9.25 | 12.57 | 105,048 | 12.57 | ||||||||||||||||||
Total | 12,807,272 | $ | 16.97 | 10,582,298 | $ | 18.03 | ||||||||||||||||||
__________ | ||||||||||||||||||||||||
(a) Represents the replacement options issued pursuant to the PMA merger. | ||||||||||||||||||||||||
Schedule of Cash Proceeds Received from Share-based Payment Awards | ' | |||||||||||||||||||||||
The cash received from stock option exercises, the total intrinsic value of stock options exercised, and the actual tax benefit realized for the tax deductions from option exercises are as follows: | ||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||
Cash received from stock option exercise | $ | 10.9 | $ | 0.1 | $ | 0.3 | ||||||||||||||||||
Intrinsic value of stock options exercised | 2.9 | — | — | |||||||||||||||||||||
Actual tax benefit realized for tax deductions | $ | 1.1 | $ | — | $ | — | ||||||||||||||||||
from stock options exercised | ||||||||||||||||||||||||
Debt_Tables
Debt (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Debt Disclosure [Abstract] | ' | ||||||||||||||||||||
Schedule of debt | ' | ||||||||||||||||||||
Consolidated debt of Old Republic and its subsidiaries is summarized below: | |||||||||||||||||||||
December 31: | 2013 | 2012 | |||||||||||||||||||
Carrying | Fair | Carrying | Fair | ||||||||||||||||||
Amount | Value | Amount | Value | ||||||||||||||||||
3.75% Convertible Senior Notes due 2018 | $ | 550 | $ | 684.1 | $ | 550 | $ | 568.5 | |||||||||||||
ESSOP debt with an average yield of 3.69% | |||||||||||||||||||||
and 3.74%, respectively | 18 | 18 | 20.8 | 20.8 | |||||||||||||||||
Other miscellaneous debt | 1.2 | 1.2 | 2 | 2 | |||||||||||||||||
Total debt | $ | 569.2 | $ | 703.4 | $ | 572.9 | $ | 591.5 | |||||||||||||
Fair Value, Debt Measured on Recurring Basis | ' | ||||||||||||||||||||
The following table shows a summary of financial liabilities disclosed, but not carried, at fair value, segregated among the various input levels described in Note 1(d) above: | |||||||||||||||||||||
Carrying | Fair | ||||||||||||||||||||
Value | Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||
Financial Liabilities: | |||||||||||||||||||||
Debt: | |||||||||||||||||||||
December 31, 2013 | $ | 569.2 | $ | 703.4 | $ | — | $ | 684.1 | $ | 19.2 | |||||||||||
December 31, 2012 | $ | 572.9 | $ | 591.5 | $ | — | $ | 568.5 | $ | 22.9 | |||||||||||
Commitments_and_Contingent_Lia1
Commitments and Contingent Liabilities (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
A Reinsurance and Retention Limits [Abstract] | ' | |||||||||||||
Reinsurance Ceded and Other Related Data | ' | |||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | |||||||||||
General Insurance Group (a) | ||||||||||||||
Written premiums: | Direct | $ | 3,348.10 | $ | 3,043.40 | $ | 2,763.00 | |||||||
Assumed | 28.8 | 19.9 | 6.1 | |||||||||||
Ceded | $ | 775.8 | $ | 696.5 | $ | 631.5 | ||||||||
Earned premiums: | Direct | $ | 3,235.70 | $ | 2,949.90 | $ | 2,716.20 | |||||||
Assumed | 24.1 | 17.9 | 8.9 | |||||||||||
Ceded | $ | 746.1 | $ | 643.4 | $ | 615.8 | ||||||||
Claims ceded | $ | 469.5 | $ | 410.6 | $ | 427 | ||||||||
RFIG Run-off Business (a) | ||||||||||||||
Written premiums: | Direct | $ | 314.3 | $ | 409.2 | $ | 544.4 | |||||||
Assumed | — | — | — | |||||||||||
Ceded | $ | 9.9 | $ | 19.3 | $ | 23.2 | ||||||||
Earned premiums: | Direct | $ | 326.4 | $ | 429.8 | $ | 526.4 | |||||||
Assumed | — | — | 0.1 | |||||||||||
Ceded | $ | 9.9 | $ | 19.3 | $ | 23.2 | ||||||||
Claims ceded | $ | 3.4 | $ | 24.2 | $ | 42.2 | ||||||||
Mortgage Guaranty Insurance in force as of December 31: | ||||||||||||||
Direct | $ | 43,994.50 | $ | 56,413.70 | $ | 70,520.90 | ||||||||
Assumed | — | — | 446 | |||||||||||
Ceded | $ | 460.4 | $ | 886.1 | $ | 1,452.70 | ||||||||
__________ | ||||||||||||||
(a) As previously noted, consumer credit indemnity coverages are reported within the RFIG Run-off segment and have been excluded from the General Insurance Group for all periods presented to conform with segment classifications adopted in 2012. See Note 6. |
Consolidated_Quarterly_Results1
Consolidated Quarterly Results - Unaudited (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | |||||||||||||||
Schedule of Quarterly Financial Information | ' | |||||||||||||||
In management's opinion, all adjustments consisting of normal recurring adjustments necessary for a fair statement of quarterly results have been reflected in the data which follows. | ||||||||||||||||
1st | 2nd | 3rd | 4th | |||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
Year Ended December 31, 2013: | ||||||||||||||||
Operating Summary: | ||||||||||||||||
Net premiums, fees, and other income | $ | 1,186.00 | $ | 1,245.40 | $ | 1,295.50 | $ | 1,248.50 | ||||||||
Net investment income and realized gains (losses) | 83.8 | 215.9 | 83.7 | 83 | ||||||||||||
Total revenues | 1,269.90 | 1,461.50 | 1,379.50 | 1,331.60 | ||||||||||||
Benefits, claims, and expenses | 1,185.40 | 1,165.20 | 1,229.70 | 1,189.30 | ||||||||||||
Net income (loss) | $ | 56.2 | $ | 193.9 | $ | 102.9 | $ | 94.7 | ||||||||
Net income (loss) per share: Basic | $ | 0.22 | $ | 0.76 | $ | 0.4 | $ | 0.37 | ||||||||
Diluted | $ | 0.21 | $ | 0.67 | $ | 0.36 | $ | 0.33 | ||||||||
Average shares outstanding: | ||||||||||||||||
Basic | 256,279,364 | 256,749,748 | 257,098,894 | 257,706,005 | ||||||||||||
Diluted | 292,081,785 | 292,842,386 | 293,444,269 | 294,396,055 | ||||||||||||
Year Ended December 31, 2012: | ||||||||||||||||
Operating Summary: | ||||||||||||||||
Net premiums, fees, and other income | $ | 1,069.10 | $ | 1,116.80 | $ | 1,204.00 | $ | 1,195.30 | ||||||||
Net investment income and realized gains (losses) | 88.7 | 107 | 100.6 | 87.8 | ||||||||||||
Total revenues | 1,158.00 | 1,223.90 | 1,304.80 | 1,283.20 | ||||||||||||
Benefits, claims, and expenses | 1,160.70 | 1,282.20 | 1,335.90 | 1,319.70 | ||||||||||||
Net income (loss) | $ | 0.4 | $ | (34.0 | ) | $ | (14.8 | ) | $ | (20.2 | ) | |||||
Net income (loss) per share: Basic | $ | — | $ | (.13 | ) | $ | (.06 | ) | $ | (.08 | ) | |||||
Diluted | $ | — | $ | (.13 | ) | $ | (.06 | ) | $ | (.08 | ) | |||||
Average shares outstanding: | ||||||||||||||||
Basic | 255,473,634 | 255,747,273 | 255,921,356 | 256,086,431 | ||||||||||||
Diluted | 255,779,449 | 255,747,273 | 255,921,356 | 256,086,431 | ||||||||||||
Information_About_Segments_of_1
Information About Segments of Business (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||
Schedule of segment reporting | ' | ||||||||||||
The accounting policies of the segments parallel those described in the summary of significant accounting policies pertinent thereto. | |||||||||||||
Segment Reporting | |||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | ||||||||||
General Insurance: | |||||||||||||
Including CCI run-off business: | |||||||||||||
Net premiums earned | $ | 2,543.50 | $ | 2,366.90 | $ | 2,167.70 | |||||||
Net investment income and other income | 336.6 | 375.1 | 379.3 | ||||||||||
Total revenues before realized gains or losses | $ | 2,880.10 | $ | 2,742.00 | $ | 2,547.10 | |||||||
Income (loss) before taxes (credits) and | |||||||||||||
realized investment gains or losses (a) | $ | 272 | $ | 186 | $ | 304.3 | |||||||
Income tax expense (credits) on above | $ | 85.2 | $ | 51.1 | $ | 94.5 | |||||||
All CCI run-off business: | |||||||||||||
Net premiums earned | $ | 29.8 | $ | 42.4 | $ | 58.3 | |||||||
Net investment income and other income | 0.4 | 0.1 | 0.1 | ||||||||||
Total revenues before realized gains or losses | $ | 30.2 | $ | 42.6 | $ | 58.4 | |||||||
Income (loss) before taxes (credits) and | |||||||||||||
realized investment gains or losses | $ | (16.2 | ) | $ | (74.9 | ) | $ | (49.6 | ) | ||||
Income tax expense (credits) on above | $ | (5.6 | ) | $ | (26.2 | ) | $ | (17.3 | ) | ||||
Total excluding all CCI run-off business: | |||||||||||||
Net premiums earned | $ | 2,513.70 | $ | 2,324.40 | $ | 2,109.40 | |||||||
Net investment income and other income | 336.2 | 374.9 | 379.2 | ||||||||||
Total revenues before realized gains or losses | $ | 2,849.90 | $ | 2,699.40 | $ | 2,488.60 | |||||||
Income (loss) before taxes (credits) and | |||||||||||||
realized investment gains or losses (a) | $ | 288.3 | $ | 261 | $ | 353.9 | |||||||
Income tax expense (credits) on above | $ | 90.9 | $ | 77.4 | $ | 111.8 | |||||||
Title Insurance: | |||||||||||||
Net premiums earned | $ | 1,567.10 | $ | 1,250.20 | $ | 1,007.90 | |||||||
Title, escrow and other fees | 429 | 427.1 | 354.5 | ||||||||||
Sub-total | 1,996.10 | 1,677.40 | 1,362.40 | ||||||||||
Net investment income and other income | 29.5 | 29.6 | 29.3 | ||||||||||
Total revenues before realized gains or losses | $ | 2,025.60 | $ | 1,707.10 | $ | 1,391.80 | |||||||
Income (loss) before taxes (credits) and | |||||||||||||
realized investment gains or losses (a) | $ | 124.3 | $ | 73.8 | $ | 36.2 | |||||||
Income tax expense (credits) on above | $ | 44 | $ | 26.5 | $ | 11.5 | |||||||
RFIG Run-off Business: | |||||||||||||
Excluding CCI run-off business: | |||||||||||||
Net premiums earned | $ | 286.7 | $ | 368 | $ | 444.9 | |||||||
Net investment income and other income | 36.4 | 36.6 | 61.2 | ||||||||||
Total revenues before realized gains or losses | $ | 323.1 | $ | 404.6 | $ | 506.1 | |||||||
Income (loss) before taxes (credits) and | |||||||||||||
realized investment gains or losses (a)(c) | $ | 126.3 | $ | (433.6 | ) | $ | (678.1 | ) | |||||
Income tax expense (credits) on above | $ | 44.2 | $ | (151.5 | ) | $ | (234.3 | ) | |||||
All CCI run-off business: | |||||||||||||
Net premiums earned | $ | 29.8 | $ | 42.4 | $ | 58.3 | |||||||
Net investment income and other income | 0.4 | 0.1 | 0.1 | ||||||||||
Total revenues before realized gains or losses | $ | 30.2 | $ | 42.6 | $ | 58.4 | |||||||
Income (loss) before taxes (credits) and | |||||||||||||
realized investment gains or losses | $ | (16.2 | ) | $ | (74.9 | ) | $ | (49.6 | ) | ||||
Income tax expense (credits) on above | $ | (5.6 | ) | $ | (26.2 | ) | $ | (17.3 | ) | ||||
Total RFIG run-off MI and CCI business: | |||||||||||||
Net premiums earned | $ | 316.5 | $ | 410.5 | $ | 503.2 | |||||||
Net investment income and other income | 36.8 | 36.7 | 61.3 | ||||||||||
Total revenues before realized gains or losses | $ | 353.4 | $ | 447.3 | $ | 564.6 | |||||||
Income (loss) before taxes (credits) and | |||||||||||||
realized investment gains or losses (a)(c) | $ | 110 | $ | (508.6 | ) | $ | (727.8 | ) | |||||
Income tax expense (credits) on above | $ | 38.5 | $ | (177.8 | ) | $ | (251.6 | ) | |||||
Segment Reporting (Continued) | |||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | ||||||||||
Consolidated Revenues: | |||||||||||||
Total revenues of above Company segments | $ | 5,228.90 | $ | 4,853.80 | $ | 4,445.10 | |||||||
Other sources (b) | 123.3 | 126.4 | 143.7 | ||||||||||
Consolidated net realized investment gains (losses) | 148.1 | 47.8 | 115.5 | ||||||||||
Consolidation elimination adjustments | (57.7 | ) | (58.0 | ) | (58.8 | ) | |||||||
Consolidated revenues | $ | 5,442.70 | $ | 4,970.10 | $ | 4,645.50 | |||||||
Consolidated Income (Loss) Before Taxes (Credits): | |||||||||||||
Total income (loss) before income taxes (credits) | |||||||||||||
and realized investment gains or losses of | |||||||||||||
above Company segments | $ | 522.7 | $ | (173.6 | ) | $ | (337.5 | ) | |||||
Other sources - net (b) | 2.1 | (2.7 | ) | (14.6 | ) | ||||||||
Consolidated net realized investment gains (losses) | 148.1 | 47.8 | 115.5 | ||||||||||
Consolidated income (loss) before income taxes (credits) | $ | 672.9 | $ | (128.5 | ) | $ | (236.7 | ) | |||||
Consolidated Income Tax Expense (Credits): | |||||||||||||
Total income tax expense (credits) | |||||||||||||
for above Company segments | $ | 173.5 | $ | (73.8 | ) | $ | (128.2 | ) | |||||
Other sources - net (b) | (.3 | ) | (2.8 | ) | (5.4 | ) | |||||||
Income tax expense (credits) on | |||||||||||||
consolidated net realized investment gains (losses) | 51.8 | 16.7 | 37.5 | ||||||||||
Consolidated income tax expense (credits) | $ | 225 | $ | (59.8 | ) | $ | (96.1 | ) | |||||
December 31: | 2013 | 2012 | |||||||||||
Consolidated Assets: | |||||||||||||
General Insurance | $ | 13,276.60 | $ | 12,770.20 | |||||||||
Title Insurance | 1,185.50 | 1,076.50 | |||||||||||
RFIG Run-off Business | 1,822.30 | 2,051.10 | |||||||||||
Total assets for above company segments | 16,284.50 | 15,897.90 | |||||||||||
Other assets (b) | 549.8 | 626.2 | |||||||||||
Consolidation elimination adjustments | (299.9 | ) | (297.3 | ) | |||||||||
Consolidated assets | $ | 16,534.40 | $ | 16,226.80 | |||||||||
__________ | |||||||||||||
In the above tables, net premiums earned on a GAAP basis differ slightly from statutory amounts due to certain differences in calculations of unearned premium reserves under each accounting method. | |||||||||||||
(a) | Income (loss) before taxes (credits) is reported net of interest charges on intercompany financing arrangements with Old Republic's holding company parent for the following segments: General - $28.9, $28.1 and $25.0 for the years ended December 31, 2013, 2012, and 2011, respectively; Title - $7.9, $8.0 and $5.3 for the years ended December 31, 2013, 2012, and 2011, respectively; RFIG Run-off - $-, $2.1 and $8.0 for the years ended December 31, 2013, 2012, and 2011, respectively. | ||||||||||||
(b) | Represents amounts for Old Republic's holding company parent, minor corporate services subsidiaries, and a small life and accident insurance operation. | ||||||||||||
(c) | Income (loss) before taxes (credits) for 2011 includes an accrual of employment severance and similar costs ($10.7), elimination of previously deferred acquisition costs ($29.1) no longer deemed recoverable in future run-off periods, and a write-off of the historical goodwill balance of ($10.7). |
Transactions_with_Affiliates_T
Transactions with Affiliates (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Transactions with Affiliates [Abstract] | ' | ||||||||||||||||||||||||
Transactions with Affiliates | ' | ||||||||||||||||||||||||
The following table shows certain unaudited information reflective of such business: | |||||||||||||||||||||||||
Assumed from Old Republic | Ceded to Old Republic | ||||||||||||||||||||||||
Years Ended December 31: | 2013 | 2012 | 2011 | 2013 | 2012 | 2011 | |||||||||||||||||||
Premiums earned | $ | 2.3 | $ | 1 | $ | 0.5 | $ | 0.6 | $ | 0.4 | $ | 0.4 | |||||||||||||
Commissions and fees | 0.6 | 0.3 | — | — | — | — | |||||||||||||||||||
Losses and loss expenses | 4.3 | 1 | 0.4 | 1.5 | 0.4 | 0.4 | |||||||||||||||||||
Loss and loss expense reserves | 8.7 | 4.9 | 4.6 | 3.7 | 2.5 | 2.3 | |||||||||||||||||||
Unearned premiums | $ | 1.6 | $ | 0.6 | $ | 0.3 | $ | 0.1 | $ | 0.1 | $ | — | |||||||||||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies Accounting Principles (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||||
Total Common Shareholders' Equity | $3,775 | ' | ' | ' | $3,596.20 | ' | ' | ' | $3,775 | $3,596.20 | ' | |||||
Net Income (Loss) | 94.7 | 102.9 | 193.9 | 56.2 | -20.2 | -14.8 | -34 | 0.4 | 447.8 | -68.6 | -140.5 | |||||
General Insurance Segment [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Risk based capital | 695.00% | ' | ' | ' | 680.00% | ' | ' | ' | 695.00% | 680.00% | ' | |||||
Costs and Expenses [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Statutory net income amount | ' | ' | ' | ' | ' | ' | ' | ' | -107.3 | -18.2 | -23.1 | |||||
Costs and Expenses [Member] | Significant Reconciling Items [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Total statutory net income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 555.1 | -50.4 | -117.4 | |||||
Costs and Expenses [Member] | Deferred Policy Acquisition Costs [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Statutory net income amount | ' | ' | ' | ' | ' | ' | ' | ' | 0.9 | -33.3 | -30.6 | |||||
Costs and Expenses [Member] | Fair Value of Fixed Maturity Securities [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Statutory net income amount | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | 0 | |||||
Costs and Expenses [Member] | Non-admitted Assets [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Statutory net income amount | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | 0 | |||||
Costs and Expenses [Member] | Deferred Income Taxes [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Statutory net income amount | ' | ' | ' | ' | ' | ' | ' | ' | -79.5 | 35.7 | 73.4 | |||||
Costs and Expenses [Member] | Mortgage Contingency and Deferred Payment Obligations Adjustments [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Statutory net income amount | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | 0 | |||||
Costs and Expenses [Member] | Title Unearned Premiums [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Statutory net income amount | ' | ' | ' | ' | ' | ' | ' | ' | 42.1 | 30 | 14.6 | |||||
Costs and Expenses [Member] | Loss Reserves [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Statutory net income amount | ' | ' | ' | ' | ' | ' | ' | ' | -71.8 | -70.4 | -49.6 | |||||
Costs and Expenses [Member] | Surplus Notes [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Statutory net income amount | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | 0 | |||||
Costs and Expenses [Member] | Sundry Adjustments [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Statutory net income amount | ' | ' | ' | ' | ' | ' | ' | ' | 0.9 | 19.4 | -30.9 | |||||
Stockholders Equity [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Statutory capital and surplus, balance | -334.8 | ' | ' | ' | 222.3 | ' | ' | ' | -334.8 | 222.3 | ' | |||||
Stockholders Equity [Member] | Significant Reconciling Items [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Total statutory capital | 4,109.70 | ' | ' | ' | 3,374 | ' | ' | ' | 4,109.70 | 3,374 | ' | |||||
Stockholders Equity [Member] | Deferred Policy Acquisition Costs [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Statutory capital and surplus, balance | 159.1 | ' | ' | ' | 161.7 | ' | ' | ' | 159.1 | 161.7 | ' | |||||
Stockholders Equity [Member] | Fair Value of Fixed Maturity Securities [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Statutory capital and surplus, balance | 220.9 | ' | ' | ' | 552.7 | ' | ' | ' | 220.9 | 552.7 | ' | |||||
Stockholders Equity [Member] | Non-admitted Assets [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Statutory capital and surplus, balance | 73.3 | ' | ' | ' | 78.2 | ' | ' | ' | 73.3 | 78.2 | ' | |||||
Stockholders Equity [Member] | Deferred Income Taxes [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Statutory capital and surplus, balance | -49.8 | ' | ' | ' | -113.9 | ' | ' | ' | -49.8 | -113.9 | ' | |||||
Stockholders Equity [Member] | Mortgage Contingency and Deferred Payment Obligations Adjustments [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Statutory capital and surplus, balance | -479 | ' | ' | ' | -296.9 | ' | ' | ' | -479 | -296.9 | ' | |||||
Stockholders Equity [Member] | Title Unearned Premiums [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Statutory capital and surplus, balance | 432.6 | ' | ' | ' | 390.4 | ' | ' | ' | 432.6 | 390.4 | ' | |||||
Stockholders Equity [Member] | Loss Reserves [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Statutory capital and surplus, balance | -432.7 | ' | ' | ' | -360.7 | ' | ' | ' | -432.7 | -360.7 | ' | |||||
Stockholders Equity [Member] | Surplus Notes [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Statutory capital and surplus, balance | -277.5 | ' | ' | ' | -202.5 | ' | ' | ' | -277.5 | -202.5 | ' | |||||
Stockholders Equity [Member] | Sundry Adjustments [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Statutory capital and surplus, balance | 17.9 | ' | ' | ' | 13 | ' | ' | ' | 17.9 | 13 | ' | |||||
Insurance Subsidiaries [Member] | Costs and Expenses [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Total statutory net income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 531.9 | [1] | 13.8 | [1] | -78.6 | [1] | ||
Insurance Subsidiaries [Member] | Costs and Expenses [Member] | General Insurance Segment [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Total statutory net income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 314.4 | [1] | 225.5 | [1] | 292.5 | [1] | ||
Insurance Subsidiaries [Member] | Costs and Expenses [Member] | Title Insurance Group [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Total statutory net income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 88.7 | [1] | 70.3 | [1] | 46.7 | [1] | ||
Insurance Subsidiaries [Member] | Costs and Expenses [Member] | RFIG Run-off Business [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Total statutory net income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 125.2 | [1] | -285 | [1] | -422.6 | [1] | ||
Insurance Subsidiaries [Member] | Costs and Expenses [Member] | Life & Health Insurance [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Total statutory net income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 3.6 | [1] | 3 | [1] | 4.8 | [1] | ||
Insurance Subsidiaries [Member] | Stockholders Equity [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Total statutory capital | 4,080 | [1] | ' | ' | ' | 3,485.10 | [1] | ' | ' | ' | 4,080 | [1] | 3,485.10 | [1] | ' | |
Insurance Subsidiaries [Member] | Stockholders Equity [Member] | General Insurance Segment [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Total statutory capital | 3,127.90 | [1] | ' | ' | ' | 2,905.90 | [1] | ' | ' | ' | 3,127.90 | [1] | 2,905.90 | [1] | ' | |
Insurance Subsidiaries [Member] | Stockholders Equity [Member] | Title Insurance Group [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Total statutory capital | 428.6 | [1] | ' | ' | ' | 358.1 | [1] | ' | ' | ' | 428.6 | [1] | 358.1 | [1] | ' | |
Insurance Subsidiaries [Member] | Stockholders Equity [Member] | RFIG Run-off Business [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Total statutory capital | 456.5 | [1] | ' | ' | ' | 149.2 | [1] | ' | ' | ' | 456.5 | [1] | 149.2 | [1] | ' | |
Insurance Subsidiaries [Member] | Stockholders Equity [Member] | Life & Health Insurance [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Total statutory capital | 67 | [1] | ' | ' | ' | 71.9 | [1] | ' | ' | ' | 67 | [1] | 71.9 | [1] | ' | |
NonInsurance Subsidiaries [Member] | Costs and Expenses [Member] | Significant Reconciling Items [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Total statutory net income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 23.2 | -64.2 | -38.7 | |||||
NonInsurance Subsidiaries [Member] | Stockholders Equity [Member] | Significant Reconciling Items [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Total statutory capital | $29.40 | ' | ' | ' | ($111.60) | ' | ' | ' | $29.40 | ($111.60) | ' | |||||
[1] | The insurance laws of the respective states in which the Company’s insurance subsidiaries are incorporated prescribe minimum capital and surplus requirements for the lines of business they are licensed to write. For domestic property and casualty and life and accident insurance companies the National Association of Insurance Commissioners also prescribes risk-based capital ("RBC") requirements. The RBC is a measure of statutory capital in relationship to a formula-driven definition of risk relative to a company’s balance sheet and mix of business. The combined RBC ratio of our primary General insurance subsidiaries was 695% and 680% of the company action level RBC at December 31, 2013 and 2012, respectively. The minimum capital requirements for the Company’s Title Insurance subsidiaries are established by statute in the respective states of domicile. The minimum regulatory capital requirements are not significant in relationship to the recorded statutory capital of the Company’s Title and Life & Accident insurance subsidiaries. At December 31, 2013 and 2012 each of the Company’s General, Title, and Life and Accident insurance subsidiaries exceeded the minimum statutory capital and surplus requirements. Refer to Note 1(s) - Regulatory Matters for a discussion regarding the RFIG Run-off group. |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies Investments (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Other-than-temporary impairments, minimum percentage decline | 20.00% | ' | ' | |||
Realized investment gains losses from impairment | $0 | $0.20 | $50.20 | |||
Fixed maturity securities, amortized cost | 8,477.30 | 7,993.10 | ' | |||
Fixed maturity securities, estimated fair value | 8,712.30 | 8,566.20 | ' | |||
Fixed maturity securities, due in one year or less, amortized cost | 785.5 | ' | ' | |||
Fixed maturity securities, due after one year through five years, amortized cost | 3,957 | ' | ' | |||
Fixed maturity securities, due after five years through ten years, amortized cost | 3,544.20 | ' | ' | |||
Fixed maturity securities, due after ten years, amortized cost | 190.4 | ' | ' | |||
Fixed maturity securities, due in one year or less, estimated fair value | 796.5 | ' | ' | |||
Fixed maturity securities, due after one year through five years, estimated fair value | 4,145.80 | ' | ' | |||
Fixed maturity securities, due after five years through ten years, estimated fair value | 3,579.40 | ' | ' | |||
Fixed maturity securities, due after ten years, estimated fair value | 190.5 | ' | ' | |||
Bonds on deposit with Governmental Authorities | 551.2 | ' | ' | |||
Other than temporary impairment losses, Equity securities | 0 | 131.3 | ' | |||
Equity securities, adjusted cost | 632 | 452.1 | ' | |||
Available-for-sale Securities, Equity Securities | 1,004.20 | 739.7 | ' | |||
Fixed maturity securities and equity, less than twelve months, fair value | 2,655 | 491.5 | ' | |||
Fixed maturity securities and equity, 12 months or less, unrealized losses | 70 | 7.8 | ' | |||
Fixed maturity securities and equity, greater than twelve months, fair value | 47.7 | 10.2 | ' | |||
Fixed maturity securities and equity, greater than twelve months, unrealized losses | 4.1 | 1.7 | ' | |||
Fixed maturity securities and equity, total, fair value | 2,702.80 | 501.8 | ' | |||
Fixed maturity securities and equity, total, unrealized losses | 74.2 | 9.5 | ' | |||
Short-term investments | 1,124.80 | 1,264.90 | ' | |||
Gross investment income | 323.7 | 341.6 | 370.9 | |||
Investment expenses | 4.9 | [1] | 5.1 | [1] | 6.2 | [1] |
Net investment income | 318.7 | 336.5 | 364.6 | |||
Net realized gains (losses) | 96.2 | 31.1 | 78 | |||
Gross realized investment gains (losses) | 148.1 | 47.8 | 115.5 | |||
Income taxes (credits) | 51.8 | [2] | 16.7 | [2] | 37.5 | [2] |
Net changes in unrealized investment gains (losses) | -166.2 | 73.8 | 7.5 | |||
Interest expense incurred on funds held | 1.7 | 2 | 1.9 | |||
Debt Securities [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Gross investment income | 298.7 | 321 | 353.2 | |||
Equity Securities [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Gross investment income | 21.2 | 13.1 | 11.3 | |||
Short-term Investments [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Gross investment income | 1.1 | 1.9 | 1.5 | |||
Investments [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Gross investment income | 2.6 | 5.4 | 4.7 | |||
Fixed Maturity Securities, U S Canadian Governments [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Fixed maturity securities, amortized cost | 1,133 | 1,151.20 | ' | |||
Fixed maturity securities, gross unrealized gains | 36.7 | 65.9 | ' | |||
Fixed maturity securities, gross unrealized losses | 8.7 | 0.3 | ' | |||
Fixed maturity securities, estimated fair value | 1,161.10 | 1,216.80 | ' | |||
Fixed maturity securities and equity, less than twelve months, fair value | 301.7 | 60.3 | ' | |||
Fixed maturity securities and equity, 12 months or less, unrealized losses | 8.7 | 0.3 | ' | |||
Fixed maturity securities and equity, greater than twelve months, fair value | 0 | 0 | ' | |||
Fixed maturity securities and equity, greater than twelve months, unrealized losses | 0 | 0 | ' | |||
Fixed maturity securities and equity, total, fair value | 301.7 | 60.3 | ' | |||
Fixed maturity securities and equity, total, unrealized losses | 8.7 | 0.3 | ' | |||
US States and Political Subdivisions Debt Securities [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Fixed maturity securities, amortized cost | 168.1 | 380.8 | ' | |||
Fixed maturity securities, gross unrealized gains | 3.7 | 11.4 | ' | |||
Fixed maturity securities, gross unrealized losses | 0.5 | 0.1 | ' | |||
Fixed maturity securities, estimated fair value | 171.3 | 392.2 | ' | |||
Fixed maturity securities and equity, less than twelve months, fair value | 10 | 3.7 | ' | |||
Fixed maturity securities and equity, 12 months or less, unrealized losses | 0.5 | 0.1 | ' | |||
Fixed maturity securities and equity, greater than twelve months, fair value | 0 | 0 | ' | |||
Fixed maturity securities and equity, greater than twelve months, unrealized losses | 0 | 0 | ' | |||
Fixed maturity securities and equity, total, fair value | 10 | 3.7 | ' | |||
Fixed maturity securities and equity, total, unrealized losses | 0.5 | 0.1 | ' | |||
Corporate Debt Securities [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Fixed maturity securities, amortized cost | 7,176 | 6,461 | ' | |||
Fixed maturity securities, gross unrealized gains | 268.1 | 502.1 | ' | |||
Fixed maturity securities, gross unrealized losses | 64.3 | 6 | ' | |||
Fixed maturity securities, estimated fair value | 7,379.80 | 6,957.10 | ' | |||
Fixed maturity securities and equity, less than twelve months, fair value | 2,312.20 | 348.4 | ' | |||
Fixed maturity securities and equity, 12 months or less, unrealized losses | 60.2 | 4.3 | ' | |||
Fixed maturity securities and equity, greater than twelve months, fair value | 47.7 | 10.2 | ' | |||
Fixed maturity securities and equity, greater than twelve months, unrealized losses | 4.1 | 1.7 | ' | |||
Fixed maturity securities and equity, total, fair value | 2,360 | 358.6 | ' | |||
Fixed maturity securities and equity, total, unrealized losses | 64.3 | 6 | ' | |||
Debt Securities [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Fixed maturity securities, amortized cost | 8,477.30 | 7,993.10 | ' | |||
Fixed maturity securities, gross unrealized gains | 308.7 | 579.5 | ' | |||
Fixed maturity securities, gross unrealized losses | 73.6 | 6.5 | ' | |||
Fixed maturity securities, estimated fair value | 8,712.30 | 8,566.20 | ' | |||
Fixed maturity securities and equity, less than twelve months, fair value | 2,624 | 412.6 | ' | |||
Fixed maturity securities and equity, 12 months or less, unrealized losses | 69.4 | 4.8 | ' | |||
Fixed maturity securities and equity, greater than twelve months, fair value | 47.7 | 10.2 | ' | |||
Fixed maturity securities and equity, greater than twelve months, unrealized losses | 4.1 | 1.7 | ' | |||
Fixed maturity securities and equity, total, fair value | 2,671.80 | 422.8 | ' | |||
Fixed maturity securities and equity, total, unrealized losses | 73.6 | 6.5 | ' | |||
Securities in unrealized loss positions, number of positions | 558 | 102 | ' | |||
Percentage of securities in unrealized loss position | 30.80% | 5.70% | ' | |||
Number of securities in continuous unrealized loss position for more than 12 months | 10 | 4 | ' | |||
Equity Securities [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Equity securities, adjusted cost | 632 | 452.1 | ' | |||
Equity securities, gross unrealized gains | 372.7 | 290.5 | ' | |||
Equity securities, gross unrealized losses | 0.5 | 2.9 | ' | |||
Available-for-sale Securities, Equity Securities | 1,004.20 | 739.7 | ' | |||
Fixed maturity securities and equity, less than twelve months, fair value | 31 | 78.9 | ' | |||
Fixed maturity securities and equity, 12 months or less, unrealized losses | 0.5 | 2.9 | ' | |||
Fixed maturity securities and equity, greater than twelve months, fair value | 0 | 0 | ' | |||
Fixed maturity securities and equity, greater than twelve months, unrealized losses | 0 | 0 | ' | |||
Fixed maturity securities and equity, total, fair value | 31 | 78.9 | ' | |||
Fixed maturity securities and equity, total, unrealized losses | 0.5 | 2.9 | ' | |||
Securities in unrealized loss positions, number of positions | 5 | 14 | ' | |||
Percentage of securities in unrealized loss position | 7.20% | 21.90% | ' | |||
Number of securities in continuous unrealized loss position for more than 12 months | 0 | 1 | ' | |||
Fair Value, Inputs, Level 1 [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Short-term investments | 1,120.50 | 1,260.20 | ' | |||
Fair Value, Inputs, Level 1 [Member] | Fixed Maturity Securities, U S Canadian Governments [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Fixed maturity securities, estimated fair value | 478.9 | 570.9 | ' | |||
Fair Value, Inputs, Level 1 [Member] | US States and Political Subdivisions Debt Securities [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Fixed maturity securities, estimated fair value | 0 | 0 | ' | |||
Fair Value, Inputs, Level 1 [Member] | Corporate Debt Securities [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Fixed maturity securities, estimated fair value | 0 | 0 | ' | |||
Fair Value, Inputs, Level 1 [Member] | Equity Securities [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Available-for-sale Securities, Equity Securities | 1,003.40 | 736.9 | ' | |||
Fair Value, Inputs, Level 2 [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Short-term investments | 0 | 0 | ' | |||
Fair Value, Inputs, Level 2 [Member] | Fixed Maturity Securities, U S Canadian Governments [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Fixed maturity securities, estimated fair value | 682.2 | 645.9 | ' | |||
Fair Value, Inputs, Level 2 [Member] | US States and Political Subdivisions Debt Securities [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Fixed maturity securities, estimated fair value | 171.3 | 392.2 | ' | |||
Fair Value, Inputs, Level 2 [Member] | Corporate Debt Securities [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Fixed maturity securities, estimated fair value | 7,369.30 | 6,926.30 | ' | |||
Fair Value, Inputs, Level 2 [Member] | Equity Securities [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Available-for-sale Securities, Equity Securities | 0 | 0 | ' | |||
Fair Value, Inputs, Level 3 [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Short-term investments | 4.2 | 4.6 | ' | |||
Level 3 security disposed of | 20.2 | ' | ' | |||
Fair Value, Inputs, Level 3 [Member] | Fixed Maturity Securities, U S Canadian Governments [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Fixed maturity securities, estimated fair value | 0 | 0 | ' | |||
Fair Value, Inputs, Level 3 [Member] | US States and Political Subdivisions Debt Securities [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Fixed maturity securities, estimated fair value | 0 | 0 | ' | |||
Fair Value, Inputs, Level 3 [Member] | Corporate Debt Securities [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Fixed maturity securities, estimated fair value | 10.5 | 30.7 | ' | |||
Fair Value, Inputs, Level 3 [Member] | Equity Securities [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Available-for-sale Securities, Equity Securities | 0.7 | 2.7 | ' | |||
Estimate of Fair Value, Fair Value Disclosure [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Short-term investments | 1,124.80 | 1,264.90 | ' | |||
Estimate of Fair Value, Fair Value Disclosure [Member] | Fixed Maturity Securities, U S Canadian Governments [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Fixed maturity securities, estimated fair value | 1,161.10 | 1,216.80 | ' | |||
Estimate of Fair Value, Fair Value Disclosure [Member] | US States and Political Subdivisions Debt Securities [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Fixed maturity securities, estimated fair value | 171.3 | 392.2 | ' | |||
Estimate of Fair Value, Fair Value Disclosure [Member] | Corporate Debt Securities [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Fixed maturity securities, estimated fair value | 7,379.80 | 6,957.10 | ' | |||
Estimate of Fair Value, Fair Value Disclosure [Member] | Equity Securities [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Available-for-sale Securities, Equity Securities | 1,004.20 | 739.7 | ' | |||
Debt Securities [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Realized gains on fixed maturity securities | 9.9 | 32.7 | 143.9 | |||
Realized losses on fixed maturity securities | -8.2 | 0 | -1.2 | |||
Net realized gains (losses) | 1.7 | 32.7 | 142.6 | |||
Changes in unrealized investment gains (losses) on: | -337.9 | 64.9 | 46.3 | |||
Less: Deferred income taxes (credits) | -117.9 | 22.6 | 16 | |||
Net changes in unrealized investment gains (losses) | -219.9 | 42.2 | 30.3 | |||
Equity securities & other long-term investments [Member] | ' | ' | ' | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ' | ' | ' | |||
Gross realized investment gains (losses) | 146.3 | 15.1 | -27 | |||
Changes in unrealized investment gains (losses) on: | 82.6 | 48.4 | -35.2 | |||
Less: Deferred income taxes (credits) | 28.9 | 16.8 | -12.4 | |||
Net changes in unrealized investment gains (losses) | $53.70 | $31.50 | ($22.70) | |||
[1] | (a)Investment expenses consist of personnel costs and investment management and custody service fees, as well as interest incurred on funds held of $1.7, $2.0 and $1.9 for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||
[2] | Reflects primarily the combination of fully taxable realized investment gains or losses and judgments about the recoverability of deferred tax assets. |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies Revenue Recognition (Details) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenue Recognition [Abstract] | ' | ' | ' |
Concentration revenue percentage | 28.00% | 32.00% | 33.00% |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies Deferred Policy Acquisition Costs (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Business Acquisition [Line Items] | ' | ' | ' |
Deferred policy acquisition cost, written off | ' | ' | $29.10 |
Deferred beginning of year | 165.5 | 197.6 | 230.6 |
Acquisition costs deferred; additions | 359.1 | 311 | 338.4 |
Amortization charged to income | -331.9 | -343.2 | -371.7 |
Change for the year | 27.1 | -32.1 | -33.3 |
Deferred end of year | 192.6 | 165.5 | 197.6 |
Commissions, net of reinsurance [Member] | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' |
Acquisition costs deferred; additions | 222.7 | 180.8 | 139 |
Premium taxes [Member] | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' |
Acquisition costs deferred; additions | 93.8 | 86.8 | 77.7 |
Salaries and other marketing expenses [Member] | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' |
Acquisition costs deferred; additions | 42.5 | 43.3 | 121.8 |
General Insurance Group [Member] | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' |
Deferred policy acquisition costs, charges relating to adoption of new accounting guidance | ' | $37.90 | ' |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies Unearned Premiums (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Unearned premiums | $1,487.80 | $1,364.40 |
General Insurance Group [Member] | ' | ' |
Unearned premiums | 1,458.90 | 1,323.80 |
RFIG Run-off Business [Member] | ' | ' |
Unearned premiums | $28.90 | $40.50 |
Summary_of_Significant_Account8
Summary of Significant Accounting Policies Losses, Claims and Settlement Expenses - General (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 |
Minimum [Member] | Maximum [Member] | |||
Supplementary Insurance Information, by Segment | ' | ' | ' | ' |
Workers' compensation discount, percent | ' | ' | 3.50% | 4.00% |
General liability insurance face amount | $10,000,000 | ' | $1,000,000 | $2,000,000 |
Retention payable | 500,000 | ' | ' | ' |
Reserve for losses and loss adjustment expenses | 159,700,000 | 147,100,000 | ' | ' |
Reserve for losses and loss adjustment expenses, net of reinsurance | $121,300,000 | $119,400,000 | ' | ' |
Average five year survival ratio, gross | '5.5 | '4.7 | ' | ' |
Average five year survival ratio, net | '7.8 | '7.6 | ' | ' |
Summary_of_Significant_Account9
Summary of Significant Accounting Policies Losses, Claims and Settlement Expenses - RFIG Run-off (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Supplementary Insurance Information, by Segment | ' | ' | ' |
Estimated reduction in ending reserve | $159.70 | $147.10 | ' |
RFIG Run-off Business [Member] | ' | ' | ' |
Supplementary Insurance Information, by Segment | ' | ' | ' |
Estimated reduction in beginning reserve | 174.9 | 313.2 | 710.3 |
Total incurred claims and settlement expenses reduced (increased) by changes in estimated rescissions, Current year | 80.5 | 111.7 | 223.1 |
Total incurred claims and settlement expenses reduced (increased) by changes in estimated rescissions, Prior year | 71.9 | 12.2 | -340.8 |
Total incurred claims and settlement expenses reduced (increased) by changes in estimated rescissions, Sub-total | 152.5 | 124 | -117.6 |
Estimated rescission reduction in settled claims | -212.2 | -262.3 | -279.5 |
Estimated reduction in ending reserve | 115.2 | 174.9 | 313.2 |
Pending or Threatened Litigation L [Member] | RFIG Run-off Business [Member] | ' | ' | ' |
Supplementary Insurance Information, by Segment | ' | ' | ' |
Estimated rescission reduction in settled claims | $26.60 | ' | ' |
Recovered_Sheet1
Summary of Significant Accounting Policies Losses, Claims and Settlement Expenses - Consolidated (Details) (USD $) | 12 Months Ended | ||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |||
Supplementary Insurance Information, by Segment | ' | ' | ' | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Gross | $9,433.50 | $9,303.30 | $8,786.60 | $8,814.60 | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Net | 6,456.20 | 5,878.50 | 5,869.30 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims Current Year | 2,523.70 | 2,653.10 | 2,608.50 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims, Prior Years | -299.1 | 95.1 | 122.6 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims | 2,224.50 | [1] | 2,748.20 | [1] | 2,731.10 | [1] | ' |
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid, Current Year | 695.9 | 668.1 | 709.2 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid, Prior Years | 1,388 | 1,502.30 | 2,012.60 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid, excluding the reclassification of Consumer Credit Indemnity coverage | 2,083.90 | [2] | 2,170.50 | [2] | 2,721.90 | [2] | ' |
Liability for Unpaid Claims and Claims Adjustment Expense, Net of Reinsurance Losses Recoverable | 6,596.80 | [3] | 6,456.20 | [3] | 5,878.50 | [3] | ' |
Net Reserve Increase (Decrease) | 140.6 | 577.6 | 9.2 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred but Not Reported (IBNR) Claims, Amount | 2,651 | 2,436.10 | 2,240.40 | ' | |||
One year development of consolidated reserves | 4.60% | -1.60% | -2.10% | ' | |||
Three year average annual development of consolidated reserves | 0.30% | ' | ' | ' | |||
General Insurance Segment [Member] | ' | ' | ' | ' | |||
Supplementary Insurance Information, by Segment | ' | ' | ' | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Net | 4,048.90 | 3,874.90 | 3,888 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims Current Year | 1,857.90 | 1,729.60 | 1,575.30 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims, Prior Years | -23.7 | -51.5 | -130.9 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid, Current Year | 620.8 | 587.8 | 569.8 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid, Prior Years | 928.2 | 916.1 | 887.6 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims, Prior Years, Excluding the Reclassification of Consumer Credit Indemnity Coverage | -40.4 | -19.8 | -149.2 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid, excluding the reclassification of Consumer Credit Indemnity coverage | 1,597.50 | 1,577.90 | 1,551.10 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Net of Reinsurance Losses Recoverable | 4,334.10 | [3] | 4,048.90 | [3] | 3,874.90 | [3] | ' |
Net Reserve Increase (Decrease) | 285.1 | 174 | -13.1 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred but Not Reported (IBNR) Claims, Amount | 2,118.40 | 1,947 | 1,878.20 | ' | |||
RFIG Run-off Business [Member] | ' | ' | ' | ' | |||
Supplementary Insurance Information, by Segment | ' | ' | ' | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Net | 1,994.80 | 1,654 | 1,663.10 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims Current Year | 487.5 | [1] | 762.2 | [1] | 887.1 | [1] | ' |
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims, Prior Years | -269.7 | [1] | 148.2 | [1] | 254.8 | [1] | ' |
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid, Current Year | 39.4 | [2] | 46.6 | [2] | 100.5 | [2] | ' |
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid, Prior Years | 398.9 | [2] | 523 | [2] | 1,050.50 | [2] | ' |
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims, Prior Years, Excluding the Reclassification of Consumer Credit Indemnity Coverage | -253 | 116.5 | 273.2 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid, excluding the reclassification of Consumer Credit Indemnity coverage | 389.8 | 495.7 | 1,057.40 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Net of Reinsurance Losses Recoverable | 1,774.20 | [3] | 1,994.80 | [3] | 1,654 | [3] | ' |
Increase (Decrease) in Loss and Loss Adjustment Expense Reserve, Current Year | 80.5 | 111.7 | 223.1 | ' | |||
Increase (Decrease) in Loss and Loss Adjustment Expense Reserve, Prior Year | 71.9 | 12.2 | -340.8 | ' | |||
Net Reserve Increase (Decrease) | -220.6 | 340.7 | -9 | ' | |||
Insurance Rescission | 212.2 | 262.3 | 279.5 | ' | |||
Deferred Payment Obligation | 551.5 | 299.5 | ' | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred but Not Reported (IBNR) Claims, Amount | 121.3 | 147.5 | 94.8 | ' | |||
Title Insurance Group [Member] | ' | ' | ' | ' | |||
Supplementary Insurance Information, by Segment | ' | ' | ' | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Net | 396.4 | 332 | 298 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims Current Year | 137.2 | 120.9 | 105.7 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims, Prior Years | -3.1 | 0 | 0 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid, Current Year | 6 | 3 | 7.9 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid, Prior Years | 52.8 | 53.4 | 63.6 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Net of Reinsurance Losses Recoverable | 471.5 | [3] | 396.4 | [3] | 332 | [3] | ' |
Net Reserve Increase (Decrease) | 75.1 | 64.3 | 34 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred but Not Reported (IBNR) Claims, Amount | 407.1 | 336.9 | 262.5 | ' | |||
Corporate & Other [Member] | ' | ' | ' | ' | |||
Supplementary Insurance Information, by Segment | ' | ' | ' | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Net | 15.9 | 17.4 | 20 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims Current Year | 41 | 40.3 | 40.2 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims, Prior Years | -2.5 | -1.5 | -1.2 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid, Current Year | 29.5 | 30.6 | 30.7 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid, Prior Years | 8 | 9.6 | 10.7 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Net of Reinsurance Losses Recoverable | 16.8 | [3] | 15.9 | [3] | 17.4 | [3] | ' |
Net Reserve Increase (Decrease) | 0.9 | -1.5 | -2.6 | ' | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred but Not Reported (IBNR) Claims, Amount | 4 | 4.6 | 4.6 | ' | |||
Reinsurance Recoverable [Member] | ' | ' | ' | ' | |||
Supplementary Insurance Information, by Segment | ' | ' | ' | ' | |||
Reinsurance Recoverables | $2,836.70 | $2,847 | $2,908.10 | $2,945.30 | |||
[1] | In common with all other insurance lines, RFIG Run-off mortgage guaranty settled and incurred claim and claim adjustment expenses include only those costs actually or expected to be paid by the Company. As previously noted, changes in mortgage guaranty aggregate case, IBNR, and loss adjustment expense reserves shown below and entering into the determination of incurred claim costs, take into account, among a large number of variables, claim cost reductions for anticipated coverage rescissions and claims denials.The RFIG Run-off mortgage guaranty provision for insured events of the current year was reduced by an estimated $80.5, $111.7 and $223.1, respectively, for 2013, 2012 and 2011. The provision for insured events of prior years in 2013, 2012 and 2011 was reduced (increased) by an estimated $71.9, $12.2 and $(340.8), respectively. These changes were offset to varying degrees by differences between actual claim settlements relative to expected experience and by subsequent revisions of assumptions in regards to claim frequency, severity or levels of associated claim settlement costs which result from consideration of underlying trends and expectations.The following table reflects the changes in net reserves between succeeding balance sheet dates. 2013Â 2012Â 2011Â Net reserve increase(decrease): General Insurance$285.1Â $174.0Â $(13.1)Â Title Insurance75.1Â 64.3Â 34.0Â RFIG Run-off(220.6)Â 340.7Â (9.0)Â Other.9Â (1.5)Â (2.6)Â Total$140.6Â $577.6Â $9.2 | ||||||
[2] | Rescissions reduced the Company's settled losses by an estimated $212.2, $262.3, and $279.5 for 2013, 2012, and 2011, respectively. 2013 and 2012 RFIG Run-off Business claim and claim adjustment expense payments reflect the retention of the DPO within claim reserves which amounted to $551.5 and $299.5 as of the respective year-ends. | ||||||
[3] | Year end net IBNR reserves for each segment were as follows: 2013Â 2012Â 2011Â General Insurance$2,118.4Â $1,947.0Â $1,878.2Â Title Insurance407.1Â 336.9Â 262.5Â RFIG Run-off121.3Â 147.5Â 94.8Â Other4.0Â 4.6Â 4.6Â Total$2,651.0Â $2,436.1Â $2,240.4 |
Recovered_Sheet2
Summary of Significant Accounting Policies Income Taxes (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income Taxes [Abstract] | ' | ' | ' |
Statutory tax rate | 35.00% | -35.00% | -35.00% |
Tax-Exempt interest | -0.40% | -4.10% | -5.40% |
Dividends received exclusion | -0.60% | -2.10% | -1.00% |
Valuation allowance | 0.00% | -2.00% | -0.60% |
Goodwill impairment | 0.00% | 0.40% | 1.60% |
Foreign income (loss) reattribution | -0.20% | -3.50% | 1.00% |
Sale of subsidiary | 0.00% | -1.30% | 0.00% |
Other items - net | -0.40% | 1.00% | -1.20% |
Effective tax rates (credit) | 33.40% | -46.60% | -40.60% |
Deferred Tax Assets [Abstract] | ' | ' | ' |
Deferred Tax Assets, losses, claims, and settlement expenses | $286.90 | $272.40 | $231.70 |
Deferred Tax Assets, Pension and deferred compensation plans | 51.3 | 90.8 | 85.8 |
Deferred Tax Assets, Impairment losses on investments | 3.2 | 49.2 | 52.9 |
Deferred Tax Assets, Net operating loss carryforward | 43.7 | 91 | 77.2 |
Deferred Tax Assets, AMT credit carryforward | 9.6 | 25.5 | 29.7 |
Deferred Tax Assets, Other temporary differences | 50.5 | 67.7 | 50.1 |
Total deferred tax assets before valuation allowance | 445.3 | 596.8 | 527.7 |
Deferred Tax Assets, Valuation allowance | -9.6 | -9.6 | -12.2 |
Total deferred tax assets | 435.7 | 587.2 | 515.4 |
Deferred Tax Liabilities [Abstract] | ' | ' | ' |
Deferred Tax Liabilties, Unearned premium reserves | 42.7 | 35.3 | 29.3 |
Deferred Tax Liabilities, Deferred policy acquisition costs | 63.1 | 52.5 | 63.9 |
Deferred Tax Liabilities, Mortgage guaranty insurers' contingency reserves | 20.1 | 0 | 0.4 |
Deferred Tax Liabilities, Amortization of fixed maturity securities | 4.9 | 6.9 | 7.2 |
Deferred Tax Liabilities, Net unrealized investment gains | 220.5 | 309.7 | 273 |
Deferred Tax Liabilities, Title plants and records | 4.9 | 5 | 5 |
Deferred Tax Liabilities, Other temporary differences | 30.6 | 29.6 | 19.7 |
Total deferred tax liabilities | 387.1 | 439.2 | 398.7 |
Net deferred tax assets (liabilities) | 48.4 | 148.1 | 116.7 |
Operating loss carryforwards | 124.8 | ' | ' |
Contingency reserve deduction | 57.6 | ' | ' |
US Treasury Tax and Loss Bonds to be acquired | $20.10 | ' | ' |
Recovered_Sheet3
Summary of Significant Accounting Policies Property and Equipment (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Depreciation | $23.80 | $23.90 | $21.90 |
Minimum [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Estimated useful lives of the assets | '2 years | ' | ' |
Maximum [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Estimated useful lives of the assets | '27 years | ' | ' |
Recovered_Sheet4
Summary of Significant Accounting Policies Goodwill and Intangible Assets (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Goodwill [Roll Forward] | ' | ' | ' |
Goodwill | $160.70 | $162 | ' |
Acquisitions | 0 | 0 | ' |
Impairments | 0 | -1.3 | ' |
Goodwill | 160.7 | 160.7 | ' |
General Insurance Segment [Member] | ' | ' | ' |
Goodwill [Roll Forward] | ' | ' | ' |
Goodwill | 116.2 | 117.5 | ' |
Acquisitions | 0 | 0 | ' |
Impairments | 0 | -1.3 | ' |
Goodwill | 116.2 | 116.2 | ' |
Title Insurance Group [Member] | ' | ' | ' |
Goodwill [Roll Forward] | ' | ' | ' |
Goodwill | 44.3 | 44.3 | ' |
Acquisitions | 0 | 0 | ' |
Impairments | 0 | 0 | ' |
Goodwill | 44.3 | 44.3 | ' |
RFIG Run-off Business [Member] | ' | ' | ' |
Goodwill [Roll Forward] | ' | ' | ' |
Goodwill | 0 | 0 | ' |
Acquisitions | 0 | 0 | ' |
Impairments | 0 | 0 | -10.7 |
Goodwill | 0 | 0 | 0 |
Corporate & Other [Member] | ' | ' | ' |
Goodwill [Roll Forward] | ' | ' | ' |
Goodwill | 0.1 | 0.1 | ' |
Acquisitions | 0 | 0 | ' |
Impairments | 0 | 0 | ' |
Goodwill | $0.10 | $0.10 | ' |
Recovered_Sheet5
Summary of Significant Accounting Policies Employee Benefit Plans (Details) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
plan | |||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Number of benefit plans | ' | 4 | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Net pretax amount recognized | ($111.70) | $19.40 | $55.80 |
Employee savings and stock ownership plan, number of allocated shares | 14,009,007 | ' | ' |
Employee savings and stock ownership plan, number of allocated shares to employees | 10,911,379 | ' | ' |
Employees Savings and Stock Ownership Plan [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Defined contribution plan, cost recognized | 7.8 | 5.3 | 5.9 |
Other profit sharing plans [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Defined contribution plan, cost recognized | 12.1 | 12.9 | 13.4 |
Cash and deferred incentive compensation [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Defined contribution plan, cost recognized | 21.6 | 20.5 | 19.5 |
Pension Plans, Defined Benefit [Member] | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Number of benefit plans | 1 | ' | ' |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ' | ' | ' |
Projected benefit obligation at beginning of year | 525.7 | 477.8 | 425.2 |
Service cost | 9.5 | 9.4 | 8.7 |
Interest cost | 21.6 | 21.8 | 22.7 |
Plan curtailments | -26.6 | 0 | 0 |
Actuarial (gains) losses | -32.8 | 31.5 | 36.7 |
Benefits paid | -18.1 | -15 | -15.5 |
Net increase (decrease) for the year | -46.4 | 47.8 | 52.6 |
Projected benefit obligation at end of year | 479.3 | 525.7 | 477.8 |
Accumulated benefit obligation at end of year | 479.3 | 495.4 | 443.4 |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Fair value of net assets available for plan benefits at beginning of year | 352.3 | 315.4 | 297.1 |
Actual return on plan assets | 61.9 | 25.8 | 0.2 |
Sponsor contributions | 12.7 | 26 | 33.6 |
Net increase (decrease) | 56.5 | 36.8 | 18.3 |
Fair value of net assets available for plan benefits at end of year | 408.8 | 352.3 | 315.4 |
Curtailment loss recognized | 0.6 | 0 | 0 |
Expected return on plan assets | -26.7 | -25.1 | -23.7 |
Recognized loss | 8.8 | 10 | 6 |
Prior service costs | 0.1 | 0.1 | 0.1 |
Net cost | 14.1 | 16.3 | 13.9 |
Net recognized gain (loss) | 68 | -30.8 | -60.2 |
Net prior service loss | 8.8 | 10 | 6 |
Net prior service cost | 0.1 | 0.1 | 0.1 |
Net pretax amount recognized | 104.3 | -20.6 | -54 |
Net recognized loss | -48.3 | -151.9 | ' |
Net prior service cost | 0 | -0.7 | ' |
Total | -48.3 | -152.7 | ' |
Settlement discount rates | 5.00% | 4.17% | ' |
Rates of compensationincrease | ' | 3.22% | ' |
Settlement discount rates | 4.17% | 4.66% | 5.46% |
Rates of compensation increase | 3.22% | 4.25% | 4.25% |
Long-term rates of return on plans' assets | 7.56% | 7.81% | 7.94% |
Expected future benefit payments in year one | 20.6 | ' | ' |
Expected future benefit payments in year two | 22.8 | ' | ' |
Expected future benefit payments in year three | 24.2 | ' | ' |
Expected future benefit payments in year four | 25.1 | ' | ' |
Expected future benefit payments in year five | 26.4 | ' | ' |
Expected future benefit payments in five fiscal years thereafter | 148.5 | ' | ' |
Estimated future cash contributions in 2013 | 26 | ' | ' |
Total investments | 100.00% | 100.00% | ' |
Defined Benefit Plan, Effect of Settlements and Curtailments on Accumulated Benefit Obligation | 17.7 | ' | ' |
Pension Plans, Defined Benefit [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Fair value of net assets available for plan benefits at end of year | 265.1 | 195.3 | ' |
Pension Plans, Defined Benefit [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Fair value of net assets available for plan benefits at end of year | 136.3 | 148.8 | ' |
Pension Plans, Defined Benefit [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Fair value of net assets available for plan benefits at end of year | 7.4 | 8.1 | ' |
Pension Plans, Defined Benefit [Member] | Common shares of Company stock [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Fair value of net assets available for plan benefits at end of year | 48.8 | 29 | ' |
Total investments | 12.00% | 8.30% | ' |
Pension Plans, Defined Benefit [Member] | Common shares of Company stock [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Fair value of net assets available for plan benefits at end of year | 48.8 | 29 | ' |
Pension Plans, Defined Benefit [Member] | Common shares of Company stock [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Fair value of net assets available for plan benefits at end of year | 0 | 0 | ' |
Pension Plans, Defined Benefit [Member] | Common shares of Company stock [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Fair value of net assets available for plan benefits at end of year | 0 | 0 | ' |
Pension Plans, Defined Benefit [Member] | Equity securities, other [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Fair value of net assets available for plan benefits at end of year | 208.1 | 171 | ' |
Total investments | 50.90% | 48.50% | ' |
Pension Plans, Defined Benefit [Member] | Equity securities, other [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Fair value of net assets available for plan benefits at end of year | 189.1 | 154 | ' |
Pension Plans, Defined Benefit [Member] | Equity securities, other [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Fair value of net assets available for plan benefits at end of year | 18.9 | 16.9 | ' |
Pension Plans, Defined Benefit [Member] | Equity securities, other [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Fair value of net assets available for plan benefits at end of year | 0 | 0 | ' |
Pension Plans, Defined Benefit [Member] | Equity Securities [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Fair value of net assets available for plan benefits at beginning of year | 200.1 | ' | ' |
Fair value of net assets available for plan benefits at end of year | 256.9 | ' | ' |
Total investments | 62.90% | 56.80% | ' |
Investment Policy Asset Allocation % Range Target, Debt Securities, range minimum | 30.00% | ' | ' |
Investment Policy Asset Allocation % Range Target, Debt Securities, range maximum | 70.00% | ' | ' |
Pension Plans, Defined Benefit [Member] | Equity Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Fair value of net assets available for plan benefits at end of year | 238 | 183.1 | ' |
Pension Plans, Defined Benefit [Member] | Equity Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Fair value of net assets available for plan benefits at end of year | 18.9 | 16.9 | ' |
Pension Plans, Defined Benefit [Member] | Equity Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Fair value of net assets available for plan benefits at end of year | 0 | 0 | ' |
Pension Plans, Defined Benefit [Member] | Fixed maturity securities [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Fair value of net assets available for plan benefits at beginning of year | 124 | ' | ' |
Fair value of net assets available for plan benefits at end of year | 120.4 | ' | ' |
Total investments | 29.50% | 35.20% | ' |
Investment Policy Asset Allocation % Range Target, Debt Securities, range minimum | 30.00% | ' | ' |
Investment Policy Asset Allocation % Range Target, Debt Securities, range maximum | 70.00% | ' | ' |
Pension Plans, Defined Benefit [Member] | Fixed maturity securities [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Fair value of net assets available for plan benefits at end of year | 10.5 | 1.5 | ' |
Pension Plans, Defined Benefit [Member] | Fixed maturity securities [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Fair value of net assets available for plan benefits at end of year | 109.9 | 122.5 | ' |
Pension Plans, Defined Benefit [Member] | Fixed maturity securities [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Fair value of net assets available for plan benefits at end of year | 0 | 0 | ' |
Pension Plans, Defined Benefit [Member] | Benefit plan assets, Other [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Fair value of net assets available for plan benefits at beginning of year | 28.1 | ' | ' |
Fair value of net assets available for plan benefits at end of year | 31.3 | ' | ' |
Total investments | 7.60% | 8.00% | ' |
Investment Policy Asset Allocation % Range Target, Debt Securities, range minimum | 1.00% | ' | ' |
Investment Policy Asset Allocation % Range Target, Debt Securities, range maximum | 20.00% | ' | ' |
Pension Plans, Defined Benefit [Member] | Benefit plan assets, Other [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Fair value of net assets available for plan benefits at end of year | 16.5 | 10.6 | ' |
Pension Plans, Defined Benefit [Member] | Benefit plan assets, Other [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Fair value of net assets available for plan benefits at end of year | 7.3 | 9.3 | ' |
Pension Plans, Defined Benefit [Member] | Benefit plan assets, Other [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' | ' |
Fair value of net assets available for plan benefits at end of year | $7.40 | $8.10 | ' |
Recovered_Sheet6
Summary of Significant Accounting Policies Escrow Funds (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ' | ' |
Liabilties Related to Escrow | $1,043.90 | $878.10 |
Title Insurance Group [Member] | ' | ' |
Restricted Cash and Cash Equivalents Items [Line Items] | ' | ' |
Escrow Deposit | $1,043.90 | $878.10 |
Recovered_Sheet7
Summary of Significant Accounting Policies Earnings Per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Net income (loss) | $94.70 | $102.90 | $193.90 | $56.20 | ($20.20) | ($14.80) | ($34) | $0.40 | $447.80 | ($68.60) | ($140.50) | |||
Numerator for basic earnings per share - income (loss) available to common stockholders | ' | ' | ' | ' | ' | ' | ' | ' | 447.8 | -68.6 | -140.5 | |||
Adjustment for interest expense incurred on assumed conversions of convertible notes | ' | ' | ' | ' | ' | ' | ' | ' | 14.6 | 0 | 0 | |||
Numerator for diluted earnings per share - income (loss) available to common stockholders after assumed conversion of convertible notes | ' | ' | ' | ' | ' | ' | ' | ' | $462.40 | ($68.60) | ($140.50) | |||
Denominator for basic earnings per share - weighted-average shares (a) | ' | ' | ' | ' | ' | ' | ' | ' | 257,443,999 | [1] | 255,812,888 | [1] | 255,045,210 | [1] |
Effect of dilutive securities - stock based compensation awards | ' | ' | ' | ' | ' | ' | ' | ' | 784,080 | 0 | 0 | |||
Effect of dilutive securities - convertible senior notes | ' | ' | ' | ' | ' | ' | ' | ' | 35,455,956 | 0 | 0 | |||
Denominator for diluted earnings per share adjusted weighted average shares and assumed conversion of convertible notes (a) | ' | ' | ' | ' | ' | ' | ' | ' | 293,684,035 | [1] | 255,812,888 | [1] | 255,045,210 | [1] |
Net income (loss) per share: basic (in dollars per share) | $0.37 | $0.40 | $0.76 | $0.22 | ($0.08) | ($0.06) | ($0.13) | $0 | $1.74 | ($0.27) | ($0.55) | |||
Earnings Per Share, Diluted (in dollars per share) | $0.33 | $0.36 | $0.67 | $0.21 | ($0.08) | ($0.06) | ($0.13) | $0 | $1.57 | ($0.27) | ($0.55) | |||
Total anti-dulitive common share equivalents excluded from earnings per share computations (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 7,563,456 | 49,953,138 | 72,471,784 | |||
Stockbased compensation awards [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Total anti-dulitive common share equivalents excluded from earnings per share computations (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 7,563,456 | 14,543,835 | 16,007,624 | |||
Convertible senior notes [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Total anti-dulitive common share equivalents excluded from earnings per share computations (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 35,409,303 | 56,464,160 | |||
[1] | In calculating earnings per share, pertinent accounting rules require that common shares owned by the Company's Employee Savings and Stock Ownership Plan that are as yet unallocated to participants in the plan be excluded from the calculation. Such shares are issued and outstanding, and have the same voting and other rights applicable to all other common shares. |
Recovered_Sheet8
Summary of Significant Accounting Policies Stock Based Compensation (Details) (USD $) | 12 Months Ended | ||||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | |||
Maximum Number of Common Stock Shares Available Under New Stock Option Plan | 14,500,000 | ' | ' | ' | |||
Share contractual period | '10 years | ' | ' | ' | |||
Number of shares available for future issuances | 10,877,713 | ' | ' | ' | |||
Award vesting rate, within one year of grant date | 10.00% | ' | ' | ' | |||
Award vesting rate, between year one and year two | 15.00% | ' | ' | ' | |||
Award vesting rate, between year two and year three | 20.00% | ' | ' | ' | |||
Award vesting rate, between year three and year four | 25.00% | ' | ' | ' | |||
Award vesting rate, between year four and year five | 30.00% | ' | ' | ' | |||
Share-based compensation expense | $1.60 | $1.70 | $3 | ' | |||
Income tax benefit | 0.5 | 0.6 | 1 | ' | |||
Expected volatility | 33.00% | 32.00% | 31.00% | ' | |||
Expected dividends | 5.99% | 6.88% | 5.95% | ' | |||
Expected term (in years) | '7 years | '7 years | '7 years | ' | |||
Risk-free rate | 1.19% | 1.74% | 2.73% | ' | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | ' | ' | ' | |||
Options, outstanding at beginning of year | 14,293,149 | 15,679,915 | 16,560,483 | ' | |||
Granted | 922,500 | 974,500 | 1,064,500 | ' | |||
Exercised | 897,909 | 14,850 | 31,113 | ' | |||
Forfeited and canceled | 1,510,468 | 2,346,416 | 1,913,955 | ' | |||
Options, outstanding at end of year | 12,807,272 | 14,293,149 | 15,679,915 | ' | |||
Exercisable at end of year | 10,582,298 | 12,032,624 | 13,262,682 | ' | |||
Options, outstanding, weighted average exercise price | $16.97 | $16.75 | $17.25 | $17.39 | |||
Granted, Weighted Average Exercise Price | $12.57 | $10.80 | $12.33 | ' | |||
Exercised, Weighted Average Exercise Price | $12.22 | $10.48 | $12.22 | ' | |||
Forfeited and canceled, Weighted Average Exercise Price | $15.01 | $17.66 | $15.85 | ' | |||
Exercisable at end of year, Weighted Average Exercise Price | $18.03 | $17.74 | $18.21 | ' | |||
Weighted average fair value of options granted during the year | $1.94 | [1] | $1.46 | [1] | $1.99 | [1] | ' |
Total unrecognized compensation cost | 1.6 | ' | ' | ' | |||
Unrecognized stock compensation costs, weighted average remaining contractual term | '3 years | ' | ' | ' | |||
Cash received from stock option exercise | 10.9 | 0.1 | 0.3 | ' | |||
Intrinsic value of stock options exercised | 2.9 | 0 | 0 | ' | |||
Actual tax benefit realized for tax deductions from stock options exercised | $1.10 | $0 | $0 | ' | |||
Restricted Stock [Member] | ' | ' | ' | ' | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | ' | ' | ' | |||
Restricted common stock vesting period | ' | '3 years | ' | ' | |||
Range of Exercise Prices, $19.32 to $20.02 [Member] | ' | ' | ' | ' | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | ' | ' | ' | |||
Options, outstanding at end of year | 1,850,852 | ' | ' | ' | |||
Exercisable at end of year | 1,850,852 | ' | ' | ' | |||
Options, outstanding, weighted average exercise price | $19.33 | ' | ' | ' | |||
Exercisable at end of year, Weighted Average Exercise Price | $19.33 | ' | ' | ' | |||
Options, Outstanding, Weighted Average Remaining Contractual Life | '0 years 3 months | ' | ' | ' | |||
Range of Exercise Prices,$18.41 to $20.87 [Member] | ' | ' | ' | ' | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | ' | ' | ' | |||
Options, outstanding at end of year | 1,572,059 | ' | ' | ' | |||
Exercisable at end of year | 1,572,059 | ' | ' | ' | |||
Options, outstanding, weighted average exercise price | $18.45 | ' | ' | ' | |||
Exercisable at end of year, Weighted Average Exercise Price | $18.45 | ' | ' | ' | |||
Options, Outstanding, Weighted Average Remaining Contractual Life | '1 year 3 months | ' | ' | ' | |||
Range of Exercise Prices, $21.36 to $22.35 [Member] | ' | ' | ' | ' | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | ' | ' | ' | |||
Options, outstanding at end of year | 2,089,525 | ' | ' | ' | |||
Exercisable at end of year | 2,089,525 | ' | ' | ' | |||
Options, outstanding, weighted average exercise price | $22 | ' | ' | ' | |||
Exercisable at end of year, Weighted Average Exercise Price | $22 | ' | ' | ' | |||
Options, Outstanding, Weighted Average Remaining Contractual Life | '2 years 3 months | ' | ' | ' | |||
Range of Exercise Prices, $21.78 to $23.16 [Member] | ' | ' | ' | ' | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | ' | ' | ' | |||
Options, outstanding at end of year | 1,971,475 | ' | ' | ' | |||
Exercisable at end of year | 1,971,475 | ' | ' | ' | |||
Options, outstanding, weighted average exercise price | $21.78 | ' | ' | ' | |||
Exercisable at end of year, Weighted Average Exercise Price | $21.78 | ' | ' | ' | |||
Options, Outstanding, Weighted Average Remaining Contractual Life | '3 years 3 months | ' | ' | ' | |||
Range of Exercise Prices, $7.73 to $12.95 [Member] | ' | ' | ' | ' | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | ' | ' | ' | |||
Options, outstanding at end of year | 1,048,370 | ' | ' | ' | |||
Exercisable at end of year | 1,048,370 | ' | ' | ' | |||
Options, outstanding, weighted average exercise price | $12.93 | ' | ' | ' | |||
Exercisable at end of year, Weighted Average Exercise Price | $12.93 | ' | ' | ' | |||
Options, Outstanding, Weighted Average Remaining Contractual Life | '4 years 3 months | ' | ' | ' | |||
Range of Exercise Prices, $10.48 [Member] | ' | ' | ' | ' | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | ' | ' | ' | |||
Options, outstanding at end of year | 698,133 | ' | ' | ' | |||
Exercisable at end of year | 698,133 | ' | ' | ' | |||
Options, outstanding, weighted average exercise price | $10.48 | ' | ' | ' | |||
Exercisable at end of year, Weighted Average Exercise Price | $10.48 | ' | ' | ' | |||
Options, Outstanding, Weighted Average Remaining Contractual Life | '5 years 3 months | ' | ' | ' | |||
Range of Exercise Prices, $12.08 [Member] | ' | ' | ' | ' | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | ' | ' | ' | |||
Options, outstanding at end of year | 690,225 | ' | ' | ' | |||
Exercisable at end of year | 490,234 | ' | ' | ' | |||
Options, outstanding, weighted average exercise price | $12.08 | ' | ' | ' | |||
Exercisable at end of year, Weighted Average Exercise Price | $12.08 | ' | ' | ' | |||
Options, Outstanding, Weighted Average Remaining Contractual Life | '6 years 3 months | ' | ' | ' | |||
Range of Exercise Prices, $10.51 to $14.31 [Member] | ' | ' | ' | ' | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | ' | ' | ' | |||
Options, outstanding at end of year | 67,745 | [2] | ' | ' | ' | ||
Exercisable at end of year | 67,745 | [2] | ' | ' | ' | ||
Options, outstanding, weighted average exercise price | $12.96 | [2] | ' | ' | ' | ||
Exercisable at end of year, Weighted Average Exercise Price | $12.96 | [2] | ' | ' | ' | ||
Options, Outstanding, Weighted Average Remaining Contractual Life | '0 years 3 months | [2] | ' | ' | ' | ||
Range of Exercise Prices, $12.33 [Member] | ' | ' | ' | ' | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | ' | ' | ' | |||
Options, outstanding at end of year | 945,413 | ' | ' | ' | |||
Exercisable at end of year | 442,146 | ' | ' | ' | |||
Options, outstanding, weighted average exercise price | $12.33 | ' | ' | ' | |||
Exercisable at end of year, Weighted Average Exercise Price | $12.33 | ' | ' | ' | |||
Options, Outstanding, Weighted Average Remaining Contractual Life | '7 years 3 months | ' | ' | ' | |||
Range of Exercise Prices, $10.80 [Member] | ' | ' | ' | ' | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | ' | ' | ' | |||
Options, outstanding at end of year | 953,475 | ' | ' | ' | |||
Exercisable at end of year | 246,711 | ' | ' | ' | |||
Options, outstanding, weighted average exercise price | $10.80 | ' | ' | ' | |||
Exercisable at end of year, Weighted Average Exercise Price | $10.80 | ' | ' | ' | |||
Options, Outstanding, Weighted Average Remaining Contractual Life | '8 years 3 months | ' | ' | ' | |||
Range of Exercise Prices, $12.57 [Member] | ' | ' | ' | ' | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | ' | ' | ' | |||
Options, outstanding at end of year | 920,000 | ' | ' | ' | |||
Exercisable at end of year | 105,048 | ' | ' | ' | |||
Options, outstanding, weighted average exercise price | $12.57 | ' | ' | ' | |||
Exercisable at end of year, Weighted Average Exercise Price | $12.57 | ' | ' | ' | |||
Options, Outstanding, Weighted Average Remaining Contractual Life | '9 years 3 months | ' | ' | ' | |||
[1] | Based on the Black-Scholes option pricing model and the assumptions outlined above. | ||||||
[2] | (a) Represents the replacement options issued pursuant to the PMA merger. |
Recovered_Sheet9
Summary of Significant Accounting Policies Regulatory Matters (Details) (USD $) | 12 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Loss Contingencies [Line Items] | ' | ' |
Number of Jurisdictions | 16 | ' |
RFIG Run-off Business [Member] | ' | ' |
Loss Contingencies [Line Items] | ' | ' |
Risk to Capital Ratio | 25 | ' |
Percentage of Claims To Be Paid In Cash | 60.00% | ' |
Deferred Payment Obligation, Percentage | 40.00% | ' |
Deferred Payment Obligation | $551.50 | $299.50 |
Statutory Capital | 518.2 | ' |
Amount Above the Minimum Policyholder Position | 161.5 | ' |
Minimum Policyholder Position | 356.6 | ' |
Consolidated GAAP Capitalization | -13.8 | ' |
Consolidated GAAP Capitalization, Per Share Amount | ($0.05) | ' |
Expected Contribution of New Capital | $50 | ' |
Debt_Details
Debt (Details) (USD $) | 12 Months Ended | |||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2008 | Dec. 31, 2013 | Dec. 31, 2012 | |
Convertible Senior Notes Due 2018 [Member] | Convertible Senior Notes Due 2018 [Member] | ESSOP Debt [Member] | ESSOP Debt [Member] | ESSOP Debt [Member] | Other miscellaneous debt [Member] | Other miscellaneous debt [Member] | ||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | ' | 3.75% | 3.75% | ' | ' | ' | ' | ' |
Number of common shares into which notes are convertible (in shares per one thousand dollar note) | ' | ' | ' | 64.3407 | ' | ' | ' | ' | ' | ' |
Face amount of note convertible into common shares | ' | ' | ' | $1,000 | ' | ' | ' | ' | ' | ' |
Debt | 569,200,000 | 572,900,000 | ' | 550,000,000 | 550,000,000 | 18,000,000 | 20,800,000 | 30,000,000 | 1,200,000 | 2,000,000 |
Fair value | 703,400,000 | 591,500,000 | ' | 684,100,000 | 568,500,000 | 18,000,000 | 20,800,000 | ' | 1,200,000 | 2,000,000 |
Debt, Weighted Average Interest Rate | ' | ' | ' | ' | ' | 3.69% | 3.74% | ' | ' | ' |
2014 | 4,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | 3,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2016 | 3,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2017 | 3,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2018 | 554,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest Expense, Debt | $23,100,000 | $34,600,000 | $51,100,000 | ' | ' | ' | ' | ' | ' | ' |
Maturity date of debt | ' | ' | ' | '2018 | '2018 | ' | ' | ' | ' | ' |
Debt_Debt_Financial_Liabilitie
Debt Debt Financial Liabilities Disclosed, but not Carried, at Fair Value (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt and Capital Lease Obligations | $569.20 | $572.90 |
Fair Value, Inputs, Level 1 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt and Capital Lease Obligations | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt and Capital Lease Obligations | 684.1 | 568.5 |
Fair Value, Inputs, Level 3 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt and Capital Lease Obligations | 19.2 | 22.9 |
Estimate of Fair Value, Fair Value Disclosure [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt and Capital Lease Obligations | $703.40 | $591.50 |
Shareholders_Equity_Preferred_
Shareholders' Equity Preferred Stock (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 |
series | Series A Preferred Stock [Member] | Series G Preferred Stock [Member] | ||
vote | vote | |||
Class of Stock | ' | ' | ' | ' |
Preferred Stock, Shares Authorized | 75,000,000 | 75,000,000 | 10,000,000 | 1,500,000 |
Number of Designated Series | 2 | ' | ' | ' |
Preferred stock, dividend rate, per dollar-amount | ' | ' | $1 | ' |
Multiple of Aggregate Share Amount | ' | ' | 100 | ' |
Votes per share | ' | ' | 100 | 1 |
Convertible Preferred Stock, shares issued upon conversion | ' | ' | ' | 0.95 |
Shareholders_Equity_Common_Sto
Shareholders' Equity Common Stock (Details) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | ||||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2008 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2008 |
Common Class B [Member] | Common Class B [Member] | Common Stock [Member] | Common Stock [Member] | ESSOP Debt [Member] | ESSOP Debt [Member] | ESSOP Debt [Member] | |||
Class of Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 | 100,000,000 | 100,000,000 | ' | 500,000,000 | ' | ' | ' |
Common Stock, Shares, Issued | 260,462,217 | 259,490,089 | 0 | 0 | ' | ' | ' | ' | ' |
Common Stock, shares outstanding | ' | ' | 0 | ' | ' | ' | ' | ' | ' |
Stock shares issued to Employee Stock Purchase Plans | ' | ' | ' | ' | 5,488,475 | ' | ' | ' | ' |
Value of Common shares issued to Employee Stock Purchase Plan | ' | ' | ' | ' | $50 | ' | ' | ' | ' |
Debt and Capital Lease Obligations | 569.2 | 572.9 | ' | ' | ' | ' | 18 | 20.8 | 30 |
Pre-fundings from ESSOP | ' | ' | ' | ' | $20 | ' | ' | ' | ' |
Common stock votes per share | 1 | ' | 0.1 | ' | ' | ' | ' | ' | ' |
Shareholders_Equity_Cash_Divid
Shareholders' Equity Cash Dividend Restrictions (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | |||
C Cash Dividend Restrictions [Abstract] | ' | ' | ' |
Amount available for dividend distribution without prior approval from regulatory agency | $427.20 | ' | ' |
Dividends declared to the Company by it subsidiaries | $205.30 | $195 | $177.10 |
Commitments_and_Contingent_Lia2
Commitments and Contingent Liabilities Reinsurance and Retention Limits (Details) (USD $) | 12 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||
Reinsurance Premiums for Insurance Companies, by Product Segment | ' | ' | ' | |||
Reinsurance Unrecoverable Amount | $21,200,000 | $21,200,000 | ' | |||
General Insurance Group [Member] | ' | ' | ' | |||
Reinsurance Premiums for Insurance Companies, by Product Segment | ' | ' | ' | |||
Workers Compensation Insurance, Maximum Coverage Limit | 5,200,000 | ' | ' | |||
Commercial Auto Liability Compensation Insurance, Maximum Coverage Limit | 3,500,000 | ' | ' | |||
General Liabiltity Insurance, Maximum Coverage Limit | 3,500,000 | ' | ' | |||
Executive Protection Insurance, Maximum Coverage Limit | 8,000,000 | ' | ' | |||
Aviation Insurance, Maximum Coverage Limit | 2,000,000 | ' | ' | |||
Property Coverages Insurance, Maximum Coverage Limit | 4,000,000 | ' | ' | |||
Workers Compensation, Coverage Limit | 200,000,000 | ' | ' | |||
Reinsurance Limits | 198,000,000 | ' | ' | |||
Reinsurance Limits for Acts of Terrorism | 2,000,000 | ' | ' | |||
Reinsurance Recoverable, Concentration Risk Ten Largest Insurers, Percentage | 59.00% | ' | ' | |||
Reinsurance Recoverable, Concentration Risk Largest Insurer, Percentage | 27.70% | ' | ' | |||
Reinsurance Recoverable, Concentration Risk Ten Largest Insurers, Percentage of A Rating or Better | 84.50% | ' | ' | |||
Reinsurance Recoverable Concentration Risk Ten Largest Insurers Percentage of B Plus Rating | 3.20% | ' | ' | |||
Reinsurance Recoverable, Concentration Risk Ten Largest Insurers, Percentage From Industry-Wide Risk Pools | 6.00% | ' | ' | |||
Reinsurance Recoverable, Concentration Risk Ten Largest Insurers, Percentage From Foreign Unrated Companies | 6.30% | ' | ' | |||
Direct Premiums Written | 3,348,100,000 | [1] | 3,043,400,000 | [1] | 2,763,000,000 | [1] |
Assumed Premiums Written | 28,800,000 | [1] | 19,900,000 | [1] | 6,100,000 | [1] |
Ceded Premiums Written | 775,800,000 | [1] | 696,500,000 | [1] | 631,500,000 | [1] |
Direct Premiums Earned | 3,235,700,000 | [1] | 2,949,900,000 | [1] | 2,716,200,000 | [1] |
Assumed Premiums Earned | 24,100,000 | [1] | 17,900,000 | [1] | 8,900,000 | [1] |
Ceded Premiums Earned | 746,100,000 | [1] | 643,400,000 | [1] | 615,800,000 | [1] |
Reinsurance Effect on Claims and Benefits Incurred, Amount Ceded | 469,500,000 | [1] | 410,600,000 | [1] | 427,000,000 | [1] |
RFIG Run-off Business [Member] | ' | ' | ' | |||
Reinsurance Premiums for Insurance Companies, by Product Segment | ' | ' | ' | |||
Mortgage Guaranty Insurance, Subjected to Reinsurance Arrangements, Percentage | 0.1 | ' | ' | |||
Average Direct Primary Mortgage Guaranty Exposure, Per Insured Loan | 38,697 | ' | ' | |||
Claims Exposure, Concentration Risk, Largest Insurer, Amount | 10.5 | ' | ' | |||
Reinsured Liabilities, Concentration Risk Largest Insurer, Percentage | 0.40% | ' | ' | |||
Direct Premiums Written | 314,300,000 | [1] | 409,200,000 | [1] | 544,400,000 | [1] |
Assumed Premiums Written | 0 | [1] | 0 | [1] | 0 | [1] |
Ceded Premiums Written | 9,900,000 | [1] | 19,300,000 | [1] | 23,200,000 | [1] |
Direct Premiums Earned | 326,400,000 | [1] | 429,800,000 | [1] | 526,400,000 | [1] |
Assumed Premiums Earned | 0 | [1] | 0 | [1] | 100,000 | [1] |
Ceded Premiums Earned | 9,900,000 | [1] | 19,300,000 | [1] | 23,200,000 | [1] |
Reinsurance Effect on Claims and Benefits Incurred, Amount Ceded | 3,400,000 | [1] | 24,200,000 | [1] | 42,200,000 | [1] |
Insurance in force, direct | 43,994,500,000 | 56,413,700,000 | 70,520,900,000 | |||
Insurance in force, assumed | 0 | 0 | 446,000,000 | |||
Insurance in force, ceded | 460,400,000 | 886,100,000 | 1,452,700,000 | |||
Title Insurance Group [Member] | ' | ' | ' | |||
Reinsurance Premiums for Insurance Companies, by Product Segment | ' | ' | ' | |||
Title Insurance Risk, Per Policy | 500,000,000 | ' | ' | |||
Title Insurance Risk Exposure, Per Policy | $1,000,000 | ' | ' | |||
[1] | As previously noted, consumer credit indemnity coverages are reported within the RFIG Run-off segment and have been excluded from the General Insurance Group for all periods presented to conform with segment classifications adopted in 2012. See Note 6. |
Commitments_and_Contingent_Lia3
Commitments and Contingent Liabilities Textuals (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Loss Contingencies [Line Items] | ' | ' | ' |
Operating Leases, Rent Expense | $49.70 | $52.60 | $56 |
Operating Leases, Future Minimum Payments Due, Current | 52.4 | ' | ' |
Operating Leases, Future Minimum Payments, Due in Two Years | 41.6 | ' | ' |
Operating Leases, Future Minimum Payments, Due in Three Years | 33.1 | ' | ' |
Operating Leases, Future Minimum Payments, Due in Four Years | 27.3 | ' | ' |
Operating Leases, Future Minimum Payments, Due in Five Years | 20 | ' | ' |
Operating Leases, Future Minimum Payments, Due Thereafter | 38.9 | ' | ' |
Affiliated Entity [Member] | Financial Guarantee [Member] | ' | ' | ' |
Loss Contingencies [Line Items] | ' | ' | ' |
Guarantor Obligations, Current Carrying Value | $154 | ' | ' |
Commitments_and_Contingent_Lia4
Commitments and Contingent Liabilities (Details) | 12 Months Ended |
Dec. 31, 2013 | |
loan | |
Pending or Threatened Litigation F [Member] | ' |
Loss Contingencies [Line Items] | ' |
Date filed | 'December 31, 2009 |
Name of plaintiff | 'Republic Mortgage Insurance Company and Republic Mortgage Insurance Company of North Carolina (together "RMIC") |
Domicile of litigation | 'New York |
Name of defendant | 'Countrywide Financial Corporation, Countrywide Home Loans, Inc., The Bank of New York Mellon Trust Company, N.A., BAC Home Loans Servicing, LP, and Bank of America N.A. as successor in interest to Countrywide Bank, N.A. (together 'Countrywide") |
Minimum number of defaulted loans for which company has rescinded or denied coverage | 1,500 |
Pending or Threatened Litigation M [Member] | ' |
Loss Contingencies [Line Items] | ' |
Date filed | 'October 10, 2012 |
Name of plaintiff | 'PNC Bank, N.A. |
Domicile of litigation | 'Pennsylvania |
Name of defendant | 'RMIC |
Minimum number of defaulted loans for which company has rescinded or denied coverage | 248 |
Consolidated_Quarterly_Results2
Consolidated Quarterly Results - Unaudited (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Quarterly Financial Information Disclosure [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net premiums, fees, and other income | $1,248.50 | $1,295.50 | $1,245.40 | $1,186 | $1,195.30 | $1,204 | $1,116.80 | $1,069.10 | ' | ' | ' |
Net investment income and realized gains (losses) | 83 | 83.7 | 215.9 | 83.8 | 87.8 | 100.6 | 107 | 88.7 | ' | ' | ' |
Total revenues | 1,331.60 | 1,379.50 | 1,461.50 | 1,269.90 | 1,283.20 | 1,304.80 | 1,223.90 | 1,158 | 5,442.70 | 4,970.10 | 4,645.50 |
Benefits, claims, and expenses | 1,189.30 | 1,229.70 | 1,165.20 | 1,185.40 | 1,319.70 | 1,335.90 | 1,282.20 | 1,160.70 | 4,769.70 | 5,098.70 | 4,882.20 |
Net income (loss) | $94.70 | $102.90 | $193.90 | $56.20 | ($20.20) | ($14.80) | ($34) | $0.40 | $447.80 | ($68.60) | ($140.50) |
Net income (loss) per share: basic (in dollars per share) | $0.37 | $0.40 | $0.76 | $0.22 | ($0.08) | ($0.06) | ($0.13) | $0 | $1.74 | ($0.27) | ($0.55) |
Net income (loss) per share: diluted (in dollars per share) | $0.33 | $0.36 | $0.67 | $0.21 | ($0.08) | ($0.06) | ($0.13) | $0 | $1.57 | ($0.27) | ($0.55) |
Average shares outstanding: Basic (in shares) | 257,706,005 | 257,098,894 | 256,749,748 | 256,279,364 | 256,086,431 | 255,921,356 | 255,747,273 | 255,473,634 | 257,443,999 | 255,812,888 | 255,045,210 |
Average shares outstanding: Diluted (in shares) | 294,396,055 | 293,444,269 | 292,842,386 | 292,081,785 | 256,086,431 | 255,921,356 | 255,747,273 | 255,779,449 | 293,684,035 | 255,812,888 | 255,045,210 |
Information_About_Segments_of_2
Information About Segments of Business Textuals (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Segment Reporting Information | ' | ' | ' |
Number of major segments | 3 | ' | ' |
Revenue, major customer, percentage | 10.00% | ' | ' |
Revenue, major customer, number | 1 | ' | ' |
Hombuyers down payment percentage | 20.00% | ' | ' |
General Insurance Group [Member] | ' | ' | ' |
Segment Reporting Information | ' | ' | ' |
Concentration risk, percentage | 35.80% | ' | ' |
RFIG Run-off Business [Member] | ' | ' | ' |
Segment Reporting Information | ' | ' | ' |
Interest Expense, Related Party | $0 | $2.10 | $8 |
Information_About_Segments_of_3
Information About Segments of Business (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||||
Segment Reporting Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Accrual Of Employment Severance And Similar Costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $10.70 | |||||
Consolidated Revenues [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Net premiums earned | ' | ' | ' | ' | ' | ' | ' | ' | 4,456.60 | 4,043.80 | 3,695.50 | |||||
Title, escrow and other fees | ' | ' | ' | ' | ' | ' | ' | ' | 429 | 427.1 | 354.5 | |||||
Sub-total | ' | ' | ' | ' | ' | ' | ' | ' | 4,885.60 | 4,471 | 4,050.10 | |||||
Total operating revenues | ' | ' | ' | ' | ' | ' | ' | ' | 5,294.50 | 4,922.20 | 4,529.90 | |||||
Consolidated net realized investment gains (losses) | ' | ' | ' | ' | ' | ' | ' | ' | 148.1 | 47.8 | 115.5 | |||||
Consolidated revenues | 1,331.60 | 1,379.50 | 1,461.50 | 1,269.90 | 1,283.20 | 1,304.80 | 1,223.90 | 1,158 | 5,442.70 | 4,970.10 | 4,645.50 | |||||
Consolidated Income (Loss) Before Taxes (Credits) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Consolidated net realized investment gains (losses) | ' | ' | ' | ' | ' | ' | ' | ' | 148.1 | 47.8 | 115.5 | |||||
Consolidated income (loss) before income taxes (credits) | ' | ' | ' | ' | ' | ' | ' | ' | 672.9 | -128.5 | -236.7 | |||||
Consolidated Income Tax Expense (Credits) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Income tax expense (credits) | ' | ' | ' | ' | ' | ' | ' | ' | 225 | -59.8 | -96.1 | |||||
Income tax expense (credits) on consolidated net realized investment gains (losses) | ' | ' | ' | ' | ' | ' | ' | ' | 51.8 | [1] | 16.7 | [1] | 37.5 | [1] | ||
Consolidated assets [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Assets | 16,534.40 | ' | ' | ' | 16,226.80 | ' | ' | ' | 16,534.40 | 16,226.80 | ' | |||||
Deferred Policy Acquisition Cost, Amortization Expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 29.1 | |||||
Goodwill, Impairment Loss | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 1.3 | ' | |||||
Deferred acquisition cost | ' | ' | ' | ' | ' | ' | ' | ' | ' | 37.9 | ' | |||||
General Insurance Group [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Consolidated Revenues [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Net premiums earned | ' | ' | ' | ' | ' | ' | ' | ' | 2,513.70 | 2,324.40 | 2,109.40 | |||||
Net investment income and other income | ' | ' | ' | ' | ' | ' | ' | ' | 336.2 | 374.9 | 379.2 | |||||
Total operating revenues | ' | ' | ' | ' | ' | ' | ' | ' | 2,849.90 | 2,699.40 | 2,488.60 | |||||
Consolidated Income (Loss) Before Taxes (Credits) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Income (loss) before income taxes (credits) and realized investment gains or losses | ' | ' | ' | ' | ' | ' | ' | ' | 288.3 | [2] | 261 | [2] | 353.9 | [2] | ||
Interest charges on intercompany financing arrangements | ' | ' | ' | ' | ' | ' | ' | ' | 28.9 | 28.1 | 25 | |||||
Consolidated Income Tax Expense (Credits) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Income tax expense (credits) | ' | ' | ' | ' | ' | ' | ' | ' | 90.9 | 77.4 | 111.8 | |||||
Consolidated assets [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Assets | 13,276.60 | ' | ' | ' | 12,770.20 | ' | ' | ' | 13,276.60 | 12,770.20 | ' | |||||
Title Insurance Group [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Consolidated Revenues [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Net premiums earned | ' | ' | ' | ' | ' | ' | ' | ' | 1,567.10 | 1,250.20 | 1,007.90 | |||||
Title, escrow and other fees | ' | ' | ' | ' | ' | ' | ' | ' | 429 | 427.1 | 354.5 | |||||
Sub-total | ' | ' | ' | ' | ' | ' | ' | ' | 1,996.10 | 1,677.40 | 1,362.40 | |||||
Net investment income and other income | ' | ' | ' | ' | ' | ' | ' | ' | 29.5 | 29.6 | 29.3 | |||||
Total operating revenues | ' | ' | ' | ' | ' | ' | ' | ' | 2,025.60 | 1,707.10 | 1,391.80 | |||||
Consolidated Income (Loss) Before Taxes (Credits) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Income (loss) before income taxes (credits) and realized investment gains or losses | ' | ' | ' | ' | ' | ' | ' | ' | 124.3 | [2] | 73.8 | [2] | 36.2 | [2] | ||
Interest charges on intercompany financing arrangements | ' | ' | ' | ' | ' | ' | ' | ' | 7.9 | 8 | 5.3 | |||||
Consolidated Income Tax Expense (Credits) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Income tax expense (credits) | ' | ' | ' | ' | ' | ' | ' | ' | 44 | 26.5 | 11.5 | |||||
Consolidated assets [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Assets | 1,185.50 | ' | ' | ' | 1,076.50 | ' | ' | ' | 1,185.50 | 1,076.50 | ' | |||||
Goodwill, Impairment Loss | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | ' | |||||
RFIG Run-off Business [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Consolidated Revenues [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Net premiums earned | ' | ' | ' | ' | ' | ' | ' | ' | 316.5 | 410.5 | 503.2 | |||||
Net investment income and other income | ' | ' | ' | ' | ' | ' | ' | ' | 36.8 | 36.7 | 61.3 | |||||
Total operating revenues | ' | ' | ' | ' | ' | ' | ' | ' | 353.4 | 447.3 | 564.6 | |||||
Consolidated Income (Loss) Before Taxes (Credits) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Income (loss) before income taxes (credits) and realized investment gains or losses | ' | ' | ' | ' | ' | ' | ' | ' | 110 | [2],[3] | -508.6 | [2],[3] | -727.8 | [2],[3] | ||
Interest charges on intercompany financing arrangements | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 2.1 | 8 | |||||
Consolidated Income Tax Expense (Credits) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Income tax expense (credits) | ' | ' | ' | ' | ' | ' | ' | ' | 38.5 | -177.8 | -251.6 | |||||
Consolidated assets [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Assets | 1,822.30 | ' | ' | ' | 2,051.10 | ' | ' | ' | 1,822.30 | 2,051.10 | ' | |||||
Goodwill, Impairment Loss | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | 10.7 | |||||
Total of major segments [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Consolidated Revenues [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Consolidated revenues | ' | ' | ' | ' | ' | ' | ' | ' | 5,228.90 | 4,853.80 | 4,445.10 | |||||
Consolidated Income (Loss) Before Taxes (Credits) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Consolidated income (loss) before income taxes (credits) | ' | ' | ' | ' | ' | ' | ' | ' | 522.7 | -173.6 | -337.5 | |||||
Consolidated Income Tax Expense (Credits) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Income tax expense (credits) | ' | ' | ' | ' | ' | ' | ' | ' | 173.5 | -73.8 | -128.2 | |||||
Consolidated assets [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Assets | 16,284.50 | ' | ' | ' | 15,897.90 | ' | ' | ' | 16,284.50 | 15,897.90 | ' | |||||
Other sources - net [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Consolidated Revenues [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Consolidated revenues | ' | ' | ' | ' | ' | ' | ' | ' | 123.3 | [4] | 126.4 | [4] | 143.7 | [4] | ||
Consolidated Income (Loss) Before Taxes (Credits) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Consolidated income (loss) before income taxes (credits) | ' | ' | ' | ' | ' | ' | ' | ' | 2.1 | [4] | -2.7 | [4] | -14.6 | [4] | ||
Consolidated Income Tax Expense (Credits) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Income tax expense (credits) | ' | ' | ' | ' | ' | ' | ' | ' | -0.3 | [4] | -2.8 | [4] | -5.4 | [4] | ||
Consolidated assets [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Assets | 549.8 | [4] | ' | ' | ' | 626.2 | [4] | ' | ' | ' | 549.8 | [4] | 626.2 | [4] | ' | |
Consolidation elimination adjustments [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Consolidated Revenues [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Consolidated revenues | ' | ' | ' | ' | ' | ' | ' | ' | -57.7 | -58 | -58.8 | |||||
Consolidated assets [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Assets | -299.9 | ' | ' | ' | -297.3 | ' | ' | ' | -299.9 | -297.3 | ' | |||||
Including CCI run-off business [Member] | General Insurance Group [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Consolidated Revenues [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Net premiums earned | ' | ' | ' | ' | ' | ' | ' | ' | 2,543.50 | 2,366.90 | 2,167.70 | |||||
Net investment income and other income | ' | ' | ' | ' | ' | ' | ' | ' | 336.6 | 375.1 | 379.3 | |||||
Total operating revenues | ' | ' | ' | ' | ' | ' | ' | ' | 2,880.10 | 2,742 | 2,547.10 | |||||
Consolidated Income (Loss) Before Taxes (Credits) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Income (loss) before income taxes (credits) and realized investment gains or losses | ' | ' | ' | ' | ' | ' | ' | ' | 272 | [2] | 186 | [2] | 304.3 | [2] | ||
Consolidated Income Tax Expense (Credits) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Income tax expense (credits) | ' | ' | ' | ' | ' | ' | ' | ' | 85.2 | 51.1 | 94.5 | |||||
All CCI run-off business [Member] | General Insurance Group [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Consolidated Revenues [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Net premiums earned | ' | ' | ' | ' | ' | ' | ' | ' | 29.8 | 42.4 | 58.3 | |||||
Net investment income and other income | ' | ' | ' | ' | ' | ' | ' | ' | 0.4 | 0.1 | 0.1 | |||||
Total operating revenues | ' | ' | ' | ' | ' | ' | ' | ' | 30.2 | 42.6 | 58.4 | |||||
Consolidated Income (Loss) Before Taxes (Credits) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Income (loss) before income taxes (credits) and realized investment gains or losses | ' | ' | ' | ' | ' | ' | ' | ' | -16.2 | [2] | -74.9 | [2] | -49.6 | [2] | ||
Consolidated Income Tax Expense (Credits) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Income tax expense (credits) | ' | ' | ' | ' | ' | ' | ' | ' | -5.6 | -26.2 | -17.3 | |||||
All CCI run-off business [Member] | RFIG Run-off Business [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Consolidated Revenues [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Net premiums earned | ' | ' | ' | ' | ' | ' | ' | ' | 29.8 | 42.4 | 58.3 | |||||
Net investment income and other income | ' | ' | ' | ' | ' | ' | ' | ' | 0.4 | 0.1 | 0.1 | |||||
Total operating revenues | ' | ' | ' | ' | ' | ' | ' | ' | 30.2 | 42.6 | 58.4 | |||||
Consolidated Income (Loss) Before Taxes (Credits) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Income (loss) before income taxes (credits) and realized investment gains or losses | ' | ' | ' | ' | ' | ' | ' | ' | -16.2 | -74.9 | -49.6 | |||||
Consolidated Income Tax Expense (Credits) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Income tax expense (credits) | ' | ' | ' | ' | ' | ' | ' | ' | -5.6 | -26.2 | -17.3 | |||||
Excluding CCI run-off business [Member] | RFIG Run-off Business [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Consolidated Revenues [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Net premiums earned | ' | ' | ' | ' | ' | ' | ' | ' | 286.7 | 368 | 444.9 | |||||
Net investment income and other income | ' | ' | ' | ' | ' | ' | ' | ' | 36.4 | 36.6 | 61.2 | |||||
Total operating revenues | ' | ' | ' | ' | ' | ' | ' | ' | 323.1 | 404.6 | 506.1 | |||||
Consolidated Income (Loss) Before Taxes (Credits) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Income (loss) before income taxes (credits) and realized investment gains or losses | ' | ' | ' | ' | ' | ' | ' | ' | 126.3 | [2],[3] | -433.6 | [2],[3] | -678.1 | [2],[3] | ||
Consolidated Income Tax Expense (Credits) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Income tax expense (credits) | ' | ' | ' | ' | ' | ' | ' | ' | $44.20 | ($151.50) | ($234.30) | |||||
[1] | Reflects primarily the combination of fully taxable realized investment gains or losses and judgments about the recoverability of deferred tax assets. | |||||||||||||||
[2] | Income (loss) before taxes (credits) is reported net of interest charges on intercompany financing arrangements with Old Republic's holding company parent for the following segments: General - $28.9, $28.1 and $25.0 for the years ended December 31, 2013, 2012, and 2011, respectively; Title - $7.9, $8.0 and $5.3 for the years ended December 31, 2013, 2012, and 2011, respectively; RFIG Run-off - $-, $2.1 and $8.0 for the years ended December 31, 2013, 2012, and 2011, respectively. | |||||||||||||||
[3] | Income (loss) before taxes (credits) for 2011 includes an accrual of employment severance and similar costs ($10.7), elimination of previously deferred acquisition costs ($29.1) no longer deemed recoverable in future run-off periods, and a write-off of the historical goodwill balance of ($10.7). | |||||||||||||||
[4] | Represents amounts for Old Republic's holding company parent, minor corporate services subsidiaries, and a small life and accident insurance operation. |
Information_About_Segments_of_4
Information About Segments of Business Reconciliation of Assets from Segment to Consolidated (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Millions, unless otherwise specified | ||||
Segment Reporting, Asset Reconciling Item | ' | ' | ||
Assets | $16,534.40 | $16,226.80 | ||
General Insurance Group [Member] | ' | ' | ||
Segment Reporting, Asset Reconciling Item | ' | ' | ||
Assets | 13,276.60 | 12,770.20 | ||
Title Insurance Group [Member] | ' | ' | ||
Segment Reporting, Asset Reconciling Item | ' | ' | ||
Assets | 1,185.50 | 1,076.50 | ||
RFIG Run-off Business [Member] | ' | ' | ||
Segment Reporting, Asset Reconciling Item | ' | ' | ||
Assets | 1,822.30 | 2,051.10 | ||
Total of major segments [Member] | ' | ' | ||
Segment Reporting, Asset Reconciling Item | ' | ' | ||
Assets | 16,284.50 | 15,897.90 | ||
All Other Segments [Member] | ' | ' | ||
Segment Reporting, Asset Reconciling Item | ' | ' | ||
Assets | 549.8 | [1] | 626.2 | [1] |
Business Intersegment, Eliminations [Member] | ' | ' | ||
Segment Reporting, Asset Reconciling Item | ' | ' | ||
Assets | ($299.90) | ($297.30) | ||
[1] | Represents amounts for Old Republic's holding company parent, minor corporate services subsidiaries, and a small life and accident insurance operation. |
Transactions_with_Affiliates_D
Transactions with Affiliates (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Transactions with Affiliates | ' | ' | ' |
Premiums earned, Assumed from Old Republic | $774.80 | $684.20 | $661.70 |
Premiums earned, Ceded to Old Republic | 26.9 | 19.6 | 11.6 |
American Business & Personal Insurance Mutual [Member] | ' | ' | ' |
Transactions with Affiliates | ' | ' | ' |
Premiums earned, Assumed from Old Republic | 2.3 | 1 | 0.5 |
Premiums earned, Ceded to Old Republic | 0.6 | 0.4 | 0.4 |
Commission and fees, Assumed from Old Republic | 0.6 | 0.3 | 0 |
Commissions and fees, Ceded to Old Republic | 0 | 0 | 0 |
Losses and loss expenses, Assumed from Old Republic | 4.3 | 1 | 0.4 |
Losses and loss expenses, Ceded to Old Republic | 1.5 | 0.4 | 0.4 |
Loss and loss expense reserves, Assumed from Old Republic | 8.7 | 4.9 | 4.6 |
Loss and loss expense reserves, Ceded to Old Republic | 3.7 | 2.5 | 2.3 |
Unearned premiums, Assumed from Old Republic | 1.6 | 0.6 | 0.3 |
Unearned premiums, Ceded to Old Republic | 0.1 | 0.1 | 0 |
Mutual's statutory capital included surplus notes due to Old Republic | 10.5 | 10.5 | ' |
Total statutory capital | $35 | $27.40 | ' |
Schedule_I_Summary_of_Investme1
Schedule I - Summary of Investments - Other Than Investments in Related Parties (Details) (USD $) | Dec. 31, 2013 | |
In Millions, unless otherwise specified | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data | ' | |
Cost | $10,261.20 | [1] |
Amount at which shown in balance sheet | 10,868.50 | |
Short-term Investments [Member] | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | ' | |
Cost | 1,124.80 | [1] |
Amount at which shown in balance sheet | 1,124.80 | |
Miscellaneous investments [Member] | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | ' | |
Cost | 21.6 | [1] |
Amount at which shown in balance sheet | 21.6 | |
Other investments [Member] | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | ' | |
Cost | 5.3 | [1] |
Amount at which shown in balance sheet | 5.3 | |
Total Investments, Excluding Other Investments [Member] | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | ' | |
Cost | 10,255.90 | [1] |
Amount at which shown in balance sheet | 10,863.10 | |
Fixed maturity securities [Member] | United States Government and government agencies and authorities [Member] | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | ' | |
Cost | 1,004.60 | [1] |
Fair Value | 1,028.60 | |
Amount at which shown in balance sheet | 1,028.60 | |
Fixed maturity securities [Member] | States, municipalities and political subdivisions [Member] | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | ' | |
Cost | 168.1 | [1] |
Fair Value | 171.3 | |
Amount at which shown in balance sheet | 171.3 | |
Fixed maturity securities [Member] | Foreign government [Member] | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | ' | |
Cost | 128.4 | [1] |
Fair Value | 132.5 | |
Amount at which shown in balance sheet | 132.5 | |
Fixed maturity securities [Member] | Corporate, industrial and all other [Member] | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | ' | |
Cost | 7,176 | [1] |
Fair Value | 7,379.80 | |
Amount at which shown in balance sheet | 7,379.80 | |
Fixed maturity securities [Member] | Fixed Maturities [Member] | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | ' | |
Cost | 8,477.30 | [1] |
Fair Value | 8,712.30 | |
Amount at which shown in balance sheet | 8,712.30 | |
Equity Securities [Member] | Non-redeemable preferred stock [Member] | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | ' | |
Cost | 0.6 | [1] |
Fair Value | 0.7 | |
Amount at which shown in balance sheet | 0.7 | |
Equity Securities [Member] | Banks, trust and insurance companies [Member] | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | ' | |
Cost | 31.8 | [1] |
Fair Value | 223.5 | |
Amount at which shown in balance sheet | 223.5 | |
Equity Securities [Member] | Industrial, miscellaneous, and all others [Member] | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | ' | |
Cost | 435.9 | [1] |
Fair Value | 540.1 | |
Amount at which shown in balance sheet | 540.1 | |
Equity Securities [Member] | Indexed mutual funds [Member] | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | ' | |
Cost | 163.6 | [1] |
Fair Value | 239.8 | |
Amount at which shown in balance sheet | 239.8 | |
Equity Securities [Member] | Equity Securities [Member] | ' | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data | ' | |
Cost | 632 | [1] |
Fair Value | 1,004.20 | |
Amount at which shown in balance sheet | $1,004.20 | |
[1] | (1)Represents original cost of equity securities, and as to fixed maturities, original cost reduced by repayments and adjusted for amortization of premium or accrual of discount. |
Schedule_II_Condensed_Financia1
Schedule II - Condensed Financial Information of Registrant Balance Sheets (details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | |
In Millions, unless otherwise specified | |||
Assets: | ' | ' | |
Bonds and Notes | $551.20 | ' | |
Short-term investments | 1,124.80 | 1,264.90 | |
Other assets | 455.7 | 454.2 | |
Total Assets | 16,534.40 | 16,226.80 | |
Liabilities: | ' | ' | |
Debt | 569.2 | 572.9 | |
Commitments and contingent liabilities | ' | ' | |
Total Liabilities | 12,759.40 | 12,630.60 | |
Common Shareholders' Equity: | ' | ' | |
Common stock | ' | 259.4 | [1] |
Additional paid-in capital | ' | 660.9 | |
Retained earnings | ' | 2,222.30 | |
Accumulated other comprehensive income (loss) | ' | 481.7 | |
Unallocated ESSOP shares (at cost) | ' | -28.2 | |
Total Common Shareholders' Equity | 3,775 | 3,596.20 | |
Liabilities and Common Shareholders' Equity: | ' | ' | |
Total Liabilities, Preferred Stock and Common Shareholders' Equity | 16,534.40 | 16,226.80 | |
Parent Company [Member] | ' | ' | |
Assets: | ' | ' | |
Bonds and Notes | 10.5 | 55.8 | |
Short-term investments | 138 | 159.4 | |
Cash | 20.1 | 0 | |
Investments in, and indebtedness of related parties | 4,308.50 | 4,121.50 | |
Other assets | 87.4 | 114.2 | |
Total Assets | 4,564.60 | 4,451.10 | |
Liabilities: | ' | ' | |
Accounts payable and accrued expenses | 131.6 | 187.2 | |
Debt | 568 | 570.8 | |
Indebtedness to affiliates and subsidiaries | 89.8 | 96.8 | |
Commitments and contingent liabilities | ' | ' | |
Total Liabilities | 789.6 | 854.9 | |
Common Shareholders' Equity: | ' | ' | |
Common stock | 260.4 | 259.4 | |
Additional paid-in capital | 673.9 | 660.9 | |
Retained earnings | 2,485.30 | 2,222.30 | |
Accumulated other comprehensive income (loss) | 378.2 | 481.7 | |
Unallocated ESSOP shares (at cost) | -23 | -28.2 | |
Total Common Shareholders' Equity | 3,775 | 3,596.20 | |
Liabilities and Common Shareholders' Equity: | ' | ' | |
Total Liabilities, Preferred Stock and Common Shareholders' Equity | $4,564.60 | $4,451.10 | |
[1] | At December 31, 2013 and 2012, there were 75,000,000 shares of $0.01 par value preferred stock authorized, of which no shares were outstanding. As of the same dates, there were 500,000,000 shares of common stock, $1.00 par value, authorized, of which 260,462,217 and 259,490,089 were issued as of December 31, 2013 and 2012, respectively. At December 31, 2013 and 2012, there were 100,000,000 shares of Class B Common Stock, $1.00 par value, authorized, of which no shares were issued. |
Schedule_II_Condensed_Financia2
Schedule II - Condensed Financial Information of Registrant Statements of Income (details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenues: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Investment income from subsidiaries | ' | ' | ' | ' | ' | ' | ' | ' | $318.70 | $336.50 | $364.60 |
Total revenues | 1,331.60 | 1,379.50 | 1,461.50 | 1,269.90 | 1,283.20 | 1,304.80 | 1,223.90 | 1,158 | 5,442.70 | 4,970.10 | 4,645.50 |
Expenses: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Federal income taxes (credits) | ' | ' | ' | ' | ' | ' | ' | ' | 225 | -59.8 | -96.1 |
Net Income (Loss) | 94.7 | 102.9 | 193.9 | 56.2 | -20.2 | -14.8 | -34 | 0.4 | 447.8 | -68.6 | -140.5 |
Parent Company [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Investment income from subsidiaries | ' | ' | ' | ' | ' | ' | ' | ' | 38.1 | 39.9 | 40.1 |
Real estate and other income | ' | ' | ' | ' | ' | ' | ' | ' | 4.4 | 4.4 | 4.1 |
Other investment income | ' | ' | ' | ' | ' | ' | ' | ' | 0.8 | 0.5 | 0.6 |
Total revenues | ' | ' | ' | ' | ' | ' | ' | ' | 43.3 | 44.9 | 44.9 |
Expenses: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest - subsidiaries | ' | ' | ' | ' | ' | ' | ' | ' | 1.3 | 0.5 | 0.6 |
Interest - other | ' | ' | ' | ' | ' | ' | ' | ' | 23.1 | 33.8 | 47.6 |
Real estate and other expenses | ' | ' | ' | ' | ' | ' | ' | ' | 4.3 | 3.8 | 3.8 |
General expenses, taxes and fees | ' | ' | ' | ' | ' | ' | ' | ' | 11.6 | 11.2 | 12.3 |
Total expenses | ' | ' | ' | ' | ' | ' | ' | ' | 40.5 | 49.4 | 64.5 |
Revenues, net of expenses | ' | ' | ' | ' | ' | ' | ' | ' | 2.7 | -4.4 | -19.5 |
Federal income taxes (credits) | ' | ' | ' | ' | ' | ' | ' | ' | 0.3 | -3.3 | -7.2 |
Income (loss) before equity in earnings (losses) of subsidiaries | ' | ' | ' | ' | ' | ' | ' | ' | 2.4 | -1 | -12.2 |
Dividends received | ' | ' | ' | ' | ' | ' | ' | ' | 205.3 | 211.5 | 177.1 |
Earnings (losses) in excess of dividends | ' | ' | ' | ' | ' | ' | ' | ' | 240.1 | -279.1 | -305.3 |
Net Income (Loss) | ' | ' | ' | ' | ' | ' | ' | ' | $447.80 | ($68.60) | ($140.50) |
Schedule_II_Condensed_Financia3
Schedule II - Condensed Financial Information of Registrant Statements of Cash Flows (details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities: | ' | ' | ' |
Net income (loss) | $447.80 | ($68.60) | ($140.50) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ' | ' | ' |
Income taxes - net | 103.7 | -60.7 | -88.5 |
Accounts payable, accrued expenses and other | 67.3 | 98.6 | 111.2 |
Total | 686.7 | 532 | -94.9 |
Cash flows from investing activities: | ' | ' | ' |
Maturities and early calls | 1,387.40 | 1,080.30 | 926.8 |
Net decrease (increase) in short-term investments | 139.1 | 211.5 | -476 |
Total | -457.6 | -3.7 | -187.1 |
Cash flows from financing activities: | ' | ' | ' |
Issuance of debentures and notes | 0 | 0 | 537 |
Issuance of common shares | 11.8 | 1 | 1.2 |
Redemption of debentures and notes | -3.6 | -339.8 | -112.1 |
Dividends on common shares | -184.8 | -181.5 | -178.4 |
Other - net | -0.3 | 0.2 | 0.1 |
Total | -176.9 | -520 | 247.8 |
Increase (decrease) in cash: | 52 | 8.1 | -34.2 |
Cash, beginning of year | 101.2 | 93 | 127.3 |
Cash, end of year | 153.3 | 101.2 | 93 |
Parent Company [Member] | ' | ' | ' |
Cash flows from operating activities: | ' | ' | ' |
Net income (loss) | 447.8 | -68.6 | -140.5 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ' | ' | ' |
Accounts receivable | -0.7 | 0.2 | -0.1 |
Income taxes - net | 24.5 | -83.8 | 55.9 |
Excess of equity in net (income) loss of subsidiaries over cash dividends received | -240.1 | 262.6 | 305.3 |
Accounts payable, accrued expenses and other | -2 | 6.4 | 10.9 |
Total | 229.5 | 116.7 | 231.5 |
Cash flows from investing activities: | ' | ' | ' |
Maturities and early calls | 10 | 0 | 0 |
Purchases of Fixed assets for company use | -2.3 | -1.4 | -4.3 |
Net repayment (issuance) of notes to related parties | -87.4 | 380 | -564.4 |
Net decrease (increase) in short-term investments | 21.4 | -44.4 | -18.6 |
Total | -58.3 | 334 | -587.4 |
Cash flows from financing activities: | ' | ' | ' |
Issuance of debentures and notes | 0 | 0 | 537 |
Net receipt (repayment) of notes and loans from related parties | 25 | 49 | -1.5 |
Issuance of common shares | 11.8 | 1 | 1.2 |
Redemption of debentures and notes | -2.7 | -318.7 | -2.3 |
Dividends on common shares | -184.8 | -181.5 | -178.4 |
Other - net | -0.4 | -0.6 | -0.1 |
Total | -151.1 | -450.8 | 355.8 |
Increase (decrease) in cash: | 20 | 0 | 0 |
Cash, beginning of year | 0 | 0 | 0 |
Cash, end of year | $20.10 | $0 | $0 |
Schedule_II_Condensed_Financia4
Schedule II - Condensed Financial Information of Registrant Debt (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2008 | Dec. 31, 2013 |
In Millions, unless otherwise specified | Convertible Senior Notes Due 2018 [Member] | Convertible Senior Notes Due 2018 [Member] | ESSOP Debt [Member] | ESSOP Debt [Member] | ESSOP Debt [Member] | RFIG Run-off Business [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Debt and Capital Lease Obligations | $569.20 | $572.90 | $550 | $550 | $18 | $20.80 | $30 | ' |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | 3.75% | 3.75% | ' | ' | ' | ' |
Number of common shares into which notes are convertible | ' | ' | 64.3407 | ' | ' | ' | ' | ' |
Debt, Weighted Average Interest Rate | ' | ' | ' | ' | 3.69% | 3.74% | ' | ' |
Expected Contribution of New Capital | ' | ' | ' | ' | ' | ' | ' | $50 |
Schedule_III_Supplementary_Ins1
Schedule III - Supplementary Insurance Information (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Supplementary Insurance Information, by Segment | ' | ' | ' | |||
Deferred Policy Acquisition Costs | $192.60 | $165.50 | $197.60 | |||
Losses, Claims and Settlement Expenses | 9,433.50 | 9,303.30 | 8,786.60 | |||
Unearned Premiums | 1,487.80 | 1,364.40 | 1,268.80 | |||
Other Policyholders' Benefits and Funds | 207.8 | 201.8 | 193.1 | |||
Premium Revenue | 4,456.60 | 4,043.80 | 3,695.50 | |||
Net Investment Income | 318.7 | 336.5 | 364.6 | |||
Benefits, Claims, Losses and Settlement Expenses | 2,238.30 | 2,765.30 | 2,764.30 | |||
Amortization of Deferred Policy Acquisition Costs | 331.9 | 343.2 | 371.8 | |||
Other Operating Expenses | 2,199.40 | 1,990.10 | 1,745.90 | |||
Premiums Written | 4,533.60 | 4,065.50 | 3,742 | |||
Reinsurance Recoverables Policy And Claim Reserves | 3,150.80 | 3,133.30 | 3,143.10 | |||
General Insurance Segment [Member] | ' | ' | ' | |||
Supplementary Insurance Information, by Segment | ' | ' | ' | |||
Deferred Policy Acquisition Costs | 170.4 | 139.4 | 168.6 | |||
Losses, Claims and Settlement Expenses | 4,334.10 | 4,048.90 | 3,874.90 | |||
Unearned Premiums | 1,174.20 | 1,068.80 | 1,009.20 | |||
Other Policyholders' Benefits and Funds | 116.9 | 107.7 | 96.9 | |||
Premium Revenue | 2,513.70 | 2,324.40 | 2,109.40 | |||
Net Investment Income | 249.6 | 264.9 | 270.5 | |||
Benefits, Claims, Losses and Settlement Expenses | 1,849.40 | 1,696 | 1,460 | |||
Amortization of Deferred Policy Acquisition Costs | 315.4 | 327.9 | 296.7 | |||
Other Operating Expenses | 396.3 | 414.4 | 374.6 | |||
Premiums Written | 2,601.10 | 2,366.90 | 2,137.60 | |||
Title Insurance Group [Member] | ' | ' | ' | |||
Supplementary Insurance Information, by Segment | ' | ' | ' | |||
Deferred Policy Acquisition Costs | 0 | 0 | 0 | |||
Losses, Claims and Settlement Expenses | 471.5 | 396.4 | 332 | |||
Unearned Premiums | 0 | 0 | 0 | |||
Other Policyholders' Benefits and Funds | 6.5 | 7 | 6.1 | |||
Premium Revenue | 1,567.10 | 1,250.20 | 1,007.90 | |||
Net Investment Income | 26.6 | 27.3 | 27.3 | |||
Benefits, Claims, Losses and Settlement Expenses | 134 | 120.8 | 105.7 | |||
Amortization of Deferred Policy Acquisition Costs | 0 | 0 | 0 | |||
Other Operating Expenses | 1,767.20 | 1,512.30 | 1,249.80 | |||
Premiums Written | 1,567.10 | 1,250.20 | 1,007.90 | |||
RFIG Run-off Business [Member] | ' | ' | ' | |||
Supplementary Insurance Information, by Segment | ' | ' | ' | |||
Deferred Policy Acquisition Costs | 0 | 0 | 0 | |||
Losses, Claims and Settlement Expenses | 1,774.20 | 1,994.80 | 1,654 | |||
Unearned Premiums | 28.8 | 40.5 | 57.6 | |||
Other Policyholders' Benefits and Funds | 0 | 0 | 0 | |||
Premium Revenue | 316.5 | 410.5 | 503.2 | |||
Net Investment Income | 36.8 | 36.3 | 59.3 | |||
Benefits, Claims, Losses and Settlement Expenses | 217.7 | 910.4 | 1,160.10 | |||
Amortization of Deferred Policy Acquisition Costs | 0 | 0 | 52.3 | |||
Other Operating Expenses | 25.5 | 45.4 | 83.2 | |||
Premiums Written | 304.3 | 389.8 | 521.2 | |||
Corporate & Other [Member] | ' | ' | ' | |||
Supplementary Insurance Information, by Segment | ' | ' | ' | |||
Deferred Policy Acquisition Costs | 22.2 | [1] | 26 | [1] | 29 | [1] |
Losses, Claims and Settlement Expenses | 16.8 | [1] | 15.9 | [1] | 17.4 | [1] |
Unearned Premiums | 0 | [1] | 0 | [1] | 0 | [1] |
Other Policyholders' Benefits and Funds | 54.8 | [1] | 55.7 | [1] | 56.9 | [1] |
Premium Revenue | 59.3 | [1] | 58.6 | [1] | 74.9 | [1] |
Net Investment Income | 5.6 | [1] | 7.9 | [1] | 7.4 | [1] |
Benefits, Claims, Losses and Settlement Expenses | 37 | [1] | 38 | [1] | 38.5 | [1] |
Amortization of Deferred Policy Acquisition Costs | 16.4 | [1] | 15.3 | [1] | 22.7 | [1] |
Other Operating Expenses | 9.9 | [1] | 17.8 | [1] | 38.2 | [1] |
Premiums Written | 61 | [1] | 58.5 | [1] | 75.1 | [1] |
Reinsurance Recoverable [Member] | ' | ' | ' | |||
Supplementary Insurance Information, by Segment | ' | ' | ' | |||
Deferred Policy Acquisition Costs | 0 | [2] | 0 | [2] | 0 | [2] |
Losses, Claims and Settlement Expenses | 2,836.70 | [2] | 2,847 | [2] | 2,908.10 | [2] |
Unearned Premiums | 284.7 | [2] | 255.1 | [2] | 201.9 | [2] |
Other Policyholders' Benefits and Funds | 29.3 | [2] | 31.2 | [2] | 33 | [2] |
Premium Revenue | 0 | [2] | 0 | [2] | 0 | [2] |
Net Investment Income | 0 | [2] | 0 | [2] | 0 | [2] |
Benefits, Claims, Losses and Settlement Expenses | 0 | [2] | 0 | [2] | 0 | [2] |
Amortization of Deferred Policy Acquisition Costs | 0 | [2] | 0 | [2] | 0 | [2] |
Other Operating Expenses | 0 | [2] | 0 | [2] | 0 | [2] |
Premiums Written | $0 | [2] | $0 | [2] | $0 | [2] |
[1] | Represents amounts for Old Republic's holding company parent, minor corporate services subsidiaries, a small life & accident insurance operation and consolidation elimination adjustments. | |||||
[2] | In accordance with GAAP, reinsured losses and unearned premiums are to be reported as assets. Assets and liabilities were, as a result, increased by corresponding amounts of approximately $3.1 billion at December 31, 2013, 2012 and 2011. This accounting treatment does not have any effect on the Company's results of operations. |
Schedule_IV_Reinsurance_Detail
Schedule IV - Reinsurance (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Reinsurance Premiums for Insurance Companies, by Product Segment | ' | ' | ' |
Gross amount | $5,204.50 | $4,708.40 | $4,345.70 |
Ceded to other companies | 774.8 | 684.2 | 661.7 |
Assumed from other companies | 26.9 | 19.6 | 11.6 |
Net amount | 4,456.60 | 4,043.80 | 3,695.50 |
Percentage of amount assumed to net | 0.60% | 0.50% | 0.30% |
Life Insurance in force [Member] | ' | ' | ' |
Reinsurance Premiums for Insurance Companies, by Product Segment | ' | ' | ' |
Gross amount | 7,950.90 | 9,375.20 | 10,201.40 |
Ceded to other companies | 3,946.90 | 4,853 | 5,312.10 |
Assumed from other companies | 0 | 0 | 0 |
Net amount | 4,004 | 4,522.10 | 4,889.20 |
Percentage of amount assumed to net | 0.00% | 0.00% | 0.00% |
General Insurance [Member] | ' | ' | ' |
Reinsurance Premiums for Insurance Companies, by Product Segment | ' | ' | ' |
Gross amount | 3,235.70 | 2,949.90 | 2,716.20 |
Ceded to other companies | 746.1 | 643.4 | 615.8 |
Assumed from other companies | 24.1 | 17.9 | 8.9 |
Net amount | 2,513.70 | 2,324.40 | 2,109.40 |
Percentage of amount assumed to net | 1.00% | 0.80% | 0.40% |
Title Insurance Group [Member] | ' | ' | ' |
Reinsurance Premiums for Insurance Companies, by Product Segment | ' | ' | ' |
Gross amount | 1,564.40 | 1,248.60 | 1,005.50 |
Ceded to other companies | 0 | 0 | 0.1 |
Assumed from other companies | 2.7 | 1.6 | 2.5 |
Net amount | 1,567.10 | 1,250.20 | 1,007.90 |
Percentage of amount assumed to net | 0.20% | 0.10% | 0.30% |
RFIG Run-off Business [Member] | ' | ' | ' |
Reinsurance Premiums for Insurance Companies, by Product Segment | ' | ' | ' |
Gross amount | 326.4 | 429.8 | 526.4 |
Ceded to other companies | 9.9 | 19.3 | 23.2 |
Assumed from other companies | 0 | 0 | 0.1 |
Net amount | 316.5 | 410.5 | 503.2 |
Percentage of amount assumed to net | 0.00% | 0.00% | 0.00% |
Life Insurance [Member] | ' | ' | ' |
Reinsurance Premiums for Insurance Companies, by Product Segment | ' | ' | ' |
Gross amount | 21.2 | 23.5 | 25.7 |
Ceded to other companies | 8.1 | 10.2 | 10.4 |
Assumed from other companies | 0 | 0 | 0 |
Net amount | 13.1 | 13.3 | 15.2 |
Percentage of amount assumed to net | 0.00% | 0.00% | 0.00% |
Accident and health Insurance [Member] | ' | ' | ' |
Reinsurance Premiums for Insurance Companies, by Product Segment | ' | ' | ' |
Gross amount | 56.6 | 56.4 | 71.7 |
Ceded to other companies | 10.4 | 11.1 | 12.1 |
Assumed from other companies | 0 | 0 | 0 |
Net amount | 46.1 | 45.2 | 59.6 |
Percentage of amount assumed to net | 0.00% | 0.00% | 0.00% |
Life & Health Insurance [Member] | ' | ' | ' |
Reinsurance Premiums for Insurance Companies, by Product Segment | ' | ' | ' |
Gross amount | 77.9 | 79.9 | 97.4 |
Ceded to other companies | 18.5 | 21.3 | 22.5 |
Assumed from other companies | 0 | 0 | 0 |
Net amount | 59.3 | 58.6 | 74.9 |
Percentage of amount assumed to net | 0.00% | 0.00% | 0.00% |
Business Intersegment, Eliminations [Member] | ' | ' | ' |
Reinsurance Premiums for Insurance Companies, by Product Segment | ' | ' | ' |
Gross amount | 0 | 0 | 0 |
Ceded to other companies | 0 | 0 | 0 |
Assumed from other companies | 0 | 0 | 0 |
Net amount | $0 | $0 | $0 |
Percentage of amount assumed to net | 0.00% | 0.00% | 0.00% |
Schedule_V_Valuation_and_Quali1
Schedule V - Valuation and Qualifying Accounts (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Reserve for unrecoverable reinsurance [Member] | ' | ' | ' | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | ' | ' | ' | |||
Balance at Beginning of Period | $21.20 | $28.20 | $28.20 | |||
Charged to Cost and Expenses | 0 | 0 | 0 | |||
Charged to Other Accounts - Describe | 0 | 0 | 0 | |||
Deductions - Describe | 0 | -7 | 0 | |||
Balance at End of Period | 21.2 | 21.2 | 28.2 | |||
Deferred tax asset valuation Allowance [Member] | ' | ' | ' | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | ' | ' | ' | |||
Balance at Beginning of Period | 9.6 | [1] | 12.2 | [1] | 13.5 | [1] |
Charged to Cost and Expenses | 0 | [1] | 0 | [1] | 0 | [1] |
Charged to Other Accounts - Describe | 0 | [1] | 0 | [1] | 0 | [1] |
Deductions - Describe | 0 | [1] | -2.5 | [1] | -1.3 | [1] |
Balance at End of Period | $9.60 | [1] | $9.60 | [1] | $12.20 | [1] |
[1] | (1) A valuation allowance was established against deferred tax assets as of December 31, 2013, 2012 and 2011 related to certain net operating loss and tax credit carryforwards which the Company did not expect to realize. In valuing the deferred tax assets, the Company considered certain factors including primarily the scheduled reversals of certain deferred tax liabilities, estimates of future taxable income, the impact of available carryback and carryforward periods, as well as the availability of certain tax planning strategies. The Company estimates that all remaining deferred tax assets at year end 2013 will more likely than not be fully realized. |
Schedule_VI_Supplemental_Infor1
Schedule VI - Supplemental Information Concerning Property-Casualty Insurance Operations (Details) (Consolidated Property and Casualty Insurance Entity [Member], USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Consolidated Property and Casualty Insurance Entity [Member] | ' | ' | ' | |||
Supplemental Information for Property, Casualty Insurance Underwriters | ' | ' | ' | |||
Deferred Policy Acquisition Costs | $170.40 | [1] | $139.40 | [1] | $168.60 | [1] |
Reserves for Unpaid Claims and Claims Adjustment Expenses | 4,400.30 | [1],[2] | 4,119.20 | [1],[2] | 3,928.10 | [1],[2] |
Discount If Any Deducted From Reserves | 241.4 | [1] | 230.8 | [1] | 235.1 | [1] |
Unearned Premiums | 1,174.20 | [1],[2] | 1,068.80 | [1],[2] | 1,009.20 | [1],[2] |
Earned Premiums | 2,543.50 | [1] | 2,366.90 | [1] | 2,167.70 | [1] |
Net Investment Income | 250 | [1] | 265 | [1] | 270.5 | [1] |
Current Year Claims and Claims Adjustment Expenses | 1,919.10 | [1] | 1,810.80 | [1] | 1,678.50 | [1] |
Prior Year Claims and Claims Adjustment Expenses | -40.4 | [1] | -19.8 | [1] | -149.2 | [1] |
Amortization of Deferred Policy Acquisition Costs | 315.4 | [1] | 327.9 | [1] | 298.9 | [1] |
Paid Claims and Claims Adjustment Expenses | 1,597.50 | [1] | 1,577.90 | [1] | 1,551.10 | [1] |
Premiums Written | $2,630.30 | [1] | $2,405.80 | [1] | $2,220.70 | [1] |
[1] | Includes consolidated property-casualty entities. The amounts relating to the Company's unconsolidated property-casualty subsidiaries and the proportionate share of the registrant's and its subsidiaries' 50%-or-less owned property-casualty equity investees are immaterial and have, therefore, been omitted from this schedule. | |||||
[2] | See note (2) to Schedule III. |