RLI (RLI) 10-K 22 Feb 19 2018 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2018	Feb. 07, 2019	Jun. 30, 2018
Document and Entity Information
Entity Registrant Name	RLI CORP
Entity Central Index Key	84,246
Document Type	10-K
Document Period End Date	Dec. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float			$ 2,616,706,281
Entity Common Stock, Shares Outstanding		44,512,543
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	FY

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Fixed income:
Available-for-sale, at fair value (amortized cost - $1,776,465 in 2018 and $1,646,411 in 2017)	$ 1,760,515	$ 1,672,239
Equity securities, at fair value (cost - $220,373 in 2018 and $182,002 in 2017)	340,483	400,492
Short-term investments, at cost which approximates fair value	11,550	9,980
Other invested assets	51,542	33,808
Cash	30,140	24,271
Total investments and cash	2,194,230	2,140,790
Accrued investment income	14,033	15,166
Premiums and reinsurance balances receivable, net of allowances for uncollectible amounts of $16,967 in 2018 and $16,935 in 2017	152,576	134,351
Ceded unearned premium	71,174	57,928
Reinsurance balances recoverable on unpaid losses and settlement expenses, net of allowances for uncollectible amounts of $9,793 in 2018 and $10,014 in 2017	364,999	301,991
Deferred policy acquisition costs	84,934	77,716
Property and equipment, at cost, net of accumulated depreciation of $54,275 in 2018 and $47,676 in 2017	54,692	55,849
Investment in unconsolidated investees	94,967	90,067
Goodwill and intangibles	54,534	59,302
Other assets	18,926	14,084
TOTAL ASSETS	3,105,065	2,947,244
Liabilities:
Unpaid losses and settlement expenses	1,461,348	1,271,503
Unearned premiums	496,505	451,449
Reinsurance balances payable	22,591	21,624
Funds held	72,309	74,560
Income taxes - deferred	24,238	53,768
Bonds payable, long-term debt	149,115	148,928
Accrued expenses	45,124	52,848
Other liabilities	26,993	18,966
TOTAL LIABILITIES	2,298,223	2,093,646
Shareholders' Equity
Common stock ($0.01 par value in 2018 and $1.00 par value in 2017, authorized 100,000,000 shares, issued 67,434,257 shares in 2018 and 67,078,569 shares in 2017, and outstanding 44,504,043 shares in 2018 and 44,148,355 shares in 2017)	674	67,079
Paid-in capital	305,660	233,077
Accumulated other comprehensive earnings	(14,572)	157,919
Retained earnings	908,079	788,522
Deferred compensation	8,354	8,640
Less: Treasury shares at cost (22,930,214 shares in 2018 and 2017)	(401,353)	(401,639)
TOTAL SHAREHOLDERS’ EQUITY	806,842	853,598
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 3,105,065	$ 2,947,244

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Condensed Consolidated Balance Sheets
Available-for-sale, amortized cost	$ 1,776,465	$ 1,646,411
Equity securities, cost	220,373	182,002
Premiums and reinsurance balances receivable, allowances for uncollectible amounts	16,967	16,935
Reinsurance balances recoverable on unpaid losses and settlement expenses, allowances for uncollectible amounts	9,793	10,014
Property and equipment, accumulated depreciation	$ 54,275	$ 47,676
Common stock, par value (in dollars per share)	$ 0.01	$ 1
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	67,434,257	67,078,569
Common stock, shares outstanding (in shares)	44,504,043	44,148,355
Treasury stock, shares (in shares)	22,930,214	22,930,214

Consolidated Statements of Earn

Consolidated Statements of Earnings and Comprehensive Earnings - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Condensed Consolidated Statements of Earnings and Comprehensive Earnings
Net premiums earned	$ 791,366	$ 737,937	$ 728,608
Net investment income	62,085	54,876	53,075
Net realized gains	63,624	6,970	34,740
Other-than-temporary-impairment (OTTI) losses on investments	(217)	(2,559)	(95)
Net unrealized losses on equity securities	(98,735)
Consolidated revenue	818,123	797,224	816,328
Losses and settlement expenses	428,193	401,584	349,778
Policy acquisition costs	267,738	252,515	249,612
Insurance operating expenses	53,803	56,994	53,093
Interest expense on debt	7,437	7,426	7,426
General corporate expenses	9,427	11,340	10,170
Total expenses	766,598	729,859	670,079
Equity in earnings of unconsolidated investees	16,056	17,224	10,833
Earnings before income taxes	67,581	84,589	157,082
Income tax expense:
Current	23,917	9,302	41,034
Deferred	(20,515)	(29,741)	1,128
Income tax expense (benefit)	3,402	(20,439)	42,162
Net earnings	64,179	105,028	114,920
Other comprehensive earnings (loss), net of tax	(33,997)	35,309	(1,164)
Comprehensive earnings	$ 30,182	$ 140,337	$ 113,756
Basic:
Net earnings per share (in dollars per share)	$ 1.45	$ 2.39	$ 2.63
Comprehensive earnings per share (in dollars per share)	0.68	3.19	2.60
Diluted:
Net earnings per share (in dollars per share)	1.43	2.36	2.59
Comprehensive earnings per share (in dollars per share)	$ 0.67	$ 3.15	$ 2.56
Weighted average number of common shares outstanding
Basic (in shares)	44,358	44,033	43,772
Diluted (in shares)	44,835	44,500	44,432
Cash dividends paid per common share	$ 1.87	$ 2.58	$ 2.79

Consolidated Statements of Shar

Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Common stock	Paid-in Capital	Accumulated Other Comprehensive Earnings (Loss)	Retained Earnings	Deferred Compensation	Treasury Stock at Cost	Total
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2015	$ 66,474	$ 221,345	$ 123,774	$ 804,875	$ 10,647	$ (403,646)	$ 823,469
Balance (in shares) at Dec. 31, 2015	43,544,128
Increase (Decrease) in Shareholders' Equity
Net earnings				114,920			114,920
Other comprehensive earnings (loss), net of tax			(1,164)				(1,164)
Deferred compensation under Rabbi trust plans					849	(849)
Stock option excess tax benefit		9,576					9,576
Share-based compensation	$ 401	(1,142)					(741)
Share-based compensation (in shares)	400,569
Dividends and dividend equivalents ($1.87, $2.58 and $2.79 per share during 2018, 2017 and 2016, respectively)				(122,488)			(122,488)
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2016	$ 66,875	229,779	122,610	797,307	11,496	(404,495)	823,572
Balance (in shares) at Dec. 31, 2016	43,944,697
Increase (Decrease) in Shareholders' Equity
Net earnings				105,028			105,028
Other comprehensive earnings (loss), net of tax			35,309				35,309
Deferred compensation under Rabbi trust plans					(2,856)	2,856
Share-based compensation	$ 204	3,298					3,502
Share-based compensation (in shares)	203,658
Dividends and dividend equivalents ($1.87, $2.58 and $2.79 per share during 2018, 2017 and 2016, respectively)				(113,813)			(113,813)
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2017	$ 67,079	233,077	157,919	788,522	8,640	(401,639)	853,598
Balance (in shares) at Dec. 31, 2017	44,148,355
Increase (Decrease) in Shareholders' Equity
Par value conversion from $1.00 per share to $0.01 per share	$ (66,409)	66,409
Net earnings				64,179			64,179
Other comprehensive earnings (loss), net of tax			(33,997)				(33,997)
Deferred compensation under Rabbi trust plans					(286)	286
Share-based compensation	$ 4	6,174					6,178
Share-based compensation (in shares)	355,688
Dividends and dividend equivalents ($1.87, $2.58 and $2.79 per share during 2018, 2017 and 2016, respectively)				(83,202)			(83,202)
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2018	$ 674	$ 305,660	(14,572)	908,079	$ 8,354	$ (401,353)	806,842
Balance (in shares) at Dec. 31, 2018	44,504,043
Increase (Decrease) in Shareholders' Equity
Cumulative-effect adjustment from ASU 2016-01 and 2018-02			$ (138,494)	$ 138,580			$ 86

Consolidated Statements of Sh_2

Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Consolidated Statements of Shareholders' Equity
Cash dividends paid per common share	$ 1.87	$ 2.58	$ 2.79
Common stock, par value (in dollars per share)	$ 0.01	$ 1

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash flows from operating activities:
Net earnings	$ 64,179,000	$ 105,028,000	$ 114,920,000
Adjustments to reconcile net earnings to net cash provided by operating activities
Net realized gains	(63,407,000)	(4,411,000)	(34,645,000)
Net unrealized losses on equity securities	98,735,000
Depreciation	7,042,000	6,944,000	6,430,000
Other items, net	6,171,000	16,368,000	17,699,000
Change in:
Accrued investment income	1,132,000	(573,000)	285,000
Premiums and reinsurance balances receivable (net of direct write-offs and commutations)	(18,225,000)	(7,964,000)	17,275,000
Reinsurance balances payable	967,000	3,696,000	(19,628,000)
Funds held	(2,251,000)	1,818,000	18,488,000
Ceded unearned premium	(13,246,000)	(5,755,000)	660,000
Reinsurance balances recoverable on unpaid losses	(63,008,000)	(13,767,000)	9,620,000
Deferred policy acquisition costs	(7,218,000)	(4,569,000)	(3,318,000)
Accrued expenses	(7,724,000)	856,000	(3,750,000)
Unpaid losses and settlement expenses	189,845,000	132,166,000	35,552,000
Unearned premiums	45,056,000	17,672,000	11,683,000
Income taxes
Current	5,725,000	(3,019,000)	12,573,000
Deferred	(20,515,000)	(29,741,000)	1,128,000
Stock option excess tax benefit			(9,576,000)
Changes in investment in unconsolidated investees:
Undistributed earnings	(16,056,000)	(17,224,000)	(10,833,000)
Dividends received	9,900,000	0	9,900,000
Net Cash Provided by (Used in) Operating Activities, Total	217,102,000	197,525,000	174,463,000
Purchase of:
Fixed income, available-for-sale	(725,675,000)	(430,727,000)	(557,067,000)
Equity securities	(115,921,000)	(20,719,000)	(36,335,000)
Short-term investments, net	(1,570,000)	(4,965,000)
Property and equipment	(6,087,000)	(9,238,000)	(16,155,000)
Acquisition of agency			(850,000)
Other	(18,754,000)	(19,112,000)	(7,722,000)
Proceeds from sale of:
Fixed income, available-for-sale	395,019,000	168,760,000	329,091,000
Proceeds from sale of equity securities	147,838,000	36,573,000	89,909,000
Short-term investments, net			2,564,000
Property and equipment	167,000	128,000	1,688,000
Subsidiary or agency		408,000
Other	3,394,000	2,063,000
Proceeds from call or maturity of:
Fixed income, available-for-sale	187,380,000	195,617,000	141,255,000
Net Cash Used in Investing Activities, Total	(134,209,000)	(81,212,000)	(53,622,000)
Cash Flows from Financing Activities
Stock option excess tax benefit			9,576,000
Proceeds from stock option exercises	6,076,000	3,502,000	(741,000)
Cash dividends paid	(83,100,000)	(113,813,000)	(122,488,000)
Net Cash Used in Financing Activities, Total	(77,024,000)	(110,311,000)	(113,653,000)
Net increase in cash	5,869,000	6,002,000	7,188,000
Cash at the beginning of the period	24,271,000	18,269,000	11,081,000
Cash at the end of the period	$ 30,140,000	$ 24,271,000	$ 18,269,000

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	Dec. 31, 2018
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. RLI Corp. (the “Company”) is an insurance holding company that was founded in 1965. On May 4, 2018, RLI Corp. changed its state of incorporation from the State of Illinois to the State of Delaware (the “Reincorporation”). The Reincorporation was effected by merging RLI Corp., an Illinois corporation (“RLI Illinois”) into RLI Corp., a Delaware corporation (“RLI Delaware”). The separate corporate existence of RLI Illinois ceased and RLI Delaware continues in existence as the surviving corporation and possesses all rights, privileges, powers and franchises of RLI Illinois. The Reincorporation did not result in any change in the name, business, management, fiscal year, location of the principal executive offices, assets or liabilities of the Company. Each outstanding share of RLI Illinois common stock, which had a par value of $1.00 per share, was automatically converted into one outstanding share of RLI Delaware common stock, with a par value of $0.01 per share. In order to reflect the new par value of common stock on the balance sheet, a $66.4 million reclassification from common stock to paid-in-capital was made. For more information on the Reincorporation, see RLI Corp.’s Form 8-K filed on May 7, 2018. We underwrite select property and casualty insurance coverages through major subsidiaries collectively known as RLI Insurance Group. We conduct operations principally through three insurance companies. RLI Insurance Company (RLI Ins.), a subsidiary of RLI Corp. and our principal insurance subsidiary, writes multiple lines of insurance on an admitted basis in all 50 states, the District of Columbia, Puerto Rico, the Virgin Islands and Guam. Mt. Hawley Insurance Company (Mt. Hawley), a subsidiary of RLI Ins., writes surplus lines insurance on a non-admitted basis in all 50 states, the District of Columbia, Puerto Rico, the Virgin Islands and Guam. Contractors Bonding and Insurance Company (CBIC), a subsidiary of RLI Ins., writes multiple lines of insurance on an admitted basis in all 50 states and the District of Columbia. B. The accompanying consolidated financial statements were prepared in conformity with generally accepted accounting principles in the United States of America (GAAP), which differ in some respects from those followed in reports to insurance regulatory authorities. The consolidated financial statements include the accounts of our holding company and our subsidiaries. All significant intercompany balances and transactions have been eliminated. Certain reclassifications were made to 2017 and 2016 to conform to the classifications used in the current year. The Company has evaluated subsequent events through the date these consolidated financial statements were issued. There were no subsequent events requiring adjustment to the financial statements or disclosure. C. ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ASU 2014-09 was issued to clarify and remove inconsistencies within revenue recognition requirements. The core principle of the update is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the transaction price for a contract is allocated among separately identifiable performance obligations and a portion of the transaction price is recognized as revenue when the associated performance obligation has been completed or transferred to the customer. All contracts and fulfillment activities within the scope of Topic 944, Financial Services – Insurance, investment income, investment-related gains and losses and equity in earnings of unconsolidated investees are outside the scope of this ASU. We adopted ASU 2014-09 on January 1, 2018. However, nearly all (over 99 percent) of our consolidated revenue is scoped out and therefore exempt from the guidance contained within this ASU. For the remaining portion, the revenue recognition policy we utilize aligns with the new guidance and there were no changes to the way we recognize revenue. Although the recognition of earnings from equity method investees is out of scope from the update, the recognition of revenue by our equity method investees would be subject to the new guidance if the revenue streams are within this update’s scope. Any impact on revenues would affect the net income of each of the equity method investees, upon which we calculate our portion of earnings to recognize. Our equity method investees are private companies and this guidance becomes effective for private companies in periods beginning after December 15, 2018. As a result, their earnings and our portion of those earnings are not impacted in 2018. We expect that revenue generated by both of our equity method investees will either be outside the scope of this update or largely unaffected by the changes. ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities This ASU was issued to improve the recognition and measurement of financial instruments. The new guidance makes targeted improvements to GAAP as follows: a. Requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net earnings, b. Simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, c. Eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, d. Requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, e. Requires an entity to present separately in other comprehensive earnings the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, f. Requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and g. Clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. We adopted ASU 2016-01 on January 1, 2018. A cumulative-effect adjustment to the balance sheet was made as of the beginning of the year, which moved $142.2 million of net unrealized gains and losses on equity securities from accumulated other comprehensive earnings to retained earnings. During 2018, we recognized $98.7 million of unrealized losses on equity securities within net earnings and $20.7 million of income tax benefit. This compares to $24.0 million and $5.6 million of unrealized gains on equity securities, net of tax, that were recognized through other comprehensive earnings for the comparable periods in 2017 and 2016, respectively. The future impact to our net earnings will vary depending upon the level of volatility in the performance of the securities held in our equity portfolio and the overall market. There were no other material impacts to the financial statements. ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ASU 2016-15 was issued to reduce the diversity in practice of how certain cash receipts and payments, for which previous guidance was silent, are classified in the statement of cash flows. The update addresses eight specific issues, including contingent consideration payments made after a business combination, distributions received from equity method investees and the classification of cash receipts and payments that have aspects of more than one class of cash flows. We adopted ASU 2016-15 on January 1, 2018. The adoption did not have a material impact on our statement of cash flows. ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ASU 2018-02 was issued as a result of the enactment of the Tax Cuts and Jobs Act of 2017 (TCJA) on December 22, 2017. Accounting guidance required deferred tax items to be revalued based on the new tax laws (the most significant of which reduced the corporate tax rate to 21 percent from 35 percent) with the change included in income from continuing operations. Since other comprehensive income was not affected by the revaluation of the deferred tax items, the net accumulated other comprehensive income (AOCI) balance was reflective of the historic 35 percent tax rate instead of the newly enacted rate, a difference that is referred to as a stranded tax effect. This ASU allows for the option to reclassify the stranded tax effects resulting from the implementation of the TCJA out of AOCI and into retained earnings. ASU 2018-02 does not replace the guidance requiring changes from the enactment of other tax laws or rates to be included within income from continuing operations and is applicable only to changes from the TCJA. We adopted ASU 2018-02 during the first quarter of 2018. A current period adjustment was made to the balance sheet, which moved $3.7 million of stranded tax effects on the unrealized balances of our fixed income securities and equity method investees from accumulated other comprehensive earnings to retained earnings. The entire unrealized balance on equity securities was reclassified from AOCI into retained earnings from the adoption of ASU 2016-01 on January 1, 2018 and was therefore unaffected by this ASU. As there was no impact to net earnings and the balance sheet effect is limited to a reclassification within the equity section, there was not a material impact on our financial statements. D. ASU 2016-02, Leases (Topic 842) ASU 2016-02 was issued to improve the financial reporting of leasing transactions. Under current guidance for lessees, leases are only included on the balance sheet if certain criteria, classifying the agreement as a capital lease, are met. This update will require the recognition of a right-of-use asset and a corresponding lease liability, discounted to the present value, for all leases that extend beyond 12 months. For operating leases, the asset and liability will be amortized over the lease term on a straight-line basis, with all cash flows included in the operating section of the statement of cash flows. For finance leases, interest on the lease liability will be recognized separately from the amortization of the right-of-use asset in the statement of comprehensive income and the repayment of the principal portion of the lease liability will be classified as a financing activity while the interest component will be included in the operating section of the statement of cash flows. This ASU is effective for annual and interim reporting periods beginning after December 15, 2018. Early adoption is permitted. ASU 2018-10, Codification Improvements to Topic 842, Leases was issued to clarify certain aspects of ASU 2016-02 and the two updates will be adopted concurrently. ASU 2016-02 requires leases to be recognized and measured at the beginning of the earliest period presented using a modified retrospective approach upon adoption. However, ASU 2018-11, Leases (Topic 842): Targeted Improvements provides an alternative transition method by which leases are recognized at the date of adoption and a cumulative-effect adjustment to the opening balance of retained earnings is recognized in the period of adoption. We plan to adopt using this alternative. It is expected that total assets and total liabilities will increase by approximately $25 million to $30 million upon implementation and the adoption of this update will not have a material impact on net earnings. ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) ASU 2016-13 was issued to provide more decision-useful information about the expected credit losses on financial instruments. Current GAAP delays the recognition of credit losses until it is probable a loss has been incurred. The update will require a financial asset measured at amortized cost, including reinsurance balances recoverable, to be presented at the net amount expected to be collected by means of an allowance for credit losses that runs through net earnings. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses. However, the amendments would limit the amount of the allowance to the amount by which fair value is below amortized cost. The measurement of credit losses on available-for-sale securities is similar under current GAAP, but the update requires the use of the allowance account through which amounts can be reversed, rather than through an irreversible write-down. This ASU is effective for annual and interim reporting periods beginning after December 15, 2019. Early adoption is permitted beginning after December 15, 2018. Upon adoption, the update will be applied using the modified-retrospective approach, by which a cumulative-effect adjustment will be made to retained earnings as of the beginning of the first reporting period presented. This update will have the most impact on our available-for-sale fixed income portfolio and reinsurance balances recoverable. However, as our fixed income portfolio is weighted towards higher rated bond (84 percent rated A or better at December 31, 2018) and we purchase reinsurance from financially strong reinsurers for which we already have an allowance for uncollectible reinsurance amounts, we do not expect that the effect of adoption will be material. ASU 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities Under current practices, the amortization period for callable debt securities held at a premium is generally the contractual life of the instrument. However, if an entity has a large number of similar loans, it may consider estimates of future principal prepayments. For those who choose to not incorporate an estimate of future prepayments, ASU 2017-08 shortens the amortization period for premium on debt securities to the earliest call date, rather than the maturity date, to align the amortization method with how the securities are quoted, priced and traded. After the earliest call date, if the call option is not exercised, the entity shall reset the effective yield using the payment terms of the debt security. Any excess of the amortized cost basis over the amount payable will be amortized to the next call date or to maturity if there are no other call dates. The method of accounting for a discount does not change and will continue to be amortized over the life of the bond. This ASU is effective for annual and interim reporting periods beginning after December 15, 2018. Early adoption is permitted. The update will be applied using a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. As we currently incorporate estimates of future principal prepayments when calculating the effective yield for bonds carrying a premium, we do not expect the adoption of this update to have a material impact on our financial statements. ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting ASU 2018-07 was issued to simplify the accounting for share-based transactions by expanding the scope of Topic 718 from only being applicable to share-based payments to employees to also include share-based payment transactions for acquiring goods and services from nonemployees. As a result, nonemployee share-based transactions will be measured by estimating the fair value of the equity instruments at the grant date, taking into consideration the probability of satisfying performance conditions. This ASU is effective for annual and interim reporting periods beginning after December 15, 2018. Early adoption is permitted. Our long-term incentive plan limits the awards of share-based payments to employees and directors of the Company or any affiliate. The share-based compensation expense to nonemployee directors was $0.3 million in 2018. Costs associated with such payments are not expected to materially increase and we do not expect this update to have a material impact on our financial statements. ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement ASU 2018-13 modifies the disclosure requirements for assets and liabilities measured at fair value. The requirements to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels and the valuation processes for Level 3 fair value measurements have all been removed. However, the changes in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period must be disclosed along with the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements (or other quantitative information if it is more reasonable). Finally, for investments measured at net asset value, the requirements have been modified so that the timing of liquidation and the date when restrictions from redemption might lapse are only disclosed if the investee has communicated the timing to the entity or announced the timing publicly. This ASU is effective for annual and interim reporting periods beginning after December 15, 2019. As the amendments are only disclosure-related and we do not currently have any assets or liabilities that are measured based on Level 3 inputs, our financial statements will not be materially impacted by this update. ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract ASU 2018-15 requires a customer in a cloud computing arrangement (i.e. hosting arrangement) that is a service contract to follow the internal-use software guidance to determine which implementation costs to capitalize as assets or expense as incurred. Relevant implementation costs in the development stage are capitalized, while costs incurred during the preliminary project and post-implementation stages are expensed as the activities are performed. Capitalized costs are expensed over the term of the hosting arrangement. This ASU is effective for annual and interim reporting periods beginning after December 15, 2019. Early adoption is permitted. This update can either be applied retrospectively or prospectively to all implementation costs incurred after the date of adoption. We have not yet completed the analysis of how adopting this ASU will affect our financial statements. E. INVESTMENTS: Equity securities are carried at fair value with unrealized gains and losses recorded within net earnings in 2018. Prior to 2018, unrealized gains and losses on equity securities were recognized through other comprehensive earnings. We classify our investments in fixed income securities into one of three categories: trading, held-to-maturity or available-for-sale. AVAILABLE-FOR-SALE SECURITIES Debt securities not included as held-to-maturity or trading are classified as available-for-sale and reported at fair value. Unrealized gains and losses on these securities are excluded from net earnings but are recorded as a separate component of comprehensive earnings and shareholders’ equity, net of deferred income taxes. All of our debt securities are classified as available-for-sale. HELD-TO-MATURITY SECURITIES Debt securities that we have the positive intent and ability to hold to maturity are classified as held-to-maturity and carried at amortized cost. Except for declines that are other-than-temporary, changes in the fair value of these securities are not reflected in the financial statements. We do not hold any debt security classified as held-to-maturity. TRADING SECURITIES Debt securities purchased for short-term resale are classified as trading securities. These securities are reported at fair value with unrealized gains and losses included in earnings. We do not hold any debt securities classified as trading. OTHER THAN TEMPORARY IMPAIRMENT We regularly evaluate our fixed income securities using quantitative and qualitative criteria to determine impairment losses for other-than-temporary declines in the fair value of the investments. The following are the key factors for determining if a security is other-than-temporarily impaired: · The length of time and the extent to which the fair value has been less than amortized cost, · The probability of significant adverse changes to the cash flows, · The occurrence of a discrete credit event resulting in the issuer defaulting on a material obligation, the issuer seeking protection from creditors under the bankruptcy laws, the issuer proposing a voluntary reorganization under which creditors are asked to exchange their claims for cash or securities having a fair value substantially lower than par value of their claims or · The probability that we will recover the entire amortized cost basis of our fixed income securities prior to maturity. Quantitative criteria considered during this process include, but are not limited to: the degree and duration of current fair value as compared to the amortized cost of the security, degree and duration of the security’s fair value being below cost and whether the issuer is in compliance with terms and covenants of the security. Qualitative criteria include the credit quality, current economic conditions, the anticipated speed of cost recovery, the financial health of and specific prospects for the issuer, as well as our absence of intent to sell or requirement to sell fixed income securities prior to recovery. In addition, we consider price declines in our other-than-temporary impairment (OTTI) analysis when they provide evidence of declining credit quality, and we distinguish between price changes caused by credit deterioration, as opposed to rising interest rates. See note 2 for further discussion of OTTI. Interest on fixed maturities and short-term investments is credited to earnings on an accrual basis. Premiums and discounts are amortized or accreted over the lives of the related fixed maturities. Dividends on equity securities are credited to earnings on the ex-dividend date. Realized gains and losses on disposition of investments are based on specific identification of the investments sold on the settlement date. F. Cash consists of uninvested balances in bank accounts. Short-term investments consist of investments with original maturities of 90 days or less, primarily AAA-rated prime and government money market funds. Short-term investments are carried at cost. We have not experienced losses on these instruments. Other invested assets include investments in low income housing tax credit partnerships (LIHTC), membership in the Federal Home Loan Bank of Chicago (FHLBC) and investments in private funds. Our LIHTC investments are carried at amortized cost, and our investment in FHLBC stock is carried at cost. Due to the nature of cash, short-term investments, the LIHTC and our membership in the FHLBC, their carrying amounts approximate fair value. The private funds are carried at fair value, using each investment’s net asset value. G. Ceded unearned premiums and reinsurance balances recoverable on paid and unpaid losses and settlement expenses are reported separately as assets, instead of being netted with the related liabilities, since reinsurance does not relieve the Company of our legal liability to our policyholders. We continuously monitor the financial condition of our reinsurers. As part of our monitoring efforts, we review their annual financial statements, quarterly disclosures and Securities and Exchange Commission (SEC) filings for reinsurers that are publicly traded. We also review insurance industry developments that may impact the financial condition of our reinsurers. We analyze the credit risk associated with our reinsurance balances recoverable by monitoring the A.M. Best and Standard & Poor’s (S&P) ratings of our reinsurers. In addition, we subject our reinsurance recoverables to detailed recoverable tests, including one based on average default by S&P rating. Based upon our review and testing, our policy is to charge to earnings, in the form of an allowance, an estimate of unrecoverable amounts from reinsurers. This allowance is reviewed on an ongoing basis to ensure that the amount makes a reasonable provision for reinsurance balances that we may be unable to recover. H. We defer incremental direct costs that relate to the successful acquisition of new or renewal insurance contracts, including commissions and premium taxes. Acquisition-related costs may be deemed ineligible for deferral when they are based on contingent or performance criteria beyond the basic acquisition of the insurance contract or when efforts to obtain or renew the insurance contract are unsuccessful. All eligible costs are capitalized and charged to expense in proportion to premium revenue recognized. The method followed in computing deferred policy acquisition costs limits the amount of such deferred costs to their estimated realizable value. This would also give effect to the premiums to be earned and anticipated losses and settlement expenses, as well as certain other costs expected to be incurred as the premiums are earned. Judgments as to the ultimate recoverability of such deferred costs are reviewed on a segment basis and are highly dependent upon estimated future loss costs associated with the premiums written. This deferral methodology applies to both gross and ceded premiums and acquisition costs. I. Property and equipment are presented at cost less accumulated depreciation and are depreciated on a straight-line basis for financial statement purposes over periods ranging from 3 to 10 years for equipment and up to 30 years for buildings and improvements. J. We maintain a 40 percent interest in the equity and earnings of Maui Jim, Inc. (Maui Jim), a manufacturer of high-quality sunglasses, which is accounted for under the equity method. We also maintain a similar minority representation on their board of directors. Maui Jim’s chief executive officer owns a controlling majority of the outstanding shares of Maui Jim. We carry this investment at the holding company level as it is not core to our insurance operations. Our investment in Maui Jim was $79.5 million in 2018 and $77.7 million in 2017. In 2018, we recorded $12.5 million in investee earnings for Maui Jim, compared to $14.4 million in 2017 and $9.7 million in 2016. Maui Jim recorded net income of $30.3 million in 2018, $34.4 million in 2017 and $26.9 million in 2016. Additional summarized financial information for Maui Jim for 2018 and 2017 is outlined in the following table: (in millions) 2018 2017 Total assets $ 265.6 $ 259.4 Total liabilities 90.4 88.0 Total equity 175.2 171.4 Approximately $68.9 million of undistributed earnings from Maui Jim are included in our retained earnings as of December 31, 2018. We received dividends of $9.9 million from Maui Jim in 2018 and 2016. No dividends were received in 2017. As of December 31, 2018, we had a 23 percent interest in the equity and earnings of Prime Holdings Insurance Services, Inc. (Prime), which is accounted for under the equity method. Prime writes business through two Illinois domiciled insurance carriers, Prime Insurance Company, an excess and surplus lines company, and Prime Property and Casualty Insurance Inc., an admitted insurance company. Our investment in Prime was $15.4 million at December 31, 2018 and $12.4 million at December 31, 2017. In 2018, we recorded $3.6 million in investee earnings for Prime, compared to $2.8 million in 2017 and $1.1 million in 2016. Additionally, we maintain a 25 percent quota share reinsurance treaty with Prime, which contributed $41.1 million of gross premiums written and $34.2 million of net premiums earned during 2018, compared to $29.6 million of gross premiums written and $21.0 million of net premiums earned during 2017 and $13.4 million of gross premiums written and $11.4 million of net premiums earned during 2016. We perform annual impairment reviews of our investments in unconsolidated investees, which take into consideration current valuation and operating results. Based upon the most recent reviews, the assets were not impaired. K. Goodwill and intangibles totaled $54.5 million and $59.3 million at December 31, 2018 and 2017, respectively, as detailed in the following table. Goodwill and Intangible Assets (in thousands) 2018 2017 Goodwill Energy surety $ 25,706 $ 25,706 Miscellaneous and contract surety 15,110 15,110 Small Commercial 5,246 5,246 Medical professional liability * - 3,595 Total goodwill $ 46,062 $ 49,657 Intangibles State insurance licenses $ 7,500 $ 7,500 Definite-lived intangibles, net of accumulated amortization of $3,062 at 12/31/18 and $5,678 at 12/31/17 972 2,145 Total intangibles $ 8,472 $ 9,645 Total goodwill and intangibles $ 54,534 $ 59,302 * The medical professional liability goodwill balance reflects a cumulative non-cash impairment charge of $12.4 million and $8.8 million as of December 31, 2018 and 2017, respectively. As the amortization of goodwill and indefinite-lived intangible assets is not permitted, the assets are tested for impairment on an annual basis, or earlier if there is reason to suspect that their values may have been diminished or impaired. Annual impairment testing was performed on each of our goodwill and indefinite-lived intangible assets during 2018. Based upon these reviews, our energy surety goodwill, miscellaneous and contract surety goodwill, small commercial goodwill and state insurance license indefinite-lived intangible asset were not impaired. In addition, as of December 31, 2018, there were no triggering events on the above-mentioned goodwill and intangible assets that would suggest an updated review was necessary. As previously disclosed, adverse loss experience triggered the need to test the medical professional liability reporting unit during the first quarter of 2018 and the second quarters of 2017 and 2016. The testing resulted in a $4.4 million non-cash impairment charge on goodwill and intangible assets in 2018, a $3.4 million non-cash impairment charge on goodwill and intangible assets in 2017 and a $7.2 million non-cash impairment charge on goodwill in 2016. In each instance, a fair value for the medical professional liability reporting unit’s agency relationships, carried as a definite-lived intangible asset, was determined by using a discounted cash flow valuation. In 2018, the carrying value exceeded the fair value, resulting in a $0.8 million non-cash impairment charge. In 2017, the resulting non-cash impairment charge on definite-lived intangibles was $1.8 million. A fair value for the medical professional liability reporting unit’s goodwill was determined by using a weighted average of a market approach and discounted cash flow valuation. The carrying value exceeded the fair value in each year, resulting in a $3.6 million non-cash impairment charge in 2018, a $1.6 million non-cash impairment charge during 2017 and a $7.2 million non-cash impairment charge in 2016. Subsequent to the 2018 impairment, the medical professional liability reporting unit had no remaining goodwill or intangible assets. All impairment charges were recorded as net realized losses in the respective period’s consolidated statement of earnings. The definite-lived intangible assets are amortized against future operating results based on their estimated useful lives. Amortization of intangible assets was $0.4 million, $0.7 million and $0.9 million for 2018, 2017 and 2016, respectively. We anticipate we will recognize

INVESTMENTS

INVESTMENTS	12 Months Ended
	Dec. 31, 2018
INVESTMENTS
INVESTMENTS	2. INVESTMENTS A summary of net investment income is as follows: NET INVESTMENT INCOME (in thousands) 2018 2017 2016 Interest on fixed income securities $ 54,491 $ 48,343 $ 46,834 Dividends on equity securities 9,814 10,506 10,929 Interest on cash, short-term investments and other invested assets 2,309 945 120 Gross investment income $ 66,614 $ 59,794 $ 57,883 Less investment expenses (4,529) (4,918) (4,808) Net investment income $ 62,085 $ 54,876 $ 53,075 Pretax net realized investment gains (losses) and net changes in unrealized gains (losses) on investments for the years ended December 31 are summarized as follows: REALIZED/UNREALIZED GAINS (in thousands) 2018 2017 2016 Net realized gains (losses): Fixed income: Available-for-sale $ (2,018) $ 859 $ 4,314 Available-for-sale OTTI (217) (2,559) (95) Equity securities 69,868 10,282 38,709 Other (4,226) (4,171) (8,283) Total $ 63,407 $ 4,411 $ 34,645 Net changes in unrealized gains (losses) on investments: Fixed income: Available-for-sale $ (41,778) $ 16,846 $ (10,972) Equity securities (98,380) 36,844 8,659 Other invested assets (355) 29 — Investment in unconsolidated investees (1,257) 604 522 Total $ (141,770) $ 54,323 $ (1,791) Net realized gains (losses) and changes in unrealized gains (losses) on investments $ (78,363) $ 58,734 $ 32,854 During 2018, we recorded $63.4 million in net realized gains, which included $4.4 million of other non-cash realized losses from goodwill and definite-lived intangible impairments. In addition, we recorded a change in net unrealized losses of $141.8 million. The majority of our net realized gains were due to sales of equity securities. The change in unrealized gain/loss position was due to the realization of gains in the course of selling equity securities and the price decline in both equities and bonds during 2018. For 2018, the net realized gains (losses) and changes in unrealized gains (losses) on investments totaled $(78.4) million. The following is a summary of the disposition of fixed income securities and equities for the years ended December 31, with separate presentations for sales and calls/maturities. Net SALES Proceeds Gross Realized Realized (in thousands) From Sales Gains Losses Gain (Loss) 2018 Available-for-sale $ 394,318 $ 3,131 $ (5,349) $ (2,218) Equities 147,838 71,065 (1,197) 69,868 2017 Available-for-sale $ 169,002 $ 2,406 $ (1,670) $ 736 Equities 36,573 13,178 (2,896) 10,282 2016 Available-for-sale $ 329,091 $ 7,158 $ (3,287) $ 3,871 Equities 89,909 39,668 (959) 38,709 Net CALLS/MATURITIES Gross Realized Realized (in thousands) Proceeds Gains Losses Gain (Loss) 2018 Available-for-sale $ 187,380 $ 311 $ (111) $ 200 2017 Available-for-sale $ 195,617 $ 262 $ (139) $ 123 2016 Available-for-sale $ 141,255 $ 445 $ (2) $ 443 FAIR VALUE MEASUREMENTS Assets measured at fair value on a recurring basis as of December 31, 2018, are summarized below: Significant Quoted in Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (in thousands) (Level 1) (Level 2) (Level 3) Total Fixed income securities - available-for-sale U.S. government $ — $ 200,229 $ — $ 200,229 U.S. agency — 31,904 — 31,904 Non-U.S. govt. & agency — 7,639 — 7,639 Agency MBS — 395,253 — 395,253 ABS/CMBS* — 136,723 — 136,723 Corporate — 668,679 — 668,679 Municipal — 320,088 — 320,088 Total fixed income securities - available-for-sale $ — $ 1,760,515 $ — $ 1,760,515 Equity securities 339,985 498 — 340,483 Total $ 339,985 $ 1,761,013 $ — $ 2,100,998 *Non-agency asset-backed & commercial mortgage-backed Assets measured at fair value on a recurring basis as of December 31, 2017, are summarized below: Significant Quoted in Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (in thousands) (Level 1) (Level 2) (Level 3) Total Fixed income securities - available-for-sale U.S. government $ — $ 91,689 $ — $ 91,689 U.S. agency — 18,778 — 18,778 Non-U.S. govt. & agency — 7,588 — 7,588 Agency MBS — 328,471 — 328,471 ABS/CMBS* — 70,526 — 70,526 Corporate — 519,022 — 519,022 Municipal — 636,165 — 636,165 Total fixed income securities - available-for-sale $ — $ 1,672,239 $ — $ 1,672,239 Equity securities 400,492 — — 400,492 Total $ 400,492 $ 1,672,239 $ — $ 2,072,731 *Non-agency asset-backed & commercial mortgage-backed As noted in the previous tables, we did not have any assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of December 31, 2018 and 2017. Additionally, there were no securities transferred in or out of levels 1 or 2 during 2018 or 2017. The amortized cost and estimated fair value of fixed income securities at December 31, 2018, by contractual maturity, are shown as follows: (in thousands) Amortized Cost Fair Value Available-for-sale Due in one year or less $ 41,319 $ 41,333 Due after one year through five years 411,153 410,680 Due after five years through 10 years 615,061 608,115 Due after 10 years 168,716 168,412 Mtge/ABS/CMBS* 540,216 531,975 Total available-for-sale $ 1,776,465 $ 1,760,515 * Mortgage-backed, asset-backed & commercial mortgage-backed Expected maturities may differ from contractual maturities due to call provisions on some existing securities. At December 31, 2018, the net unrealized losses of available-for-sale fixed income securities totaled $16.0 million pretax. At December 31, 2017, the net unrealized appreciation of available-for-sale fixed maturities securities totaled $25.8 million pretax. In addition, the following table is a schedule of amortized costs and estimated fair values of investments in fixed income securities as of December 31, 2018 and 2017: 2018 Amortized Gross Unrealized (in thousands) Cost Fair Value Gains Losses Available-for-sale U.S. government $ 199,982 $ 200,229 $ 1,232 $ (985) U.S. agency 31,716 31,904 403 (215) Non-U.S. govt. & agency 8,170 7,639 — (531) Agency MBS 402,992 395,253 1,709 (9,448) ABS/CMBS* 137,224 136,723 375 (876) Corporate 681,909 668,679 2,894 (16,124) Municipal 314,472 320,088 6,926 (1,310) Total fixed income $ 1,776,465 $ 1,760,515 $ 13,539 $ (29,489) 2017 Amortized Gross Unrealized (in thousands) Cost Fair Value Gains Losses Available-for-sale U.S. government $ 92,561 $ 91,689 $ 23 $ (895) U.S. agency 18,541 18,778 347 (110) Non-U.S. govt. & agency 7,501 7,588 143 (56) Agency MBS 329,129 328,471 3,420 (4,078) ABS/CMBS* 70,405 70,526 436 (315) Corporate 508,128 519,022 12,575 (1,681) Municipal 620,146 636,165 17,272 (1,253) Total fixed income $ 1,646,411 $ 1,672,239 $ 34,216 $ (8,388) * Non-agency asset-backed & commercial mortgage-backed Mortgage-Backed, Commercial Mortgage-Backed and Asset-Backed Securities Gross unrealized losses in the collateralized securities bond portfolio increased to $10.3 million in 2018 as interest rates increased during the year. All of our collateralized securities carry the highest credit rating by one or more major rating agencies and continue to pay according to contractual terms. For all fixed income securities at an unrealized loss at December 31, 2018, we believe it is probable that we will receive all contractual payments in the form of principal and interest. In addition, we are not required to, nor do we intend to, sell these investments prior to recovering the entire amortized cost basis of each security, which may be at maturity. We do not consider these investments to be other-than-temporarily impaired at December 31, 2018. Corporate Bonds Gross unrealized losses in the corporate bond portfolio increased to $16.1 million in 2018 from $1.7 million at the end of 2017 as interest rates and credit spreads increased during the year. The corporate bond portfolio has an overall rating of A-. Municipal Bonds As of December 31, 2018, municipal bonds totaled $320.1 million with gross unrealized losses of $1.3 million, the same as the previous year. As of December 31, 2018, approximately 42 percent of the municipal fixed income securities in the investment portfolio were general obligations of state and local governments and the remaining 58 percent were revenue based. Eighty-five percent of our municipal fixed income securities were rated AA or better while 99 percent were rated A or better. Equity Securities Our equity portfolio consists of common stocks and exchange traded funds (ETF). Gross unrealized losses in the equity portfolio increased $9.2 million to $10.1 million in 2018 as equity markets declined during the year. Impairment Analysis Under current accounting standards, an OTTI write-down of debt securities, where fair value is below amortized cost, is triggered by circumstances where: (1) an entity has the intent to sell a security, (2) it is more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis or (3) the entity does not expect to recover the entire amortized cost basis of the security. If an entity intends to sell a security or if it is more likely than not the entity will be required to sell the security before recovery, an OTTI write-down is recognized in earnings equal to the difference between the security’s amortized cost and its fair value. If an entity does not intend to sell the security or it is not more likely than not that it will be required to sell the security before recovery, the OTTI write-down is separated into an amount representing the credit loss, which is recognized in earnings, and the amount related to all other factors, which is recognized in other comprehensive income. As part of our evaluation of whether particular securities are other-than-temporarily impaired, we consider our intent to sell a security (which is determined on a security-by-security basis) and whether it is more likely than not we will be required to sell the security before the recovery of our amortized cost basis. Significant changes in these factors could result in a charge to net earnings for impairment losses. Impairment losses result in a reduction of the underlying investment’s cost basis. The following table is also used as part of our impairment analysis and displays the total value of debt securities that were in an unrealized loss position as of December 31, 2018, and December 31, 2017. The table segregates the securities based on type, noting the fair value, amortized cost and unrealized loss on each category of investment as well as in total. The table further classifies the securities based on the length of time they have been in an unrealized loss position. December 31, 2018 December 31, 2017 12 Mos. 12 Mos. (in thousands) < 12 Mos. & Greater Total < 12 Mos. & Greater Total U.S. Government Fair value $ 7,249 $ 76,073 $ 83,322 $ 58,009 $ 30,888 $ 88,897 Amortized cost 7,270 77,037 84,307 58,443 31,349 89,792 Unrealized Loss $ (21) $ (964) $ (985) $ (434) $ (461) $ (895) U.S. Agency Fair value $ — $ 8,843 $ 8,843 $ 10,917 $ — $ 10,917 Amortized cost — 9,058 9,058 11,027 — 11,027 Unrealized Loss $ — $ (215) $ (215) $ (110) $ — $ (110) Non-U.S. Government Fair value $ 5,432 $ 2,207 $ 7,639 $ — $ 1,840 $ 1,840 Amortized cost 5,571 2,599 8,170 — 1,896 1,896 Unrealized Loss $ (139) $ (392) $ (531) $ — $ (56) $ (56) Agency MBS Fair value $ 25,345 $ 261,325 $ 286,670 $ 122,130 $ 111,306 $ 233,436 Amortized cost 25,486 270,632 296,118 123,559 113,955 237,514 Unrealized Loss $ (141) $ (9,307) $ (9,448) $ (1,429) $ (2,649) $ (4,078) ABS/CMBS* Fair value $ 46,918 $ 32,137 $ 79,055 $ 23,406 $ 21,587 $ 44,993 Amortized cost 47,146 32,785 79,931 23,491 21,817 45,308 Unrealized Loss $ (228) $ (648) $ (876) $ (85) $ (230) $ (315) Corporate Fair value $ 306,177 $ 147,751 $ 453,928 $ 86,946 $ 28,600 $ 115,546 Amortized cost 315,428 154,624 470,052 87,736 29,491 117,227 Unrealized Loss $ (9,251) $ (6,873) $ (16,124) $ (790) $ (891) $ (1,681) Municipal Fair value $ 6,036 $ 55,681 $ 61,717 $ 71,059 $ 60,049 $ 131,108 Amortized cost 6,052 56,975 63,027 71,534 60,827 132,361 Unrealized Loss $ (16) $ (1,294) $ (1,310) $ (475) $ (778) $ (1,253) Total fixed income Fair value $ 397,157 $ 584,017 $ 981,174 $ 372,467 $ 254,270 $ 626,737 Amortized cost 406,953 603,710 1,010,663 375,790 259,335 635,125 Unrealized Loss $ (9,796) $ (19,693) $ (29,489) $ (3,323) $ (5,065) $ (8,388) *Non-agency asset-backed & commercial mortgage-backed The fixed income portfolio contained 777 securities in an unrealized loss position as of December 31, 2018. Of these 777 securities, 302 have been in an unrealized loss position for 12 consecutive months or longer and represent $19.7 million in unrealized losses. All fixed income securities continue to pay the expected coupon payments under the contractual terms of the securities. Credit-related impairments on fixed income securities that we do not plan to sell, and for which we are not more likely than not to be required to sell, are recognized in net earnings. Any non-credit related impairment is recognized in comprehensive earnings. Based on our analysis, our fixed income portfolio is of a high credit quality and we believe we will recover the amortized cost basis of our fixed income securities. We continually monitor the credit quality of our fixed income investments to assess if it is probable that we will receive our contractual or estimated cash flows in the form of principal and interest. There were no OTTI losses recognized in other comprehensive earnings in the periods presented. Key factors that we consider in the evaluation of credit quality include: · Changes in technology that may impair the earnings potential of the investment, · The discontinuance of a segment of business that may affect future earnings potential, · Reduction or elimination of dividends, · Specific concerns related to the issuer’s industry or geographic area of operation, · Significant or recurring operating losses, poor cash flows and/or deteriorating liquidity ratios and · Downgrades in credit quality by a major rating agency. Based on our analysis, we concluded that the securities in an unrealized loss position were not other-than-temporarily impaired at December 31, 2018 and 2017. There were $0.2 million, $2.6 million and $0.1 million in losses associated with OTTI of securities in 2018, 2017 and 2016, respectively. Unrealized Gains and Losses on Equity Securities Unrealized gains (losses) recognized during 2018 on equity securities still held as of December 31, 2018 were $(28.7) million. Unrealized gains (losses) recognized during 2017 on equity securities still held as of December 31, 2017 were $47.2 million. Other Invested Assets We had $51.5 million of other invested assets at December 31, 2018, compared to $33.8 million at the end of 2017. Other invested assets include investments in low income housing tax credit (LIHTC) partnerships, membership stock in the Federal Home Loan Bank of Chicago (FHLBC) and investments in private funds. Our LIHTC investments are carried at amortized cost and our investment in FHLBC stock is carried at cost. Due to the nature of the LIHTC and our membership in the FHLBC, their carrying amounts approximate fair value. The private funds are carried at fair value, using each investment’s net asset value. Our LIHTC interests had a balance of $20.3 million at December 31, 2018 compared to $15.5 million at December 31, 2017 and recognized a total tax benefit of $2.2 million during 2018 compared to $2.4 million during 2017 and $1.9 million during 2016. Our unfunded commitment for our LIHTC investments totaled $7.4 million at December 31, 2018 and will be paid out in installments through 2025. We had $18.8 million of unfunded commitments related to our investments in private funds at December 31, 2018. Additionally, our interest in these investments is generally restricted from being transferred or otherwise redeemed without prior consent by the respective entities. An initial public offering would allow for the transfer of interest in some situations, while the timed dissolution of the partnership would trigger redemption in others. Restricted Assets As of December 31, 2018, $16.1 million of investments were pledged as collateral with the FHLBC to ensure timely access to the secured lending facility that ownership of the FHLBC stock provides. As of and during year ended December 31, 2018, there were no outstanding borrowings with the FHLBC. As of December 31, 2018, fixed income securities with a carrying value of $59.2 million were on deposit with regulatory authorities as required by law.

POLICY ACQUISITION COSTS

POLICY ACQUISITION COSTS	12 Months Ended
	Dec. 31, 2018
POLICY ACQUISITION COSTS
POLICY ACQUISITION COSTS	3. POLICY ACQUISITION COSTS Policy acquisition costs deferred and amortized to income for the years ended December 31 are summarized as follows: (in thousands) 2018 2017 2016 Deferred policy acquisition costs (DAC), beginning of year $ 77,716 $ 73,147 $ 69,829 Deferred: Direct commissions $ 175,697 $ 157,723 $ 150,390 Premium taxes 12,654 11,651 11,759 Ceding commissions (22,190) (18,096) (17,488) Net deferred $ 166,161 $ 151,278 $ 144,661 Amortized 158,943 146,709 141,343 DAC, end of year $ 84,934 $ 77,716 $ 73,147 Policy acquisition costs: Amortized to expense - DAC $ 158,943 $ 146,709 $ 141,343 Period costs: Ceding commission - contingent (2,241) (3,575) (1,524) Other underwriting expenses 111,036 109,381 109,793 Total policy acquisition costs $ 267,738 $ 252,515 $ 249,612

DEBT

DEBT	12 Months Ended
	Dec. 31, 2018
DEBT
DEBT	4. DEBT As of December 31, 2018, outstanding debt balances totaled $149.1 million, net of unamortized discount and debt issuance costs, all of which were our long-term senior notes. On October 2, 2013, we completed a public debt offering, issuing $150.0 million in senior notes maturing September 15, 2023, and paying interest semi-annually at the rate of 4.875 percent. The notes were issued at a discount resulting in proceeds, net of discount and commission, of $148.6 million. The amount of the discount is being charged to income over the life of the debt on an effective-yield basis. The estimated fair value for the senior note was $155.9 million as of December 31, 2018. The fair value of our long-term debt is based on the limited observable prices that reflect thinly traded securities and is therefore classified as a level 2 liability within the fair value hierarchy. We paid $7.3 million of interest on our senior notes in each of the last three years. The average rate on debt was 4.91 percent in 2018, 2017 and 2016. We maintain a revolving line of credit with JP Morgan Chase Bank N.A., which permits the Company to borrow up to an aggregate principal amount of $50.0 million. This facility was entered into during the second quarter of 2018 and replaced the previous $40.0 million facility which expired on May 28, 2018. Under certain conditions, the line may be increased up to an aggregate principal amount of $75.0 million. This facility has a two-year term that expires on May 24, 2020. As of and during the years ended December 31, 2018, 2017 and 2016, no amounts were outstanding on these facilities.

REINSURANCE

REINSURANCE	12 Months Ended
	Dec. 31, 2018
REINSURANCE
REINSURANCE	5. REINSURANCE In the ordinary course of business, our insurance subsidiaries assume and cede premiums and selected insured risks with other insurance companies, known as reinsurance. A large portion of the reinsurance is put into effect under contracts known as treaties and, in some instances, by negotiation on each individual risk (known as facultative reinsurance). In addition, there are several types of treaties including quota share, excess of loss and catastrophe reinsurance contracts that protect against losses over stipulated amounts arising from any one occurrence or event. The arrangements allow the Company to pursue greater diversification of business and serve to limit the maximum net loss to a single event, such as a catastrophe. Through the quantification of exposed policy limits in each region and the extensive use of computer-assisted modeling techniques, we monitor the concentration of risks exposed to catastrophic events. Through the purchase of reinsurance, we also generally limit our net loss on any individual risk to a maximum of $3.0 million, although retentions can vary. Premiums written and earned along with losses and settlement expenses incurred for the years ended December 31 are summarized as follows: (in thousands) 2018 2017 2016 WRITTEN Direct $ 934,913 $ 848,153 $ 844,430 Reinsurance assumed 48,303 37,159 30,434 Reinsurance ceded (160,041) (135,458) (133,912) Net $ 823,175 $ 749,854 $ 740,952 EARNED Direct $ 896,234 $ 835,118 $ 835,294 Reinsurance assumed 41,926 32,521 27,886 Reinsurance ceded (146,794) (129,702) (134,572) Net $ 791,366 $ 737,937 $ 728,608 LOSSES AND SETTLEMENT EXPENSES INCURRED Direct $ 560,421 $ 486,986 $ 405,873 Reinsurance assumed 20,376 16,072 13,196 Reinsurance ceded (152,604) (101,474) (69,291) Net $ 428,193 $ 401,584 $ 349,778 At December 31, 2018, we had unearned reinsurance premiums and recoverables on paid and unpaid losses and settlement expenses totaling $430.0 million. More than 93 percent of our reinsurance recoverables are due from companies with financial strength ratings of “A” or better by A.M. Best and S&P rating services. The following table displays net reinsurance balances recoverable, after consideration of collateral, from our top reinsurers as of December 31, 2018. These reinsurers all have financial strength ratings of “A” or better by A.M. Best and Standard and Poor’s ratings services. Also shown are the amounts of written premium ceded to these reinsurers during the calendar year 2018. Net Reinsurer Ceded A.M. Best S & P Exposure as of Percent of Premiums Percent of (dollars in thousands) Rating Rating 12/31/2018 Total Written Total Munich Re / HSB A+, Superior AA-, Very Strong $ 73,593 17.1 % $ 24,479 15.3 % Swiss Re / Westport Ins. Corp. A+, Superior AA-, Very Strong 35,095 8.2 % 2,100 1.3 % Endurance Re A+, Superior A+, Strong 28,754 6.7 % 6,000 3.8 % Aspen UK Ltd. A, Excellent A, Strong 27,735 6.4 % 7,906 4.9 % Berkley Insurance Co. A+, Superior A+, Strong 23,267 5.4 % 6,335 4.0 % Hannover Ruckversicherung A+, Superior AA-, Very Strong 22,629 5.3 % 9,458 5.9 % Axis Re A+, Superior A+, Strong 19,928 4.6 % 6,424 4.0 % Transatlantic Re A+, Superior A+, Strong 19,517 4.5 % 7,911 4.9 % Toa Re A, Excellent A+, Strong 18,480 4.3 % 6,495 4.1 % General Re A++, Superior AA+, Very Strong 18,168 4.2 % 5,170 3.2 % Tokio Millennium Re A+, Superior A+, Strong 17,044 4.0 % 6,947 4.3 % All other reinsurers* 125,777 29.3 % 70,816 44.3 % Total ceded exposure $ 429,987 100.0 % $ 160,041 100.0 % * All other reinsurance balances recoverable, when considered by individual reinsurer, are less than 2 percent of shareholders’ equity. Ceded unearned premiums and reinsurance balances recoverable on paid losses and settlement expenses are reported separately as an asset, rather than being netted with the related liability, since reinsurance does not relieve the Company of our liability to policyholders. Such balances are subject to the credit risk associated with the individual reinsurer. We continually monitor the financial condition of our reinsurers and actively follow up on any past due or disputed amounts. As part of our monitoring efforts, we review their annual financial statements and SEC filings for those reinsurers that are publicly traded. We also review insurance industry developments that may impact the financial condition of our reinsurers. We analyze the credit risk associated with our reinsurance balances recoverable by monitoring the A.M. Best and S&P ratings of our reinsurers. In addition, we subject our reinsurance recoverables to detailed recoverability tests, including a segment-based analysis using the average default rating percentage by S&P rating, which assists the Company in assessing the sufficiency of the existing allowance. Additionally, we perform an in-depth reinsurer financial condition analysis prior to the renewal of our reinsurance placements. Our policy is to charge to earnings, in the form of an allowance, an estimate of unrecoverable amounts from reinsurers. This allowance is reviewed on an ongoing basis to ensure that the amount makes a reasonable provision for reinsurance balances that we may be unable to recover. Once regulatory action (such as receivership, finding of insolvency, order of conservation or order of liquidation) is taken against a reinsurer, the paid and unpaid recoverable for the reinsurer are specifically identified and written off through the use of our allowance for estimated unrecoverable amounts from reinsurers. When we write-off such a balance, it is done in full. We then re-evaluate the remaining allowance and determine whether the balance is sufficient as detailed above and if needed, an additional allowance is recognized and income charged. The amounts of allowances for uncollectible amounts on paid and unpaid recoverables were $16.1 million and $9.8 million, respectively, at December 31, 2018. At December 31, 2017, the amounts were $15.9 million and $10.0 million, respectively. We have no receivables with a due date that extends beyond one year that are not included in our allowance for uncollectible amounts.

HISTORICAL LOSS AND LAE DEVELOP

HISTORICAL LOSS AND LAE DEVELOPMENT	12 Months Ended
	Dec. 31, 2018
HISTORICAL LOSS AND LAE DEVELOPMENT
HISTORICAL LOSS AND LAE DEVELOPMENT	6. HISTORICAL LOSS AND LAE DEVELOPMENT The following table is a reconciliation of our unpaid losses and settlement expenses (LAE) for the years 2018, 2017 and 2016: (in thousands) 2018 2017 2016 Unpaid losses and LAE at beginning of year: Gross $ 1,271,503 $ 1,139,337 $ 1,103,785 Ceded (301,991) (288,224) (297,844) Net $ 969,512 $ 851,113 $ 805,941 Increase (decrease) in incurred losses and LAE: Current accident year $ 478,143 $ 440,452 $ 391,772 Prior accident years (49,950) (38,868) (41,994) Total incurred $ 428,193 $ 401,584 $ 349,778 Loss and LAE payments for claims incurred: Current accident year $ (76,050) $ (73,392) $ (70,540) Prior accident year (225,306) (209,793) (234,066) Total paid $ (301,356) $ (283,185) $ (304,606) Net unpaid losses and LAE at end of year $ 1,096,349 $ 969,512 $ 851,113 Unpaid losses and LAE at end of year: Gross $ 1,461,348 $ 1,271,503 $ 1,139,337 Ceded (364,999) (301,991) (288,224) Net $ 1,096,349 $ 969,512 $ 851,113 Loss development occurs when our current estimate of ultimate losses, established through our reserve analysis processes, differs from the initial reserve estimate. The recognition of the changes in initial reserve estimates occurred over time as claims were reported, initial case reserves were established, initial reserves were reviewed in light of additional information and ultimate payments were made on the collective set of claims incurred as of that evaluation date. The new information on the ultimate settlement value of claims is continually updated until all claims in a defined set are settled. As a small specialty insurer with a diversified product portfolio, our experience will ordinarily exhibit fluctuations from period to period. While we attempt to identify and react to systematic changes in the loss environment, we also must consider the volume of claim experience directly available to the Company and interpret any particular period’s indications with a realistic technical understanding of the reliability of those observations. The following is information about incurred and paid loss development as of December 31, 2018, net of reinsurance, as well as cumulative claim frequency, the total of IBNR liabilities included within the net incurred loss amounts and average historical claims duration as of December 31, 2018. The loss information has been disaggregated so that only losses that are expected to develop in a similar manner are grouped together. This has resulted in the presentation of loss information for our property and surety segments at the segment level, while information for our casualty segment has been separated in four groupings: primary occurrence, excess occurrence, claims made and transportation. Primary occurrence includes select lines within the professional services product along with general liability, small commercial and other casualty products. Excess occurrence encompasses commercial excess and personal umbrella, while claims made includes select lines within the professional services product and medical professional liability and executive products. Reported claim counts represent claim events on a specified policy rather than individual claimants and includes claims that did not or are not expected to result in an incurred loss. The information about incurred and paid claims development for the years ended December 31, 2009 to 2017 is presented as unaudited required supplementary information. Casualty - Primary Occurrence (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2018 For the Years Ended December 31, Cumulative Number of Reported AY 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018 Total IBNR Claims 2009 $ 85,476 $ 119,957 $ 99,765 $ 91,441 $ 86,888 $ 82,651 $ 81,138 $ 80,518 $ 80,350 $ 81,445 $ 2,202 5,713 2010 87,875 96,582 93,589 88,820 85,034 80,289 78,685 78,991 80,216 2,392 6,117 2011 91,139 98,428 94,145 89,622 86,342 83,181 82,193 82,248 3,180 5,851 2012 91,807 78,406 65,893 61,072 59,028 59,488 60,328 3,502 5,163 2013 80,823 67,297 62,882 60,329 60,162 59,556 6,538 4,287 2014 88,092 79,497 71,592 67,237 66,389 12,492 4,242 2015 94,835 84,975 83,579 78,675 21,351 4,311 2016 101,950 96,753 90,611 38,505 4,148 2017 119,741 111,391 64,662 4,119 2018 141,513 109,482 3,773 Total $ 852,372 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018 2009 $ 1,972 $ 9,233 $ 24,115 $ 43,702 $ 58,460 $ 65,913 $ 70,220 $ 74,920 $ 75,948 $ 77,175 2010 2,587 13,025 29,312 44,051 55,992 61,929 66,399 69,514 73,318 2011 5,924 17,124 32,978 48,822 60,769 67,358 71,413 74,814 2012 5,897 14,539 23,889 33,822 43,276 47,970 51,611 2013 6,334 13,021 22,366 34,786 40,609 45,753 2014 11,436 18,771 29,545 40,270 47,343 2015 10,157 19,902 33,020 45,056 2016 10,142 24,186 35,764 2017 13,154 25,933 2018 15,066 * Presented as unaudited required supplementary information. Total $ 491,833 All outstanding liabilities before 2009, net of reinsurance 11,911 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 372,450 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 % % % % % % % % % % Casualty - Excess Occurrence (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2018 For the Years Ended December 31, Cumulative Number of Reported AY 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018 Total IBNR Claims 2009 $ 30,267 $ 19,719 $ 14,981 $ 12,893 $ 12,966 $ 12,459 $ 12,601 $ 11,982 $ 12,055 $ 12,072 $ 285 567 2010 29,314 24,244 22,111 18,932 20,044 22,044 21,018 20,530 20,527 369 500 2011 26,272 17,148 17,443 18,641 19,160 20,959 21,295 22,032 824 581 2012 29,042 21,558 21,021 21,885 21,231 22,433 23,020 1,386 855 2013 39,984 34,824 26,857 25,425 25,599 24,922 3,488 933 2014 50,889 39,095 35,119 32,274 33,372 8,832 875 2015 53,672 50,857 47,392 42,840 14,320 669 2016 56,341 49,385 37,676 25,675 572 2017 62,863 55,868 43,891 473 2018 69,362 63,524 258 Total $ 341,691 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018 2009 $ 956 $ 3,947 $ 6,585 $ 9,460 $ 11,001 $ 10,808 $ 11,776 $ 11,780 $ 11,786 $ 11,787 2010 7 6,002 10,705 13,282 15,512 17,302 19,175 19,256 19,308 2011 2,169 5,145 6,981 8,793 10,772 16,494 17,769 20,214 2012 1,315 3,573 8,843 15,380 16,879 17,747 19,310 2013 1,060 5,701 10,967 14,545 16,967 17,956 2014 1,899 4,006 11,002 18,852 22,541 2015 2,048 10,127 19,571 23,184 2016 1,068 3,396 7,441 2017 17 5,679 2018 2,506 * Presented as unaudited required supplementary information. Total $ 149,926 All outstanding liabilities before 2009, net of reinsurance 17,918 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 209,683 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 % % % % % % % % % % Casualty - Claims Made (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2018 For the Years Ended December 31, Cumulative Number of Reported AY 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018 Total IBNR Claims 2009 $ 12,918 $ 13,703 $ 9,687 $ 13,562 $ 11,710 $ 13,117 $ 12,810 $ 12,053 $ 11,827 $ 16,056 $ 398 383 2010 13,690 15,556 9,776 10,429 11,689 10,581 9,175 9,024 8,735 219 502 2011 17,416 17,454 12,260 10,619 8,510 7,720 7,852 11,506 640 682 2012 27,576 26,144 20,727 19,590 18,022 17,612 17,569 1,251 803 2013 40,095 41,488 44,054 40,288 38,473 37,959 3,751 1,042 2014 53,929 55,386 58,152 55,350 51,554 7,271 1,304 2015 55,006 47,831 42,206 39,906 10,559 1,335 2016 59,992 67,760 69,493 23,817 1,500 2017 60,572 62,450 35,365 1,627 2018 66,128 50,820 1,272 Total $ 381,356 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018 2009 $ 113 $ 442 $ 773 $ 3,413 $ 5,176 $ 10,678 $ 11,217 $ 11,398 $ 11,475 $ 11,955 2010 259 1,548 2,308 3,626 5,733 5,749 6,956 8,485 8,512 2011 330 1,949 4,508 5,947 5,637 6,209 6,835 7,132 2012 433 4,086 6,898 9,218 10,968 14,378 15,621 2013 792 7,073 18,425 26,121 29,678 32,789 2014 1,705 9,775 27,923 35,755 40,080 2015 2,215 10,738 16,774 20,920 2016 2,060 14,558 27,465 2017 2,455 11,350 2018 1,964 * Presented as unaudited required supplementary information. Total $ 177,788 All outstanding liabilities before 2009, net of reinsurance 933 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 204,501 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 % % % % % % % % % % Casualty - Transportation (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2018 For the Years Ended December 31, Cumulative Number of Reported AY 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018 Total IBNR Claims 2009 $ 26,349 $ 23,366 $ 23,174 $ 22,929 $ 22,613 $ 22,340 $ 21,958 $ 21,969 $ 21,926 $ 21,911 $ 19 2,644 2010 27,239 23,390 24,912 25,593 23,981 23,625 23,701 23,786 23,776 44 2,843 2011 22,957 23,479 25,747 25,272 25,431 25,376 25,167 25,614 52 2,469 2012 21,452 22,203 22,924 23,511 23,689 23,620 23,305 76 2,284 2013 32,742 32,853 32,989 37,673 38,811 39,974 350 2,852 2014 38,361 33,015 36,452 38,590 40,202 911 3,099 2015 38,561 46,258 47,021 46,395 3,824 3,179 2016 50,430 53,519 54,105 7,632 3,920 2017 55,640 53,641 16,406 3,597 2018 57,597 16,690 3,154 Total $ 386,520 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018 2009 $ 5,035 $ 8,698 $ 14,613 $ 19,933 $ 21,100 $ 21,325 $ 21,640 $ 21,650 $ 21,650 $ 21,650 2010 6,296 10,116 15,475 20,045 21,792 23,063 23,488 23,533 23,556 2011 5,295 9,485 14,477 19,443 22,375 23,537 23,941 24,377 2012 4,466 8,533 12,394 17,318 20,931 22,566 22,730 2013 5,306 11,978 19,761 28,220 33,480 35,923 2014 7,125 13,933 19,676 27,457 33,190 2015 6,984 20,709 29,554 37,222 2016 8,923 18,354 30,354 2017 7,979 17,070 2018 6,980 * Presented as unaudited required supplementary information. Total $ 253,052 All outstanding liabilities before 2009, net of reinsurance 90 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 133,558 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 % % % % % % % % % % Property (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2018 For the Years Ended December 31, Cumulative Number of Reported AY 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018 Total IBNR Claims 2009 $ 59,975 $ 55,821 $ 52,286 $ 49,534 $ 48,969 $ 48,857 $ 48,707 $ 49,267 $ 49,323 $ 48,925 $ 13 2,630 2010 63,194 59,145 55,427 53,937 54,153 52,927 52,964 52,952 52,903 29 2,851 2011 70,246 66,924 64,976 63,724 62,770 62,570 62,456 62,875 142 3,028 2012 85,485 80,155 79,181 77,569 79,175 78,125 78,161 167 2,640 2013 63,864 62,090 62,173 62,114 61,914 61,834 273 2,995 2014 56,587 49,441 48,801 48,761 49,217 315 4,560 2015 59,863 56,103 53,958 52,720 680 4,076 2016 62,900 55,594 55,384 2,093 3,369 2017 90,803 83,273 9,346 2,873 2018 89,091 23,235 2,030 Total $ 634,383 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018 2009 $ 25,464 $ 40,775 $ 43,758 $ 46,004 $ 48,031 $ 48,297 $ 48,329 $ 49,051 $ 49,173 $ 48,898 2010 25,274 43,091 47,743 50,055 52,729 52,426 52,719 52,851 52,855 2011 27,676 48,756 55,778 59,099 60,272 61,428 61,834 62,729 2012 39,074 66,509 72,057 73,705 75,640 76,152 77,159 2013 32,208 50,840 57,407 59,259 60,520 61,195 2014 30,550 43,380 46,148 46,528 47,799 2015 32,184 49,348 50,197 51,290 2016 33,134 46,921 51,371 2017 41,314 66,818 2018 37,048 * Presented as unaudited required supplementary information. Total $ 557,162 All outstanding liabilities before 2009, net of reinsurance 17 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 77,238 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 % % % % % % % % % -0.6 % Surety (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2018 For the Years Ended December 31, Cumulative Number of Reported AY 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018 Total IBNR Claims 2009 $ 15,474 $ 4,896 $ 4,708 $ 4,246 $ 4,146 $ 4,551 $ 4,288 $ 4,923 $ 4,860 $ 4,935 $ 2 1,665 2010 13,961 8,205 6,630 7,076 6,810 7,136 7,645 6,244 6,580 14 1,540 2011 13,842 17,832 17,792 17,321 16,766 16,695 16,480 18,281 13 1,674 2012 17,114 11,452 8,667 8,180 7,867 7,471 7,099 22 1,469 2013 16,080 7,516 6,170 5,399 5,271 5,231 50 1,400 2014 16,450 8,106 5,225 4,427 4,267 88 1,337 2015 16,958 12,957 11,113 10,456 824 1,201 2016 18,928 11,062 9,351 1,543 1,307 2017 16,127 8,641 3,630 1,409 2018 16,765 14,535 654 Total $ 91,606 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018 2009 $ 892 $ 1,914 $ 2,382 $ 2,493 $ 3,490 $ 4,336 $ 3,919 $ 3,908 $ 4,849 $ 4,933 2010 1,724 3,205 5,702 7,092 7,151 7,285 7,822 6,663 6,637 2011 8,160 16,932 17,151 17,403 17,212 17,086 17,086 17,013 2012 1,883 6,680 6,726 7,416 7,536 7,406 7,065 2013 1,116 2,856 4,701 4,911 5,098 5,150 2014 722 4,283 4,166 4,059 4,131 2015 3,192 6,719 7,695 9,436 2016 3,087 5,817 6,299 2017 979 2,862 2018 1,835 * Presented as unaudited required supplementary information. Total $ 65,361 All outstanding liabilities before 2009, net of reinsurance 1,992 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 28,237 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 % % % % % % -1.3 % -6.1 % % % The following is a reconciliation of the net incurred and paid loss development tables to the liability for unpaid losses and settlement expenses in the consolidated balance sheet: Reconciliation of the Disclosure of Incurred and Paid Loss Development to the Liability for Unpaid Losses and Settlement Expenses (in thousands) December 31, 2018 December 31, 2017 Net outstanding liabilities: Casualty - Primary Occurrence $ 372,450 $ 325,182 Casualty - Excess Occurrence 209,683 188,963 Casualty - Claims Made 204,501 171,241 Casualty - Transportation 133,558 119,704 Property 77,238 68,867 Surety 28,237 23,375 Unallocated loss adjustment expenses 50,891 48,844 Allowance for uncollectible reinsurance balances recoverable on unpaid losses and settlement expenses 9,793 10,014 Other 9,998 13,322 Liabilities for unpaid loss and settlement expenses, net of reinsurance $ 1,096,349 $ 969,512 Reinsurance recoverable on unpaid claims: Casualty - Primary Occurrence $ 34,742 $ 36,158 Casualty - Excess Occurrence 81,072 74,400 Casualty - Claims Made 144,921 117,436 Casualty - Transportation 50,748 46,590 Property 50,495 28,613 Surety 11,834 7,079 Allowance for uncollectible reinsurance balances recoverable on unpaid losses and settlement expenses Other 980 1,729 Total reinsurance balances recoverable on unpaid losses and settlement expenses $ 364,999 $ 301,991 Total gross liability for unpaid loss and settlement expenses $ 1,461,348 $ 1,271,503 DETERMINATION OF IBNR Initial carried IBNR reserves are determined through a reserve estimation process. For most casualty and surety products, this process involves the use of an initial loss and allocated loss adjustment expense (ALAE) ratio that is applied to the earned premium for a given period. Payments and case reserves are subtracted from this initial estimate of ultimate loss and ALAE to determine a carried IBNR reserve. For most property products, the IBNR reserves are determined by IBNR percentages applied to premium earned. The percentages are determined based on historical reporting patterns and are updated periodically. No deductions for paid or case reserves are made. Shortly after natural or man-made catastrophes, we review insured locations exposed to the event and model losses based on our own exposures and industry loss estimates of the event. We also consider our knowledge of frequency and severity from early claim reports to determine an appropriate reserve for the catastrophe. Adjustments to the initial loss ratio by product and segment are made where necessary and reflect updated assumptions regarding loss experience, loss trends, price changes and prevailing risk factors. Actuaries perform a ground-up reserve study of the expected value of the unpaid loss and LAE derived using multiple standard actuarial methodologies on a quarterly basis. Each method produces an estimate of ultimate loss by accident year. We review all of these various estimates and assign weights to each based on the characteristics of the product being reviewed. These estimates are then compared to the carried loss reserves to determine the appropriateness of the current reserve balance. In addition, an emergence analysis is completed quarterly to determine if further adjustments are necessary. Upon completion of our loss and LAE estimation analysis, a review of the resulting variance between the indicated reserves and the carried reserves takes place. Our actuaries make a recommendation to management in regards to booked reserves that reflect their analytical assessment and view of estimation risk. After discussion of these analyses and all relevant risk factors, the Loss Reserve Committee, a panel of management including the lead reserving actuary, chief executive officer, chief operating officer, chief financial officer and other executives, confirms the appropriateness of the reserve balances. DEVELOPMENT OF IBNR RESERVES The following table summarizes our prior accident years’ loss reserve development by segment for 2018, 2017 and 2016: (FAVORABLE)/UNFAVORABLE RESERVE DEVELOPMENT BY SEGMENT (in thousands) 2018 2017 2016 Casualty $ (33,252) $ (17,462) $ (32,401) Property (10,813) (12,134) (4,793) Surety (5,885) (9,272) (4,800) Total $ (49,950) $ (38,868) $ (41,994) A discussion of significant components of reserve development for the three most recent calendar years follows: 2018. We experienced favorable emergence relative to prior years’ reserve estimates in all of our segments during 2018. Development from the casualty segment totaled $33.3 million, inclusive of unallocated loss and adjustment expenses (ULAE). The largest amounts of favorable development came from accident years 2015 through 2017. We continued to experience emergence that was generally better than previously estimated. We attribute the favorable emergence to loss trends in most lines outperforming our long-term expectations. Further, we believe our underwriters’ risk selection contributed to the Company experiencing less loss cost inflation than originally anticipated. The primary occurrence grouping had favorable development of $15.6 million, driven by our general liability product with $6.7 million of favorable development. The excess occurrence grouping had favorable development of $21.4 million, with commercial insureds contributing $10.8 million and personal insureds contributing the remainder. Claims made exposures had adverse development of $3.9 million driven by medical errors and omissions coverages. Transportation had $0.5 million of favorable development. Our marine product was the predominant driver of the favorable development in the property segment, accounting for $5.0 million of the $10.8 million total favorable development for the segment, inclusive of ULAE. Accident years 2015 through 2017 made the largest contribution. Our excess and surplus lines commercial property product and assumed reinsurance products also contributed $2.0 million and $2.8 million of favorable development, respectively. The surety segment experienced $5.9 million of favorable development, inclusive of ULAE. The majority of the favorable development came from the 2017 accident year, which served to offset the unfavorable development from accident years 2011 and 2016. Commercial and energy surety contributed favorable development of $4.6 million and $1.7 million, respectively. Miscellaneous surety experienced adverse development totaling $0.8 million. 2017. We experienced favorable emergence relative to prior years’ reserve estimates in all of our segments during 2017. The casualty segment contributed $17.5 million in favorable development, inclusive of ULAE. Accident years 2014, 2015 and 2016 contributed significantly to the favorable development. This was predominantly caused by favorable frequency and severity trends that continued to be better than our long-term expectations. In addition, we believe this to be the result of our underwriters’ risk selection, which has mostly offset price declines and loss cost inflation. Nearly all of our casualty products contributed to the favorable development. Within the primary occurrence grouping, the general liability product contributed $4.6 million to our favorable development with all coverages contributing to the favorable development in 2017. Small commercial products were the second largest contributor with $3.2 million in favorable development. Within the excess occurrence grouping, personal umbrella and commercial excess were favorable by $1.1 million and $9.9 million, respectively. Within the claims made grouping, our executive products had favorable contributions of $4.4 million, while medical professional liability was adverse $3.7 million. Transportation was adverse $7.4 million for the year, but posted favorable experience during the last three quarters of the year. The marine product was the primary driver of the favorable development in the property segment. Marine contributed $6.8 million of the $12.1 million total favorable property development, inclusive of ULAE. Accident years 2015 and 2016 contributed to the marine products’ favorable development. Commercial property was favorable $3.2 million. The surety segment experienced favorable development of $9.3 million, inclusive of ULAE. The majority of the favorable development was from accident year 2016. Contract and commercial surety products were the main contributors with favorable development of $4.4 million and $3.5 million, respectively. Energy surety had favorable development of $1.5 million and miscellaneous surety had unfavorable development of $0.1 million. 2016. We experienced favorable emergence relative to prior years’ reserve estimates in all of our segments during 2016. The casualty segment contributed $32.4 million in favorable development, inclusive of ULAE, which is excluded from the incurred loss and loss adjustment expense tables above. Accident year 2015 contributed significantly to the favorable development, with accident years 2010 to 2014 also continuing to develop favorably. The favorable development in 2016 was smaller than 2015 but continued to reflect favorable frequency and severity trends. In addition, the risk selection by our underwriters continued to provide better results than estimated in our reserving process. Within the primary occurrence grouping, the general liability product contributed $17.6 million to our favorable development. Small commercial products were favorable by $6.2 million. Within the excess occurrence grouping, commercial excess was favorable by $13.8 million which was offset by adverse development in our personal umbrella product of $4.9 million. Within the claims made grouping, executive products contributed $14.7 million in favorable development and miscellaneous professional liability had $0.8 million of favorable development. Transportation experienced unfavorable development of $15.4 million as adverse commercial loss trends resulted in an increase in case reserves for accident years 2013 through 2015. Marine contributed $2.1 million of the $4.8 million total favorable property development, inclusive of ULAE. Accident years 2013 through 2015 contributed to the marine products’ favorable development. Assumed property contributed $2.5 million of favorable development offsetting the unfavorable development of $0.2 million in other direct property products. The surety segment experienced favorable development of $4.8 million, inclusive of ULAE. The majority of the favorable development was from accident year 2015, which offset the unfavorable development from accident years 2008 through 2011 and 2014. Commercial and energy surety products were the main contributors with favorable development of $1.7 million and $1.9 million, respectively. Miscellaneous surety had favorable development of $1.1 million and contract surety had favorable development of $0.1 million. ENVIRONMENTAL, ASBESTOS AND MASS TORT EXPOSURES We are subject to environmental site cleanup, asbestos removal and mass tort claims and exposures through our commercial excess, general liability and discontinued assumed casualty reinsurance lines of business. The majority of the exposure is in the excess layers of our commercial excess and assumed reinsurance books of business. The following table represents paid and unpaid environmental, asbestos and mass tort claims data (including incurred but not reported losses) as of December 31, 2018, 2017 and 2016: (in thousands) 2018 2017 2016 Loss and LAE Payments (Cumulative): Gross $ 136,043 $ 132,883 $ 130,358 Ceded (68,638) (67,507) (66,644) Net $ 67,405 $ 65,376 $ 63,714 Unpaid Losses and LAE at End of Year: Gross $ 24,262 $ 28,042 $ 28,815 Ceded (5,373) (5,715) (4,987) Net $ 18,889 $ 22,327 $ 23,828 Our environmental, asbestos and mass tort exposure is limited, relative to other insurers, as a result of entering the affected liability lines after the insurance industry had already recognized environmental and asbestos exposure as a problem and adopted appropriate coverage exclusions. The majority of our reserves are associated with products that went into runoff at least two decades ago. Some are for assumed reinsurance, some are for excess liability business and some followed from the acquisition of Underwriters Indemnity Company in 1999. During 2018, inception to date incurred environmental, asbestos and mass tort losses decreased slightly. While our environmental exposure is limited, the ultimate liability for this exposure is difficult to assess because of the extensive and complicated litigation involved in the settlement of claims and evolving legislation on issues such as joint and several liability, retroactive liability and standards of cleanup. Additionally, we participate primarily in the excess layers of coverage, where accurate estimates of ultimate loss are more difficult to derive than for primary coverage.

INCOME TAXES

INCOME TAXES	12 Months Ended
	Dec. 31, 2018
INCOME TAXES
INCOME TAXES	7. INCOME TAXES The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are summarized as follows: (in thousands) 2018 2017 Deferred tax assets: Tax discounting of unpaid losses and settlement expenses $ 18,327 $ 20,020 Unearned premium offset 17,864 16,528 Deferred compensation 2,700 1,435 Stock option expense 2,702 2,283 Other 616 578 Deferred tax assets before allowance $ 42,209 $ 40,844 Less valuation allowance — — Total deferred tax assets $ 42,209 $ 40,844 Deferred tax liabilities: Net unrealized appreciation of securities $ 22,177 $ 51,448 Deferred policy acquisition costs 17,836 16,320 Discounting of unpaid losses and settlement expenses - TCJA implementation offset 5,203 9,466 Book/tax depreciation 3,133 3,159 Intangible assets 1,711 584 Undistributed earnings of unconsolidated investees 15,811 13,431 Other 576 204 Total deferred tax liabilities $ 66,447 $ 94,612 Net deferred tax liability $ (24,238) $ (53,768) Income tax expense (benefit) attributable to income from operations for the years ended December 31, 2018, 2017 and 2016, differed from the amounts computed by applying the U.S. federal tax rate of 21 percent, 35 percent and 35 percent, respectively, to pretax income from continuing operations as demonstrated in the following table: (in thousands) 2018 2017 2016 Provision for income taxes at the statutory federal tax rates $ 14,192 21.0 % $ 29,606 35.0 % $ 54,979 35.0 % Increase (reduction) in taxes resulting from: Enactment of Tax Cuts and Jobs Act (TCJA) (2,268) (3.4) % (32,821) (38.8) % — — % Excess tax benefit on share-based compensation (4,533) (6.7) % (5,798) (6.9) % — — % Dividends received deduction (775) (1.1) % (2,025) (2.4) % (2,216) (1.4) % ESOP dividends paid deduction (1,184) (1.8) % (2,905) (3.4) % (3,302) (2.1) % Tax-exempt interest income (1,795) (2.7) % (4,671) (5.5) % (4,263) (2.7) % Unconsolidated investee dividends — — % (1,351) (1.6) % (2,772) (1.8) % Other items, net (235) (0.3) % (474) (0.6) % (264) (0.2) % Total $ 3,402    5.0 % $ (20,439)    (24.2) % $ 42,162    26.8 % Our effective tax rates were 5.0 percent, -24.2 percent and 26.8 percent for 2018, 2017 and 2016, respectively. Effective rates are dependent upon components of pretax earnings and the related tax effects. While the effective rate was low in 2018, it was significantly lower in 2017 as a result of the impact of tax reform. Major factors contributing to the low rate in 2018 are the inclusion of unrealized losses from equity securities in pretax earnings in 2018, a reduced federal tax rate and adjustments to provisional deferred tax amounts recorded in 2017. Among other provisions, the TCJA lowered the federal corporate tax rate from 35 percent to 21 percent effective January 1, 2018. Our deferred tax items were revalued as of year-end 2017 to reflect the lower rate, which reduced our net deferred tax liability and income tax expense by $32.8 million and decreased the effective tax rate by 38.8 percent. Except for two aspects, the accounting for the tax effects of the enactment of the TCJA were completed as of December 31, 2017. The first provisional item recorded in 2017 was related to an expected disallowance of deductions for certain performance based compensation, including bonuses and stock options. At the time of enactment, there was a lack of clarity on whether some amounts could be grandfathered in as deductible. The Internal Revenue Service (IRS) and Treasury Department provided additional guidance and we were able to finalize the accounting in 2018 by recording a $2.3 million deferred tax benefit to restore the deferred tax assets related to those performance based compensation amounts. The second provisional item related to discount factors on loss reserves that the IRS had not yet published. The IRS published the factors in the fourth quarter of 2018 and we were able to complete the accounting for the effects of the enactment of the TCJA. While there was no net impact to the deferred tax amount that was recorded at December 31, 2017, we implemented the new discounting methodology and will recognize the adjustment ratably over the allowed eight-year period beginning in 2018. New accounting guidance required the excess tax benefit on share-based compensation to flow through income tax expense beginning in 2017. Prior to the adoption, excess tax benefits on share-based compensation were recorded directly to shareholders’ equity and had no impact on the effective tax rate. Due to the new accounting method, we recognized a $4.5 million and $5.8 million tax benefit in 2018 and 2017, respectively, which decreased the effective tax rate by 6.7 percent and 6.9 percent, respectively. Our net earnings include equity in earnings of unconsolidated investees, Maui Jim and Prime. The investees do not have a policy or pattern of paying dividends. As a result, we record a deferred tax liability on the earnings at the recently revised corporate capital gains rate of 21 percent in anticipation of recovering our investments through means other than through the receipt of dividends, such as a sale. In the fourth quarter of 2017, Maui Jim gave notification that a $9.9 million dividend would be paid in January 2018. Even though no dividend was received in 2017, we were aware that the lower tax rate applicable to affiliated dividends (7.4 percent in 2018) would be applied when the dividend was paid in 2018 and we therefore recorded a $1.4 million tax benefit in 2017. We received a $9.9 million dividend from Maui Jim in the fourth quarter of 2016 and recognized a $2.8 million tax benefit from applying the lower tax rate applicable to affiliated dividends (7.0 percent in 2016), as compared to the corporate capital gains rate on which the deferred tax liabilities were based. Standing alone, the dividends resulted in a 1.6 percent and 1.8 percent reduction to the 2017 and 2016 effective tax rates, respectively. As no additional dividends were declared from unconsolidated investees in 2018, there was no impact to the 2018 effective tax rate. Dividends paid to our Employee Stock Ownership Plan (ESOP) also result in a tax deduction. Dividends paid to the ESOP in 2018, 2017 and 2016 resulted in tax benefits of $1.2 million, $2.9 million and $3.3 million, respectively. These tax benefits reduced the effective tax rate for 2018, 2017 and 2016 by 1.8 percent, 3.4 percent and 2.1 percent, respectively. We have recorded our deferred tax assets and liabilities using the statutory federal tax rate of 21 percent. We believe it is more likely than not that all deferred tax assets will be recovered, given the carry back availability as well as the results of future operations, which will generate sufficient taxable income to realize the deferred tax asset. In addition, we believe when these deferred items reverse in future years, our taxable income will be taxed at an effective rate of 21 percent. Federal and state income taxes paid in 2018, 2017 and 2016, amounted to $16.4 million, $10.4 million and $26.9 million, respectively. Although we are not currently under audit by the IRS, tax years 2015 through 2018 remain open and are subject to examination.

EMPLOYEE BENEFITS

EMPLOYEE BENEFITS	12 Months Ended
	Dec. 31, 2018
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS	8. EMPLOYEE BENEFITS EMPLOYEE STOCK OWNERSHIP, 401(K) AND INCENTIVE PLANS We maintain ESOP, 401(k) and incentive plans covering executives, managers and associates. Funding of these plans is primarily dependent upon reaching predetermined levels of operating return on equity, combined ratio and Market Value Potential (MVP). MVP is a compensation model that measures components of comprehensive earnings against a minimum required return on our capital. Bonuses are earned as we generate earnings in excess of this required return. While some management incentive plans may be affected somewhat by other performance factors, the larger influence of corporate performance ensures that the interests of our executives, managers and associates align with those of our shareholders. Our 401(k) plan allows voluntary contributions by employees and permits ESOP diversification transfers for employees meeting certain age and service requirements. We provide a basic 401(k) contribution of 3 percent of eligible compensation. Participants are 100 percent vested in both voluntary and basic contributions. Additionally, an annual discretionary profit-sharing contribution may be made to the ESOP and 401(k), subject to the achievement of certain overall financial goals and board approval. Profit-sharing contributions vest after three years of plan service. Our ESOP and 401(k) cover all employees meeting eligibility requirements. ESOP and 401(k) profit-sharing contributions are approved annually by our board of directors and are expensed in the year earned. ESOP and 401(k)-related expenses (basic and profit-sharing) were $8.8 million, $12.5 million and $11.7 million, for 2018, 2017 and 2016, respectively. During 2018, the ESOP purchased 98,717 shares of RLI Corp. stock on the open market at an average price of $62.80 ($6.2 million) relating to the contribution for plan year 2017. Shares held by the ESOP as of December 31, 2018, totaled 2,985,390 and are treated as outstanding in computing our earnings per share. During 2017, the ESOP purchased 124,186 shares of RLI Corp. stock on the open market at an average price of $58.02 ($7.2 million) relating to the contribution for plan year 2016. During 2016, the ESOP purchased 112,608 shares of RLI Corp. stock on the open market at an average price of $64.20 ($7.2 million) relating to the contribution for plan year 2015. The above-mentioned ESOP purchases relate only to our annual contributions to the plan and do not include amounts or shares resulting from the reinvestment of dividends. Annual awards are provided to executives, managers and associates through our incentive plans, provided certain financial and operational goals are met. Annual expenses for these incentive plans totaled $11.9 million, $19.7 million and $19.2 million for 2018, 2017 and 2016, respectively. DEFERRED COMPENSATION We maintain rabbi trusts for deferred compensation plans for directors, key employees and executive officers through which our shares are purchased. The employer stock in the plan is classified and accounted for as equity, in a manner consistent with the accounting for treasury stock. In 2018, the trusts purchased 7,049 shares of our common stock on the open market at an average price of $68.36 ($0.5 million). In 2017, the trusts purchased 7,464 shares of our common stock on the open market at an average price of $58.66 ($0.4 million). In 2016, the trusts purchased 6,702 shares of our common stock on the open market at an average price of $61.61 ($0.4 million). At December 31, 2018, the trusts’ assets were valued at $36.2 million. STOCK PLANS Our RLI Corp. Long-Term Incentive Plan (2010 LTIP) was in place from 2010 to 2015. The 2010 LTIP provided for equity-based compensation, including stock options, up to a maximum of 4,000,000 shares of common stock (subject to adjustment for changes in our capitalization and other events). Between 2010 and 2015, we granted 2,878,000 stock options under the 2010 LTIP. The 2010 LTIP was replaced in 2015. In 2015, our shareholders approved the 2015 RLI Corp. Long-Term Incentive Plan (2015 LTIP), which provides for equity-based compensation and replaced the 2010 LTIP. In conjunction with the adoption of the 2015 LTIP, effective May 7, 2015, options were no longer granted under the 2010 LTIP. Awards under the 2015 LTIP may be in the form of restricted stock, stock options (non-qualified only), stock appreciation rights, performance units as well as other stock-based awards. Eligibility under the 2015 LTIP is limited to employees and directors of the company or any affiliate. The granting of awards under the 2015 LTIP is solely at the discretion of the board of directors. The maximum number of shares of common stock available for distribution under the 2015 LTIP is 4,000,000 shares (subject to adjustment for changes in our capitalization and other events). Since the plan’s approval in 2015, we have granted 1,903,630 awards under the 2015 LTIP, including 455,055 in 2018. Stock Options Under the 2015 LTIP, as under the 2010 LTIP, we grant stock options for shares with an exercise price equal to the fair market value of the shares at the date of grant (subject to adjustments for changes in our capitalization, including special dividends and other events as set forth in such plans). Options generally vest and become exercisable ratably over a five-year period and expire eight years after grant. For most participants, the requisite service period and vesting period will be the same. For participants who are retirement eligible, defined by the plan as those individuals whose age and years of service equals 75, the requisite service period is deemed to be met and options are immediately expensed on the date of grant. For participants who will become retirement eligible during the vesting period, the requisite service period over which expense is recognized is the period between the grant date and the attainment of retirement eligibility. Shares issued upon option exercise are newly issued shares. Shares issued may be less than the number of shares actually exercised, as our plan allows net settlement to cover the option exercise price and taxes due upon option exercise. When options are exercised via net settlement, amounts withheld for taxes result in a decrease to shareholders’ equity and the degree of the impact is dependent on the level of intrinsic value (i.e. market value in excess of exercise price). During 2016, the number of option exercises facilitated via net settlement and the level of intrinsic value on those exercises resulted in a decrease to paid-in-capital, as the reduction from tax withholdings exceeded the impact of other share-based compensation activity. This was not the case in 2018 and 2017, and the impacts of share-based compensation increased paid-in-capital. Refer to our consolidated statements of shareholders’ equity to see the impact share-based compensation had on shareholders’ equity. Prior to the adoption of FASB ASU 2016-09 in 2017, shareholders’ equity was also impacted by corporate tax deductions allowed as a result of option exercises. This tax benefit offset our current tax liability and was recorded as an increase to paid-in-capital. Beginning in 2017, all tax effects related to share-based payments were required to be recorded in net earnings and directly impact our effective tax rate. See note 7 for the impact in 2018 and 2017. For 2016, refer to our consolidated statements of shareholders’ equity for the impact to paid-in capital from this tax benefit. The following tables summarize option activity in 2018, 2017 and 2016: Weighted Weighted Average Aggregate Number of Average Remaining Intrinsic Options Exercise Contractual Value Outstanding Price Life (in 000’s) Outstanding options at January 1, 2018 2,257,015 $ 46.80 Options granted 432,000 $ 64.91 Options exercised (705,785) $ 36.81 $ 24,304 Options canceled/forfeited (18,350) $ 60.84 Outstanding options at December 31, 2018 1,964,880 $ 54.24 5.25 $ 29,317 Exercisable options at December 31, 2018 724,730 $ 46.62 3.79 $ 16,212 Weighted Weighted Average Aggregate Number of Average Remaining Intrinsic Options Exercise Contractual Value Outstanding Price Life (in 000’s) Outstanding options at January 1, 2017 2,207,110 $ 40.90 Options granted 482,375 $ 57.12 Options exercised (390,870) $ 26.07 $ 12,779 Options canceled/forfeited (41,600) $ 48.30 Outstanding options at December 31, 2017 2,257,015 $ 46.80 4.88 $ 32,620 Exercisable options at December 31, 2017 975,055 $ 38.66 3.25 $ 21,780 Weighted Weighted Average Aggregate Number of Average Remaining Intrinsic Options Exercise Contractual Value Outstanding Price Life (in 000’s) Outstanding options at January 1, 2016 2,582,220 $ 32.42 Options granted 440,750 $ 63.54 Options exercised (756,380) $ 24.87 $ 31,328 Options canceled/forfeited (59,480) $ 44.39 Outstanding options at December 31, 2016 2,207,110 $ 40.90 4.93 $ 49,531 Exercisable options at December 31, 2016 862,605 $ 31.23 3.27 $ 27,523 The majority of our stock options are granted annually at our regular board meeting in May. In addition, options are approved at the May meeting for quarterly grants to certain retirement eligible employees. Since stock option grants to retirement eligible employees are fully expensed when granted, the approach allows for a more even expense distribution throughout the year. In 2018, 432,000 options were granted with an average exercise price of $64.91 and an average fair value of $10.58. Of these grants, 330,750 were granted at the board meeting in May with a calculated fair value of $10.31. We recognized $4.5 million of expense during 2018 related to options vesting. Since options granted under our plan are non-qualified, we recorded a deferred tax benefit of $0.9 million related to this compensation expense. Total unrecognized compensation expense relating to outstanding and unvested options was $5.6 million, which will be recognized over the remainder of the vesting period. In 2017, 482,375 options were granted with an average exercise price of $57.12 and an average fair value of $8.00. Of these grants, 384,750 were granted at the board meeting in May with a calculated fair value of $7.91. We recognized $4.4 million of expense during 2017 related to options vesting. Since options granted under our plan are non-qualified, we recorded a deferred tax benefit of $1.5 million related to this compensation expense. Total unrecognized compensation expense relating to outstanding and unvested options was $5.7 million, which will be recognized over the remainder of the vesting period. In 2016, 440,750 options were granted with an average exercise price of $63.54 and an average fair value of $11.38. Of these grants, 345,750 were granted at the board meeting in May with a calculated fair value of $11.42. We recognized $4.1 million of expense during 2016 related to options vesting. Since options granted under our plan are non-qualified, we recorded a deferred tax benefit of $1.4 million related to this compensation expense. Total unrecognized compensation expense relating to outstanding and unvested options was $6.2 million, which will be recognized over the remainder of the vesting period. The fair value of options were estimated using a Black-Scholes based option pricing model with the following weighted-average grant-date assumptions and weighted-average fair values as of December 31: 2018 2017 2016 Weighted-average fair value of grants $ 10.58 $ 8.00 $ 11.38 Risk-free interest rates 2.72 % 1.90 % 1.21 % Dividend yield 2.98 % 3.60 % 1.61 % Expected volatility 22.87 % 22.95 % 23.06 % Expected option life 5.07 years 5.05 years 5.04 years The risk-free rate was determined based on U.S. treasury yields that most closely approximated the option’s expected life. The dividend yield for 2018 and 2017 was determined based on the average annualized quarterly dividends paid during the most recent five-year period and incorporated a consideration for special dividends paid in recent history. The dividend yield in 2016 was calculated based on the average annualized dividends paid during the most recent five-year period, exclusive of consideration for special dividends. The expected volatility was calculated based on the median of the rolling volatilities for the expected life of the options. The expected option life was determined based on historical exercise behavior and the assumption that all outstanding options will be exercised at the midpoint of the current date and remaining contractual term, adjusted for the demographics of the current year’s grant. Restricted Stock Units In addition to stock options, restricted stock units (RSUs) are granted with a value equal to the closing stock price of the Company’s stock on the dates the shares are granted. Generally, these units have a three-year cliff vesting. When participants terminate employment with the Company after having met the definition of retirement under the 2015 LTIP, defined as those individuals whose age and years of service equals 75, the RSUs will become fully vested. In addition, RSUs have dividend participation which accrue as additional units and are settled with granted stock units at the end of the vesting period. As of December 31, 2018, 30,075 RSUs have been granted to employees under the 2015 LTIP, including 14,625 during 2018. Due to dividend participation on RSUs, which accrue as additional units, 30,567 employee RSUs were outstanding as of December 31, 2018. We recognized $0.6 million and $0.4 million of expense on these units during 2018 and 2017, respectively. Total unrecognized compensation expense relating to outstanding and unvested employee RSUs was $0.7 million, which will be recognized over the remainder of the vesting period. In 2018, each outside director received RSUs with a fair market value of $50,000 on the date of grant as part of annual director compensation. Director RSUs vest one year from the date of grant. As of December 31, 2018, 8,430 restricted stock units were granted to directors under the 2015 LTIP. Due to dividend participation on RSUs, which accrue as additional units, 8,629 director RSUs were outstanding as of December 31, 2018. We recognized $0.3 million of compensation expense on these units during 2018. Total unrecognized compensation expense relating to outstanding and unvested director RSUs was $0.2 million, which will be recognized over the remainder of the vesting period.

STATUTORY INFORMATION AND DIVID

STATUTORY INFORMATION AND DIVIDEND RESTRICTIONS	12 Months Ended
	Dec. 31, 2018
STATUTORY INFORMATION AND DIVIDEND RESTRICTIONS
STATUTORY INFORMATION AND DIVIDEND RESTRICTIONS	9. STATUTORY INFORMATION AND DIVIDEND RESTRICTIONS The statutory financial statements of our three insurance companies are presented on the basis of accounting practices prescribed or permitted by the Illinois Department of Insurance (IDOI), which has adopted the NAIC statutory accounting principles as the basis of its statutory accounting principles. We do not use any permitted statutory accounting principles that differ from NAIC prescribed statutory accounting principles. In converting from statutory to GAAP, typical adjustments include deferral of policy acquisition costs, the inclusion of statutory non-admitted assets and the inclusion of net unrealized holding gains or losses in shareholders’ equity relating to fixed income securities. The NAIC has risk based capital (RBC) requirements for insurance companies to calculate and report information under a risk-based formula, which measures statutory capital and surplus needs based upon a regulatory definition of risk relative to the company’s balance sheet and mix of products. As of December 31, 2018, each of our insurance subsidiaries had an RBC amount in excess of the authorized control level RBC, as defined by the NAIC. RLI Insurance Company (RLI Ins.), our principal insurance company subsidiary, had an authorized control level RBC of $170.9 million, $157.7 million and $127.0 million as of December 31, 2018, 2017 and 2016, respectively, compared to actual statutory capital and surplus of $829.8 million, $864.6 million and $860.0 million, respectively, for these same periods. Year-end statutory surplus for 2018 presented in the table below includes $132.8 million of RLI Corp. stock (cost basis of $64.6 million) held by Mt. Hawley Insurance Company, compared to $106.9 million and $104.4 million in 2017 and 2016, respectively. The Securities Valuation Office provides specific guidance for valuing this investment, which is eliminated in our GAAP consolidated financial statements. The following table includes selected information for our insurance subsidiaries for the year ending and as of December 31: (in thousands) 2018 2017 2016 Consolidated net income, statutory basis $ 135,791 $ 72,889 $ 128,165 Consolidated surplus, statutory basis $ 829,775 $ 864,554 $ 859,976 As discussed in note 1.A., our three insurance companies are subsidiaries of RLI Corp, with RLI Ins. as the first-level, or principal, insurance subsidiary. At the holding company (RLI Corp.) level, we rely largely on dividends from our insurance company subsidiaries to meet our obligations for paying principal and interest on outstanding debt, corporate expenses and dividends to RLI Corp. shareholders. As discussed further below, dividend payments to RLI Corp. from our principal insurance subsidiary are restricted by state insurance laws as to the amount that may be paid without prior approval of the insurance regulatory authorities of Illinois. As a result, we may not be able to receive dividends from such subsidiary at times and in amounts necessary to pay desired dividends to RLI Corp. shareholders. On a GAAP basis, as of December 31, 2018, our holding company had $806.8 million in equity. This includes amounts related to the equity of our insurance subsidiaries, which is subject to regulatory restrictions under state insurance laws. The unrestricted portion of holding company net assets is comprised primarily of investments and cash, including $63.1 million in liquid assets, which more than covers our annual holding company expenditures. Unrestricted funds at the holding company are available to fund debt interest, general corporate obligations and regular dividend payments to our shareholders. If necessary, the holding company also has other potential sources of liquidity that could provide for additional funding to meet corporate obligations or pay shareholder dividends, which include a revolving line of credit, as well as access to capital markets. Ordinary dividends, which may be paid by our principal insurance subsidiary without prior regulatory approval, are subject to certain limitations based upon statutory income, surplus and earned surplus. The maximum ordinary dividend distribution from our principal insurance subsidiary in a rolling 12-month period is limited by Illinois law to the greater of 10 percent of RLI Ins. policyholder surplus, as of December 31 of the preceding year, or the net income of RLI Ins. for the 12-month period ending December 31 of the preceding year. Ordinary dividends are further restricted by the requirement that they be paid from earned surplus. In 2018, 2017 and 2016, our principal insurance subsidiary paid ordinary dividends totaling $13.0 million, $107.0 million and $123.6 million, respectively, to RLI Corp. Any dividend distribution in excess of the ordinary dividend limits is deemed extraordinary and requires prior approval from the IDOI. In 2018, our principal insurance subsidiary sought and received regulatory approval prior to the payment of extraordinary dividends totaling $110.0 million. No extraordinary dividends were paid in 2017 or 2016. Given the amount of dividends paid during the prior rolling 12-month period, the net assets of our principal insurance subsidiary are restricted until the fourth quarter of 2019 and cannot be distributed to RLI Corp. without prior approval of the IDOI. In addition to restrictions from our principal subsidiary’s insurance regulator, we also consider internal models and how capital adequacy is defined by our rating agencies in determining amounts available for distribution. However, as discussed above, RLI Corp. had the necessary amount of unrestricted liquid net assets on hand at December 31, 2018 to cover normal annual holding company expenditures as they are incurred and become payable in 2019.

COMMITMENTS AND CONTINGENT LIAB

COMMITMENTS AND CONTINGENT LIABILITIES	12 Months Ended
	Dec. 31, 2018
COMMITMENTS AND CONTINGENT LIABILITIES
COMMITMENTS AND CONTINGENT LIABILITIES	10. COMMITMENTS AND CONTINGENT LIABILITIES Other Litigation We are party to numerous claims, losses and litigation matters that arise in the normal course of our business. Many of such claims, losses or litigation matters involve claims under policies that we underwrite as an insurer. We believe that the resolution of these claims and losses will not have a material adverse effect on our financial condition, results of operations or cash flows. We are also involved in various other legal proceedings and litigation unrelated to our insurance business that arise in the ordinary course of business operations. Management believes that any liabilities that may arise as a result of these legal matters will not have a material adverse effect on our financial condition, results of operations or cash flows. Carriage Hill Associates Coverage Dispute As reported in the Company’s Form 10-Q filed for the second and third quarters of 2018, Carriage Hill Associates of Charleston, LLC and certain other plaintiffs (collectively, “Plaintiffs”) filed a complaint in the Court of Common Pleas (the “Court”) for the Ninth Judicial Circuit of Berkeley County, South Carolina in December 2010 against Mt. Hawley Insurance Company (“Mt. Hawley”), a subsidiary of our principal subsidiary, RLI Insurance Company, relating to a coverage dispute. The complaint sought, among other things, compensatory damages, punitive damages and attorneys’ fees. On May 25, 2018, the Court issued an Order finding in favor of Plaintiffs (the “Order”). The Court held that Mt. Hawley was responsible for compensatory damages relating to the alleged breach of duty to defend, breach of duty to indemnify and breach of duty of good faith totaling $21.7 million. The Court further held that Plaintiffs were entitled to attorneys’ fees and costs and that punitive damages were appropriate, with a hearing to be conducted at a later date to determine the amount of attorney fees and costs, and punitive damages. Mt. Hawley vigorously contested all the claims against it in this matter and filed certain post-trial motions seeking to, among other things, vacate and withdraw the Order. As the result of Court-recommended mediation between the parties, all of the claims in this matter among all parties were settled on a confidential basis for an amount that did not have a material impact on the Company’s financial statements. On November 15, 2018, the Court vacated and withdrew the Order and the entire matter was dismissed with prejudice on November 28, 2018. Commitments We have operating lease obligations for regional office facilities. These leases expire in various years through 2035. Expenses associated with these leases totaled $6.9 million in 2018, $6.8 million in 2017 and $6.4 million in 2016. Minimum future rental payments under non-cancellable leases are as follows: (in thousands) 2019 $ 5,911 2020 6,019 2021 5,924 2022 5,884 2023 4,459 2024-2035 3,968 Total minimum future rental payments $ 32,165 As of December 31, 2018, we also had $18.8 million of unfunded commitments related to our investments in private funds and $7.4 million of unfunded commitments related to our low income housing tax credit investments. See note 2 for more information on these investments.

OPERATING SEGMENT INFORMATION

OPERATING SEGMENT INFORMATION	12 Months Ended
	Dec. 31, 2018
OPERATING SEGMENT INFORMATION
OPERATING SEGMENT INFORMATION	11. OPERATING SEGMENT INFORMATION The segments of our insurance operations include casualty, property and surety. The casualty portion of our business consists largely of commercial excess, personal umbrella, general liability, transportation and executive products coverages, as well as package business and other specialty coverages, such as professional liability and workers’ compensation for office-based professionals. We offer fidelity and crime coverage for commercial insureds and select financial institutions and medical and healthcare professional liability coverage in the excess and surplus market. We also assume a limited amount of hard-to-place risks through a quota share reinsurance agreement. The casualty business is subject to the risk of estimating losses and related loss reserves because the ultimate settlement of a casualty claim may take several years to fully develop. The casualty segment is also subject to inflation risk and may be affected by evolving legislation and court decisions that define the extent of coverage and the amount of compensation due for injuries or losses. Our property segment is comprised primarily of commercial fire, earthquake, difference in conditions and marine coverages. We also offer select personal lines policies, including homeowners’ coverages. Our property reinsurance and recreational vehicle products are in runoff after we began curtailing offerings at the end of 2015 and 2016, respectively. Property insurance results are subject to the variability introduced by perils such as earthquakes, fires and hurricanes. Our major catastrophe exposure is to losses caused by earthquakes, primarily on the West Coast. Our second largest catastrophe exposure is to losses caused by wind storms to commercial properties throughout the Gulf and East Coast, as well as to homes we insure in Hawaii. We limit our net aggregate exposure to a catastrophic event by minimizing the total policy limits written in a particular region, purchasing reinsurance and maintaining policy terms and conditions throughout market cycles. We also use computer-assisted modeling techniques to provide estimates that help the Company carefully manage the concentration of risks exposed to catastrophic events. The surety segment specializes in writing small to large-sized commercial and contract surety coverages, as well as those for the energy, petrochemical and refining industries. We also offer miscellaneous bonds including license and permit, notary and court bonds. Often, our surety coverages involve a statutory requirement for bonds. While these bonds typically maintain a relatively low loss ratio, losses may fluctuate due to adverse economic conditions affecting the financial viability of our insureds. The contract surety product guarantees the construction work of a commercial contractor for a specific project. Generally, losses occur due to the deterioration of a contractor’s financial condition. This line has historically produced marginally higher loss ratios than other surety lines during economic downturns. Net investment income consists of the interest and dividend income streams from our investments in fixed income and equity securities. Interest and general corporate expenses include the cost of debt, other director and shareholder relations costs and other compensation-related expenses incurred for the benefit of the corporation, but not attributable to the operations of our insurance segments. Investee earnings represent our share in Maui Jim and Prime earnings. We own 40 percent of Maui Jim, a privately-held company which operates in the sunglass and optical goods industries, and 23 percent of Prime Holdings Insurance Services, Inc., a privately-held insurance company which specializes in hard-to-place risks in the excess and surplus market and has recently expanded into certain coverages in the admitted market. Our investment in Maui Jim, which is carried at the holding company, is unrelated to our core insurance operations. The following table summarizes our segment data based on the internal structure and reporting of information as it is used by management. The net earnings of each segment are before taxes and include revenues (if applicable), direct product or segment costs (such as commissions and claims costs), as well as allocated support costs from various support departments. While depreciation and amortization charges have been included in these measures via our expense allocation system, the related assets are not allocated for management use and, therefore, are not included in this schedule. REVENUES (in thousands) 2018 2017 2016 Casualty $ 523,472 $ 478,603 $ 454,843 Property 149,261 138,346 152,167 Surety 118,633 120,988 121,598 Net premiums earned $ 791,366 $ 737,937 $ 728,608 Net investment income 62,085 54,876 53,075 Net realized gains 63,407 4,411 34,645 Net unrealized losses on equity securities (98,735) — — Total $ 818,123 $ 797,224 $ 816,328 INSURANCE EXPENSES (in thousands) 2018 2017 2016 Loss and settlement expenses: Casualty $ 329,763 $ 305,679 $ 259,907 Property 83,822 85,027 71,350 Surety 14,608 10,878 18,521 Total net loss and settlement expenses $ 428,193 $ 401,584 $ 349,778 Policy acquisition costs: Casualty $ 151,007 $ 136,135 $ 128,566 Property 51,830 51,070 54,167 Surety 64,901 65,310 66,879 Total policy acquisition costs $ 267,738 $ 252,515 $ 249,612 Other insurance expenses: Casualty $ 31,562 $ 32,885 $ 30,040 Property 12,725 14,108 13,819 Surety 9,516 10,001 9,234 Total other insurance expenses $ 53,803 $ 56,994 $ 53,093 Total $ 749,734 $ 711,093 $ 652,483 NET EARNINGS (LOSSES) (in thousands) 2018 2017 2016 Casualty $ 11,140 $ 3,904 $ 36,329 Property 884 (11,859) 12,832 Surety 29,608 34,799 26,964 Net underwriting income $ 41,632 $ 26,844 $ 76,125 Net investment income 62,085 54,876 53,075 Net realized gains 63,407 4,411 34,645 Net unrealized losses on equity securities (98,735) — — General corporate expense and interest on debt (16,864) (18,766) (17,596) Equity in earnings of unconsolidated investees 16,056 17,224 10,833 Total earnings before incomes taxes $ 67,581 $ 84,589 $ 157,082 Income tax expense (benefit) $ 3,402 $ (20,439) $ 42,162 Total $ 64,179 $ 105,028 $ 114,920 The following table further summarizes revenues by major product type within each segment: NET PREMIUMS EARNED Year ended December 31, (in thousands) 2018 2017 2016 CASUALTY Commercial excess and personal umbrella $ 124,350 $ 115,543 $ 111,079 General liability 93,928 90,283 86,853 Commercial transportation 81,053 78,061 81,402 Professional services 79,951 78,508 75,872 Small commercial 51,519 49,601 45,660 Executive products 21,326 18,086 18,755 Medical professional liability 16,042 17,072 17,449 Other casualty 55,303 31,449 17,773 Total $ 523,472 $ 478,603 $ 454,843 PROPERTY Commercial property $ 71,501 $ 63,117 $ 68,165 Marine 59,795 50,931 48,301 Specialty personal 16,901 20,793 24,981 Other property 1,064 3,505 10,720 Total $ 149,261 $ 138,346 $ 152,167 SURETY Miscellaneous $ 46,968 $ 47,237 $ 46,235 Contract 28,196 28,573 28,240 Commercial 26,751 27,625 29,105 Energy 16,718 17,553 18,018 Total $ 118,633 $ 120,988 $ 121,598 Grand total $ 791,366 $ 737,937 $ 728,608

UNAUDITED INTERIM FINANCIAL INF

UNAUDITED INTERIM FINANCIAL INFORMATION	12 Months Ended
	Dec. 31, 2018
UNAUDITED INTERIM FINANCIAL INFORMATION
UNAUDITED INTERIM FINANCIAL INFORMATION	12. UNAUDITED INTERIM FINANCIAL INFORMATION Select unaudited quarterly information is as follows: (in thousands, except per share data) First Second Third Fourth Year 2018 Net premiums earned $ 190,027 $ 196,522 $ 200,815 $ 204,002 $ 791,366 Net investment income 14,232 14,577 16,314 16,962 62,085 Net realized gains (losses) 8,404 20,849 18,647 15,507 63,407 Net unrealized gains (losses) on equity securities (26,772) (12,611) 4,848 (64,200) (98,735) Earnings (losses) before income taxes 14,378 39,562 46,349 (32,708) 67,581 Net earnings (loss) 12,216 33,251 39,372 (20,660) 64,179 Basic earnings per share(1) $ 0.28 $ 0.75 $ 0.89 $ (0.46) $ 1.45 Diluted earnings per share(1) $ 0.27 $ 0.74 $ 0.88 $ (0.46) $ 1.43 2017 Net premiums earned $ 183,285 $ 184,331 $ 182,025 $ 188,296 $ 737,937 Net investment income 13,005 13,238 14,187 14,446 54,876 Net realized gains (losses) 624 (1,359) 35 5,111 4,411 Net unrealized gains (losses) on equity securities — — — — — Earnings (losses) before income taxes 26,443 34,036 (862) 24,972 84,589 Net earnings (loss) 19,828 26,208 1,734 57,258 105,028 Basic earnings per share(1) $ 0.45 $ 0.60 $ 0.04 $ 1.30 $ 2.39 Diluted earnings per share(1) $ 0.45 $ 0.59 $ 0.04 $ 1.29 $ 2.36 (1) Since the weighted-average shares for the quarters are calculated independently of the weighted-average shares for the year, quarterly earnings per share may not total to annual earnings per share.

SCHEDULE I-SUMMARY OF INVESTMEN

SCHEDULE I-SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES	12 Months Ended
	Dec. 31, 2018
SCHEDULE I-SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES
SCHEDULE I-SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES	RLI CORP. AND SUBSIDIARIES SCHEDULE I—SUMMARY OF INVESTMENTS—OTHER THAN INVESTMENTS IN RELATED PARTIES December 31, 2018 Column A Column B Column C Column D Amount at (in thousands) which shown in Type of Investment Cost (1) Fair Value the balance sheet Fixed maturities: Bonds: Available-for-sale: U.S. Government $ 199,982 $ 200,229 $ 200,229 U.S. Agency 31,716 31,904 31,904 Non-U.S. Government & Agency 8,170 7,639 7,639 Agency MBS 402,992 395,253 395,253 ABS/CMBS* 137,224 136,723 136,723 Corporate 681,909 668,679 668,679 Municipal 314,472 320,088 320,088 Total available-for-sale $ 1,776,465 $ 1,760,515 $ 1,760,515 Total fixed maturities $ 1,776,465 $ 1,760,515 $ 1,760,515 Equity securities: Common stock: Ind Misc & all other $ 98,879 $ 177,040 $ 177,040 ETFs (Ind/misc) 121,494 163,443 163,443 Total equity securities $ 220,373 $ 340,483 $ 340,483 Cash & short-term investments 41,690 41,690 41,690 Other invested assets 51,760 51,542 51,542 Total investments and cash $ 2,090,288 $ 2,194,230 $ 2,194,230 * Non-agency asset-backed & commercial mortgage-backed Note: See notes 1E and 2 of Notes to Consolidated Financial Statements. See also the accompanying report of independent registered public accounting firm on page 108 of this report. (1) Original cost of equity securities and, as to fixed maturities, original cost reduced by repayments and adjusted for amortization of premiums or accrual of discounts.

SCHEDULE II-CONDENSED FINANCIAL

SCHEDULE II-CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)	12 Months Ended
	Dec. 31, 2018
SCHEDULE II-CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)
SCHEDULE II-CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)	RLI CORP. AND SUBSIDIARIES SCHEDULE II—CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY) CONDENSED BALANCE SHEETS December 31, (in thousands, except share data) 2018 2017 ASSETS Cash $ 3,214 $ 204 Short-term investments, at cost which approximates fair value — 70 Accounts receivable, affiliates — 1,057 Investments in subsidiaries 828,806 912,515 Investments in unconsolidated investee 79,521 77,720 Fixed income: Available-for-sale, at fair value (amortized cost - $58,812 in 2018 and $23,184 in 2017) 59,878 23,210 Property and equipment, at cost, net of accumulated depreciation of $1,494 in 2018 and $1,426 in 2017 1,914 1,982 Income taxes receivable - current — 1,542 Other assets 547 156 Total assets $ 973,880 $ 1,018,456 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities: Accounts payable, affiliates $ 130 $ — Income taxes payable - current 32 — Income taxes - deferred 15,081 13,207 Bonds payable, long-term debt 149,115 148,928 Interest payable, long-term debt 2,153 2,153 Other liabilities 527 570 Total liabilities $ 167,038 $ 164,858 Shareholders’ equity: Common stock ($0.01 par value in 2018 and $1.00 par value in 2017) (100,000,000 share authorized, 67,434,257 shares issued and 44,504,043 shares outstanding in 2018) (100,000,000 share authorized, 67,078,569 shares issued and 44,148,355 shares outstanding in 2017) $ 674 $ 67,079 Paid-in capital 305,660 233,077 Accumulated other comprehensive earnings, net of tax (14,572) 157,919 Retained earnings 908,079 788,522 Deferred compensation 8,354 8,640 Treasury stock, at cost (401,353) (401,639) Total shareholders’ equity $ 806,842 $ 853,598 Total liabilities and shareholders’ equity $ 973,880 $ 1,018,456 See Notes to Consolidated Financial Statements. See also the accompanying report of independent registered public accounting firm on page 108 of this report. RLI CORP. AND SUBSIDIARIES SCHEDULE II—CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)—(continued) CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS Years ended December 31, (in thousands) 2018 2017 2016 Net investment income $ 648 $ 647 $ 942 Net realized losses (142) (36) (360) Equity in earnings of unconsolidated investee 12,471 14,436 9,764 Selling, general and administrative expenses (9,427) (11,340) (10,170) Interest expense on debt (7,437) (7,426) (7,426) Loss before income taxes $ (3,887) $ (3,719) $ (7,250) Income tax benefit (2,359) (16,601) (8,467) Net earnings (loss) before equity in net earnings of subsidiaries $ (1,528) $ 12,882 $ 1,217 Equity in net earnings of subsidiaries 65,707 92,146 113,703 Net earnings $ 64,179 $ 105,028 $ 114,920 Other comprehensive income (loss), net of tax Unrealized gains (losses) on securities: Unrealized holding gains (losses) arising during the period $ 710 $ 21 $ 308 Less: reclassification adjustment for gains (losses) included in net earnings 112 6 (131) Other comprehensive income - parent only $ 822 $ 27 $ 177 Equity in other comprehensive earnings (loss) of subsidiaries/investees (34,819) 35,282 (1,341) Other comprehensive earnings (loss) $ (33,997) $ 35,309 $ (1,164) Comprehensive earnings $ 30,182 $ 140,337 $ 113,756 See Notes to Consolidated Financial Statements. See also the accompanying report of independent registered public accounting firm on page 108 of this report. RLI CORP. AND SUBSIDIARIES SCHEDULE II—CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)—(continued) CONDENSED STATEMENTS OF CASH FLOWS Years ended December 31, (in thousands) 2018 2017 2016 Cash flows from operating activities Earnings before equity in net earnings of subsidiaries $ (1,528) $ 12,882 $ 1,217 Adjustments to reconcile net losses to net cash provided by (used in) operating activities: Net realized losses 142 36 360 Depreciation 68 77 196 Other items, net (471) 595 560 Change in: Affiliate balances receivable/payable 1,187 (930) (535) Federal income taxes 3,430 (6,874) 9,762 Stock option excess tax benefit — — (9,576) Changes in investment in unconsolidated investee: Undistributed earnings (12,471) (14,436) (9,764) Dividends received 9,900 — 9,900 Net cash provided by (used in) operating activities $ 257 $ (8,650) $ 2,120 Cash flows from investing activities Purchase of: Fixed income, available-for-sale $ (73,812) $ (5,773) $ (12,844) Short-term investments, net — (47) — Sale of: Fixed income, available-for-sale 12,056 24,771 4,981 Short-term investments, net 70 — 63 Property and equipment — 128 — Call or maturity of: Fixed income, available-for-sale 75,662 3,499 6,859 Cash dividends received-subsidiaries 73,363 107,000 123,600 Net cash provided by investing activities $ 87,339 $ 129,578 $ 122,659 Cash flows from financing activities Stock option excess tax benefit $ — $ — $ 9,576 Proceeds from stock option exercises 6,076 3,502 (741) Cash dividends paid (90,662) (124,247) (133,771) Net cash used in financing activities $ (84,586) $ (120,745) $ (124,936) Net (decrease) increase in cash $ 3,010 $ 183 $ (157) Cash at beginning of year 204 21 178 Cash at end of year $ 3,214 $ 204 $ 21 Interest paid on outstanding debt amounted to $7.3 million for 2018, 2017 and 2016, respectively. See Notes to Consolidated Financial Statements. See also the accompanying report of independent registered public accounting firm on page 108 of this report.

SCHEDULE III-SUPPLEMENTARY INSU

SCHEDULE III-SUPPLEMENTARY INSURANCE INFORMATION	12 Months Ended
	Dec. 31, 2018
SCHEDULE III-SUPPLEMENTARY INSURANCE INFORMATION
SCHEDULE III-SUPPLEMENTARY INSURANCE INFORMATION	RLI CORP. AND SUBSIDIARIES SCHEDULE III—SUPPLEMENTARY INSURANCE INFORMATION As of and for the years ended December 31, 2018, 2017 and 2016 Incurred losses Deferred policy Unpaid losses Unearned Net and settlement acquisition and settlement premiums, premiums expenses (in thousands) costs expenses, gross gross earned current year Year ended December 31, 2018 Casualty segment $ 50,040 $ 1,283,204 $ 330,836 $ 523,472 $ 363,015 Property segment 14,090 134,822 93,032 149,261 94,635 Surety segment 20,804 43,322 72,637 118,633 20,493 RLI Insurance Group $ 84,934 $ 1,461,348 $ 496,505 $ 791,366 $ 478,143 Year ended December 31, 2017 Casualty segment $ 44,358 $ 1,127,787 $ 296,751 $ 478,603 $ 323,141 Property segment 13,029 107,304 84,010 138,346 97,161 Surety segment 20,329 36,412 70,688 120,988 20,150 RLI Insurance Group $ 77,716 $ 1,271,503 $ 451,449 $ 737,937 $ 440,452 Year ended December 31, 2016 Casualty segment $ 39,131 $ 1,021,506 $ 276,096 $ 454,843 $ 292,308 Property segment 13,115 76,989 84,425 152,167 76,143 Surety segment 20,901 40,842 73,256 121,598 23,321 RLI Insurance Group $ 73,147 $ 1,139,337 $ 433,777 $ 728,608 $ 391,772 NOTE 1: Investment income is not allocated to the segments, therefore net investment income has not been provided. See the accompanying report of independent registered public accounting firm on page 108 of this report. RLI CORP. AND SUBSIDIARIES SCHEDULE III—SUPPLEMENTARY INSURANCE INFORMATION (continued) As of and for the years ended December 31, 2018, 2017 and 2016 Incurred losses and settlement Policy Other Net expenses acquisition operating premiums (in thousands) prior year costs expenses written Year ended December 31, 2018 Casualty segment $ (33,252) $ 151,007 $ 31,562 $ 547,177 Property segment (10,813) 51,830 12,725 155,601 Surety segment (5,885) 64,901 9,516 120,397 RLI Insurance Group $ (49,950) $ 267,738 $ 53,803 $ 823,175 Year ended December 31, 2017 Casualty segment $ (17,462) $ 136,135 $ 32,885 $ 494,649 Property segment (12,134) 51,070 14,108 137,031 Surety segment (9,272) 65,310 10,001 118,174 RLI Insurance Group $ (38,868) $ 252,515 $ 56,994 $ 749,854 Year ended December 31, 2016 Casualty segment $ (32,401) $ 128,566 $ 30,040 $ 470,082 Property segment (4,793) 54,167 13,819 149,170 Surety segment (4,800) 66,879 9,234 121,700 RLI Insurance Group $ (41,994) $ 249,612 $ 53,093 $ 740,952 See the accompanying report of independent registered public accounting firm on page 108 of this report.

SCHEDULE IV-REINSURANCE

SCHEDULE IV-REINSURANCE	12 Months Ended
	Dec. 31, 2018
SCHEDULE IV-REINSURANCE
SCHEDULE IV-REINSURANCE	RLI CORP. AND SUBSIDIARIES SCHEDULE IV—REINSURANCE Years ended December 31, 2018, 2017 and 2016 Percentage Ceded to Assumed of amount Direct other from other Net assumed (in thousands) amount companies companies amount to net 2018 Casualty segment $ 578,643 $ 96,639 $ 41,468 $ 523,472 7.9 % Property segment 193,855 44,634 40 149,261 0.0 % Surety segment 123,736 5,521 418 118,633 0.4 % RLI Insurance Group premiums earned $ 896,234 $ 146,794 $ 41,926 $ 791,366 5.3 % 2017 Casualty segment $ 536,085 $ 86,190 $ 28,708 $ 478,603 6.0 % Property segment 172,668 37,607 3,285 138,346 2.4 % Surety segment 126,365 5,905 528 120,988 0.4 % RLI Insurance Group premiums earned $ 835,118 $ 129,702 $ 32,521 $ 737,937 4.4 % 2016 Casualty segment $ 528,691 $ 89,635 $ 15,787 $ 454,843 3.5 % Property segment 179,460 38,353 11,060 152,167 7.3 % Surety segment 127,143 6,584 1,039 121,598 0.9 % RLI Insurance Group premiums earned $ 835,294 $ 134,572 $ 27,886 $ 728,608 3.8 % See the accompanying report of independent registered public accounting firm on page 108 of this report.

SCHEDULE V-VALUATION AND QUALIF

SCHEDULE V-VALUATION AND QUALIFYING ACCOUNTS	12 Months Ended
	Dec. 31, 2018
SCHEDULE V-VALUATION AND QUALIFYING ACCOUNTS
SCHEDULE V-VALUATION AND QUALIFYING ACCOUNTS	RLI CORP. AND SUBSIDIARIES SCHEDULE V—VALUATION AND QUALIFYING ACCOUNTS Years ended December 31, 2018, 2017 and 2016 Balance Amounts Amounts Balance at beginning charged recovered at end of (in thousands) of period to expense (written off) period 2018 Allowance for uncollectible reinsurance $ 25,911 $ — $ — $ 25,911 2017 Allowance for uncollectible reinsurance $ 25,911 $ — $ — $ 25,911 2016 Allowance for uncollectible reinsurance $ 25,911 $ — $ — $ 25,911 See the accompanying report of independent registered public accounting firm on page 108 of this report.

SCHEDULE VI-SUPPLEMENTARY INFOR

SCHEDULE VI-SUPPLEMENTARY INFORMATION CONCERNING PROPERTY-CASUALTY INSURANCE OPERATIONS	12 Months Ended
	Dec. 31, 2018
SCHEDULE VI-SUPPLEMENTARY INFORMATION CONCERNING PROPERTY-CASUALTY INSURANCE OPERATIONS
SCHEDULE VI-SUPPLEMENTARY INFORMATION CONCERNING PROPERTY-CASUALTY INSURANCE OPERATIONS	RLI CORP. AND SUBSIDIARIES SCHEDULE VI—SUPPLEMENTARY INFORMATION CONCERNING PROPERTY-CASUALTY INSURANCE OPERATIONS Years ended December 31, 2018, 2017 and 2016 (in thousands) Deferred policy Claims and Unearned Net Net Affiliation with acquisition claim adjustment premiums, premiums investment Registrant (1) costs expense reserves gross earned income 2018 $ 84,934 $ 1,461,348 $ 496,505 $ 791,366 $ 62,085 2017 $ 77,716 $ 1,271,503 $ 451,449 $ 737,937 $ 54,876 2016 $ 73,147 $ 1,139,337 $ 433,777 $ 728,608 $ 53,075 Claims and claim adjustment expenses incurred related to: Amortization Paid claims and Net Current Prior of deferred claim adjustment premiums year year acquisition costs expenses written 2018 $ 478,143 $ (49,950) $ 267,738 $ 301,356 $ 823,175 2017 $ 440,452 $ (38,868) $ 252,515 $ 283,185 $ 749,854 2016 $ 391,772 $ (41,994) $ 249,612 $ 304,606 $ 740,952 (1) Consolidated property-casualty insurance operations. See the accompanying report of independent registered public accounting firm on page 108 of this report.

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Dec. 31, 2018
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF BUSINESS	A. RLI Corp. (the “Company”) is an insurance holding company that was founded in 1965. On May 4, 2018, RLI Corp. changed its state of incorporation from the State of Illinois to the State of Delaware (the “Reincorporation”). The Reincorporation was effected by merging RLI Corp., an Illinois corporation (“RLI Illinois”) into RLI Corp., a Delaware corporation (“RLI Delaware”). The separate corporate existence of RLI Illinois ceased and RLI Delaware continues in existence as the surviving corporation and possesses all rights, privileges, powers and franchises of RLI Illinois. The Reincorporation did not result in any change in the name, business, management, fiscal year, location of the principal executive offices, assets or liabilities of the Company. Each outstanding share of RLI Illinois common stock, which had a par value of $1.00 per share, was automatically converted into one outstanding share of RLI Delaware common stock, with a par value of $0.01 per share. In order to reflect the new par value of common stock on the balance sheet, a $66.4 million reclassification from common stock to paid-in-capital was made. For more information on the Reincorporation, see RLI Corp.’s Form 8-K filed on May 7, 2018. We underwrite select property and casualty insurance coverages through major subsidiaries collectively known as RLI Insurance Group. We conduct operations principally through three insurance companies. RLI Insurance Company (RLI Ins.), a subsidiary of RLI Corp. and our principal insurance subsidiary, writes multiple lines of insurance on an admitted basis in all 50 states, the District of Columbia, Puerto Rico, the Virgin Islands and Guam. Mt. Hawley Insurance Company (Mt. Hawley), a subsidiary of RLI Ins., writes surplus lines insurance on a non-admitted basis in all 50 states, the District of Columbia, Puerto Rico, the Virgin Islands and Guam. Contractors Bonding and Insurance Company (CBIC), a subsidiary of RLI Ins., writes multiple lines of insurance on an admitted basis in all 50 states and the District of Columbia.
PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION	B. The accompanying consolidated financial statements were prepared in conformity with generally accepted accounting principles in the United States of America (GAAP), which differ in some respects from those followed in reports to insurance regulatory authorities. The consolidated financial statements include the accounts of our holding company and our subsidiaries. All significant intercompany balances and transactions have been eliminated. Certain reclassifications were made to 2017 and 2016 to conform to the classifications used in the current year. The Company has evaluated subsequent events through the date these consolidated financial statements were issued. There were no subsequent events requiring adjustment to the financial statements or disclosure.
ADOPTED ACCOUNTING STANDARDS	C. ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ASU 2014-09 was issued to clarify and remove inconsistencies within revenue recognition requirements. The core principle of the update is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the transaction price for a contract is allocated among separately identifiable performance obligations and a portion of the transaction price is recognized as revenue when the associated performance obligation has been completed or transferred to the customer. All contracts and fulfillment activities within the scope of Topic 944, Financial Services – Insurance, investment income, investment-related gains and losses and equity in earnings of unconsolidated investees are outside the scope of this ASU. We adopted ASU 2014-09 on January 1, 2018. However, nearly all (over 99 percent) of our consolidated revenue is scoped out and therefore exempt from the guidance contained within this ASU. For the remaining portion, the revenue recognition policy we utilize aligns with the new guidance and there were no changes to the way we recognize revenue. Although the recognition of earnings from equity method investees is out of scope from the update, the recognition of revenue by our equity method investees would be subject to the new guidance if the revenue streams are within this update’s scope. Any impact on revenues would affect the net income of each of the equity method investees, upon which we calculate our portion of earnings to recognize. Our equity method investees are private companies and this guidance becomes effective for private companies in periods beginning after December 15, 2018. As a result, their earnings and our portion of those earnings are not impacted in 2018. We expect that revenue generated by both of our equity method investees will either be outside the scope of this update or largely unaffected by the changes. ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities This ASU was issued to improve the recognition and measurement of financial instruments. The new guidance makes targeted improvements to GAAP as follows: a. Requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net earnings, b. Simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, c. Eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, d. Requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, e. Requires an entity to present separately in other comprehensive earnings the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, f. Requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and g. Clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. We adopted ASU 2016-01 on January 1, 2018. A cumulative-effect adjustment to the balance sheet was made as of the beginning of the year, which moved $142.2 million of net unrealized gains and losses on equity securities from accumulated other comprehensive earnings to retained earnings. During 2018, we recognized $98.7 million of unrealized losses on equity securities within net earnings and $20.7 million of income tax benefit. This compares to $24.0 million and $5.6 million of unrealized gains on equity securities, net of tax, that were recognized through other comprehensive earnings for the comparable periods in 2017 and 2016, respectively. The future impact to our net earnings will vary depending upon the level of volatility in the performance of the securities held in our equity portfolio and the overall market. There were no other material impacts to the financial statements. ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ASU 2016-15 was issued to reduce the diversity in practice of how certain cash receipts and payments, for which previous guidance was silent, are classified in the statement of cash flows. The update addresses eight specific issues, including contingent consideration payments made after a business combination, distributions received from equity method investees and the classification of cash receipts and payments that have aspects of more than one class of cash flows. We adopted ASU 2016-15 on January 1, 2018. The adoption did not have a material impact on our statement of cash flows. ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ASU 2018-02 was issued as a result of the enactment of the Tax Cuts and Jobs Act of 2017 (TCJA) on December 22, 2017. Accounting guidance required deferred tax items to be revalued based on the new tax laws (the most significant of which reduced the corporate tax rate to 21 percent from 35 percent) with the change included in income from continuing operations. Since other comprehensive income was not affected by the revaluation of the deferred tax items, the net accumulated other comprehensive income (AOCI) balance was reflective of the historic 35 percent tax rate instead of the newly enacted rate, a difference that is referred to as a stranded tax effect. This ASU allows for the option to reclassify the stranded tax effects resulting from the implementation of the TCJA out of AOCI and into retained earnings. ASU 2018-02 does not replace the guidance requiring changes from the enactment of other tax laws or rates to be included within income from continuing operations and is applicable only to changes from the TCJA. We adopted ASU 2018-02 during the first quarter of 2018. A current period adjustment was made to the balance sheet, which moved $3.7 million of stranded tax effects on the unrealized balances of our fixed income securities and equity method investees from accumulated other comprehensive earnings to retained earnings. The entire unrealized balance on equity securities was reclassified from AOCI into retained earnings from the adoption of ASU 2016-01 on January 1, 2018 and was therefore unaffected by this ASU. As there was no impact to net earnings and the balance sheet effect is limited to a reclassification within the equity section, there was not a material impact on our financial statements.
PROSPECTIVE ACCOUNTING STANDARDS	D. ASU 2016-02, Leases (Topic 842) ASU 2016-02 was issued to improve the financial reporting of leasing transactions. Under current guidance for lessees, leases are only included on the balance sheet if certain criteria, classifying the agreement as a capital lease, are met. This update will require the recognition of a right-of-use asset and a corresponding lease liability, discounted to the present value, for all leases that extend beyond 12 months. For operating leases, the asset and liability will be amortized over the lease term on a straight-line basis, with all cash flows included in the operating section of the statement of cash flows. For finance leases, interest on the lease liability will be recognized separately from the amortization of the right-of-use asset in the statement of comprehensive income and the repayment of the principal portion of the lease liability will be classified as a financing activity while the interest component will be included in the operating section of the statement of cash flows. This ASU is effective for annual and interim reporting periods beginning after December 15, 2018. Early adoption is permitted. ASU 2018-10, Codification Improvements to Topic 842, Leases was issued to clarify certain aspects of ASU 2016-02 and the two updates will be adopted concurrently. ASU 2016-02 requires leases to be recognized and measured at the beginning of the earliest period presented using a modified retrospective approach upon adoption. However, ASU 2018-11, Leases (Topic 842): Targeted Improvements provides an alternative transition method by which leases are recognized at the date of adoption and a cumulative-effect adjustment to the opening balance of retained earnings is recognized in the period of adoption. We plan to adopt using this alternative. It is expected that total assets and total liabilities will increase by approximately $25 million to $30 million upon implementation and the adoption of this update will not have a material impact on net earnings. ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) ASU 2016-13 was issued to provide more decision-useful information about the expected credit losses on financial instruments. Current GAAP delays the recognition of credit losses until it is probable a loss has been incurred. The update will require a financial asset measured at amortized cost, including reinsurance balances recoverable, to be presented at the net amount expected to be collected by means of an allowance for credit losses that runs through net earnings. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses. However, the amendments would limit the amount of the allowance to the amount by which fair value is below amortized cost. The measurement of credit losses on available-for-sale securities is similar under current GAAP, but the update requires the use of the allowance account through which amounts can be reversed, rather than through an irreversible write-down. This ASU is effective for annual and interim reporting periods beginning after December 15, 2019. Early adoption is permitted beginning after December 15, 2018. Upon adoption, the update will be applied using the modified-retrospective approach, by which a cumulative-effect adjustment will be made to retained earnings as of the beginning of the first reporting period presented. This update will have the most impact on our available-for-sale fixed income portfolio and reinsurance balances recoverable. However, as our fixed income portfolio is weighted towards higher rated bond (84 percent rated A or better at December 31, 2018) and we purchase reinsurance from financially strong reinsurers for which we already have an allowance for uncollectible reinsurance amounts, we do not expect that the effect of adoption will be material. ASU 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities Under current practices, the amortization period for callable debt securities held at a premium is generally the contractual life of the instrument. However, if an entity has a large number of similar loans, it may consider estimates of future principal prepayments. For those who choose to not incorporate an estimate of future prepayments, ASU 2017-08 shortens the amortization period for premium on debt securities to the earliest call date, rather than the maturity date, to align the amortization method with how the securities are quoted, priced and traded. After the earliest call date, if the call option is not exercised, the entity shall reset the effective yield using the payment terms of the debt security. Any excess of the amortized cost basis over the amount payable will be amortized to the next call date or to maturity if there are no other call dates. The method of accounting for a discount does not change and will continue to be amortized over the life of the bond. This ASU is effective for annual and interim reporting periods beginning after December 15, 2018. Early adoption is permitted. The update will be applied using a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. As we currently incorporate estimates of future principal prepayments when calculating the effective yield for bonds carrying a premium, we do not expect the adoption of this update to have a material impact on our financial statements. ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting ASU 2018-07 was issued to simplify the accounting for share-based transactions by expanding the scope of Topic 718 from only being applicable to share-based payments to employees to also include share-based payment transactions for acquiring goods and services from nonemployees. As a result, nonemployee share-based transactions will be measured by estimating the fair value of the equity instruments at the grant date, taking into consideration the probability of satisfying performance conditions. This ASU is effective for annual and interim reporting periods beginning after December 15, 2018. Early adoption is permitted. Our long-term incentive plan limits the awards of share-based payments to employees and directors of the Company or any affiliate. The share-based compensation expense to nonemployee directors was $0.3 million in 2018. Costs associated with such payments are not expected to materially increase and we do not expect this update to have a material impact on our financial statements. ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement ASU 2018-13 modifies the disclosure requirements for assets and liabilities measured at fair value. The requirements to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels and the valuation processes for Level 3 fair value measurements have all been removed. However, the changes in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period must be disclosed along with the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements (or other quantitative information if it is more reasonable). Finally, for investments measured at net asset value, the requirements have been modified so that the timing of liquidation and the date when restrictions from redemption might lapse are only disclosed if the investee has communicated the timing to the entity or announced the timing publicly. This ASU is effective for annual and interim reporting periods beginning after December 15, 2019. As the amendments are only disclosure-related and we do not currently have any assets or liabilities that are measured based on Level 3 inputs, our financial statements will not be materially impacted by this update. ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract ASU 2018-15 requires a customer in a cloud computing arrangement (i.e. hosting arrangement) that is a service contract to follow the internal-use software guidance to determine which implementation costs to capitalize as assets or expense as incurred. Relevant implementation costs in the development stage are capitalized, while costs incurred during the preliminary project and post-implementation stages are expensed as the activities are performed. Capitalized costs are expensed over the term of the hosting arrangement. This ASU is effective for annual and interim reporting periods beginning after December 15, 2019. Early adoption is permitted. This update can either be applied retrospectively or prospectively to all implementation costs incurred after the date of adoption. We have not yet completed the analysis of how adopting this ASU will affect our financial statements.
INVESTMENTS	E. INVESTMENTS: Equity securities are carried at fair value with unrealized gains and losses recorded within net earnings in 2018. Prior to 2018, unrealized gains and losses on equity securities were recognized through other comprehensive earnings. We classify our investments in fixed income securities into one of three categories: trading, held-to-maturity or available-for-sale. AVAILABLE-FOR-SALE SECURITIES Debt securities not included as held-to-maturity or trading are classified as available-for-sale and reported at fair value. Unrealized gains and losses on these securities are excluded from net earnings but are recorded as a separate component of comprehensive earnings and shareholders’ equity, net of deferred income taxes. All of our debt securities are classified as available-for-sale. HELD-TO-MATURITY SECURITIES Debt securities that we have the positive intent and ability to hold to maturity are classified as held-to-maturity and carried at amortized cost. Except for declines that are other-than-temporary, changes in the fair value of these securities are not reflected in the financial statements. We do not hold any debt security classified as held-to-maturity. TRADING SECURITIES Debt securities purchased for short-term resale are classified as trading securities. These securities are reported at fair value with unrealized gains and losses included in earnings. We do not hold any debt securities classified as trading. OTHER THAN TEMPORARY IMPAIRMENT We regularly evaluate our fixed income securities using quantitative and qualitative criteria to determine impairment losses for other-than-temporary declines in the fair value of the investments. The following are the key factors for determining if a security is other-than-temporarily impaired: · The length of time and the extent to which the fair value has been less than amortized cost, · The probability of significant adverse changes to the cash flows, · The occurrence of a discrete credit event resulting in the issuer defaulting on a material obligation, the issuer seeking protection from creditors under the bankruptcy laws, the issuer proposing a voluntary reorganization under which creditors are asked to exchange their claims for cash or securities having a fair value substantially lower than par value of their claims or · The probability that we will recover the entire amortized cost basis of our fixed income securities prior to maturity. Quantitative criteria considered during this process include, but are not limited to: the degree and duration of current fair value as compared to the amortized cost of the security, degree and duration of the security’s fair value being below cost and whether the issuer is in compliance with terms and covenants of the security. Qualitative criteria include the credit quality, current economic conditions, the anticipated speed of cost recovery, the financial health of and specific prospects for the issuer, as well as our absence of intent to sell or requirement to sell fixed income securities prior to recovery. In addition, we consider price declines in our other-than-temporary impairment (OTTI) analysis when they provide evidence of declining credit quality, and we distinguish between price changes caused by credit deterioration, as opposed to rising interest rates. See note 2 for further discussion of OTTI. Interest on fixed maturities and short-term investments is credited to earnings on an accrual basis. Premiums and discounts are amortized or accreted over the lives of the related fixed maturities. Dividends on equity securities are credited to earnings on the ex-dividend date. Realized gains and losses on disposition of investments are based on specific identification of the investments sold on the settlement date.
CASH AND SHORT-TERM INVESTMENTS	F. Cash consists of uninvested balances in bank accounts. Short-term investments consist of investments with original maturities of 90 days or less, primarily AAA-rated prime and government money market funds. Short-term investments are carried at cost. We have not experienced losses on these instruments. Other invested assets include investments in low income housing tax credit partnerships (LIHTC), membership in the Federal Home Loan Bank of Chicago (FHLBC) and investments in private funds. Our LIHTC investments are carried at amortized cost, and our investment in FHLBC stock is carried at cost. Due to the nature of cash, short-term investments, the LIHTC and our membership in the FHLBC, their carrying amounts approximate fair value. The private funds are carried at fair value, using each investment’s net asset value.
REINSURANCE	G. Ceded unearned premiums and reinsurance balances recoverable on paid and unpaid losses and settlement expenses are reported separately as assets, instead of being netted with the related liabilities, since reinsurance does not relieve the Company of our legal liability to our policyholders. We continuously monitor the financial condition of our reinsurers. As part of our monitoring efforts, we review their annual financial statements, quarterly disclosures and Securities and Exchange Commission (SEC) filings for reinsurers that are publicly traded. We also review insurance industry developments that may impact the financial condition of our reinsurers. We analyze the credit risk associated with our reinsurance balances recoverable by monitoring the A.M. Best and Standard & Poor’s (S&P) ratings of our reinsurers. In addition, we subject our reinsurance recoverables to detailed recoverable tests, including one based on average default by S&P rating. Based upon our review and testing, our policy is to charge to earnings, in the form of an allowance, an estimate of unrecoverable amounts from reinsurers. This allowance is reviewed on an ongoing basis to ensure that the amount makes a reasonable provision for reinsurance balances that we may be unable to recover.
POLICY ACQUISITION COSTS	H. We defer incremental direct costs that relate to the successful acquisition of new or renewal insurance contracts, including commissions and premium taxes. Acquisition-related costs may be deemed ineligible for deferral when they are based on contingent or performance criteria beyond the basic acquisition of the insurance contract or when efforts to obtain or renew the insurance contract are unsuccessful. All eligible costs are capitalized and charged to expense in proportion to premium revenue recognized. The method followed in computing deferred policy acquisition costs limits the amount of such deferred costs to their estimated realizable value. This would also give effect to the premiums to be earned and anticipated losses and settlement expenses, as well as certain other costs expected to be incurred as the premiums are earned. Judgments as to the ultimate recoverability of such deferred costs are reviewed on a segment basis and are highly dependent upon estimated future loss costs associated with the premiums written. This deferral methodology applies to both gross and ceded premiums and acquisition costs.
PROPERTY AND EQUIPMENT	I. Property and equipment are presented at cost less accumulated depreciation and are depreciated on a straight-line basis for financial statement purposes over periods ranging from 3 to 10 years for equipment and up to 30 years for buildings and improvements.
INVESTMENT IN UNCONSOLIDATED INVESTEES	J. We maintain a 40 percent interest in the equity and earnings of Maui Jim, Inc. (Maui Jim), a manufacturer of high-quality sunglasses, which is accounted for under the equity method. We also maintain a similar minority representation on their board of directors. Maui Jim’s chief executive officer owns a controlling majority of the outstanding shares of Maui Jim. We carry this investment at the holding company level as it is not core to our insurance operations. Our investment in Maui Jim was $79.5 million in 2018 and $77.7 million in 2017. In 2018, we recorded $12.5 million in investee earnings for Maui Jim, compared to $14.4 million in 2017 and $9.7 million in 2016. Maui Jim recorded net income of $30.3 million in 2018, $34.4 million in 2017 and $26.9 million in 2016. Additional summarized financial information for Maui Jim for 2018 and 2017 is outlined in the following table: (in millions) 2018 2017 Total assets $ 265.6 $ 259.4 Total liabilities 90.4 88.0 Total equity 175.2 171.4 Approximately $68.9 million of undistributed earnings from Maui Jim are included in our retained earnings as of December 31, 2018. We received dividends of $9.9 million from Maui Jim in 2018 and 2016. No dividends were received in 2017. As of December 31, 2018, we had a 23 percent interest in the equity and earnings of Prime Holdings Insurance Services, Inc. (Prime), which is accounted for under the equity method. Prime writes business through two Illinois domiciled insurance carriers, Prime Insurance Company, an excess and surplus lines company, and Prime Property and Casualty Insurance Inc., an admitted insurance company. Our investment in Prime was $15.4 million at December 31, 2018 and $12.4 million at December 31, 2017. In 2018, we recorded $3.6 million in investee earnings for Prime, compared to $2.8 million in 2017 and $1.1 million in 2016. Additionally, we maintain a 25 percent quota share reinsurance treaty with Prime, which contributed $41.1 million of gross premiums written and $34.2 million of net premiums earned during 2018, compared to $29.6 million of gross premiums written and $21.0 million of net premiums earned during 2017 and $13.4 million of gross premiums written and $11.4 million of net premiums earned during 2016. We perform annual impairment reviews of our investments in unconsolidated investees, which take into consideration current valuation and operating results. Based upon the most recent reviews, the assets were not impaired.
INTANGIBLE ASSETS	K. Goodwill and intangibles totaled $54.5 million and $59.3 million at December 31, 2018 and 2017, respectively, as detailed in the following table. Goodwill and Intangible Assets (in thousands) 2018 2017 Goodwill Energy surety $ 25,706 $ 25,706 Miscellaneous and contract surety 15,110 15,110 Small Commercial 5,246 5,246 Medical professional liability * - 3,595 Total goodwill $ 46,062 $ 49,657 Intangibles State insurance licenses $ 7,500 $ 7,500 Definite-lived intangibles, net of accumulated amortization of $3,062 at 12/31/18 and $5,678 at 12/31/17 972 2,145 Total intangibles $ 8,472 $ 9,645 Total goodwill and intangibles $ 54,534 $ 59,302 * The medical professional liability goodwill balance reflects a cumulative non-cash impairment charge of $12.4 million and $8.8 million as of December 31, 2018 and 2017, respectively. As the amortization of goodwill and indefinite-lived intangible assets is not permitted, the assets are tested for impairment on an annual basis, or earlier if there is reason to suspect that their values may have been diminished or impaired. Annual impairment testing was performed on each of our goodwill and indefinite-lived intangible assets during 2018. Based upon these reviews, our energy surety goodwill, miscellaneous and contract surety goodwill, small commercial goodwill and state insurance license indefinite-lived intangible asset were not impaired. In addition, as of December 31, 2018, there were no triggering events on the above-mentioned goodwill and intangible assets that would suggest an updated review was necessary. As previously disclosed, adverse loss experience triggered the need to test the medical professional liability reporting unit during the first quarter of 2018 and the second quarters of 2017 and 2016. The testing resulted in a $4.4 million non-cash impairment charge on goodwill and intangible assets in 2018, a $3.4 million non-cash impairment charge on goodwill and intangible assets in 2017 and a $7.2 million non-cash impairment charge on goodwill in 2016. In each instance, a fair value for the medical professional liability reporting unit’s agency relationships, carried as a definite-lived intangible asset, was determined by using a discounted cash flow valuation. In 2018, the carrying value exceeded the fair value, resulting in a $0.8 million non-cash impairment charge. In 2017, the resulting non-cash impairment charge on definite-lived intangibles was $1.8 million. A fair value for the medical professional liability reporting unit’s goodwill was determined by using a weighted average of a market approach and discounted cash flow valuation. The carrying value exceeded the fair value in each year, resulting in a $3.6 million non-cash impairment charge in 2018, a $1.6 million non-cash impairment charge during 2017 and a $7.2 million non-cash impairment charge in 2016. Subsequent to the 2018 impairment, the medical professional liability reporting unit had no remaining goodwill or intangible assets. All impairment charges were recorded as net realized losses in the respective period’s consolidated statement of earnings. The definite-lived intangible assets are amortized against future operating results based on their estimated useful lives. Amortization of intangible assets was $0.4 million, $0.7 million and $0.9 million for 2018, 2017 and 2016, respectively. We anticipate we will recognize amortization expense of $0.4 million in 2019 and 2020 and $0.1 million in 2021.
UNPAID LOSSES AND SETTLEMENT EXPENSES	L. The liability for unpaid losses and settlement expenses represents estimates of amounts needed to pay reported and unreported claims and related expenses. The estimates are based on certain actuarial and other assumptions related to the ultimate cost to settle such claims. Such assumptions are subject to occasional changes due to evolving economic, social and political conditions. All estimates are periodically reviewed and, as experience develops and new information becomes known, the reserves are adjusted as necessary. Such adjustments are reflected in the results of operations in the period in which they are determined. Due to the inherent uncertainty in estimating reserves for losses and settlement expenses, there can be no assurance that the ultimate liability will not exceed recorded amounts. If actual liabilities do exceed recorded amounts, there will be an adverse effect. Furthermore, we may determine that recorded reserves are more than adequate to cover expected losses, which would lead to a reduction in our reserves.
INSURANCE REVENUE RECOGNITION	M. Insurance premiums are recognized ratably over the term of the contracts, net of ceded reinsurance. Unearned premiums are calculated on a monthly pro rata basis.
INCOME TAXES	N. We file a consolidated federal income tax return. Federal income taxes are accounted for using the asset and liability method under which deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities, operating losses and tax credit carry forwards. The effect on deferred taxes for a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that all or some of the deferred tax assets will not be realized. We consider uncertainties in income taxes and recognize those in our financial statements as required. As it relates to uncertainties in income taxes, our unrecognized tax benefits, including interest and penalty accruals, are not considered material to the consolidated financial statements. Also, no tax uncertainties are expected to result in significant increases or decreases to unrecognized tax benefits within the next 12-month period. Penalties and interest related to income tax uncertainties, should they occur, would be included in income tax expense in the period in which they are incurred. As an insurance company, we are subject to minimal state income tax liabilities. On a state basis, since the majority of our income is from insurance operations, we pay premium taxes which are calculated as a percentage of gross premiums written in lieu of state income taxes. Premium taxes are a component of policy acquisition costs.
EARNINGS PER SHARE	O. Basic earnings per share (EPS) is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the dilution that could occur if securities or other contracts to issue common stock or common stock equivalents were exercised or converted into common stock. When inclusion of these items increases the earnings per share or reduces the loss per share, the effect on earnings is anti-dilutive. Under these circumstances, the diluted net earnings or net loss per share is computed excluding these items. The following represents a reconciliation of the numerator and denominator of the basic and diluted EPS computations contained in the consolidated financial statements: Weighted Average Income Shares Per Share (in thousands, except per share data) (Numerator) (Denominator) Amount For the year ended December 31, 2018 Basic EPS Income available to common shareholders $ 64,179 44,358 $ 1.45 Stock options — 477 Diluted EPS Income available to common shareholders and assumed conversions $ 64,179 44,835 $ 1.43 For the year ended December 31, 2017 Basic EPS Income available to common shareholders $ 105,028 44,033 $ 2.39 Stock options — 467 Diluted EPS Income available to common shareholders and assumed conversions $ 105,028 44,500 $ 2.36 For the year ended December 31, 2016 Basic EPS Income available to common shareholders $ 114,920 43,772 $ 2.63 Stock options — 660 Diluted EPS Income available to common shareholders and assumed conversions $ 114,920 44,432 $ 2.59
COMPREHENSIVE EARNINGS	P. Our comprehensive earnings include net earnings plus after-tax unrealized gains and losses on our available-for-sale fixed income portfolio in 2018. In 2017 and 2016, after-tax unrealized gains and losses on our equity portfolio were also included. With the adoption of ASU 2016-01 on January 1, 2018, we began recognizing unrealized gains and losses on the equity portfolio through net income. See note 1.C for more information. In reporting the components of comprehensive earnings, we used the federal statutory tax rate of 21 percent in 2018 and 35 percent in 2017 and 2016. Other comprehensive income (loss), as shown in the consolidated statements of earnings and comprehensive earnings, is net of tax expense (benefit) of $(9.0) million, $19.0 million and $(0.6) million for 2018, 2017 and 2016, respectively. The following table illustrates the changes in the balance of each component of accumulated other comprehensive earnings for each period presented in the consolidated financial statements. The 2016 and 2017 activity and balances include the net unrealized gain and loss activity on both fixed income and equity securities, while the 2018 activity and ending balance reflect only the net unrealized gain and loss activity on fixed income securities due to the aforementioned adoption of ASU 2016-01. Unrealized Gains/Losses on Available-for-Sale Securities For the Year Ended December 31, (in thousands) 2018 2017 2016 Beginning balance $ 157,919 $ 122,610 $ 123,774 Cumulative effect adjustment of ASU 2016-01 (142,219) — — Adjusted beginning balance $ 15,700 $ 122,610 $ 123,774 Other comprehensive earnings before reclassifications (35,763) 40,887 26,740 Amounts reclassified from accumulated other comprehensive earnings 1,766 (5,578) (27,904) Net current-period other comprehensive earnings (loss) $ (33,997) $ 35,309 $ (1,164) Reclassification of stranded tax effect per ASU 2018-02 (see note 1.C) 3,725 — — Ending balance $ (14,572) $ 157,919 $ 122,610 The sale or other-than-temporary impairment of an available-for-sale security results in amounts being reclassified from accumulated other comprehensive earnings to current period net earnings. The effects of reclassifications out of accumulated other comprehensive earnings by the respective line items of net earnings are presented in the following table. As previously mentioned, 2018 activity is reflective of activity on fixed income securities classified as available-for-sale, while 2017 and 2016 also includes activity from the equity portfolio. Amount Reclassified from Accumulated Other Comprehensive Earnings (in thousands) Component of Accumulated For the Year Ended December 31, Affected line item in the Other Comprehensive Earnings 2018 2017 2016 Statement of Earnings Unrealized gains and losses on available-for-sale securities $ (2,018) $ 11,141 $ 43,024 Net realized investment gains (217) (2,559) (95) Other-than-temporary impairment (OTTI) losses on investments $ (2,235) $ 8,582 $ 42,929 Earnings before income taxes 469 (3,004) (15,025) Income tax benefit (expense) $ (1,766) $ 5,578 $ 27,904 Net earnings
FAIR VALUE DISCLOSURES	Q. Fair value is defined as the price in the principal market that would be received for an asset to facilitate an orderly transaction between market participants on the measurement date. We determined the fair value of certain financial instruments based on their underlying characteristics and relevant transactions in the marketplace. We maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following are the levels of the fair value hierarchy and a brief description of the type of valuation inputs that are used to establish each level. Financial assets are classified based upon the lowest level of significant input that is used to determine fair value. · Pricing Level 1 is applied to valuations based on readily available, unadjusted quoted prices in active markets for identical assets. · Pricing Level 2 is applied to valuations based upon quoted prices for similar assets in active markets, quoted prices for identical or similar assets in inactive markets; or valuations based on models where the significant inputs are observable (e.g. interest rates, yield curves, prepayment speeds, default rates, loss severities) or can be corroborated by observable market data. · Pricing Level 3 is applied to valuations that are derived from techniques in which one or more of the significant inputs are unobservable. As a part of management’s process to determine fair value, we utilize widely recognized, third-party pricing sources to determine our fair values. We have obtained an understanding of the third-party pricing sources’ valuation methodologies and inputs. The following is a description of the valuation techniques used for financial assets that are measured at fair value, including the general classification of such assets pursuant to the fair value hierarchy. Corporate, Agencies, Government and Municipal Bonds: The pricing vendor employs a multi-dimensional model which uses standard inputs including (listed in approximate order of priority for use) benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, market bids/offers and other reference data. The pricing vendor also monitors market indicators, as well as industry and economic events. All bonds valued using these techniques are classified as Level 2. All Corporate, Agencies, Government and Municipal securities are deemed Level 2. Mortgage-backed Securities (MBS)/Collateralized Mortgage Obligations (CMO) and Asset-backed Securities (ABS): The pricing vendor evaluation methodology includes principally interest rate movements and new issue data. Evaluation of the tranches (non-volatile, volatile or credit sensitivity) is based on the pricing vendors’ interpretation of accepted modeling and pricing conventions. This information is then used to determine the cash flows for each tranche, benchmark yields, pre-payment assumptions and to incorporate collateral performance. To evaluate CMO volatility, an option adjusted spread model is used in combination with models that simulate interest rate paths to determine market price information. This process allows the pricing vendor to obtain evaluations of a broad universe of securities in a way that reflects changes in yield curve, index rates, implied volatility, mortgage rates and recent trade activity. MBS/CMO and ABS with corroborated, observable inputs are classified as Level 2. All of our MBS/CMO and ABS are deemed Level 2. For all of our fixed income securities classified as Level 2, as described above, we periodically conduct a review to assess the reasonableness of the fair values provided by our pricing services. Our review consists of a two-pronged approach. First, we compare prices provided by our pricing services to those provided by an additional source. In some cases, we obtain prices from securities brokers and compare them to the prices provided by our pricing services. In our comparisons, if discrepancies are found, we compare our prices to actual reported trade data for like securities. No changes to the fair values supplied by our pricing services have occurred as a result of our reviews. Based on these assessments, we have determined that the fair values of our Level 2 securities provided by our pricing services are reasonable. Common Stock: All but one of our common stock holdings are traded on an exchange. Exchange traded equities have readily observable price levels and are classified as Level 1 (fair value based on quoted market prices). Pricing for the equity security not traded on an exchange is provided by a third-party pricing source and is classified as Level 2. Due to the relatively short-term nature of cash, short-term investments, accounts receivable and accounts payable, their carrying amounts are reasonable estimates of fair value. Our investments in private funds, classified as other invested assets, are measured using the investments’ net asset value per share and are not categorized within the fair value hierarchy. The fair value of our long-term debt is discussed further in note 4.
STOCK-BASED COMPENSATION	R. We expense the estimated fair value of employee stock options and similar awards. We measure compensation cost for awards of equity instruments to employees based on the grant-date fair value of those awards and recognize compensation expense over the service period that the awards are expected to vest. The tax effects related to share-based payments were made through net earnings in 2018 and 2017. In 2016, the tax effects of share-based compensation were recognized in additional paid-in capital under the alternative transition method. The alternative transition method used simplified methods to determine the impact on the additional paid-in capital pool and consolidated statements of cash flows. See note 8 for further discussion and related disclosures regarding stock options.
RISKS AND UNCERTAINTIES	S. Certain risks and uncertainties are inherent to our day-to-day operations and to the process of preparing our consolidated financial statements. The more significant risks and uncertainties, as well as our attempt to mitigate, quantify and minimize such risks, are presented below and throughout the notes to the consolidated financial statements. Insurance Risks We compete with a large number of other companies in our selected lines of business. During periods of intense competition for premium, we are vulnerable to the actions of other companies who may seek to write business without the appropriate regard for risk and profitability. The insurance industry is currently operating under highly competitive conditions and, as a result, margins in the industry are under pressure. During these times, it is very difficult to grow or maintain premium volume without sacrificing underwriting discipline and income. Our profitability can be affected significantly by the ability of our underwriters to accurately select and price risk and our claim personnel to appropriately deliver fair outcomes. We attempt to mitigate this risk by incentivizing our underwriters to maximize underwriting profit and remain disciplined in pricing and selecting risks. If we are unable to compete effectively in the markets in which we operate or expand our operations into new markets, our underwriting revenues may decline, as well as overall business results. Our loss reserves are based on estimates and may be inadequate to cover our actual insured losses, which would negatively impact our profitability. As of December 31, 2018 we had $1.5 billion of gross loss and LAE reserves. Significant periods of time often elapse between the occurrence of an insured loss, the reporting of the loss to the Company and our payment of that loss. As part of the reserving process, we review historical data and consider the impact of various factors such as trends in claim frequency and severity, emerging economic and social trends, inflation and changes in the regulatory and litigation environments. If the actual amount of insured losses is greater than the amount we have reserved for these losses, our profitability would suffer. Catastrophe Exposures Our insurance coverages include exposure to catastrophic events. We monitor all catastrophe exposures by quantifying our exposed policy limits in each region and by using computer-assisted modeling techniques. Additionally, we limit our risk to such catastrophes through restraining the total policy limits written in each region and by purchasing reinsurance. Our major catastrophe exposure is to losses caused by earthquakes, primarily on the West Coast. In 2018, we had reinsurance protection of $300 million in excess of $25 million first-dollar retention for earthquakes in California and $325 million in excess of a $25 million first-dollar retention for earthquakes outside of California. These amounts are subject to certain co-participations by the Company on losses in excess of the $25 million retentions. Our second largest catastrophe exposure is to losses caused by wind storms to commercial properties throughout the Gulf and East Coasts, as well as to homes we insure in Hawaii. In 2018, these coverages were supported by $225 million in excess of a $25 million first-dollar retention in traditional catastrophe reinsurance protection, subject to certain co-participations by the Company in the excess layers. In addition, we have incidental exposure to international catastrophic events. Our catastrophe reinsurance treaty renewed on January 1, 2019. We purchased reinsurance protection of $400 million in excess of $25 million first-dollar retention for earthquakes in California and $425 million in excess of a $25 million first-dollar retention for earthquakes outside of California. For other CAT events, such as hurricanes, we purchased reinsurance protection of $275 million in excess of a $25 million first dollar retention. These amounts are subject to certain co-participations by the Company on losses in excess of the $25 million retentions. We actively manage our catastrophe program to keep our net retention in line with risk tolerances and to optimize the risk/return trade off. Environmental Exposures We are subject to environmental claims and exposures primarily through our commercial excess, general liability and discontinued assumed casualty reinsurance lines of business. Although exposure to environmental claims exists in these lines of business, we seek to mitigate or control the extent of this exposure on the vast majority of this business through the following methods: (1) our policies include pollution exclusions that have been continually updated to further strengthen them, (2) our policies primarily cover moderate hazard risks and (3) we began writing this business after the insurance industry became aware of the potential pollution liability exposure and implemented changes to limit exposure to this hazard. We offer coverage for low to moderate environmental liability exposures for small contractors and asbestos and mold remediation specialists. We also provide limited coverage for individually underwritten underground storage tanks. The overall exposure is mitigated by focusing on smaller risks with low to moderate exposures. Risks that have large-scale exposures are avoided including petrochemical, chemical, mining, manufacturers and other risks that might be exposed to superfund sites. This business is covered under our casualty ceded reinsurance treaties. We made loss and settlement expense payments on environmental liability claims and have loss and settlement expense reserves for others. We include this historical environmental loss experience with the remaining loss experience in the applicable line of business to project ultimate incurred losses and settlement expenses as well as related incurred but not reported (IBNR) loss and settlement expense reserves. Although historical experience on environmental claims may not accurately reflect future environmental exposures, we used this experience to record loss and settlement expense reserves in the exposed lines of business. See further discussion of environmental exposures in note 6. Reinsurance Reinsurance does not discharge the Company from our primary liability to policyholders, and to the extent that a reinsurer is unable to meet its obligations, we would be liable. We continuously monitor the financial condition of prospective and existing reinsurers. As a result, we purchase reinsurance from a number of financially strong reinsurers. We provide an allowance for reinsurance balances deemed uncollectible. See further discussion of reinsurance exposures in note 5. Investment Risk Our investment portfolio is subject to market, credit and interest rate risks. The equity portfolio will fluctuate with movements in the overall stock market. While the equity portfolio has been constructed to have lower downside risk than the market, the portfolio is positively correlated with movements in domestic stocks. The bond portfolio is affected by interest rate changes and movement in credit spreads. We attempt to mitigate our interest rate and credit risks by constructing a well-diversified portfolio with high-quality securities with varied maturities. Downturns in the financial markets could have a negative effect on our portfolio. However, we attempt to manage this risk through asset allocation, duration and security selection. Liquidity Risk Liquidity is essential to our business and a key component of our concept of asset-liability matching. Our liquidity may be impaired by an inability to collect premium receivable or reinsurance recoverable balances in a timely manner, an inability to sell assets or redeem our investments, an inability to access funds from our insurance subsidiaries, unforeseen outflows of cash or large claim payments or an inability to access debt or equity capital markets. This situation may arise due to circumstances that we may be unable to control, such as a general market disruption, an operational problem that affects third parties or the Company, or even by the perception among market participants that we, or other market participants, are experiencing greater liquidity risk. Our credit ratings are important to our liquidity. A reduction in our credit ratings could adversely affect our liquidity and competitive position by increasing our borrowing costs or limiting our access to the capital markets. Financial Statements The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities and reported amounts of revenues and expenses. The most significant of these amounts is the liability for unpaid losses and settlement expenses. Other estimates include investment valuation and OTTIs, the collectability of reinsurance balances, recoverability of deferred tax assets and deferred policy acquisition costs. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. Although recorded estimates are supported by actuarial computations and other supportive data, the estimates are ultimately based on our expectations of future events. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods. External Factors Our insurance subsidiaries are highly regulated by the state in which they are incorporated and by the states in which they do business. Such regulations, among other things, limit the amount of dividends, impose restrictions on the amount and types of investments and regulate rates insurers may charge for various coverages. We are also subject to insolvency and guaranty fund assessments for various programs designed to ensure policyholder indemnification. We generally accrue an assessment during the period in which it becomes probable that a liability has been incurred from an insolvency and the amount of the related assessment can be reasonably estimated. The National Association of Insurance Commissioners (NAIC) has developed Property/Casualty Risk-Based Capital (RBC) standards that relate an insurer’s reported statutory surplus to the risks inherent in its overall operations. The RBC formula uses the statutory annual statement to calculate the minimum indicated capital level to support investment and underwriting risk. The NAIC model law calls for various levels of regulatory action based on the magnitude of an indicated RBC capital deficiency, if any. We regularly monitor our subsidiaries’ internal capital requirements and the NAIC’s RBC developments. As of December 31, 2018, we determined that our capital levels are well in excess of the minimum capital requirements for all RBC action levels and that our capital levels are sufficient to support the level of risk inherent in our operations. See note 9 for further discussion of statutory information and related insurance regulatory restrictions. In addition, ratings are a critical factor in establishing the competitive position of insurance companies. Our insurance companies are rated by A.M. Best, S&P and Moody’s. Their ratings reflect their opinions of an insurance company’s and an insurance holding company’s financial strength, operating performance, strategic position and ability to meet its obligations to policyholders.

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
	Dec. 31, 2018
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Schedule of summarized financial information of Maui Jim	(in millions) 2018 2017 Total assets $ 265.6 $ 259.4 Total liabilities 90.4 88.0 Total equity 175.2 171.4
Schedule of goodwill and intangible assets	Goodwill and Intangible Assets (in thousands) 2018 2017 Goodwill Energy surety $ 25,706 $ 25,706 Miscellaneous and contract surety 15,110 15,110 Small Commercial 5,246 5,246 Medical professional liability * - 3,595 Total goodwill $ 46,062 $ 49,657 Intangibles State insurance licenses $ 7,500 $ 7,500 Definite-lived intangibles, net of accumulated amortization of $3,062 at 12/31/18 and $5,678 at 12/31/17 972 2,145 Total intangibles $ 8,472 $ 9,645 Total goodwill and intangibles $ 54,534 $ 59,302 * The medical professional liability goodwill balance reflects a cumulative non-cash impairment charge of $12.4 million and $8.8 million as of December 31, 2018 and 2017, respectively.
Schedule of reconciliation of numerator and denominator of the basic and diluted earnings per share computations	Weighted Average Income Shares Per Share (in thousands, except per share data) (Numerator) (Denominator) Amount For the year ended December 31, 2018 Basic EPS Income available to common shareholders $ 64,179 44,358 $ 1.45 Stock options — 477 Diluted EPS Income available to common shareholders and assumed conversions $ 64,179 44,835 $ 1.43 For the year ended December 31, 2017 Basic EPS Income available to common shareholders $ 105,028 44,033 $ 2.39 Stock options — 467 Diluted EPS Income available to common shareholders and assumed conversions $ 105,028 44,500 $ 2.36 For the year ended December 31, 2016 Basic EPS Income available to common shareholders $ 114,920 43,772 $ 2.63 Stock options — 660 Diluted EPS Income available to common shareholders and assumed conversions $ 114,920 44,432 $ 2.59
Schedule of changes in the balance of each component of accumulated other comprehensive earnings	Unrealized Gains/Losses on Available-for-Sale Securities For the Year Ended December 31, (in thousands) 2018 2017 2016 Beginning balance $ 157,919 $ 122,610 $ 123,774 Cumulative effect adjustment of ASU 2016-01 (142,219) — — Adjusted beginning balance $ 15,700 $ 122,610 $ 123,774 Other comprehensive earnings before reclassifications (35,763) 40,887 26,740 Amounts reclassified from accumulated other comprehensive earnings 1,766 (5,578) (27,904) Net current-period other comprehensive earnings (loss) $ (33,997) $ 35,309 $ (1,164) Reclassification of stranded tax effect per ASU 2018-02 (see note 1.C) 3,725 — — Ending balance $ (14,572) $ 157,919 $ 122,610
Schedule of effects of reclassifications out of accumulated other comprehensive earnings	Amount Reclassified from Accumulated Other Comprehensive Earnings (in thousands) Component of Accumulated For the Year Ended December 31, Affected line item in the Other Comprehensive Earnings 2018 2017 2016 Statement of Earnings Unrealized gains and losses on available-for-sale securities $ (2,018) $ 11,141 $ 43,024 Net realized investment gains (217) (2,559) (95) Other-than-temporary impairment (OTTI) losses on investments $ (2,235) $ 8,582 $ 42,929 Earnings before income taxes 469 (3,004) (15,025) Income tax benefit (expense) $ (1,766) $ 5,578 $ 27,904 Net earnings

INVESTMENTS (Tables)

INVESTMENTS (Tables)	12 Months Ended
	Dec. 31, 2018
INVESTMENTS
Schedule of net investment income	NET INVESTMENT INCOME (in thousands) 2018 2017 2016 Interest on fixed income securities $ 54,491 $ 48,343 $ 46,834 Dividends on equity securities 9,814 10,506 10,929 Interest on cash, short-term investments and other invested assets 2,309 945 120 Gross investment income $ 66,614 $ 59,794 $ 57,883 Less investment expenses (4,529) (4,918) (4,808) Net investment income $ 62,085 $ 54,876 $ 53,075
Schedule of pretax net realized investment gains (losses) and net changes in unrealized gains (losses) on investments	REALIZED/UNREALIZED GAINS (in thousands) 2018 2017 2016 Net realized gains (losses): Fixed income: Available-for-sale $ (2,018) $ 859 $ 4,314 Available-for-sale OTTI (217) (2,559) (95) Equity securities 69,868 10,282 38,709 Other (4,226) (4,171) (8,283) Total $ 63,407 $ 4,411 $ 34,645 Net changes in unrealized gains (losses) on investments: Fixed income: Available-for-sale $ (41,778) $ 16,846 $ (10,972) Equity securities (98,380) 36,844 8,659 Other invested assets (355) 29 — Investment in unconsolidated investees (1,257) 604 522 Total $ (141,770) $ 54,323 $ (1,791) Net realized gains (losses) and changes in unrealized gains (losses) on investments $ (78,363) $ 58,734 $ 32,854
Schedule of disposition of fixed maturities and equities	Net SALES Proceeds Gross Realized Realized (in thousands) From Sales Gains Losses Gain (Loss) 2018 Available-for-sale $ 394,318 $ 3,131 $ (5,349) $ (2,218) Equities 147,838 71,065 (1,197) 69,868 2017 Available-for-sale $ 169,002 $ 2,406 $ (1,670) $ 736 Equities 36,573 13,178 (2,896) 10,282 2016 Available-for-sale $ 329,091 $ 7,158 $ (3,287) $ 3,871 Equities 89,909 39,668 (959) 38,709 Net CALLS/MATURITIES Gross Realized Realized (in thousands) Proceeds Gains Losses Gain (Loss) 2018 Available-for-sale $ 187,380 $ 311 $ (111) $ 200 2017 Available-for-sale $ 195,617 $ 262 $ (139) $ 123 2016 Available-for-sale $ 141,255 $ 445 $ (2) $ 443
Schedule of assets measured at fair value on recurring basis	Assets measured at fair value on a recurring basis as of December 31, 2018, are summarized below: Significant Quoted in Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (in thousands) (Level 1) (Level 2) (Level 3) Total Fixed income securities - available-for-sale U.S. government $ — $ 200,229 $ — $ 200,229 U.S. agency — 31,904 — 31,904 Non-U.S. govt. & agency — 7,639 — 7,639 Agency MBS — 395,253 — 395,253 ABS/CMBS* — 136,723 — 136,723 Corporate — 668,679 — 668,679 Municipal — 320,088 — 320,088 Total fixed income securities - available-for-sale $ — $ 1,760,515 $ — $ 1,760,515 Equity securities 339,985 498 — 340,483 Total $ 339,985 $ 1,761,013 $ — $ 2,100,998 *Non-agency asset-backed & commercial mortgage-backed Assets measured at fair value on a recurring basis as of December 31, 2017, are summarized below: Significant Quoted in Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (in thousands) (Level 1) (Level 2) (Level 3) Total Fixed income securities - available-for-sale U.S. government $ — $ 91,689 $ — $ 91,689 U.S. agency — 18,778 — 18,778 Non-U.S. govt. & agency — 7,588 — 7,588 Agency MBS — 328,471 — 328,471 ABS/CMBS* — 70,526 — 70,526 Corporate — 519,022 — 519,022 Municipal — 636,165 — 636,165 Total fixed income securities - available-for-sale $ — $ 1,672,239 $ — $ 1,672,239 Equity securities 400,492 — — 400,492 Total $ 400,492 $ 1,672,239 $ — $ 2,072,731 *Non-agency asset-backed & commercial mortgage-backed
Schedule of contractual maturity of securities	The amortized cost and estimated fair value of fixed income securities at December 31, 2018, by contractual maturity, are shown as follows: (in thousands) Amortized Cost Fair Value Available-for-sale Due in one year or less $ 41,319 $ 41,333 Due after one year through five years 411,153 410,680 Due after five years through 10 years 615,061 608,115 Due after 10 years 168,716 168,412 Mtge/ABS/CMBS* 540,216 531,975 Total available-for-sale $ 1,776,465 $ 1,760,515 *
Schedule of amortized cost and fair value of available-for-sale securities	In addition, the following table is a schedule of amortized costs and estimated fair values of investments in fixed income securities as of December 31, 2018 and 2017: 2018 Amortized Gross Unrealized (in thousands) Cost Fair Value Gains Losses Available-for-sale U.S. government $ 199,982 $ 200,229 $ 1,232 $ (985) U.S. agency 31,716 31,904 403 (215) Non-U.S. govt. & agency 8,170 7,639 — (531) Agency MBS 402,992 395,253 1,709 (9,448) ABS/CMBS* 137,224 136,723 375 (876) Corporate 681,909 668,679 2,894 (16,124) Municipal 314,472 320,088 6,926 (1,310) Total fixed income $ 1,776,465 $ 1,760,515 $ 13,539 $ (29,489) 2017 Amortized Gross Unrealized (in thousands) Cost Fair Value Gains Losses Available-for-sale U.S. government $ 92,561 $ 91,689 $ 23 $ (895) U.S. agency 18,541 18,778 347 (110) Non-U.S. govt. & agency 7,501 7,588 143 (56) Agency MBS 329,129 328,471 3,420 (4,078) ABS/CMBS* 70,405 70,526 436 (315) Corporate 508,128 519,022 12,575 (1,681) Municipal 620,146 636,165 17,272 (1,253) Total fixed income $ 1,646,411 $ 1,672,239 $ 34,216 $ (8,388) * Non-agency asset-backed & commercial mortgage-backed
Schedule of securities in an unrealized loss position segregated by type and length of time in an unrealized loss position	December 31, 2018 December 31, 2017 12 Mos. 12 Mos. (in thousands) < 12 Mos. & Greater Total < 12 Mos. & Greater Total U.S. Government Fair value $ 7,249 $ 76,073 $ 83,322 $ 58,009 $ 30,888 $ 88,897 Amortized cost 7,270 77,037 84,307 58,443 31,349 89,792 Unrealized Loss $ (21) $ (964) $ (985) $ (434) $ (461) $ (895) U.S. Agency Fair value $ — $ 8,843 $ 8,843 $ 10,917 $ — $ 10,917 Amortized cost — 9,058 9,058 11,027 — 11,027 Unrealized Loss $ — $ (215) $ (215) $ (110) $ — $ (110) Non-U.S. Government Fair value $ 5,432 $ 2,207 $ 7,639 $ — $ 1,840 $ 1,840 Amortized cost 5,571 2,599 8,170 — 1,896 1,896 Unrealized Loss $ (139) $ (392) $ (531) $ — $ (56) $ (56) Agency MBS Fair value $ 25,345 $ 261,325 $ 286,670 $ 122,130 $ 111,306 $ 233,436 Amortized cost 25,486 270,632 296,118 123,559 113,955 237,514 Unrealized Loss $ (141) $ (9,307) $ (9,448) $ (1,429) $ (2,649) $ (4,078) ABS/CMBS* Fair value $ 46,918 $ 32,137 $ 79,055 $ 23,406 $ 21,587 $ 44,993 Amortized cost 47,146 32,785 79,931 23,491 21,817 45,308 Unrealized Loss $ (228) $ (648) $ (876) $ (85) $ (230) $ (315) Corporate Fair value $ 306,177 $ 147,751 $ 453,928 $ 86,946 $ 28,600 $ 115,546 Amortized cost 315,428 154,624 470,052 87,736 29,491 117,227 Unrealized Loss $ (9,251) $ (6,873) $ (16,124) $ (790) $ (891) $ (1,681) Municipal Fair value $ 6,036 $ 55,681 $ 61,717 $ 71,059 $ 60,049 $ 131,108 Amortized cost 6,052 56,975 63,027 71,534 60,827 132,361 Unrealized Loss $ (16) $ (1,294) $ (1,310) $ (475) $ (778) $ (1,253) Total fixed income Fair value $ 397,157 $ 584,017 $ 981,174 $ 372,467 $ 254,270 $ 626,737 Amortized cost 406,953 603,710 1,010,663 375,790 259,335 635,125 Unrealized Loss $ (9,796) $ (19,693) $ (29,489) $ (3,323) $ (5,065) $ (8,388) *Non-agency asset-backed & commercial mortgage-backed

POLICY ACQUISITION COSTS (Table

POLICY ACQUISITION COSTS (Tables)	12 Months Ended
	Dec. 31, 2018
POLICY ACQUISITION COSTS
Schedule of policy acquisition costs deferred and amortized to income	Policy acquisition costs deferred and amortized to income for the years ended December 31 are summarized as follows: (in thousands) 2018 2017 2016 Deferred policy acquisition costs (DAC), beginning of year $ 77,716 $ 73,147 $ 69,829 Deferred: Direct commissions $ 175,697 $ 157,723 $ 150,390 Premium taxes 12,654 11,651 11,759 Ceding commissions (22,190) (18,096) (17,488) Net deferred $ 166,161 $ 151,278 $ 144,661 Amortized 158,943 146,709 141,343 DAC, end of year $ 84,934 $ 77,716 $ 73,147 Policy acquisition costs: Amortized to expense - DAC $ 158,943 $ 146,709 $ 141,343 Period costs: Ceding commission - contingent (2,241) (3,575) (1,524) Other underwriting expenses 111,036 109,381 109,793 Total policy acquisition costs $ 267,738 $ 252,515 $ 249,612

REINSURANCE (Tables)

REINSURANCE (Tables)	12 Months Ended
	Dec. 31, 2018
REINSURANCE
Schedule of premiums written and earned along with losses and settlement expenses incurred	(in thousands) 2018 2017 2016 WRITTEN Direct $ 934,913 $ 848,153 $ 844,430 Reinsurance assumed 48,303 37,159 30,434 Reinsurance ceded (160,041) (135,458) (133,912) Net $ 823,175 $ 749,854 $ 740,952 EARNED Direct $ 896,234 $ 835,118 $ 835,294 Reinsurance assumed 41,926 32,521 27,886 Reinsurance ceded (146,794) (129,702) (134,572) Net $ 791,366 $ 737,937 $ 728,608 LOSSES AND SETTLEMENT EXPENSES INCURRED Direct $ 560,421 $ 486,986 $ 405,873 Reinsurance assumed 20,376 16,072 13,196 Reinsurance ceded (152,604) (101,474) (69,291) Net $ 428,193 $ 401,584 $ 349,778
Schedule of net reinsurance balances recoverable, after consideration of collateral, from top 10 reinsurers	Net Reinsurer Ceded A.M. Best S & P Exposure as of Percent of Premiums Percent of (dollars in thousands) Rating Rating 12/31/2018 Total Written Total Munich Re / HSB A+, Superior AA-, Very Strong $ 73,593 17.1 % $ 24,479 15.3 % Swiss Re / Westport Ins. Corp. A+, Superior AA-, Very Strong 35,095 8.2 % 2,100 1.3 % Endurance Re A+, Superior A+, Strong 28,754 6.7 % 6,000 3.8 % Aspen UK Ltd. A, Excellent A, Strong 27,735 6.4 % 7,906 4.9 % Berkley Insurance Co. A+, Superior A+, Strong 23,267 5.4 % 6,335 4.0 % Hannover Ruckversicherung A+, Superior AA-, Very Strong 22,629 5.3 % 9,458 5.9 % Axis Re A+, Superior A+, Strong 19,928 4.6 % 6,424 4.0 % Transatlantic Re A+, Superior A+, Strong 19,517 4.5 % 7,911 4.9 % Toa Re A, Excellent A+, Strong 18,480 4.3 % 6,495 4.1 % General Re A++, Superior AA+, Very Strong 18,168 4.2 % 5,170 3.2 % Tokio Millennium Re A+, Superior A+, Strong 17,044 4.0 % 6,947 4.3 % All other reinsurers* 125,777 29.3 % 70,816 44.3 % Total ceded exposure $ 429,987 100.0 % $ 160,041 100.0 % * All other reinsurance balances recoverable, when considered by individual reinsurer, are less than 2 percent of shareholders’ equity.

HISTORICAL LOSS AND LAE DEVEL_2

HISTORICAL LOSS AND LAE DEVELOPMENT (Tables)	12 Months Ended
	Dec. 31, 2018
HISTORICAL LOSS AND LAE DEVELOPMENT
Schedule of reconciliation of unpaid losses and settlement expenses (LAE)	The following table is a reconciliation of our unpaid losses and settlement expenses (LAE) for the years 2018, 2017 and 2016: (in thousands) 2018 2017 2016 Unpaid losses and LAE at beginning of year: Gross $ 1,271,503 $ 1,139,337 $ 1,103,785 Ceded (301,991) (288,224) (297,844) Net $ 969,512 $ 851,113 $ 805,941 Increase (decrease) in incurred losses and LAE: Current accident year $ 478,143 $ 440,452 $ 391,772 Prior accident years (49,950) (38,868) (41,994) Total incurred $ 428,193 $ 401,584 $ 349,778 Loss and LAE payments for claims incurred: Current accident year $ (76,050) $ (73,392) $ (70,540) Prior accident year (225,306) (209,793) (234,066) Total paid $ (301,356) $ (283,185) $ (304,606) Net unpaid losses and LAE at end of year $ 1,096,349 $ 969,512 $ 851,113 Unpaid losses and LAE at end of year: Gross $ 1,461,348 $ 1,271,503 $ 1,139,337 Ceded (364,999) (301,991) (288,224) Net $ 1,096,349 $ 969,512 $ 851,113
Schedule of incurred and paid claims development	Casualty - Primary Occurrence (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2018 For the Years Ended December 31, Cumulative Number of Reported AY 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018 Total IBNR Claims 2009 $ 85,476 $ 119,957 $ 99,765 $ 91,441 $ 86,888 $ 82,651 $ 81,138 $ 80,518 $ 80,350 $ 81,445 $ 2,202 5,713 2010 87,875 96,582 93,589 88,820 85,034 80,289 78,685 78,991 80,216 2,392 6,117 2011 91,139 98,428 94,145 89,622 86,342 83,181 82,193 82,248 3,180 5,851 2012 91,807 78,406 65,893 61,072 59,028 59,488 60,328 3,502 5,163 2013 80,823 67,297 62,882 60,329 60,162 59,556 6,538 4,287 2014 88,092 79,497 71,592 67,237 66,389 12,492 4,242 2015 94,835 84,975 83,579 78,675 21,351 4,311 2016 101,950 96,753 90,611 38,505 4,148 2017 119,741 111,391 64,662 4,119 2018 141,513 109,482 3,773 Total $ 852,372 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018 2009 $ 1,972 $ 9,233 $ 24,115 $ 43,702 $ 58,460 $ 65,913 $ 70,220 $ 74,920 $ 75,948 $ 77,175 2010 2,587 13,025 29,312 44,051 55,992 61,929 66,399 69,514 73,318 2011 5,924 17,124 32,978 48,822 60,769 67,358 71,413 74,814 2012 5,897 14,539 23,889 33,822 43,276 47,970 51,611 2013 6,334 13,021 22,366 34,786 40,609 45,753 2014 11,436 18,771 29,545 40,270 47,343 2015 10,157 19,902 33,020 45,056 2016 10,142 24,186 35,764 2017 13,154 25,933 2018 15,066 * Presented as unaudited required supplementary information. Total $ 491,833 All outstanding liabilities before 2009, net of reinsurance 11,911 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 372,450 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 % % % % % % % % % % Casualty - Excess Occurrence (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2018 For the Years Ended December 31, Cumulative Number of Reported AY 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018 Total IBNR Claims 2009 $ 30,267 $ 19,719 $ 14,981 $ 12,893 $ 12,966 $ 12,459 $ 12,601 $ 11,982 $ 12,055 $ 12,072 $ 285 567 2010 29,314 24,244 22,111 18,932 20,044 22,044 21,018 20,530 20,527 369 500 2011 26,272 17,148 17,443 18,641 19,160 20,959 21,295 22,032 824 581 2012 29,042 21,558 21,021 21,885 21,231 22,433 23,020 1,386 855 2013 39,984 34,824 26,857 25,425 25,599 24,922 3,488 933 2014 50,889 39,095 35,119 32,274 33,372 8,832 875 2015 53,672 50,857 47,392 42,840 14,320 669 2016 56,341 49,385 37,676 25,675 572 2017 62,863 55,868 43,891 473 2018 69,362 63,524 258 Total $ 341,691 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018 2009 $ 956 $ 3,947 $ 6,585 $ 9,460 $ 11,001 $ 10,808 $ 11,776 $ 11,780 $ 11,786 $ 11,787 2010 7 6,002 10,705 13,282 15,512 17,302 19,175 19,256 19,308 2011 2,169 5,145 6,981 8,793 10,772 16,494 17,769 20,214 2012 1,315 3,573 8,843 15,380 16,879 17,747 19,310 2013 1,060 5,701 10,967 14,545 16,967 17,956 2014 1,899 4,006 11,002 18,852 22,541 2015 2,048 10,127 19,571 23,184 2016 1,068 3,396 7,441 2017 17 5,679 2018 2,506 * Presented as unaudited required supplementary information. Total $ 149,926 All outstanding liabilities before 2009, net of reinsurance 17,918 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 209,683 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 % % % % % % % % % % Casualty - Claims Made (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2018 For the Years Ended December 31, Cumulative Number of Reported AY 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018 Total IBNR Claims 2009 $ 12,918 $ 13,703 $ 9,687 $ 13,562 $ 11,710 $ 13,117 $ 12,810 $ 12,053 $ 11,827 $ 16,056 $ 398 383 2010 13,690 15,556 9,776 10,429 11,689 10,581 9,175 9,024 8,735 219 502 2011 17,416 17,454 12,260 10,619 8,510 7,720 7,852 11,506 640 682 2012 27,576 26,144 20,727 19,590 18,022 17,612 17,569 1,251 803 2013 40,095 41,488 44,054 40,288 38,473 37,959 3,751 1,042 2014 53,929 55,386 58,152 55,350 51,554 7,271 1,304 2015 55,006 47,831 42,206 39,906 10,559 1,335 2016 59,992 67,760 69,493 23,817 1,500 2017 60,572 62,450 35,365 1,627 2018 66,128 50,820 1,272 Total $ 381,356 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018 2009 $ 113 $ 442 $ 773 $ 3,413 $ 5,176 $ 10,678 $ 11,217 $ 11,398 $ 11,475 $ 11,955 2010 259 1,548 2,308 3,626 5,733 5,749 6,956 8,485 8,512 2011 330 1,949 4,508 5,947 5,637 6,209 6,835 7,132 2012 433 4,086 6,898 9,218 10,968 14,378 15,621 2013 792 7,073 18,425 26,121 29,678 32,789 2014 1,705 9,775 27,923 35,755 40,080 2015 2,215 10,738 16,774 20,920 2016 2,060 14,558 27,465 2017 2,455 11,350 2018 1,964 * Presented as unaudited required supplementary information. Total $ 177,788 All outstanding liabilities before 2009, net of reinsurance 933 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 204,501 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 % % % % % % % % % % Casualty - Transportation (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2018 For the Years Ended December 31, Cumulative Number of Reported AY 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018 Total IBNR Claims 2009 $ 26,349 $ 23,366 $ 23,174 $ 22,929 $ 22,613 $ 22,340 $ 21,958 $ 21,969 $ 21,926 $ 21,911 $ 19 2,644 2010 27,239 23,390 24,912 25,593 23,981 23,625 23,701 23,786 23,776 44 2,843 2011 22,957 23,479 25,747 25,272 25,431 25,376 25,167 25,614 52 2,469 2012 21,452 22,203 22,924 23,511 23,689 23,620 23,305 76 2,284 2013 32,742 32,853 32,989 37,673 38,811 39,974 350 2,852 2014 38,361 33,015 36,452 38,590 40,202 911 3,099 2015 38,561 46,258 47,021 46,395 3,824 3,179 2016 50,430 53,519 54,105 7,632 3,920 2017 55,640 53,641 16,406 3,597 2018 57,597 16,690 3,154 Total $ 386,520 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018 2009 $ 5,035 $ 8,698 $ 14,613 $ 19,933 $ 21,100 $ 21,325 $ 21,640 $ 21,650 $ 21,650 $ 21,650 2010 6,296 10,116 15,475 20,045 21,792 23,063 23,488 23,533 23,556 2011 5,295 9,485 14,477 19,443 22,375 23,537 23,941 24,377 2012 4,466 8,533 12,394 17,318 20,931 22,566 22,730 2013 5,306 11,978 19,761 28,220 33,480 35,923 2014 7,125 13,933 19,676 27,457 33,190 2015 6,984 20,709 29,554 37,222 2016 8,923 18,354 30,354 2017 7,979 17,070 2018 6,980 * Presented as unaudited required supplementary information. Total $ 253,052 All outstanding liabilities before 2009, net of reinsurance 90 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 133,558 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 % % % % % % % % % % Property (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2018 For the Years Ended December 31, Cumulative Number of Reported AY 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018 Total IBNR Claims 2009 $ 59,975 $ 55,821 $ 52,286 $ 49,534 $ 48,969 $ 48,857 $ 48,707 $ 49,267 $ 49,323 $ 48,925 $ 13 2,630 2010 63,194 59,145 55,427 53,937 54,153 52,927 52,964 52,952 52,903 29 2,851 2011 70,246 66,924 64,976 63,724 62,770 62,570 62,456 62,875 142 3,028 2012 85,485 80,155 79,181 77,569 79,175 78,125 78,161 167 2,640 2013 63,864 62,090 62,173 62,114 61,914 61,834 273 2,995 2014 56,587 49,441 48,801 48,761 49,217 315 4,560 2015 59,863 56,103 53,958 52,720 680 4,076 2016 62,900 55,594 55,384 2,093 3,369 2017 90,803 83,273 9,346 2,873 2018 89,091 23,235 2,030 Total $ 634,383 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018 2009 $ 25,464 $ 40,775 $ 43,758 $ 46,004 $ 48,031 $ 48,297 $ 48,329 $ 49,051 $ 49,173 $ 48,898 2010 25,274 43,091 47,743 50,055 52,729 52,426 52,719 52,851 52,855 2011 27,676 48,756 55,778 59,099 60,272 61,428 61,834 62,729 2012 39,074 66,509 72,057 73,705 75,640 76,152 77,159 2013 32,208 50,840 57,407 59,259 60,520 61,195 2014 30,550 43,380 46,148 46,528 47,799 2015 32,184 49,348 50,197 51,290 2016 33,134 46,921 51,371 2017 41,314 66,818 2018 37,048 * Presented as unaudited required supplementary information. Total $ 557,162 All outstanding liabilities before 2009, net of reinsurance 17 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 77,238 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 % % % % % % % % % -0.6 % Surety (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2018 For the Years Ended December 31, Cumulative Number of Reported AY 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018 Total IBNR Claims 2009 $ 15,474 $ 4,896 $ 4,708 $ 4,246 $ 4,146 $ 4,551 $ 4,288 $ 4,923 $ 4,860 $ 4,935 $ 2 1,665 2010 13,961 8,205 6,630 7,076 6,810 7,136 7,645 6,244 6,580 14 1,540 2011 13,842 17,832 17,792 17,321 16,766 16,695 16,480 18,281 13 1,674 2012 17,114 11,452 8,667 8,180 7,867 7,471 7,099 22 1,469 2013 16,080 7,516 6,170 5,399 5,271 5,231 50 1,400 2014 16,450 8,106 5,225 4,427 4,267 88 1,337 2015 16,958 12,957 11,113 10,456 824 1,201 2016 18,928 11,062 9,351 1,543 1,307 2017 16,127 8,641 3,630 1,409 2018 16,765 14,535 654 Total $ 91,606 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018 2009 $ 892 $ 1,914 $ 2,382 $ 2,493 $ 3,490 $ 4,336 $ 3,919 $ 3,908 $ 4,849 $ 4,933 2010 1,724 3,205 5,702 7,092 7,151 7,285 7,822 6,663 6,637 2011 8,160 16,932 17,151 17,403 17,212 17,086 17,086 17,013 2012 1,883 6,680 6,726 7,416 7,536 7,406 7,065 2013 1,116 2,856 4,701 4,911 5,098 5,150 2014 722 4,283 4,166 4,059 4,131 2015 3,192 6,719 7,695 9,436 2016 3,087 5,817 6,299 2017 979 2,862 2018 1,835 * Presented as unaudited required supplementary information. Total $ 65,361 All outstanding liabilities before 2009, net of reinsurance 1,992 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 28,237 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 % % % % % % -1.3 % -6.1 % % %
Schedule of reconciliation of the net incurred and paid loss development tables to the liability for unpaid losses and settlement expenses in the consolidated balance sheet	Reconciliation of the Disclosure of Incurred and Paid Loss Development to the Liability for Unpaid Losses and Settlement Expenses (in thousands) December 31, 2018 December 31, 2017 Net outstanding liabilities: Casualty - Primary Occurrence $ 372,450 $ 325,182 Casualty - Excess Occurrence 209,683 188,963 Casualty - Claims Made 204,501 171,241 Casualty - Transportation 133,558 119,704 Property 77,238 68,867 Surety 28,237 23,375 Unallocated loss adjustment expenses 50,891 48,844 Allowance for uncollectible reinsurance balances recoverable on unpaid losses and settlement expenses 9,793 10,014 Other 9,998 13,322 Liabilities for unpaid loss and settlement expenses, net of reinsurance $ 1,096,349 $ 969,512 Reinsurance recoverable on unpaid claims: Casualty - Primary Occurrence $ 34,742 $ 36,158 Casualty - Excess Occurrence 81,072 74,400 Casualty - Claims Made 144,921 117,436 Casualty - Transportation 50,748 46,590 Property 50,495 28,613 Surety 11,834 7,079 Allowance for uncollectible reinsurance balances recoverable on unpaid losses and settlement expenses Other 980 1,729 Total reinsurance balances recoverable on unpaid losses and settlement expenses $ 364,999 $ 301,991 Total gross liability for unpaid loss and settlement expenses $ 1,461,348 $ 1,271,503
Schedule of prior accident years' loss reserve development by segment	(FAVORABLE)/UNFAVORABLE RESERVE DEVELOPMENT BY SEGMENT (in thousands) 2018 2017 2016 Casualty $ (33,252) $ (17,462) $ (32,401) Property (10,813) (12,134) (4,793) Surety (5,885) (9,272) (4,800) Total $ (49,950) $ (38,868) $ (41,994)
Schedule of paid and unpaid environmental, asbestos and mass tort claims data (including incurred but not reported losses)	(in thousands) 2018 2017 2016 Loss and LAE Payments (Cumulative): Gross $ 136,043 $ 132,883 $ 130,358 Ceded (68,638) (67,507) (66,644) Net $ 67,405 $ 65,376 $ 63,714 Unpaid Losses and LAE at End of Year: Gross $ 24,262 $ 28,042 $ 28,815 Ceded (5,373) (5,715) (4,987) Net $ 18,889 $ 22,327 $ 23,828

INCOME TAXES (Tables)

INCOME TAXES (Tables)	12 Months Ended
	Dec. 31, 2018
INCOME TAXES
Schedule of deferred tax assets and deferred tax liabilities	(in thousands) 2018 2017 Deferred tax assets: Tax discounting of unpaid losses and settlement expenses $ 18,327 $ 20,020 Unearned premium offset 17,864 16,528 Deferred compensation 2,700 1,435 Stock option expense 2,702 2,283 Other 616 578 Deferred tax assets before allowance $ 42,209 $ 40,844 Less valuation allowance — — Total deferred tax assets $ 42,209 $ 40,844 Deferred tax liabilities: Net unrealized appreciation of securities $ 22,177 $ 51,448 Deferred policy acquisition costs 17,836 16,320 Discounting of unpaid losses and settlement expenses - TCJA implementation offset 5,203 9,466 Book/tax depreciation 3,133 3,159 Intangible assets 1,711 584 Undistributed earnings of unconsolidated investees 15,811 13,431 Other 576 204 Total deferred tax liabilities $ 66,447 $ 94,612 Net deferred tax liability $ (24,238) $ (53,768)
Schedule of reconciliation of income tax expense attributable to income from operations with amounts computed by applying the U.S. federal tax rate to pretax income from continuing operations	(in thousands) 2018 2017 2016 Provision for income taxes at the statutory federal tax rates $ 14,192 21.0 % $ 29,606 35.0 % $ 54,979 35.0 % Increase (reduction) in taxes resulting from: Enactment of Tax Cuts and Jobs Act (TCJA) (2,268) (3.4) % (32,821) (38.8) % — — % Excess tax benefit on share-based compensation (4,533) (6.7) % (5,798) (6.9) % — — % Dividends received deduction (775) (1.1) % (2,025) (2.4) % (2,216) (1.4) % ESOP dividends paid deduction (1,184) (1.8) % (2,905) (3.4) % (3,302) (2.1) % Tax-exempt interest income (1,795) (2.7) % (4,671) (5.5) % (4,263) (2.7) % Unconsolidated investee dividends — — % (1,351) (1.6) % (2,772) (1.8) % Other items, net (235) (0.3) % (474) (0.6) % (264) (0.2) % Total $ 3,402    5.0 % $ (20,439)    (24.2) % $ 42,162    26.8 %

EMPLOYEE BENEFITS (Tables)

EMPLOYEE BENEFITS (Tables)	12 Months Ended
	Dec. 31, 2018
EMPLOYEE BENEFITS
Schedule of stock option activity	The following tables summarize option activity in 2018, 2017 and 2016: Weighted Weighted Average Aggregate Number of Average Remaining Intrinsic Options Exercise Contractual Value Outstanding Price Life (in 000’s) Outstanding options at January 1, 2018 2,257,015 $ 46.80 Options granted 432,000 $ 64.91 Options exercised (705,785) $ 36.81 $ 24,304 Options canceled/forfeited (18,350) $ 60.84 Outstanding options at December 31, 2018 1,964,880 $ 54.24 5.25 $ 29,317 Exercisable options at December 31, 2018 724,730 $ 46.62 3.79 $ 16,212 Weighted Weighted Average Aggregate Number of Average Remaining Intrinsic Options Exercise Contractual Value Outstanding Price Life (in 000’s) Outstanding options at January 1, 2017 2,207,110 $ 40.90 Options granted 482,375 $ 57.12 Options exercised (390,870) $ 26.07 $ 12,779 Options canceled/forfeited (41,600) $ 48.30 Outstanding options at December 31, 2017 2,257,015 $ 46.80 4.88 $ 32,620 Exercisable options at December 31, 2017 975,055 $ 38.66 3.25 $ 21,780 Weighted Weighted Average Aggregate Number of Average Remaining Intrinsic Options Exercise Contractual Value Outstanding Price Life (in 000’s) Outstanding options at January 1, 2016 2,582,220 $ 32.42 Options granted 440,750 $ 63.54 Options exercised (756,380) $ 24.87 $ 31,328 Options canceled/forfeited (59,480) $ 44.39 Outstanding options at December 31, 2016 2,207,110 $ 40.90 4.93 $ 49,531 Exercisable options at December 31, 2016 862,605 $ 31.23 3.27 $ 27,523
Schedule of stock option assumptions for fair value estimate	2018 2017 2016 Weighted-average fair value of grants $ 10.58 $ 8.00 $ 11.38 Risk-free interest rates 2.72 % 1.90 % 1.21 % Dividend yield 2.98 % 3.60 % 1.61 % Expected volatility 22.87 % 22.95 % 23.06 % Expected option life 5.07 years 5.05 years 5.04 years

STATUTORY INFORMATION AND DIV_2

STATUTORY INFORMATION AND DIVIDEND RESTRICTIONS (Tables)	12 Months Ended
	Dec. 31, 2018
STATUTORY INFORMATION AND DIVIDEND RESTRICTIONS
Schedule of selected information for insurance subsidiaries	(in thousands) 2018 2017 2016 Consolidated net income, statutory basis $ 135,791 $ 72,889 $ 128,165 Consolidated surplus, statutory basis $ 829,775 $ 864,554 $ 859,976

COMMITMENTS AND CONTINGENT LI_2

COMMITMENTS AND CONTINGENT LIABILITIES (Tables)	12 Months Ended
	Dec. 31, 2018
COMMITMENTS AND CONTINGENT LIABILITIES
Schedule of minimum future rental payments under noncancellable leases	(in thousands) 2019 $ 5,911 2020 6,019 2021 5,924 2022 5,884 2023 4,459 2024-2035 3,968 Total minimum future rental payments $ 32,165

OPERATING SEGMENT INFORMATION (

OPERATING SEGMENT INFORMATION (Tables)	12 Months Ended
	Dec. 31, 2018
OPERATING SEGMENT INFORMATION
Schedule of revenues and net earnings by segment	REVENUES (in thousands) 2018 2017 2016 Casualty $ 523,472 $ 478,603 $ 454,843 Property 149,261 138,346 152,167 Surety 118,633 120,988 121,598 Net premiums earned $ 791,366 $ 737,937 $ 728,608 Net investment income 62,085 54,876 53,075 Net realized gains 63,407 4,411 34,645 Net unrealized losses on equity securities (98,735) — — Total $ 818,123 $ 797,224 $ 816,328 INSURANCE EXPENSES (in thousands) 2018 2017 2016 Loss and settlement expenses: Casualty $ 329,763 $ 305,679 $ 259,907 Property 83,822 85,027 71,350 Surety 14,608 10,878 18,521 Total net loss and settlement expenses $ 428,193 $ 401,584 $ 349,778 Policy acquisition costs: Casualty $ 151,007 $ 136,135 $ 128,566 Property 51,830 51,070 54,167 Surety 64,901 65,310 66,879 Total policy acquisition costs $ 267,738 $ 252,515 $ 249,612 Other insurance expenses: Casualty $ 31,562 $ 32,885 $ 30,040 Property 12,725 14,108 13,819 Surety 9,516 10,001 9,234 Total other insurance expenses $ 53,803 $ 56,994 $ 53,093 Total $ 749,734 $ 711,093 $ 652,483 NET EARNINGS (LOSSES) (in thousands) 2018 2017 2016 Casualty $ 11,140 $ 3,904 $ 36,329 Property 884 (11,859) 12,832 Surety 29,608 34,799 26,964 Net underwriting income $ 41,632 $ 26,844 $ 76,125 Net investment income 62,085 54,876 53,075 Net realized gains 63,407 4,411 34,645 Net unrealized losses on equity securities (98,735) — — General corporate expense and interest on debt (16,864) (18,766) (17,596) Equity in earnings of unconsolidated investees 16,056 17,224 10,833 Total earnings before incomes taxes $ 67,581 $ 84,589 $ 157,082 Income tax expense (benefit) $ 3,402 $ (20,439) $ 42,162 Total $ 64,179 $ 105,028 $ 114,920
Schedule of net premiums earned by major product type	NET PREMIUMS EARNED Year ended December 31, (in thousands) 2018 2017 2016 CASUALTY Commercial excess and personal umbrella $ 124,350 $ 115,543 $ 111,079 General liability 93,928 90,283 86,853 Commercial transportation 81,053 78,061 81,402 Professional services 79,951 78,508 75,872 Small commercial 51,519 49,601 45,660 Executive products 21,326 18,086 18,755 Medical professional liability 16,042 17,072 17,449 Other casualty 55,303 31,449 17,773 Total $ 523,472 $ 478,603 $ 454,843 PROPERTY Commercial property $ 71,501 $ 63,117 $ 68,165 Marine 59,795 50,931 48,301 Specialty personal 16,901 20,793 24,981 Other property 1,064 3,505 10,720 Total $ 149,261 $ 138,346 $ 152,167 SURETY Miscellaneous $ 46,968 $ 47,237 $ 46,235 Contract 28,196 28,573 28,240 Commercial 26,751 27,625 29,105 Energy 16,718 17,553 18,018 Total $ 118,633 $ 120,988 $ 121,598 Grand total $ 791,366 $ 737,937 $ 728,608

UNAUDITED INTERIM FINANCIAL I_2

UNAUDITED INTERIM FINANCIAL INFORMATION (Tables)	12 Months Ended
	Dec. 31, 2018
UNAUDITED INTERIM FINANCIAL INFORMATION
Schedule of selected quarterly information	Select unaudited quarterly information is as follows: (in thousands, except per share data) First Second Third Fourth Year 2018 Net premiums earned $ 190,027 $ 196,522 $ 200,815 $ 204,002 $ 791,366 Net investment income 14,232 14,577 16,314 16,962 62,085 Net realized gains (losses) 8,404 20,849 18,647 15,507 63,407 Net unrealized gains (losses) on equity securities (26,772) (12,611) 4,848 (64,200) (98,735) Earnings (losses) before income taxes 14,378 39,562 46,349 (32,708) 67,581 Net earnings (loss) 12,216 33,251 39,372 (20,660) 64,179 Basic earnings per share(1) $ 0.28 $ 0.75 $ 0.89 $ (0.46) $ 1.45 Diluted earnings per share(1) $ 0.27 $ 0.74 $ 0.88 $ (0.46) $ 1.43 2017 Net premiums earned $ 183,285 $ 184,331 $ 182,025 $ 188,296 $ 737,937 Net investment income 13,005 13,238 14,187 14,446 54,876 Net realized gains (losses) 624 (1,359) 35 5,111 4,411 Net unrealized gains (losses) on equity securities — — — — — Earnings (losses) before income taxes 26,443 34,036 (862) 24,972 84,589 Net earnings (loss) 19,828 26,208 1,734 57,258 105,028 Basic earnings per share(1) $ 0.45 $ 0.60 $ 0.04 $ 1.30 $ 2.39 Diluted earnings per share(1) $ 0.45 $ 0.59 $ 0.04 $ 1.29 $ 2.36 Since the weighted-average shares for the quarters are calculated independently of the weighted-average shares for the year, quarterly earnings per share may not total to annual earnings per share.

SUMMARY OF SIGNIFICANT ACCOUN_4

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Description of Business (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2018USD ($)statecompany$ / shares	Dec. 31, 2017$ / shares
DESCRIPTION OF BUSINESS
Number of insurance companies through which the entity conducts operations | company	3
Common Stock, Par or Stated Value Per Share | $ / shares	$ 0.01	$ 1
RLI Ins.
DESCRIPTION OF BUSINESS
Number of states in which entity operates	50
Mt. Hawley Insurance Company
DESCRIPTION OF BUSINESS
Number of states in which entity operates	50
Contractors Bonding and Insurance Company
DESCRIPTION OF BUSINESS
Number of states in which entity operates	50
Common stock
DESCRIPTION OF BUSINESS
Reclassification due to change in par value | $	$ (66,409)
Paid-in Capital
DESCRIPTION OF BUSINESS
Reclassification due to change in par value | $	$ 66,409

SUMMARY OF SIGNIFICANT ACCOUN_5

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounting Standards (Details) - USD ($) $ in Thousands	3 Months Ended				12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Accumulated other comprehensive earnings	$ (14,572)				$ (14,572)	$ 157,919
Retained earnings	908,079				908,079	788,522
Net unrealized losses on equity securities	(64,200)	$ 4,848	$ (12,611)	$ (26,772)	(98,735)
Unrealized Gain (Loss) Net Of Tax On Equity Securities Recognized in Other Comprehensive Income						24,000	$ 5,600
Income tax expense (benefit)					3,402	(20,439)	42,162
Assets	3,105,065				3,105,065	2,947,244
Liabilities	$ 2,298,223				2,298,223	2,093,646
Expense associated with operating leases					$ 6,900	$ 6,800	$ 6,400
Percentage Of Fixed Income Portfolio Rated A Or Better	84.00%				84.00%
Tax rate used (as a percent)					21.00%	35.00%	35.00%
Allocated Share-based Compensation Expense					$ 4,500	$ 4,400	$ 4,100
Accounting Standards Update 2014-09
Percent of Revenue Out of Scope of ASU 2014-09					99.00%
Accounting Standards Update 2016-01
Accumulated other comprehensive earnings	$ (142,200)				$ (142,200)
Retained earnings	142,200				142,200
Net unrealized losses on equity securities					98,700
Income tax expense (benefit)					(20,700)
Accounting Standards Update 2018-02
Accumulated other comprehensive earnings	3,700				3,700
Retained earnings	(3,700)				(3,700)
Scenario Forecast Adjustment | Minimum | Accounting Standards Update 2016-02
Assets	25,000				25,000
Liabilities	25,000				25,000
Scenario Forecast Adjustment | Maximum | Accounting Standards Update 2016-02
Assets	30,000				30,000
Liabilities	$ 30,000				30,000
Outside director | Restricted Stock Units (RSUs) [Member]
Allocated Share-based Compensation Expense					$ 300

SUMMARY OF SIGNIFICANT ACCOUN_6

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2018
Equipment | Minimum
PROPERTY AND EQUIPMENT
Useful life	3 years
Equipment | Maximum
PROPERTY AND EQUIPMENT
Useful life	10 years
Buildings and improvements | Maximum
PROPERTY AND EQUIPMENT
Useful life	30 years

SUMMARY OF SIGNIFICANT ACCOUN_7

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Investment in Unconsolidated Investees (Details)	3 Months Ended								12 Months Ended
	Dec. 31, 2018USD ($)	Sep. 30, 2018USD ($)	Jun. 30, 2018USD ($)	Mar. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Sep. 30, 2017USD ($)	Jun. 30, 2017USD ($)	Mar. 31, 2017USD ($)	Dec. 31, 2018USD ($)item	Dec. 31, 2017USD ($)	Dec. 31, 2016USD ($)
INVESTMENT IN UNCONSOLIDATED INVESTEES:
Investment amount	$ 94,967,000				$ 90,067,000				$ 94,967,000	$ 90,067,000
Investee earnings recorded in income									16,056,000	17,224,000	$ 10,833,000
Reinsurance assumed									48,303,000	37,159,000	30,434,000
Net premiums earned	$ 204,002,000	$ 200,815,000	$ 196,522,000	$ 190,027,000	188,296,000	$ 182,025,000	$ 184,331,000	$ 183,285,000	791,366,000	737,937,000	728,608,000
Additional summarized financial information for investee
Dividends received									$ 9,900,000	0	9,900,000
Maui Jim Inc.
INVESTMENT IN UNCONSOLIDATED INVESTEES:
Equity ownership interest (as a percent)	40.00%								40.00%
Prime Holdings Insurance Services, Inc. (Prime)
INVESTMENT IN UNCONSOLIDATED INVESTEES:
Equity ownership interest (as a percent)	23.00%								23.00%
Maui Jim Inc.
INVESTMENT IN UNCONSOLIDATED INVESTEES:
Investment amount	$ 79,500,000				77,700,000				$ 79,500,000	77,700,000
Investee earnings recorded in income									12,500,000	14,400,000	9,700,000
Total investee net income									30,300,000	34,400,000	26,900,000
Additional summarized financial information for investee
Total assets	265,600,000				259,400,000				265,600,000	259,400,000
Total liabilities	90,400,000				88,000,000				90,400,000	88,000,000
Total equity	175,200,000				171,400,000				175,200,000	171,400,000
Undistributed earnings included in retained earnings	68,900,000								68,900,000
Dividends received									9,900,000	0	9,900,000
Prime Holdings Insurance Services, Inc. (Prime)
INVESTMENT IN UNCONSOLIDATED INVESTEES:
Investment amount	$ 15,400,000				$ 12,400,000				15,400,000	12,400,000
Investee earnings recorded in income									$ 3,600,000	2,800,000	1,100,000
Number of insurance carriers Company writes through | item									2
Equity ownership interest (as a percent)	23.00%								23.00%
Percentage of quota share reinsurance treaty, effective January 1, 2014									25.00%
Reinsurance assumed									$ 41,100,000	29,600,000	13,400,000
Net premiums earned									$ 34,200,000	$ 21,000,000	$ 11,400,000

SUMMARY OF SIGNIFICANT ACCOUN_8

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangible Assets (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Goodwill and Intangible Assets
Goodwill	$ 46,062,000	$ 49,657,000
State insurance licenses	7,500,000	7,500,000
Definite-lived intangibles, net of accumulated amortization of $3,062 at 12/31/18 and $5,678 at 12/31/17	972,000	2,145,000
Accumulated amortization of definite-lived intangibles	3,062,000	5,678,000
Total intangibles	8,472,000	9,645,000
Goodwill and intangibles	54,534,000	59,302,000
Goodwill and Intangible Asset Impairment	4,400,000
Amortization of intangible assets	400,000	700,000	$ 900,000
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months	400,000
Finite-Lived Intangible Assets, Amortization Expense, Year Two	400,000
Finite-Lived Intangible Assets, Amortization Expense, Year Three	100,000
Energy Surety
Goodwill and Intangible Assets
Goodwill	25,706,000	25,706,000
Miscellaneous and Contract Surety
Goodwill and Intangible Assets
Goodwill	15,110,000	15,110,000
Small commercial
Goodwill and Intangible Assets
Goodwill	5,246,000	5,246,000
Medical professional liability
Goodwill and Intangible Assets
Goodwill	0	3,595,000
Casualty segment | Medical professional liability
Goodwill and Intangible Assets
Goodwill, Impaired, Accumulated Impairment Loss	12,400,000	8,800,000
Goodwill and Intangible Asset Impairment	4,400,000	3,400,000
Goodwill, Impairment Loss	3,600,000	1,600,000	$ 7,200,000
Impairment of Intangible Assets, Finite-lived	$ 800,000	$ 1,800,000

SUMMARY OF SIGNIFICANT ACCOUN_9

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Basic EPS, Income (Numerator)
Income available to common shareholders									$ 64,179	$ 105,028	$ 114,920
Diluted EPS, Income (Numerator)
Income available to common shareholders									$ 64,179	$ 105,028	$ 114,920
Basic EPS, Weighted Average Shares (Denominator)
Number of shares outstanding									44,358	44,033	43,772
Effect of Dilutive Securities, Shares (Denominator)
Stock options (in shares)									477	467	660
Diluted EPS, Weighted Average Shares (Denominator)
Number of shares outstanding									44,835	44,500	44,432
Basic EPS, Per Share Amount
Basic net earnings per share (in dollars per share)	$ (0.46)	$ 0.89	$ 0.75	$ 0.28	$ 1.30	$ 0.04	$ 0.60	$ 0.45	$ 1.45	$ 2.39	$ 2.63
Diluted EPS, Per Share Amount
Diluted earnings per share (in dollars per share)	$ (0.46)	$ 0.88	$ 0.74	$ 0.27	$ 1.29	$ 0.04	$ 0.59	$ 0.45	$ 1.43	$ 2.36	$ 2.59

SUMMARY OF SIGNIFICANT ACCOU_10

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Changes in Accumulated Other Comprehensive Earnings (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
COMPREHENSIVE EARNINGS
Tax rate used (as a percent)									21.00%	35.00%	35.00%
Other comprehensive income (loss), tax									$ (9,000)	$ 19,000	$ (600)
Changes in the balance of each component of accumulated other comprehensive earnings
Beginning balance				$ 157,919					157,919
Net current-period other comprehensive earnings (loss)									(33,997)	35,309	(1,164)
Ending balance	$ (14,572)				$ 157,919				(14,572)	157,919
Reclassification Adjustment Out of Accumulated Other Comprehensive Income Abstract
Net realized gains									63,624	6,970	34,740
Other-than-temporary-impairment (OTTI) losses on investments									(217)	(2,559)	(95)
Earnings before income taxes	(32,708)	$ 46,349	$ 39,562	14,378	24,972	$ (862)	$ 34,036	$ 26,443	67,581	84,589	157,082
Income tax expense									(3,402)	20,439	(42,162)
Net earnings	(20,660)	$ 39,372	$ 33,251	12,216	57,258	$ 1,734	$ 26,208	19,828	64,179	105,028	114,920
Unrealized Gains and Losses on Available-for-Sale Securities
Changes in the balance of each component of accumulated other comprehensive earnings
Beginning balance				$ 157,919				$ 122,610	157,919	122,610	123,774
Cumulative effect adjustment of ASU 2016-01	(142,219)								(142,219)
Adjusted beginning balance	15,700				122,610				15,700	122,610	123,774
Other comprehensive earnings before reclassifications									(35,763)	40,887	26,740
Amounts reclassified from accumulated other comprehensive earnings									1,766	(5,578)	(27,904)
Net current-period other comprehensive earnings (loss)									(33,997)	35,309	(1,164)
Reclassification of stranded tax effect per ASU 2018-02									3,725
Ending balance	$ (14,572)				$ 157,919				(14,572)	157,919	122,610
Reclassifications out of accumulated other comprehensive earnings
Reclassification Adjustment Out of Accumulated Other Comprehensive Income Abstract
Net realized gains									(2,018)	11,141	43,024
Other-than-temporary-impairment (OTTI) losses on investments									(217)	(2,559)	(95)
Earnings before income taxes									(2,235)	8,582	42,929
Income tax expense									469	(3,004)	(15,025)
Net earnings									$ (1,766)	$ 5,578	$ 27,904

SUMMARY OF SIGNIFICANT ACCOU_11

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Insurance Risk (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Unpaid losses and settlement expenses	$ 1,461,348	$ 1,271,503	$ 1,139,337	$ 1,103,785

SUMMARY OF SIGNIFICANT ACCOU_12

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Catastrophe Exposures (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
California earthquake
Catastrophe Exposures
Catastrophe reinsurance	$ 400	$ 300
First-dollar retention	25	25
Non-California earthquake
Catastrophe Exposures
Catastrophe reinsurance	425	325
First-dollar retention	25	25
Other perils
Catastrophe Exposures
Catastrophe reinsurance	275	225
First-dollar retention	$ 25	$ 25

INVESTMENTS - Net Investment In

INVESTMENTS - Net Investment Income (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Net investment income
Gross investment income									$ 66,614	$ 59,794	$ 57,883
Less investment expenses									(4,529)	(4,918)	(4,808)
Net Investment Income	$ 16,962	$ 16,314	$ 14,577	$ 14,232	$ 14,446	$ 14,187	$ 13,238	$ 13,005	62,085	54,876	53,075
Debt securities
Net investment income
Gross investment income									54,491	48,343	46,834
Equity securities
Net investment income
Gross investment income									9,814	10,506	10,929
Cash and Short-term Investments
Net investment income
Gross investment income									$ 2,309	$ 945	$ 120

INVESTMENTS - Realized and Unre

INVESTMENTS - Realized and Unrealized Gains (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
INVESTMENTS
Net realized gains (losses), excluding OTTI									$ 63,624	$ 6,970	$ 34,740
OTTI									(217)	(2,559)	(95)
Total net realized gains (losses)	$ 15,507	$ 18,647	$ 20,849	$ 8,404	$ 5,111	$ 35	$ (1,359)	$ 624	63,407	4,411	34,645
Net changes in unrealized gains (losses) on investments:									(141,770)	54,323	(1,791)
Net unrealized losses on equity securities	$ (64,200)	$ 4,848	$ (12,611)	$ (26,772)					(98,735)
Net realized gains (losses) and changes in unrealized gains (losses) on investments									(78,363)	58,734	32,854
Goodwill and Intangible Asset Impairment									4,400
Debt securities | Available for sale securities
INVESTMENTS
Net realized gains (losses), excluding OTTI									(2,018)	859	4,314
Net changes in unrealized gains (losses) on investments:									(41,778)	16,846	(10,972)
Equity securities
INVESTMENTS
Net realized gains (losses), excluding OTTI									69,868	10,282	38,709
Net unrealized losses on equity securities									(98,380)	36,844	8,659
Other
INVESTMENTS
Net realized gains (losses), excluding OTTI									(4,226)	(4,171)	(8,283)
Net changes in unrealized gains (losses) on investments:									(355)	29
Equity Method Investments [Member]
INVESTMENTS
Net changes in unrealized gains (losses) on investments:									$ (1,257)	$ 604	$ 522

INVESTMENTS - Disposition of Fi

INVESTMENTS - Disposition of Fixed Securities and Equities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Debt securities | Available for sale securities | SALES
Summary of the disposition of fixed maturities and equities
Proceeds From Sales	$ 394,318	$ 169,002	$ 329,091
Gross Realized Gains	3,131	2,406	7,158
Gross Realized Losses	(5,349)	(1,670)	(3,287)
Marketable Securities, Realized Gain (Loss), Excluding Other than Temporary Impairments, Total	(2,218)	736	3,871
Debt securities | Available for sale securities | CALLS/MATURITIES
Summary of the disposition of fixed maturities and equities
Proceeds From Sales	187,380	195,617	141,255
Gross Realized Gains	311	262	445
Gross Realized Losses	(111)	(139)	(2)
Marketable Securities, Realized Gain (Loss), Excluding Other than Temporary Impairments, Total	200	123	443
Equity securities | SALES
Summary of the disposition of fixed maturities and equities
Proceeds From Sales	147,838	36,573	89,909
Gross Realized Gains	71,065	13,178	39,668
Gross Realized Losses	(1,197)	(2,896)	(959)
Marketable Securities, Realized Gain (Loss), Excluding Other than Temporary Impairments, Total	$ 69,868	$ 10,282	$ 38,709

INVESTMENTS - Assets Measured A

INVESTMENTS - Assets Measured At Fair Value (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Assets measured at Fair Value
Available-for-sale fixed income	$ 1,760,515	$ 1,672,239
Equity securities, at fair value (cost - $220,373 in 2018 and $182,002 in 2017)	340,483	400,492
Transfers in (out of) level 1	0	0
Transfers in (out of) level 2	0	0
U.S. government
Assets measured at Fair Value
Available-for-sale fixed income	200,229	91,689
U.S. Agency
Assets measured at Fair Value
Available-for-sale fixed income	31,904	18,778
Non-U.S. govt. & agency
Assets measured at Fair Value
Available-for-sale fixed income	7,639	7,588
Mortgage-backed
Assets measured at Fair Value
Available-for-sale fixed income	395,253	328,471
ABS/CMBS
Assets measured at Fair Value
Available-for-sale fixed income	136,723	70,526
Corporate Debt
Assets measured at Fair Value
Available-for-sale fixed income	668,679	519,022
Municipal
Assets measured at Fair Value
Available-for-sale fixed income	320,088	636,165
Fair value measured on recurring basis
Assets measured at Fair Value
Available-for-sale fixed income	1,760,515	1,672,239
Total assets at fair value	2,100,998	2,072,731
Fair value measured on recurring basis | U.S. government
Assets measured at Fair Value
Available-for-sale fixed income	200,229	91,689
Fair value measured on recurring basis | U.S. Agency
Assets measured at Fair Value
Available-for-sale fixed income	31,904	18,778
Fair value measured on recurring basis | Non-U.S. govt. & agency
Assets measured at Fair Value
Available-for-sale fixed income	7,639	7,588
Fair value measured on recurring basis | Mortgage-backed
Assets measured at Fair Value
Available-for-sale fixed income	395,253	328,471
Fair value measured on recurring basis | ABS/CMBS
Assets measured at Fair Value
Available-for-sale fixed income	136,723	70,526
Fair value measured on recurring basis | Corporate Debt
Assets measured at Fair Value
Available-for-sale fixed income	668,679	519,022
Fair value measured on recurring basis | Municipal
Assets measured at Fair Value
Available-for-sale fixed income	320,088	636,165
Fair value measured on recurring basis | Equity securities
Assets measured at Fair Value
Equity securities, at fair value (cost - $220,373 in 2018 and $182,002 in 2017)	340,483	400,492
Fair value measured on recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1)
Assets measured at Fair Value
Total assets at fair value	339,985	400,492
Fair value measured on recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Equity securities
Assets measured at Fair Value
Equity securities, at fair value (cost - $220,373 in 2018 and $182,002 in 2017)	339,985	400,492
Fair value measured on recurring basis | Significant Other Observable Inputs (Level 2)
Assets measured at Fair Value
Available-for-sale fixed income	1,760,515	1,672,239
Total assets at fair value	1,761,013	1,672,239
Fair value measured on recurring basis | Significant Other Observable Inputs (Level 2) | U.S. government
Assets measured at Fair Value
Available-for-sale fixed income	200,229	91,689
Fair value measured on recurring basis | Significant Other Observable Inputs (Level 2) | U.S. Agency
Assets measured at Fair Value
Available-for-sale fixed income	31,904	18,778
Fair value measured on recurring basis | Significant Other Observable Inputs (Level 2) | Non-U.S. govt. & agency
Assets measured at Fair Value
Available-for-sale fixed income	7,639	7,588
Fair value measured on recurring basis | Significant Other Observable Inputs (Level 2) | Mortgage-backed
Assets measured at Fair Value
Available-for-sale fixed income	395,253	328,471
Fair value measured on recurring basis | Significant Other Observable Inputs (Level 2) | ABS/CMBS
Assets measured at Fair Value
Available-for-sale fixed income	136,723	70,526
Fair value measured on recurring basis | Significant Other Observable Inputs (Level 2) | Corporate Debt
Assets measured at Fair Value
Available-for-sale fixed income	668,679	519,022
Fair value measured on recurring basis | Significant Other Observable Inputs (Level 2) | Municipal
Assets measured at Fair Value
Available-for-sale fixed income	320,088	$ 636,165
Fair value measured on recurring basis | Significant Other Observable Inputs (Level 2) | Equity securities
Assets measured at Fair Value
Equity securities, at fair value (cost - $220,373 in 2018 and $182,002 in 2017)	$ 498

INVESTMENTS - Fixed Income Secu

INVESTMENTS - Fixed Income Securities By Contractual Maturity (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Amortized cost of available-for-sale debt securities by contractual maturity
Due in one year or less	$ 41,319
Due after one year through five years	411,153
Due after five years through 10 years	615,061
Due after 10 years	168,716
Total amortized cost	1,776,465	$ 1,646,411
Fair value of available-for-sale debt securities by contractual maturity
Due in one year or less	41,333
Due after one year through five years	410,680
Due after five years through 10 years	608,115
Due after 10 years	168,412
Total fair value	1,760,515	$ 1,672,239
Mtge/ABS/CMBS
Amortized cost of available-for-sale debt securities by contractual maturity
Total amortized cost	540,216
Fair value of available-for-sale debt securities by contractual maturity
Total fair value	$ 531,975

INVESTMENTS - Investments In Fi

INVESTMENTS - Investments In Fixed Income Securities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Available-for-sale
Total amortized cost	$ 1,776,465	$ 1,646,411
Available-for-sale, at fair value (amortized cost - $1,776,465 in 2018 and $1,646,411 in 2017)	1,760,515	1,672,239
Total fixed income and equity securities
Net unrealized appreciation of available-for-sale fixed income securities	16,000	25,800
U.S. government
Available-for-sale
Total amortized cost	199,982	92,561
Available-for-sale, at fair value (amortized cost - $1,776,465 in 2018 and $1,646,411 in 2017)	200,229	91,689
Gross Unrealized Gains	1,232	23
Gross Unrealized Losses	(985)	(895)
U.S. Agency
Available-for-sale
Total amortized cost	31,716	18,541
Available-for-sale, at fair value (amortized cost - $1,776,465 in 2018 and $1,646,411 in 2017)	31,904	18,778
Gross Unrealized Gains	403	347
Gross Unrealized Losses	(215)	(110)
Non-U.S. govt. & agency
Available-for-sale
Total amortized cost	8,170	7,501
Available-for-sale, at fair value (amortized cost - $1,776,465 in 2018 and $1,646,411 in 2017)	7,639	7,588
Gross Unrealized Gains		143
Gross Unrealized Losses	(531)	(56)
Mtge/ABS/CMO
Available-for-sale
Gross Unrealized Losses	(10,300)
Mortgage-backed
Available-for-sale
Total amortized cost	402,992	329,129
Available-for-sale, at fair value (amortized cost - $1,776,465 in 2018 and $1,646,411 in 2017)	395,253	328,471
Gross Unrealized Gains	1,709	3,420
Gross Unrealized Losses	(9,448)	(4,078)
ABS/CMBS
Available-for-sale
Total amortized cost	137,224	70,405
Available-for-sale, at fair value (amortized cost - $1,776,465 in 2018 and $1,646,411 in 2017)	136,723	70,526
Gross Unrealized Gains	375	436
Gross Unrealized Losses	(876)	(315)
Corporate Debt
Available-for-sale
Total amortized cost	681,909	508,128
Available-for-sale, at fair value (amortized cost - $1,776,465 in 2018 and $1,646,411 in 2017)	668,679	519,022
Gross Unrealized Gains	2,894	12,575
Gross Unrealized Losses	(16,124)	(1,681)
Municipal
Available-for-sale
Total amortized cost	314,472	620,146
Available-for-sale, at fair value (amortized cost - $1,776,465 in 2018 and $1,646,411 in 2017)	320,088	636,165
Gross Unrealized Gains	6,926	17,272
Gross Unrealized Losses	$ (1,310)	(1,253)
General obligations to state and local governments Percentage	42.00%
Revenue based obligations percentage	58.00%
Percentage of securities of portfolio rated as AA or better	85.00%
Percentage of securities of portfolio rated as A or better	99.00%
Debt securities
Available-for-sale
Total amortized cost	$ 1,776,465	1,646,411
Available-for-sale, at fair value (amortized cost - $1,776,465 in 2018 and $1,646,411 in 2017)	1,760,515	1,672,239
Gross Unrealized Gains	13,539	34,216
Gross Unrealized Losses	(29,489)	$ (8,388)
Equity securities
Available-for-sale
Increase (decrease) in Gross Unrealized Losses	9,200
Total fixed income and equity securities
Gross Unrealized Losses	$ 10,100

INVESTMENTS - Types of Debt and

INVESTMENTS - Types of Debt and Equity Securities (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Debt securities
Fair value
Less than 12 months	$ 397,157	$ 372,467
12 months and greater	584,017	254,270
Total Fair Value	981,174	626,737
Cost or amortized Cost
Less than 12 months	406,953	375,790
12 months and greater	603,710	259,335
Total Cost or Amortized Cost	1,010,663	635,125
Unrealized Loss
Less than 12 months	9,796	3,323
12 months and greater	19,693	5,065
Total Unrealized Loss	29,489	8,388
U.S. government
Fair value
Less than 12 months	7,249	58,009
12 months and greater	76,073	30,888
Total Fair Value	83,322	88,897
Cost or amortized Cost
Less than 12 months	7,270	58,443
12 months and greater	77,037	31,349
Total Cost or Amortized Cost	84,307	89,792
Unrealized Loss
Less than 12 months	21	434
12 months and greater	964	461
Total Unrealized Loss	985	895
U.S. Agency
Fair value
Less than 12 months		10,917
12 months and greater	8,843
Total Fair Value	8,843	10,917
Cost or amortized Cost
Less than 12 months		11,027
12 months and greater	9,058
Total Cost or Amortized Cost	9,058	11,027
Unrealized Loss
Less than 12 months		110
12 months and greater	215
Total Unrealized Loss	215	110
Non-U.S. govt. & agency
Fair value
Less than 12 months	5,432
12 months and greater	2,207	1,840
Total Fair Value	7,639	1,840
Cost or amortized Cost
Less than 12 months	5,571
12 months and greater	2,599	1,896
Total Cost or Amortized Cost	8,170	1,896
Unrealized Loss
Less than 12 months	139
12 months and greater	392	56
Total Unrealized Loss	531	56
Mortgage-backed
Fair value
Less than 12 months	25,345	122,130
12 months and greater	261,325	111,306
Total Fair Value	286,670	233,436
Cost or amortized Cost
Less than 12 months	25,486	123,559
12 months and greater	270,632	113,955
Total Cost or Amortized Cost	296,118	237,514
Unrealized Loss
Less than 12 months	141	1,429
12 months and greater	9,307	2,649
Total Unrealized Loss	9,448	4,078
ABS/CMBS
Fair value
Less than 12 months	46,918	23,406
12 months and greater	32,137	21,587
Total Fair Value	79,055	44,993
Cost or amortized Cost
Less than 12 months	47,146	23,491
12 months and greater	32,785	21,817
Total Cost or Amortized Cost	79,931	45,308
Unrealized Loss
Less than 12 months	228	85
12 months and greater	648	230
Total Unrealized Loss	876	315
Corporate Debt
Fair value
Less than 12 months	306,177	86,946
12 months and greater	147,751	28,600
Total Fair Value	453,928	115,546
Cost or amortized Cost
Less than 12 months	315,428	87,736
12 months and greater	154,624	29,491
Total Cost or Amortized Cost	470,052	117,227
Unrealized Loss
Less than 12 months	9,251	790
12 months and greater	6,873	891
Total Unrealized Loss	16,124	1,681
Municipal
Fair value
Less than 12 months	6,036	71,059
12 months and greater	55,681	60,049
Total Fair Value	61,717	131,108
Cost or amortized Cost
Less than 12 months	6,052	71,534
12 months and greater	56,975	60,827
Total Cost or Amortized Cost	63,027	132,361
Unrealized Loss
Less than 12 months	16	475
12 months and greater	1,294	778
Total Unrealized Loss	$ 1,310	$ 1,253

INVESTMENTS - Portfolio Analysi

INVESTMENTS - Portfolio Analysis (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2018USD ($)securityposition	Dec. 31, 2017USD ($)	Dec. 31, 2016USD ($)
Securities in unrealized loss positions
Other-than-temporary impairment (OTTI) losses	$ 217	$ 2,559	$ 95
Fixed maturities and short-term investments on deposit with either regulatory authorities or banks	59,200
Unrealized gains (losses) recognized on equity securities still held at end of period	$ (28,700)	$ 47,200
Debt securities
Securities in unrealized loss positions
Number of unrealized loss positions | position	777
Number of securities in unrealized loss positions for 12 months or longer | security	302

INVESTMENTS - Other Invested As

INVESTMENTS - Other Invested Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Other invested assets
Other Investments	$ 51,542	$ 33,808
Qualified Affordable Housing Project Investments, Commitment	7,400
Investments pledged as collateral	$ 16,100
Investment in Federal Home Loan Bank Stock	us-gaap:AssetPledgedAsCollateralMember
Federal Home Loan Bank Borrowings, Fair Value Disclosure	$ 0
Investment In Low Income Housing Tax Credit Partnership Net Of Amortization Member
Other invested assets
Other Investments	20,300	15,500
Qualified Affordable Housing Project Investments, Commitment	7,400
Total tax benefit on investments in housing tax credit partnership	2,200	$ 2,400	$ 1,900
Investment in Private Funds
Other invested assets
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Unfunded Commitments	$ 18,800

POLICY ACQUISITION COSTS (Detai

POLICY ACQUISITION COSTS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Policy acquisition costs deferred and amortized to income
Deferred policy acquisition costs (DAC), beginning of year	$ 77,716	$ 73,147	$ 69,829
Deferred:
Direct commissions	175,697	157,723	150,390
Premium taxes	12,654	11,651	11,759
Ceding commissions	(22,190)	(18,096)	(17,488)
Net deferred	166,161	151,278	144,661
Amortized	158,943	146,709	141,343
DAC/VOBA*, end of year	84,934	77,716	73,147
Policy acquisition costs:
Amortized to expense - DAC	158,943	146,709	141,343
Period costs:
Ceding commission - contingent	(2,241)	(3,575)	(1,524)
Other underwriting expenses	111,036	109,381	109,793
Total policy acquisition costs	$ 267,738	$ 252,515	$ 249,612

DEBT (Details)

DEBT (Details) - USD ($) $ in Thousands	Oct. 02, 2013	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	May 08, 2018
Debt
Outstanding long-term senior notes		$ 149,115	$ 148,928
Interest Paid		$ 7,300	$ 7,300	$ 7,300
Senior Notes
Debt
Average interest rate on debt (as a percent)		4.91%	4.91%	4.91%
Senior notes maturing September 15, 2023
Debt
Issue of senior notes by public debt offering	$ 150,000
Stated interest rate, payable semi-annually (as a percent)	4.875%
Proceeds from issuance of debt, net of discount and commission	$ 148,600
Estimated fair value of senior notes		$ 155,900
Line of credit
Debt
Borrowing capacity under revolving line of credit facility		50,000			$ 40,000
Maximum borrowing capacity conditional expansion		$ 75,000
Term of facility		2 years
Amount outstanding on this facility		$ 0	$ 0	$ 0

REINSURANCE - Summary of Premiu

REINSURANCE - Summary of Premiums and Losses (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
REINSURANCE
Maximum amount beyond which net loss on any individual risk is limited through the purchase of reinsurance	$ 3,000								$ 3,000
WRITTEN
Direct									934,913	$ 848,153	$ 844,430
Reinsurance assumed									48,303	37,159	30,434
Reinsurance ceded									(160,041)	(135,458)	(133,912)
Net									823,175	749,854	740,952
EARNED
Direct									896,234	835,118	835,294
Reinsurance assumed									41,926	32,521	27,886
Reinsurance ceded									(146,794)	(129,702)	(134,572)
Net amount	$ 204,002	$ 200,815	$ 196,522	$ 190,027	$ 188,296	$ 182,025	$ 184,331	$ 183,285	791,366	737,937	728,608
LOSSES AND SETTLEMENT EXPENSES INCURRED
Direct									560,421	486,986	405,873
Reinsurance assumed									20,376	16,072	13,196
Reinsurance ceded									(152,604)	(101,474)	(69,291)
Net									$ 428,193	$ 401,584	$ 349,778

REINSURANCE - Summary of Reinsu

REINSURANCE - Summary of Reinsurers (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Net reinsurance balances recoverable
Percentage of reinsurance recoverables due from companies with financial strength ratings of "A" or better by A.M. Best and S&P rating services	93.00%
Reinsurer Exposure	$ 429,987
Ceded Premium Written	$ 160,041	$ 135,458	$ 133,912
Percent of Total Ceded Premium Written	100.00%
Reinsurance balances recoverable as a percentage of shareholder's equity, threshold for disclosure	2.00%
Amount of allowance for uncollectible amounts on paid recoverables	$ 16,100	15,900
Reinsurance balances recoverable on unpaid losses and settlement expenses, allowances for uncollectible amounts	$ 9,793	$ 10,014
Threshold period for including reinsurance receivables in the allowance for uncollectible amounts	1 year
Reinsurer Concentration Risk [Member] | Reinsurance Recoverable [Member]
Net reinsurance balances recoverable
Percent of Total Net Reinsurer Exposure	100.00%
Munich Re America / HSB | A.M. Best Rating, A+, Superior | S&P Rating, AA-, Very Strong
Net reinsurance balances recoverable
Reinsurer Exposure	$ 73,593
Ceded Premium Written	$ 24,479
Percent of Total Ceded Premium Written	15.30%
Munich Re America / HSB | A.M. Best Rating, A+, Superior | S&P Rating, AA-, Very Strong | Reinsurer Concentration Risk [Member] | Reinsurance Recoverable [Member]
Net reinsurance balances recoverable
Percent of Total Net Reinsurer Exposure	17.10%
Swiss Re /Westport Ins. Corp. | A.M. Best Rating, A+, Superior | S&P Rating, AA-, Very Strong
Net reinsurance balances recoverable
Reinsurer Exposure	$ 35,095
Ceded Premium Written	$ 2,100
Percent of Total Ceded Premium Written	1.30%
Swiss Re /Westport Ins. Corp. | A.M. Best Rating, A+, Superior | S&P Rating, AA-, Very Strong | Reinsurer Concentration Risk [Member] | Reinsurance Recoverable [Member]
Net reinsurance balances recoverable
Percent of Total Net Reinsurer Exposure	8.20%
Endurance Re | A.M. Best Rating, A+, Superior | S&P Rating, A+, Strong
Net reinsurance balances recoverable
Reinsurer Exposure	$ 28,754
Ceded Premium Written	$ 6,000
Percent of Total Ceded Premium Written	3.80%
Endurance Re | A.M. Best Rating, A+, Superior | S&P Rating, A+, Strong | Reinsurer Concentration Risk [Member] | Reinsurance Recoverable [Member]
Net reinsurance balances recoverable
Percent of Total Net Reinsurer Exposure	6.70%
Aspen UK Ltd. | A.M. Best Rating, A, Excellent | S&P Rating, A, Strong
Net reinsurance balances recoverable
Reinsurer Exposure	$ 27,735
Ceded Premium Written	$ 7,906
Percent of Total Ceded Premium Written	4.90%
Aspen UK Ltd. | A.M. Best Rating, A, Excellent | S&P Rating, A, Strong | Reinsurer Concentration Risk [Member] | Reinsurance Recoverable [Member]
Net reinsurance balances recoverable
Percent of Total Net Reinsurer Exposure	6.40%
Berkley Insurance Co. | A.M. Best Rating, A+, Superior | S&P Rating, A+, Strong
Net reinsurance balances recoverable
Reinsurer Exposure	$ 23,267
Ceded Premium Written	$ 6,335
Percent of Total Ceded Premium Written	4.00%
Berkley Insurance Co. | A.M. Best Rating, A+, Superior | S&P Rating, A+, Strong | Reinsurer Concentration Risk [Member] | Reinsurance Recoverable [Member]
Net reinsurance balances recoverable
Percent of Total Net Reinsurer Exposure	5.40%
Hannover Ruckversicherung Member | A.M. Best Rating, A+, Superior | S&P Rating, AA-, Very Strong
Net reinsurance balances recoverable
Reinsurer Exposure	$ 22,629
Ceded Premium Written	$ 9,458
Percent of Total Ceded Premium Written	5.90%
Hannover Ruckversicherung Member | A.M. Best Rating, A+, Superior | S&P Rating, AA-, Very Strong | Reinsurer Concentration Risk [Member] | Reinsurance Recoverable [Member]
Net reinsurance balances recoverable
Percent of Total Net Reinsurer Exposure	5.30%
Axis Re | A.M. Best Rating, A+, Superior | S&P Rating, A+, Strong
Net reinsurance balances recoverable
Reinsurer Exposure	$ 19,928
Ceded Premium Written	$ 6,424
Percent of Total Ceded Premium Written	4.00%
Axis Re | A.M. Best Rating, A+, Superior | S&P Rating, A+, Strong | Reinsurer Concentration Risk [Member] | Reinsurance Recoverable [Member]
Net reinsurance balances recoverable
Percent of Total Net Reinsurer Exposure	4.60%
Transatlantic Re | A.M. Best Rating, A+, Superior | S&P Rating, A+, Strong
Net reinsurance balances recoverable
Reinsurer Exposure	$ 19,517
Ceded Premium Written	$ 7,911
Percent of Total Ceded Premium Written	4.90%
Transatlantic Re | A.M. Best Rating, A+, Superior | S&P Rating, A+, Strong | Reinsurer Concentration Risk [Member] | Reinsurance Recoverable [Member]
Net reinsurance balances recoverable
Percent of Total Net Reinsurer Exposure	4.50%
Toa-Re | A.M. Best Rating, A, Excellent | S&P Rating, A+, Strong
Net reinsurance balances recoverable
Reinsurer Exposure	$ 18,480
Ceded Premium Written	$ 6,495
Percent of Total Ceded Premium Written	4.10%
Toa-Re | A.M. Best Rating, A, Excellent | S&P Rating, A+, Strong | Reinsurer Concentration Risk [Member] | Reinsurance Recoverable [Member]
Net reinsurance balances recoverable
Percent of Total Net Reinsurer Exposure	4.30%
General Re | AM Best, A++ Rating | Standard & Poor's, AA+ Rating
Net reinsurance balances recoverable
Reinsurer Exposure	$ 18,168
Ceded Premium Written	$ 5,170
Percent of Total Ceded Premium Written	3.20%
General Re | AM Best, A++ Rating | Standard & Poor's, AA+ Rating | Reinsurer Concentration Risk [Member] | Reinsurance Recoverable [Member]
Net reinsurance balances recoverable
Percent of Total Net Reinsurer Exposure	4.20%
Tokio Millennium Re | A.M. Best Rating, A+, Superior | S&P Rating, A+, Strong
Net reinsurance balances recoverable
Reinsurer Exposure	$ 17,044
Ceded Premium Written	$ 6,947
Percent of Total Ceded Premium Written	4.30%
Tokio Millennium Re | A.M. Best Rating, A+, Superior | S&P Rating, A+, Strong | Reinsurer Concentration Risk [Member] | Reinsurance Recoverable [Member]
Net reinsurance balances recoverable
Percent of Total Net Reinsurer Exposure	4.00%
All other reinsurers
Net reinsurance balances recoverable
Reinsurer Exposure	$ 125,777
Ceded Premium Written	$ 70,816
Percent of Total Ceded Premium Written	44.30%
All other reinsurers | Reinsurer Concentration Risk [Member] | Reinsurance Recoverable [Member]
Net reinsurance balances recoverable
Percent of Total Net Reinsurer Exposure	29.30%

HISTORICAL LOSS AND LAE DEVEL_3

HISTORICAL LOSS AND LAE DEVELOPMENT - Unpaid Losses and Settlement Expenses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Unpaid losses and LAE at beginning of year:
Gross	$ 1,271,503	$ 1,139,337	$ 1,103,785
Ceded	(301,991)	(288,224)	(297,844)
Net	969,512	851,113	805,941
Increase (decrease) in incurred losses and LAE:
Current accident year	478,143	440,452	391,772
Prior accident years	(49,950)	(38,868)	(41,994)
Total incurred	428,193	401,584	349,778
Loss and LAE payments for claims incurred:
Current accident year	(76,050)	(73,392)	(70,540)
Prior accident year	(225,306)	(209,793)	(234,066)
Total paid	(301,356)	(283,185)	(304,606)
Net	1,096,349	969,512	851,113
Unpaid losses and LAE at year end
Gross	1,461,348	1,271,503	1,139,337
Ceded	(364,999)	(301,991)	(288,224)
Net	1,096,349	969,512	851,113
Casualty segment
Increase (decrease) in incurred losses and LAE:
Current accident year	363,015	323,141	292,308
Prior accident years	(33,252)	(17,462)	(32,401)
Property segment
Unpaid losses and LAE at beginning of year:
Ceded	(28,613)
Increase (decrease) in incurred losses and LAE:
Current accident year	94,635	97,161	76,143
Prior accident years	(10,813)	(12,134)	(4,793)
Unpaid losses and LAE at year end
Ceded	(50,495)	(28,613)
Surety segment
Unpaid losses and LAE at beginning of year:
Ceded	(7,079)
Increase (decrease) in incurred losses and LAE:
Current accident year	20,493	20,150	23,321
Prior accident years	(5,885)	(9,272)	$ (4,800)
Unpaid losses and LAE at year end
Ceded	$ (11,834)	$ (7,079)

HISTORICAL LOSS AND LAE DEVEL_4

HISTORICAL LOSS AND LAE DEVELOPMENT - Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance (Details) $ in Thousands	Dec. 31, 2018USD ($)claim	Dec. 31, 2017USD ($)	Dec. 31, 2016USD ($)	Dec. 31, 2015USD ($)	Dec. 31, 2014USD ($)	Dec. 31, 2013USD ($)	Dec. 31, 2012USD ($)	Dec. 31, 2011USD ($)	Dec. 31, 2010USD ($)	Dec. 31, 2009USD ($)
Claims Development [Line Items]
Liabilities for losses and loss adjustment expenses, net of reinsurance	$ 1,096,349	$ 969,512
Casualty segment | Primary Occurrence
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	852,372
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	491,833
All outstanding liabilities before 2009, net of reinsurance	11,911
Liabilities for losses and loss adjustment expenses, net of reinsurance	372,450	325,182
Casualty segment | Primary Occurrence | Short-duration Insurance Contracts, Accident Year 2009
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	81,445	80,350	$ 80,518	$ 81,138	$ 82,651	$ 86,888	$ 91,441	$ 99,765	$ 119,957	$ 85,476
Total IBNR	$ 2,202
Cumulative number of reported claims | claim	5,713
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 77,175	75,948	74,920	70,220	65,913	58,460	43,702	24,115	9,233	1,972
Casualty segment | Primary Occurrence | Short-duration Insurance Contracts, Accident Year 2010
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	80,216	78,991	78,685	80,289	85,034	88,820	93,589	96,582	87,875
Total IBNR	$ 2,392
Cumulative number of reported claims | claim	6,117
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 73,318	69,514	66,399	61,929	55,992	44,051	29,312	13,025	2,587
Casualty segment | Primary Occurrence | Short-duration Insurance Contracts, Accident Year 2011
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	82,248	82,193	83,181	86,342	89,622	94,145	98,428	91,139
Total IBNR	$ 3,180
Cumulative number of reported claims | claim	5,851
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 74,814	71,413	67,358	60,769	48,822	32,978	17,124	5,924
Casualty segment | Primary Occurrence | Short-duration Insurance Contracts, Accident Year 2012
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	60,328	59,488	59,028	61,072	65,893	78,406	91,807
Total IBNR	$ 3,502
Cumulative number of reported claims | claim	5,163
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 51,611	47,970	43,276	33,822	23,889	14,539	5,897
Casualty segment | Primary Occurrence | Short-duration Insurance Contracts, Accident Year 2013
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	59,556	60,162	60,329	62,882	67,297	80,823
Total IBNR	$ 6,538
Cumulative number of reported claims | claim	4,287
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 45,753	40,609	34,786	22,366	13,021	6,334
Casualty segment | Primary Occurrence | Short-duration Insurance Contracts, Accident Year 2014
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	66,389	67,237	71,592	79,497	88,092
Total IBNR	$ 12,492
Cumulative number of reported claims | claim	4,242
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 47,343	40,270	29,545	18,771	11,436
Casualty segment | Primary Occurrence | Short-duration Insurance Contracts, Accident Year 2015
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	78,675	83,579	84,975	94,835
Total IBNR	$ 21,351
Cumulative number of reported claims | claim	4,311
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 45,056	33,020	19,902	10,157
Casualty segment | Primary Occurrence | Short-duration Insurance Contracts, Accident Year 2016
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	90,611	96,753	101,950
Total IBNR	$ 38,505
Cumulative number of reported claims | claim	4,148
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 35,764	24,186	10,142
Casualty segment | Primary Occurrence | Short-duration Insurance Contracts, Accident Year 2017
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	111,391	119,741
Total IBNR	$ 64,662
Cumulative number of reported claims | claim	4,119
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 25,933	13,154
Casualty segment | Primary Occurrence | Short-duration Insurance Contracts, Accident Year 2018
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	141,513
Total IBNR	$ 109,482
Cumulative number of reported claims | claim	3,773
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 15,066
Casualty segment | Excess Occurrence
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	341,691
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	149,926
All outstanding liabilities before 2009, net of reinsurance	17,918
Liabilities for losses and loss adjustment expenses, net of reinsurance	209,683	188,963
Casualty segment | Excess Occurrence | Short-duration Insurance Contracts, Accident Year 2009
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	12,072	12,055	11,982	12,601	12,459	12,966	12,893	14,981	19,719	30,267
Total IBNR	$ 285
Cumulative number of reported claims | claim	567
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 11,787	11,786	11,780	11,776	10,808	11,001	9,460	6,585	3,947	956
Casualty segment | Excess Occurrence | Short-duration Insurance Contracts, Accident Year 2010
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	20,527	20,530	21,018	22,044	20,044	18,932	22,111	24,244	29,314
Total IBNR	$ 369
Cumulative number of reported claims | claim	500
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 19,308	19,256	19,175	17,302	15,512	13,282	10,705	6,002	7
Casualty segment | Excess Occurrence | Short-duration Insurance Contracts, Accident Year 2011
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	22,032	21,295	20,959	19,160	18,641	17,443	17,148	26,272
Total IBNR	$ 824
Cumulative number of reported claims | claim	581
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 20,214	17,769	16,494	10,772	8,793	6,981	5,145	2,169
Casualty segment | Excess Occurrence | Short-duration Insurance Contracts, Accident Year 2012
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	23,020	22,433	21,231	21,885	21,021	21,558	29,042
Total IBNR	$ 1,386
Cumulative number of reported claims | claim	855
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 19,310	17,747	16,879	15,380	8,843	3,573	1,315
Casualty segment | Excess Occurrence | Short-duration Insurance Contracts, Accident Year 2013
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	24,922	25,599	25,425	26,857	34,824	39,984
Total IBNR	$ 3,488
Cumulative number of reported claims | claim	933
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 17,956	16,967	14,545	10,967	5,701	1,060
Casualty segment | Excess Occurrence | Short-duration Insurance Contracts, Accident Year 2014
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	33,372	32,274	35,119	39,095	50,889
Total IBNR	$ 8,832
Cumulative number of reported claims | claim	875
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 22,541	18,852	11,002	4,006	1,899
Casualty segment | Excess Occurrence | Short-duration Insurance Contracts, Accident Year 2015
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	42,840	47,392	50,857	53,672
Total IBNR	$ 14,320
Cumulative number of reported claims | claim	669
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 23,184	19,571	10,127	2,048
Casualty segment | Excess Occurrence | Short-duration Insurance Contracts, Accident Year 2016
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	37,676	49,385	56,341
Total IBNR	$ 25,675
Cumulative number of reported claims | claim	572
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 7,441	3,396	1,068
Casualty segment | Excess Occurrence | Short-duration Insurance Contracts, Accident Year 2017
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	55,868	62,863
Total IBNR	$ 43,891
Cumulative number of reported claims | claim	473
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 5,679	17
Casualty segment | Excess Occurrence | Short-duration Insurance Contracts, Accident Year 2018
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	69,362
Total IBNR	$ 63,524
Cumulative number of reported claims | claim	258
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 2,506
Casualty segment | Claims Made
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	381,356
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	177,788
All outstanding liabilities before 2009, net of reinsurance	933
Liabilities for losses and loss adjustment expenses, net of reinsurance	204,501	171,241
Casualty segment | Claims Made | Short-duration Insurance Contracts, Accident Year 2009
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	16,056	11,827	12,053	12,810	13,117	11,710	13,562	9,687	13,703	12,918
Total IBNR	$ 398
Cumulative number of reported claims | claim	383
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 11,955	11,475	11,398	11,217	10,678	5,176	3,413	773	442	113
Casualty segment | Claims Made | Short-duration Insurance Contracts, Accident Year 2010
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	8,735	9,024	9,175	10,581	11,689	10,429	9,776	15,556	13,690
Total IBNR	$ 219
Cumulative number of reported claims | claim	502
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 8,512	8,485	6,956	5,749	5,733	3,626	2,308	1,548	259
Casualty segment | Claims Made | Short-duration Insurance Contracts, Accident Year 2011
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	11,506	7,852	7,720	8,510	10,619	12,260	17,454	17,416
Total IBNR	$ 640
Cumulative number of reported claims | claim	682
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 7,132	6,835	6,209	5,637	5,947	4,508	1,949	330
Casualty segment | Claims Made | Short-duration Insurance Contracts, Accident Year 2012
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	17,569	17,612	18,022	19,590	20,727	26,144	27,576
Total IBNR	$ 1,251
Cumulative number of reported claims | claim	803
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 15,621	14,378	10,968	9,218	6,898	4,086	433
Casualty segment | Claims Made | Short-duration Insurance Contracts, Accident Year 2013
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	37,959	38,473	40,288	44,054	41,488	40,095
Total IBNR	$ 3,751
Cumulative number of reported claims | claim	1,042
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 32,789	29,678	26,121	18,425	7,073	792
Casualty segment | Claims Made | Short-duration Insurance Contracts, Accident Year 2014
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	51,554	55,350	58,152	55,386	53,929
Total IBNR	$ 7,271
Cumulative number of reported claims | claim	1,304
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 40,080	35,755	27,923	9,775	1,705
Casualty segment | Claims Made | Short-duration Insurance Contracts, Accident Year 2015
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	39,906	42,206	47,831	55,006
Total IBNR	$ 10,559
Cumulative number of reported claims | claim	1,335
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 20,920	16,774	10,738	2,215
Casualty segment | Claims Made | Short-duration Insurance Contracts, Accident Year 2016
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	69,493	67,760	59,992
Total IBNR	$ 23,817
Cumulative number of reported claims | claim	1,500
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 27,465	14,558	2,060
Casualty segment | Claims Made | Short-duration Insurance Contracts, Accident Year 2017
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	62,450	60,572
Total IBNR	$ 35,365
Cumulative number of reported claims | claim	1,627
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 11,350	2,455
Casualty segment | Claims Made | Short-duration Insurance Contracts, Accident Year 2018
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	66,128
Total IBNR	$ 50,820
Cumulative number of reported claims | claim	1,272
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 1,964
Casualty segment | Transportation
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	386,520
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	253,052
All outstanding liabilities before 2009, net of reinsurance	90
Liabilities for losses and loss adjustment expenses, net of reinsurance	133,558	119,704
Casualty segment | Transportation | Short-duration Insurance Contracts, Accident Year 2009
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	21,911	21,926	21,969	21,958	22,340	22,613	22,929	23,174	23,366	26,349
Total IBNR	$ 19
Cumulative number of reported claims | claim	2,644
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 21,650	21,650	21,650	21,640	21,325	21,100	19,933	14,613	8,698	5,035
Casualty segment | Transportation | Short-duration Insurance Contracts, Accident Year 2010
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	23,776	23,786	23,701	23,625	23,981	25,593	24,912	23,390	27,239
Total IBNR	$ 44
Cumulative number of reported claims | claim	2,843
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 23,556	23,533	23,488	23,063	21,792	20,045	15,475	10,116	6,296
Casualty segment | Transportation | Short-duration Insurance Contracts, Accident Year 2011
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	25,614	25,167	25,376	25,431	25,272	25,747	23,479	22,957
Total IBNR	$ 52
Cumulative number of reported claims | claim	2,469
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 24,377	23,941	23,537	22,375	19,443	14,477	9,485	5,295
Casualty segment | Transportation | Short-duration Insurance Contracts, Accident Year 2012
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	23,305	23,620	23,689	23,511	22,924	22,203	21,452
Total IBNR	$ 76
Cumulative number of reported claims | claim	2,284
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 22,730	22,566	20,931	17,318	12,394	8,533	4,466
Casualty segment | Transportation | Short-duration Insurance Contracts, Accident Year 2013
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	39,974	38,811	37,673	32,989	32,853	32,742
Total IBNR	$ 350
Cumulative number of reported claims | claim	2,852
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 35,923	33,480	28,220	19,761	11,978	5,306
Casualty segment | Transportation | Short-duration Insurance Contracts, Accident Year 2014
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	40,202	38,590	36,452	33,015	38,361
Total IBNR	$ 911
Cumulative number of reported claims | claim	3,099
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 33,190	27,457	19,676	13,933	7,125
Casualty segment | Transportation | Short-duration Insurance Contracts, Accident Year 2015
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	46,395	47,021	46,258	38,561
Total IBNR	$ 3,824
Cumulative number of reported claims | claim	3,179
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 37,222	29,554	20,709	6,984
Casualty segment | Transportation | Short-duration Insurance Contracts, Accident Year 2016
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	54,105	53,519	50,430
Total IBNR	$ 7,632
Cumulative number of reported claims | claim	3,920
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 30,354	18,354	8,923
Casualty segment | Transportation | Short-duration Insurance Contracts, Accident Year 2017
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	53,641	55,640
Total IBNR	$ 16,406
Cumulative number of reported claims | claim	3,597
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 17,070	7,979
Casualty segment | Transportation | Short-duration Insurance Contracts, Accident Year 2018
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	57,597
Total IBNR	$ 16,690
Cumulative number of reported claims | claim	3,154
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 6,980
Property segment
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	634,383
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	557,162
All outstanding liabilities before 2009, net of reinsurance	17
Liabilities for losses and loss adjustment expenses, net of reinsurance	77,238	68,867
Property segment | Short-duration Insurance Contracts, Accident Year 2009
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	48,925	49,323	49,267	48,707	48,857	48,969	49,534	52,286	55,821	59,975
Total IBNR	$ 13
Cumulative number of reported claims | claim	2,630
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 48,898	49,173	49,051	48,329	48,297	48,031	46,004	43,758	40,775	25,464
Property segment | Short-duration Insurance Contracts, Accident Year 2010
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	52,903	52,952	52,964	52,927	54,153	53,937	55,427	59,145	63,194
Total IBNR	$ 29
Cumulative number of reported claims | claim	2,851
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 52,855	52,851	52,719	52,426	52,729	50,055	47,743	43,091	25,274
Property segment | Short-duration Insurance Contracts, Accident Year 2011
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	62,875	62,456	62,570	62,770	63,724	64,976	66,924	70,246
Total IBNR	$ 142
Cumulative number of reported claims | claim	3,028
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 62,729	61,834	61,428	60,272	59,099	55,778	48,756	27,676
Property segment | Short-duration Insurance Contracts, Accident Year 2012
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	78,161	78,125	79,175	77,569	79,181	80,155	85,485
Total IBNR	$ 167
Cumulative number of reported claims | claim	2,640
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 77,159	76,152	75,640	73,705	72,057	66,509	39,074
Property segment | Short-duration Insurance Contracts, Accident Year 2013
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	61,834	61,914	62,114	62,173	62,090	63,864
Total IBNR	$ 273
Cumulative number of reported claims | claim	2,995
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 61,195	60,520	59,259	57,407	50,840	32,208
Property segment | Short-duration Insurance Contracts, Accident Year 2014
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	49,217	48,761	48,801	49,441	56,587
Total IBNR	$ 315
Cumulative number of reported claims | claim	4,560
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 47,799	46,528	46,148	43,380	30,550
Property segment | Short-duration Insurance Contracts, Accident Year 2015
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	52,720	53,958	56,103	59,863
Total IBNR	$ 680
Cumulative number of reported claims | claim	4,076
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 51,290	50,197	49,348	32,184
Property segment | Short-duration Insurance Contracts, Accident Year 2016
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	55,384	55,594	62,900
Total IBNR	$ 2,093
Cumulative number of reported claims | claim	3,369
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 51,371	46,921	33,134
Property segment | Short-duration Insurance Contracts, Accident Year 2017
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	83,273	90,803
Total IBNR	$ 9,346
Cumulative number of reported claims | claim	2,873
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 66,818	41,314
Property segment | Short-duration Insurance Contracts, Accident Year 2018
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	89,091
Total IBNR	$ 23,235
Cumulative number of reported claims | claim	2,030
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 37,048
Surety segment
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	91,606
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	65,361
All outstanding liabilities before 2009, net of reinsurance	1,992
Liabilities for losses and loss adjustment expenses, net of reinsurance	28,237	23,375
Surety segment | Short-duration Insurance Contracts, Accident Year 2009
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	4,935	4,860	4,923	4,288	4,551	4,146	4,246	4,708	4,896	15,474
Total IBNR	$ 2
Cumulative number of reported claims | claim	1,665
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 4,933	4,849	3,908	3,919	4,336	3,490	2,493	2,382	1,914	$ 892
Surety segment | Short-duration Insurance Contracts, Accident Year 2010
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	6,580	6,244	7,645	7,136	6,810	7,076	6,630	8,205	13,961
Total IBNR	$ 14
Cumulative number of reported claims | claim	1,540
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 6,637	6,663	7,822	7,285	7,151	7,092	5,702	3,205	$ 1,724
Surety segment | Short-duration Insurance Contracts, Accident Year 2011
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	18,281	16,480	16,695	16,766	17,321	17,792	17,832	13,842
Total IBNR	$ 13
Cumulative number of reported claims | claim	1,674
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 17,013	17,086	17,086	17,212	17,403	17,151	16,932	$ 8,160
Surety segment | Short-duration Insurance Contracts, Accident Year 2012
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	7,099	7,471	7,867	8,180	8,667	11,452	17,114
Total IBNR	$ 22
Cumulative number of reported claims | claim	1,469
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 7,065	7,406	7,536	7,416	6,726	6,680	$ 1,883
Surety segment | Short-duration Insurance Contracts, Accident Year 2013
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	5,231	5,271	5,399	6,170	7,516	16,080
Total IBNR	$ 50
Cumulative number of reported claims | claim	1,400
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 5,150	5,098	4,911	4,701	2,856	$ 1,116
Surety segment | Short-duration Insurance Contracts, Accident Year 2014
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	4,267	4,427	5,225	8,106	16,450
Total IBNR	$ 88
Cumulative number of reported claims | claim	1,337
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 4,131	4,059	4,166	4,283	$ 722
Surety segment | Short-duration Insurance Contracts, Accident Year 2015
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	10,456	11,113	12,957	16,958
Total IBNR	$ 824
Cumulative number of reported claims | claim	1,201
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 9,436	7,695	6,719	$ 3,192
Surety segment | Short-duration Insurance Contracts, Accident Year 2016
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	9,351	11,062	18,928
Total IBNR	$ 1,543
Cumulative number of reported claims | claim	1,307
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 6,299	5,817	$ 3,087
Surety segment | Short-duration Insurance Contracts, Accident Year 2017
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	8,641	16,127
Total IBNR	$ 3,630
Cumulative number of reported claims | claim	1,409
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 2,862	$ 979
Surety segment | Short-duration Insurance Contracts, Accident Year 2018
Claims Development [Line Items]
Incurred losses and loss adjustment expenses, net of reinsurance	16,765
Total IBNR	$ 14,535
Cumulative number of reported claims | claim	654
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance	$ 1,835

HISTORICAL LOSS AND LAE DEVEL_5

HISTORICAL LOSS AND LAE DEVELOPMENT - Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance (Details)	Dec. 31, 2018
Property segment
Short-duration Insurance Contracts, Historical Claims Duration [Line Items]
Average annual percentage payout of incurred losses by age, Year 1	52.00%
Average annual percentage payout of incurred losses by age, Year 2	30.90%
Average annual percentage payout of incurred losses by age, Year 3	7.40%
Average annual percentage payout of incurred losses by age, Year 4	3.20%
Average annual percentage payout of incurred losses by age, Year 5	3.00%
Average annual percentage payout of incurred losses by age, Year 6	0.70%
Average annual percentage payout of incurred losses by age, Year 7	0.60%
Average annual percentage payout of incurred losses by age, Year 8	1.00%
Average annual percentage payout of incurred losses by age, Year 9	0.10%
Average annual percentage payout of incurred losses by age, Year 10	(0.60%)
Surety segment
Short-duration Insurance Contracts, Historical Claims Duration [Line Items]
Average annual percentage payout of incurred losses by age, Year 1	24.00%
Average annual percentage payout of incurred losses by age, Year 2	40.00%
Average annual percentage payout of incurred losses by age, Year 3	12.00%
Average annual percentage payout of incurred losses by age, Year 4	7.50%
Average annual percentage payout of incurred losses by age, Year 5	4.50%
Average annual percentage payout of incurred losses by age, Year 6	3.50%
Average annual percentage payout of incurred losses by age, Year 7	(1.30%)
Average annual percentage payout of incurred losses by age, Year 8	(6.10%)
Average annual percentage payout of incurred losses by age, Year 9	9.30%
Average annual percentage payout of incurred losses by age, Year 10	1.70%
Primary Occurrence | Casualty segment
Short-duration Insurance Contracts, Historical Claims Duration [Line Items]
Average annual percentage payout of incurred losses by age, Year 1	9.70%
Average annual percentage payout of incurred losses by age, Year 2	12.40%
Average annual percentage payout of incurred losses by age, Year 3	16.80%
Average annual percentage payout of incurred losses by age, Year 4	18.60%
Average annual percentage payout of incurred losses by age, Year 5	13.90%
Average annual percentage payout of incurred losses by age, Year 6	8.20%
Average annual percentage payout of incurred losses by age, Year 7	5.50%
Average annual percentage payout of incurred losses by age, Year 8	4.60%
Average annual percentage payout of incurred losses by age, Year 9	3.00%
Average annual percentage payout of incurred losses by age, Year 10	1.50%
Excess Occurrence | Casualty segment
Short-duration Insurance Contracts, Historical Claims Duration [Line Items]
Average annual percentage payout of incurred losses by age, Year 1	4.50%
Average annual percentage payout of incurred losses by age, Year 2	15.30%
Average annual percentage payout of incurred losses by age, Year 3	18.90%
Average annual percentage payout of incurred losses by age, Year 4	17.00%
Average annual percentage payout of incurred losses by age, Year 5	10.00%
Average annual percentage payout of incurred losses by age, Year 6	8.20%
Average annual percentage payout of incurred losses by age, Year 7	7.40%
Average annual percentage payout of incurred losses by age, Year 8	3.80%
Average annual percentage payout of incurred losses by age, Year 9	0.20%
Average annual percentage payout of incurred losses by age, Year 10	0.00%
Claims Made | Casualty segment
Short-duration Insurance Contracts, Historical Claims Duration [Line Items]
Average annual percentage payout of incurred losses by age, Year 1	3.00%
Average annual percentage payout of incurred losses by age, Year 2	15.30%
Average annual percentage payout of incurred losses by age, Year 3	18.50%
Average annual percentage payout of incurred losses by age, Year 4	14.70%
Average annual percentage payout of incurred losses by age, Year 5	10.00%
Average annual percentage payout of incurred losses by age, Year 6	13.40%
Average annual percentage payout of incurred losses by age, Year 7	7.40%
Average annual percentage payout of incurred losses by age, Year 8	7.10%
Average annual percentage payout of incurred losses by age, Year 9	0.40%
Average annual percentage payout of incurred losses by age, Year 10	3.00%
Transportation | Casualty segment
Short-duration Insurance Contracts, Historical Claims Duration [Line Items]
Average annual percentage payout of incurred losses by age, Year 1	17.90%
Average annual percentage payout of incurred losses by age, Year 2	18.20%
Average annual percentage payout of incurred losses by age, Year 3	20.10%
Average annual percentage payout of incurred losses by age, Year 4	20.20%
Average annual percentage payout of incurred losses by age, Year 5	11.20%
Average annual percentage payout of incurred losses by age, Year 6	4.80%
Average annual percentage payout of incurred losses by age, Year 7	1.40%
Average annual percentage payout of incurred losses by age, Year 8	0.60%
Average annual percentage payout of incurred losses by age, Year 9	0.00%
Average annual percentage payout of incurred losses by age, Year 10	0.00%

HISTORICAL LOSS AND LAE DEVEL_6

HISTORICAL LOSS AND LAE DEVELOPMENT - Reconciliation of Incurred and Paid Loss Development to the Liability for Unpaid Losses and Settlement Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Net outstanding liabilities	$ 1,461,348	$ 1,271,503	$ 1,139,337	$ 1,103,785
Unallocated loss adjustment expenses	50,891	48,844
Other	9,998	13,322
Liabilities for losses and loss adjustment expenses, net of reinsurance	1,096,349	969,512
Allowance for uncollectible reinsurance balances recoverable on unpaid losses and settlement expenses	9,793	10,014
Other	980	1,729
Reinsurance recoverable on unpaid claims	364,999	301,991	$ 288,224	$ 297,844
Total gross liability for unpaid loss and settlement expenses	1,461,348	1,271,503
Casualty segment | Primary Occurrence
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Liabilities for losses and loss adjustment expenses, net of reinsurance	372,450	325,182
Reinsurance recoverable on unpaid claims	34,742	36,158
Casualty segment | Excess Occurrence
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Liabilities for losses and loss adjustment expenses, net of reinsurance	209,683	188,963
Reinsurance recoverable on unpaid claims	81,072	74,400
Casualty segment | Claims Made
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Liabilities for losses and loss adjustment expenses, net of reinsurance	204,501	171,241
Reinsurance recoverable on unpaid claims	144,921	117,436
Casualty segment | Transportation
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Liabilities for losses and loss adjustment expenses, net of reinsurance	133,558	119,704
Reinsurance recoverable on unpaid claims	50,748	46,590
Property segment
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Liabilities for losses and loss adjustment expenses, net of reinsurance	77,238	68,867
Reinsurance recoverable on unpaid claims	50,495	28,613
Surety segment
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Liabilities for losses and loss adjustment expenses, net of reinsurance	28,237	23,375
Reinsurance recoverable on unpaid claims	$ 11,834	$ 7,079

HISTORICAL LOSS AND LAE DEVEL_7

HISTORICAL LOSS AND LAE DEVELOPMENT - Reserve Development (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
(Favorable)/unfavorable reserve development
(Favorable)/unfavorable reserve development	$ (49,950)	$ (38,868)	$ (41,994)
Casualty segment
(Favorable)/unfavorable reserve development
(Favorable)/unfavorable reserve development	(33,252)	(17,462)	(32,401)
Property segment
(Favorable)/unfavorable reserve development
(Favorable)/unfavorable reserve development	(10,813)	(12,134)	(4,793)
Property segment | Marine
(Favorable)/unfavorable reserve development
(Favorable)/unfavorable reserve development	(5,000)	(6,800)	(2,100)
Property segment | Assumed property
(Favorable)/unfavorable reserve development
(Favorable)/unfavorable reserve development	(2,800)		(2,500)
Property segment | Commercial property
(Favorable)/unfavorable reserve development
(Favorable)/unfavorable reserve development	(2,000)	(3,200)
Property segment | Other direct property products
(Favorable)/unfavorable reserve development
(Favorable)/unfavorable reserve development			200
Surety segment
(Favorable)/unfavorable reserve development
(Favorable)/unfavorable reserve development	(5,885)	(9,272)	(4,800)
Surety segment | Commercial surety product
(Favorable)/unfavorable reserve development
(Favorable)/unfavorable reserve development	(4,600)	(3,500)	(1,700)
Surety segment | Contract surety product
(Favorable)/unfavorable reserve development
(Favorable)/unfavorable reserve development		(4,400)	(100)
Surety segment | Energy surety product
(Favorable)/unfavorable reserve development
(Favorable)/unfavorable reserve development	(1,700)	(1,500)	(1,900)
Surety segment | Miscellaneous Surety Product
(Favorable)/unfavorable reserve development
(Favorable)/unfavorable reserve development	800	100	(1,100)
Primary Occurrence | Casualty segment
(Favorable)/unfavorable reserve development
(Favorable)/unfavorable reserve development	(15,600)
Primary Occurrence | Casualty segment | General liability
(Favorable)/unfavorable reserve development
(Favorable)/unfavorable reserve development	(6,700)	(4,600)	(17,600)
Primary Occurrence | Casualty segment | P&C Package
(Favorable)/unfavorable reserve development
(Favorable)/unfavorable reserve development		(3,200)	(6,200)
Excess Occurrence | Casualty segment
(Favorable)/unfavorable reserve development
(Favorable)/unfavorable reserve development	(21,400)
Excess Occurrence | Casualty segment | Commercial products
(Favorable)/unfavorable reserve development
(Favorable)/unfavorable reserve development	(10,800)	(9,900)	(13,800)
Excess Occurrence | Casualty segment | Personal umbrella
(Favorable)/unfavorable reserve development
(Favorable)/unfavorable reserve development		(1,100)	4,900
Claims Made | Casualty segment
(Favorable)/unfavorable reserve development
(Favorable)/unfavorable reserve development	(3,900)
Claims Made | Casualty segment | Executive products
(Favorable)/unfavorable reserve development
(Favorable)/unfavorable reserve development		(4,400)	(14,700)
Claims Made | Casualty segment | Medical professional liability
(Favorable)/unfavorable reserve development
(Favorable)/unfavorable reserve development		3,700
Claims Made | Casualty segment | Miscellaneous Professional Liability Member
(Favorable)/unfavorable reserve development
(Favorable)/unfavorable reserve development			(800)
Transportation | Casualty segment
(Favorable)/unfavorable reserve development
(Favorable)/unfavorable reserve development	$ (500)	$ 7,400	$ 15,400

HISTORICAL LOSS AND LAE DEVEL_8

HISTORICAL LOSS AND LAE DEVELOPMENT - Environmental, Asbestos and Mass Tort Exposures (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
UNPAID LOSSES AND LAE AT END OF YEAR
Gross	$ 1,461,348	$ 1,271,503	$ 1,139,337	$ 1,103,785
Net	$ 1,096,349	969,512	851,113	$ 805,941
Minimum period for which product lines related to majority of reserves have been in runoff	20 years
Asbestos and environmental exposures
LOSS AND LAE PAYMENTS (CUMULATIVE)
Gross	$ 136,043	132,883	130,358
Ceded	(68,638)	(67,507)	(66,644)
Net	67,405	65,376	63,714
UNPAID LOSSES AND LAE AT END OF YEAR
Gross	24,262	28,042	28,815
Ceded	(5,373)	(5,715)	(4,987)
Net	$ 18,889	$ 22,327	$ 23,828

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Deferred tax assets:
Tax discounting of claim reserves	$ 18,327,000	$ 20,020,000
Unearned premium offset	17,864,000	16,528,000
Deferred compensation	2,700,000	1,435,000
Stock option expense	2,702,000	2,283,000
Other	616,000	578,000
Deferred tax assets before allowance	42,209,000	40,844,000
Total deferred tax assets	42,209,000	40,844,000
Deferred tax liabilities:
Net unrealized appreciation of securities	22,177,000	51,448,000
Deferred policy acquisition costs	17,836,000	16,320,000
Deferred Tax Liabilities Discounting Of Unpaid Losses TCJA Offset	5,203,000	9,466,000
Book/tax depreciation	3,133,000	3,159,000
Intangible assets	1,711,000	584,000
Undistributed earnings of unconsolidated investees	15,811,000	13,431,000
Other	576,000	204,000
Total deferred tax liabilities	66,447,000	94,612,000
Net deferred tax liability	$ (24,238,000)	$ (53,768,000)
U.S. federal tax rate (as a percent)	21.00%	35.00%	35.00%
Increase (reduction) in taxes resulting from:
Provision for income taxes at the statutory rate of 21% in 2018 and 35% in 2017	$ 14,192,000	$ 29,606,000	$ 54,979,000
Enactment Of Tax Cuts And Jobs Act	(2,268,000)	(32,821,000)
Excess tax benefit on share-based compensation	(4,533,000)	(5,798,000)
Dividends received deduction	(775,000)	(2,025,000)	(2,216,000)
ESOP dividends paid deduction	(1,184,000)	(2,905,000)	(3,302,000)
Tax-exempt interest income	(1,795,000)	(4,671,000)	(4,263,000)
Unconsolidated investee dividends		(1,351,000)	(2,772,000)
Other items, net	(235,000)	(474,000)	(264,000)
Income tax expense (benefit)	$ 3,402,000	$ (20,439,000)	$ 42,162,000
Reconciliation of income tax expense rate to the U.S. federal tax rate
U.S. federal tax rate (as a percent)	21.00%	35.00%	35.00%
Enactment of Tax Cuts and Jobs Act (TCJA)	(3.40%)	(38.80%)
Excess tax benefit on share-based compensation	(6.70%)	(6.90%)
Effective rate reduction due to dividend received (as a percent)	(1.10%)	(2.40%)	(1.40%)
Effective rate reduction due to dividend paid to ESOP (as a percent)	(1.80%)	(3.40%)	(2.10%)
Effective rate reduction due to tax exempt interest income (as a percent)	(2.70%)	(5.50%)	(2.70%)
Effective rate reduction due to unconsolidated investee dividends		(1.60%)	(1.80%)
Effective rate reduction due to other items, net (as a percent)	(0.30%)	(0.60%)	(0.20%)
Effective Income Tax Rate Reconciliation, Percent, Total	5.00%	(24.20%)	26.80%
Income tax expense (benefit)	$ 3,402,000	$ (20,439,000)	$ 42,162,000
Effective tax rates (as a percent)	5.00%	(24.20%)	26.80%
Capital gains rate (as a percent)	21.00%
Dividend received	$ 9,900,000	$ 0	$ 9,900,000
Lower tax rate (as a percent)	7.40%		7.00%
Effective rate reduction due to dividends paid to ESOP (as a percent)	1.80%	3.40%	2.10%
Expected effective tax rate when deferred items reverse in future years (as a percent)	21.00%
Federal and state income taxes paid	$ 16,400,000	$ 10,400,000	$ 26,900,000

EMPLOYEE BENEFITS - Stock Owner

EMPLOYEE BENEFITS - Stock Ownership and Incentive Plans (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Employee Stock Ownership, 401(K) And Deferred Compensation Plan
Annual expenses for incentive plans	$ 11.9	$ 19.7	$ 19.2
ESOP and 401(k) Plans
Employee Stock Ownership, 401(K) And Deferred Compensation Plan
Vesting period of profit sharing contributions	3 years
Expenses recognized	$ 8.8	$ 12.5	$ 11.7
Employee Stock Ownership Plan (ESOP)
Employee Stock Ownership, 401(K) And Deferred Compensation Plan
Shares purchased under defined contribution plan	98,717	124,186	112,608
Average price of shares purchased (in dollars per share)	$ 62.80	$ 58.02	$ 64.20
Aggregate price of shares purchased	$ 6.2	$ 7.2	$ 7.2
Shares held by the ESOP	2,985,390
Employee 401(k) Plans
Employee Stock Ownership, 401(K) And Deferred Compensation Plan
Employer contribution as a percent of eligible compensation	3.00%
Vesting percentage in basic and voluntary contributions	100.00%
Deferred compensation plan
Employee Stock Ownership, 401(K) And Deferred Compensation Plan
Shares purchased under defined contribution plan	7,049	7,464	6,702
Average price of shares purchased (in dollars per share)	$ 68.36	$ 58.66	$ 61.61
Aggregate price of shares purchased	$ 0.5	$ 0.4	$ 0.4
Assets held under trust	$ 36.2

EMPLOYEE BENEFITS - Stock Optio

EMPLOYEE BENEFITS - Stock Options and Stock Plans (Details) - USD ($)	1 Months Ended			12 Months Ended			24 Months Ended	44 Months Ended	60 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2018	Dec. 31, 2018	May 06, 2015	May 07, 2015
Weighted Number of Options Outstanding
Outstanding options at the beginning of the period (in shares)				2,257,015	2,207,110	2,582,220	2,207,110
Options granted (in shares)	330,750	384,750	345,750	432,000	482,375	440,750
Options exercised (in shares)				(705,785)	(390,870)	(756,380)
Options canceled/forfeited (in shares)				(18,350)	(41,600)	(59,480)
Outstanding options at the end of the period (in shares)				1,964,880	2,257,015	2,207,110	1,964,880	1,964,880
Exercisable options at the end of the period (in shares)				724,730	975,055	862,605	724,730	724,730
Weighted Average Exercise Price
Outstanding options at the beginning of the period (in dollars per share)				$ 46.80	$ 40.90	$ 32.42	$ 40.90
Options granted (in dollars per share)				64.91	57.12	63.54
Options exercised (in dollars per share)				36.81	26.07	24.87
Options canceled/forfeited (in dollars per share)				60.84	48.30	44.39
Outstanding options at the end of the period (in dollars per share)				54.24	46.80	40.90	54.24	$ 54.24
Exercisable options at the end of the period (in dollars per share)				$ 46.62	$ 38.66	$ 31.23	$ 46.62	$ 46.62
Weighted Average Remaining Contractual Life
Weighted-average remaining contractual term of options outstanding				5 years 3 months	4 years 10 months 17 days	4 years 11 months 5 days
Weighted-average remaining contractual term of exercisable options				3 years 9 months 15 days	3 years 3 months	3 years 3 months 7 days
Aggregate Intrinsic Value
Options exercised (in dollars)				$ 24,304,000	$ 12,779,000	$ 31,328,000
Outstanding options at the end of the period (in dollars)				29,317,000	32,620,000	49,531,000	$ 29,317,000	$ 29,317,000
Exercisable options at the end of the period (in dollars)				$ 16,212,000	$ 21,780,000	$ 27,523,000	16,212,000	16,212,000
Weighted-average fair value of options granted (in dollars per share)	$ 10.31	$ 7.91	$ 11.42	$ 10.58	$ 8	$ 11.38
Stock-based compensation expenses (in dollars)				$ 4,500,000	$ 4,400,000	$ 4,100,000
Income tax benefit from stock-based compensation (in dollars)				900,000	1,500,000	1,400,000
Unrecognized stock-based compensation expense (in dollars)				$ 5,600,000	$ 5,700,000	$ 6,200,000	$ 5,600,000	$ 5,600,000
Weighted average grant date assumptions and weighted average fair value
Weighted-average fair value of grants (in dollars per share)	$ 10.31	$ 7.91	$ 11.42	$ 10.58	$ 8	$ 11.38
Risk-free interest rates (as a percent)				2.72%	1.90%	1.21%
Dividend yield (as a percent)				2.98%	3.60%	1.61%
Expected volatility (as a percent)				22.87%	22.95%	23.06%
Expected option life				5 years 26 days	5 years 18 days	5 years 15 days
Period for which annualized dividends is considered to calculate dividend yield				5 years
RLI Corp. Long-Term Incentive Plan (LTIP) and Omnibus Stock Plan
Stock options and stock plans
Award vesting period				5 years
Term of options				8 years
Age and period of service of the participant to be eligible for retirement				75 years
RLI Corp. Long-Term Incentive Plan (2010 LTIP)
Stock options and stock plans
Shares authorized for grant										4,000,000
Stock options granted to date (in shares)									2,878,000
RLI Corp. Long-Term Incentive Plan (2015 LTIP)
Stock options and stock plans
Shares authorized for grant				4,000,000			4,000,000	4,000,000
Stock options granted to date (in shares)								1,903,630
Weighted Number of Options Outstanding
Options granted (in shares)				455,055
Restricted Stock Units (RSUs) [Member] | Outside director
Stock options and stock plans
Award vesting period				1 year
Aggregate Intrinsic Value
Stock-based compensation expenses (in dollars)				$ 300,000
Unrecognized stock-based compensation expense (in dollars)				$ 200,000			$ 200,000	$ 200,000
Weighted average grant date assumptions and weighted average fair value
RSUs Granted				8,430
RSUs Outstanding				8,629			8,629	8,629
Grant date fair value of RSUs				$ 50,000
Restricted Stock Units (RSUs) [Member] | RLI Corp. Long-Term Incentive Plan (2015 LTIP)
Stock options and stock plans
Award vesting period				3 years
Age and period of service of the participant to be eligible for retirement				75 years
Aggregate Intrinsic Value
Stock-based compensation expenses (in dollars)				$ 600,000	$ 400,000
Unrecognized stock-based compensation expense (in dollars)				$ 700,000			$ 700,000	$ 700,000
Weighted average grant date assumptions and weighted average fair value
RSUs Granted				14,625			30,075
RSUs Outstanding				30,567			30,567	30,567

STATUTORY INFORMATION AND DIV_3

STATUTORY INFORMATION AND DIVIDEND RESTRICTIONS (Details)	12 Months Ended
	Dec. 31, 2018USD ($)company	Dec. 31, 2017USD ($)	Dec. 31, 2016USD ($)	Dec. 31, 2015USD ($)
Statutory information and dividend restrictions
Number of insurance companies | company	3
Remaining unrestricted equity, liquid assets	$ 63,100,000
Equity	806,842,000	$ 853,598,000	$ 823,572,000	$ 823,469,000
Fair Value of Investment in Affiliate Included in Statutory Surplus	132,800,000	106,900,000	104,400,000
Cost Basis of Investment in Affiliate Included in Statutory Surplus	64,600,000
Insurance subsidiaries
Selected information for insurance subsidiaries
Consolidated net income, statutory basis	135,791,000	72,889,000	128,165,000
Consolidated surplus, statutory basis	829,775,000	864,554,000	859,976,000
RLI Ins.
Statutory information and dividend restrictions
Authorized control level RBC	170,900,000	157,700,000	127,000,000
Selected information for insurance subsidiaries
Consolidated surplus, statutory basis	$ 829,800,000	864,600,000	860,000,000
Dividend restriction as percentage of policyholder surplus	10.00%
Payments of Ordinary Dividends	$ 13,000,000	107,000,000	123,600,000
Extraordinary dividend paid after seeking and receiving approval from the Illinois regulatory authorities	$ 110,000,000	$ 0	$ 0

COMMITMENTS AND CONTINGENT LI_3

COMMITMENTS AND CONTINGENT LIABILITIES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Minimum future rental payments under noncancellable leases
2,019	$ 5,911
2,020	6,019
2,021	5,924
2,022	5,884
2,023	4,459
2024-2035	3,968
Total minimum future rental payments	32,165
Expense associated with operating leases	6,900	$ 6,800	$ 6,400
Other Assets [Abstract]
Qualified Affordable Housing Project Investments, Commitment	7,400
Loss Contingency, Information about Litigation Matters [Abstract]
Loss Contingency, Damages Sought, Value	21,700
Investment In Low Income Housing Tax Credit Partnership Net Of Amortization Member
Other Assets [Abstract]
Qualified Affordable Housing Project Investments, Commitment	7,400
Investment in Private Funds
Other Assets [Abstract]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Unfunded Commitments	$ 18,800

OPERATING SEGMENT INFORMATION -

OPERATING SEGMENT INFORMATION - Summary of Segments (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
REVENUES
Net premiums earned	$ 204,002	$ 200,815	$ 196,522	$ 190,027	$ 188,296	$ 182,025	$ 184,331	$ 183,285	$ 791,366	$ 737,937	$ 728,608
Net investment income	16,962	16,314	14,577	14,232	14,446	14,187	13,238	13,005	62,085	54,876	53,075
Net realized gains	15,507	18,647	20,849	8,404	5,111	35	(1,359)	624	63,407	4,411	34,645
Net unrealized losses on equity securities	(64,200)	4,848	(12,611)	(26,772)					(98,735)
Consolidated revenue									818,123	797,224	816,328
INSURANCE EXPENSES
Loss and settlement expenses									428,193	401,584	349,778
Policy acquisition costs									267,738	252,515	249,612
Other insurance expenses									53,803	56,994	53,093
Insurance expenses									749,734	711,093	652,483
NET EARNINGS
Net underwriting income									41,632	26,844	76,125
Net investment income	16,962	16,314	14,577	14,232	14,446	14,187	13,238	13,005	62,085	54,876	53,075
Net realized gains	15,507	18,647	20,849	8,404	5,111	35	(1,359)	624	63,407	4,411	34,645
Net unrealized losses on equity securities	(64,200)	4,848	(12,611)	(26,772)					(98,735)
General corporate expense and interest on debt									(16,864)	(18,766)	(17,596)
Equity in earnings of unconsolidated investees									16,056	17,224	10,833
Earnings before income taxes	(32,708)	46,349	39,562	14,378	24,972	(862)	34,036	26,443	67,581	84,589	157,082
Income tax expense									3,402	(20,439)	42,162
Net earnings	$ (20,660)	$ 39,372	$ 33,251	$ 12,216	$ 57,258	$ 1,734	$ 26,208	$ 19,828	$ 64,179	105,028	114,920
Maui Jim Inc.
Segment reporting information
Ownership percentage	40.00%								40.00%
Prime Holdings Insurance Services, Inc. (Prime)
Segment reporting information
Ownership percentage	23.00%								23.00%
Casualty segment
REVENUES
Net premiums earned									$ 523,472	478,603	454,843
INSURANCE EXPENSES
Loss and settlement expenses									329,763	305,679	259,907
Policy acquisition costs									151,007	136,135	128,566
Other insurance expenses									31,562	32,885	30,040
NET EARNINGS
Net underwriting income									11,140	3,904	36,329
Property segment
REVENUES
Net premiums earned									149,261	138,346	152,167
INSURANCE EXPENSES
Loss and settlement expenses									83,822	85,027	71,350
Policy acquisition costs									51,830	51,070	54,167
Other insurance expenses									12,725	14,108	13,819
NET EARNINGS
Net underwriting income									884	(11,859)	12,832
Surety segment
REVENUES
Net premiums earned									118,633	120,988	121,598
INSURANCE EXPENSES
Loss and settlement expenses									14,608	10,878	18,521
Policy acquisition costs									64,901	65,310	66,879
Other insurance expenses									9,516	10,001	9,234
NET EARNINGS
Net underwriting income									$ 29,608	$ 34,799	$ 26,964

OPERATING SEGMENT INFORMATION_2

OPERATING SEGMENT INFORMATION - Revenue by Product (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Revenue by major product
Net premiums earned	$ 204,002	$ 200,815	$ 196,522	$ 190,027	$ 188,296	$ 182,025	$ 184,331	$ 183,285	$ 791,366	$ 737,937	$ 728,608
Casualty segment
Revenue by major product
Net premiums earned									523,472	478,603	454,843
Casualty segment | Commercial excess and personal umbrella
Revenue by major product
Net premiums earned									124,350	115,543	111,079
Casualty segment | General liability
Revenue by major product
Net premiums earned									93,928	90,283	86,853
Casualty segment | Transportation
Revenue by major product
Net premiums earned									81,053	78,061	81,402
Casualty segment | Professional services
Revenue by major product
Net premiums earned									79,951	78,508	75,872
Casualty segment | Small commercial
Revenue by major product
Net premiums earned									51,519	49,601	45,660
Casualty segment | Executive products
Revenue by major product
Net premiums earned									21,326	18,086	18,755
Casualty segment | Medical professional liability
Revenue by major product
Net premiums earned									16,042	17,072	17,449
Casualty segment | Other casualty
Revenue by major product
Net premiums earned									55,303	31,449	17,773
Property segment
Revenue by major product
Net premiums earned									149,261	138,346	152,167
Property segment | Commercial property
Revenue by major product
Net premiums earned									71,501	63,117	68,165
Property segment | Marine
Revenue by major product
Net premiums earned									59,795	50,931	48,301
Property segment | Specialty Personal
Revenue by major product
Net premiums earned									16,901	20,793	24,981
Property segment | Other property
Revenue by major product
Net premiums earned									1,064	3,505	10,720
Surety segment
Revenue by major product
Net premiums earned									118,633	120,988	121,598
Surety segment | Miscellaneous
Revenue by major product
Net premiums earned									46,968	47,237	46,235
Surety segment | Contract
Revenue by major product
Net premiums earned									28,196	28,573	28,240
Surety segment | Commercial
Revenue by major product
Net premiums earned									26,751	27,625	29,105
Surety segment | Energy Surety
Revenue by major product
Net premiums earned									$ 16,718	$ 17,553	$ 18,018

UNAUDITED INTERIM FINANCIAL I_3

UNAUDITED INTERIM FINANCIAL INFORMATION (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
UNAUDITED INTERIM FINANCIAL INFORMATION
Net premiums earned	$ 204,002	$ 200,815	$ 196,522	$ 190,027	$ 188,296	$ 182,025	$ 184,331	$ 183,285	$ 791,366	$ 737,937	$ 728,608
Net investment income	16,962	16,314	14,577	14,232	14,446	14,187	13,238	13,005	62,085	54,876	53,075
Net realized gains (losses)	15,507	18,647	20,849	8,404	5,111	35	(1,359)	624	63,407	4,411	34,645
Equity Securities, FV-NI, Unrealized Gain (Loss)	(64,200)	4,848	(12,611)	(26,772)					(98,735)
Earnings before income taxes	(32,708)	46,349	39,562	14,378	24,972	(862)	34,036	26,443	67,581	84,589	157,082
Net earnings	$ (20,660)	$ 39,372	$ 33,251	$ 12,216	$ 57,258	$ 1,734	$ 26,208	$ 19,828	$ 64,179	$ 105,028	$ 114,920
Basic earnings per share (in dollars per share)	$ (0.46)	$ 0.89	$ 0.75	$ 0.28	$ 1.30	$ 0.04	$ 0.60	$ 0.45	$ 1.45	$ 2.39	$ 2.63
Diluted earnings per share (in dollars per share)	$ (0.46)	$ 0.88	$ 0.74	$ 0.27	$ 1.29	$ 0.04	$ 0.59	$ 0.45	$ 1.43	$ 2.36	$ 2.59

SCHEDULE I-SUMMARY OF INVESTM_2

SCHEDULE I-SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES (Details) $ in Thousands	Dec. 31, 2018USD ($)
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES
Cost	$ 2,090,288
Fair Value	2,194,230
Amount at which shown in the balance sheet	2,194,230
Available for sale securities
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES
Cost	1,776,465
Fair Value	1,760,515
Amount at which shown in the balance sheet	1,760,515
Debt securities
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES
Cost	1,776,465
Fair Value	1,760,515
Amount at which shown in the balance sheet	1,760,515
U.S. government | Available for sale securities
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES
Cost	199,982
Fair Value	200,229
Amount at which shown in the balance sheet	200,229
U.S. Agency | Available for sale securities
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES
Cost	31,716
Fair Value	31,904
Amount at which shown in the balance sheet	31,904
Non-U.S. govt. & agency | Available for sale securities
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES
Cost	8,170
Fair Value	7,639
Amount at which shown in the balance sheet	7,639
Mtge/ABS/CMBS | Available for sale securities
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES
Cost	402,992
Fair Value	395,253
Amount at which shown in the balance sheet	395,253
ABS/CMBS | Available for sale securities
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES
Cost	137,224
Fair Value	136,723
Amount at which shown in the balance sheet	136,723
Corporate Debt | Available for sale securities
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES
Cost	681,909
Fair Value	668,679
Amount at which shown in the balance sheet	668,679
Municipal | Available for sale securities
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES
Cost	314,472
Fair Value	320,088
Amount at which shown in the balance sheet	320,088
Equity securities | Available for sale securities
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES
Cost	220,373
Fair Value	340,483
Amount at which shown in the balance sheet	340,483
Ind Misc & all other | Available for sale securities
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES
Cost	98,879
Fair Value	177,040
Amount at which shown in the balance sheet	177,040
ETFs (Ind/misc) | Available for sale securities
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES
Cost	121,494
Fair Value	163,443
Amount at which shown in the balance sheet	163,443
Cash and Short-term Investments | Available for sale securities
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES
Cost	41,690
Fair Value	41,690
Amount at which shown in the balance sheet	41,690
Other Invested Assets | Available for sale securities
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES
Cost	51,760
Fair Value	51,542
Amount at which shown in the balance sheet	$ 51,542

SCHEDULE II-CONDENSED FINANCI_2

SCHEDULE II-CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY) - Balance Sheets (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
ASSETS
Cash	$ 30,140	$ 24,271
Short-term investments, at cost which approximates fair value	11,550	9,980
Investments in unconsolidated investee, at equity value	94,967	90,067
Fixed income:
Available-for-sale fixed income	1,760,515	1,672,239
Property and equipment, at cost, net of accumulated depreciation of $1,426 in 2017 and $1,523 in 2016	54,692	55,849
TOTAL ASSETS	3,105,065	2,947,244
Liabilities:
Bonds payable, long-term debt	149,115	148,928
TOTAL LIABILITIES	2,298,223	2,093,646
Shareholders' Equity
Common stock ($1 par value, authorized 100,000,000 shares, issued 67,078,569 shares in 2017 and 66,874,911 shares in 2016, and outstanding 44,148,355 shares in 2017 and 43,944,697 shares in 2016)	674	67,079
Paid-in capital	305,660	233,077
Accumulated other comprehensive earnings	(14,572)	157,919
Retained earnings	908,079	788,522
Deferred compensation	8,354	8,640
Treasury shares at cost (22,930,214 shares in 2017 and 2016)	(401,353)	(401,639)
TOTAL SHAREHOLDERS’ EQUITY	806,842	853,598	$ 823,572	$ 823,469
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	3,105,065	2,947,244
PARENT COMPANY
ASSETS
Cash	3,214	204
Short-term investments, at cost which approximates fair value		70
Accounts receivable, affiliates		1,057
Investments in subsidiaries, at equity value	828,806	912,515
Investments in unconsolidated investee, at equity value	79,521	77,720
Fixed income:
Available-for-sale fixed income	59,878	23,210
Property and equipment, at cost, net of accumulated depreciation of $1,426 in 2017 and $1,523 in 2016	1,914	1,982
Income taxes receivable - current		1,542
Other assets	547	156
TOTAL ASSETS	973,880	1,018,456
Liabilities:
Accounts payable, affiliates	130
Income taxes payable--current	32
Income taxes payable--deferred	15,081	13,207
Bonds payable, long-term debt	149,115	148,928
Interest payable, long-term debt	2,153	2,153
Other liabilities	527	570
TOTAL LIABILITIES	167,038	164,858
Shareholders' Equity
Common stock ($1 par value, authorized 100,000,000 shares, issued 67,078,569 shares in 2017 and 66,874,911 shares in 2016, and outstanding 44,148,355 shares in 2017 and 43,944,697 shares in 2016)	674	67,079
Paid-in capital	305,660	233,077
Accumulated other comprehensive earnings	(14,572)	157,919
Retained earnings	908,079	788,522
Deferred compensation	8,354	8,640
Treasury shares at cost (22,930,214 shares in 2017 and 2016)	(401,353)	(401,639)
TOTAL SHAREHOLDERS’ EQUITY	806,842	853,598
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 973,880	$ 1,018,456

SCHEDULE II-CONDENSED FINANCI_3

SCHEDULE II-CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY) - Balance Sheets Information (Details) - USD ($) $ / shares in Units, $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
CONDENSED BALANCE SHEETS (Parenthetical)
Available-for-sale, amortized cost	$ 1,776,465	$ 1,646,411
Property and equipment, accumulated depreciation	$ 54,275	$ 47,676
Common stock, par value (in dollars per share)	$ 0.01	$ 1
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	67,434,257	67,078,569
Common stock, shares outstanding (in shares)	44,504,043	44,148,355
Treasury stock, shares (in shares)	22,930,214	22,930,214
PARENT COMPANY
CONDENSED BALANCE SHEETS (Parenthetical)
Available-for-sale, amortized cost	$ 58,812	$ 23,184
Property and equipment, accumulated depreciation	$ 1,494	$ 1,426
Common stock, par value (in dollars per share)	$ 0.01	$ 1
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	67,434,257	67,078,569
Common stock, shares outstanding (in shares)	44,504,043	44,148,355
Treasury stock, shares (in shares)	22,930,214	22,930,214

SCHEDULE II-CONDENSED FINANCI_4

SCHEDULE II-CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY) - Statements of Earnings and Comprehensive Earnings (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS
Net investment income	$ 16,962	$ 16,314	$ 14,577	$ 14,232	$ 14,446	$ 14,187	$ 13,238	$ 13,005	$ 62,085	$ 54,876	$ 53,075
Net realized gains									63,624	6,970	34,740
Equity in earnings of unconsolidated investees									16,056	17,224	10,833
Interest expense on debt									(7,437)	(7,426)	(7,426)
Earnings before income taxes	(32,708)	46,349	39,562	14,378	24,972	(862)	34,036	26,443	67,581	84,589	157,082
Income tax benefit									3,402	(20,439)	42,162
Net earnings	$ (20,660)	$ 39,372	$ 33,251	$ 12,216	$ 57,258	$ 1,734	$ 26,208	$ 19,828	64,179	105,028	114,920
Unrealized gains (losses) on securities:
Other comprehensive earnings (loss), net of tax									(33,997)	35,309	(1,164)
Comprehensive earnings									30,182	140,337	113,756
PARENT COMPANY
CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS
Net investment income									648	647	942
Net realized gains									(142)	(36)	(360)
Equity in earnings of unconsolidated investees									12,471	14,436	9,764
Selling, general and administrative expenses									(9,427)	(11,340)	(10,170)
Interest expense on debt									(7,437)	(7,426)	(7,426)
Earnings before income taxes									(3,887)	(3,719)	(7,250)
Income tax benefit									(2,359)	(16,601)	(8,467)
Net earnings (loss) before equity in net earnings of subsidiaries									(1,528)	12,882	1,217
Equity in net earnings of subsidiaries									65,707	92,146	113,703
Net earnings									64,179	105,028	114,920
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during the period									710	21	308
Less: reclassification adjustment for losses (gains) included in net earnings									112	6	(131)
Other Comprehensive Income (Loss), Net of Tax, Total									822	27	177
Equity in other comprehensive earnings (loss) of subsidiaries/investees									(34,819)	35,282	(1,341)
Other comprehensive earnings (loss), net of tax									(33,997)	35,309	(1,164)
Comprehensive earnings									$ 30,182	$ 140,337	$ 113,756

SCHEDULE II-CONDENSED FINANCI_5

SCHEDULE II-CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY) - Statements of Cash Flows (Details) - USD ($)	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Adjustments to reconcile net losses to net cash provided by (used in) operating activities:
Net realized gains (losses)	$ (15,507,000)	$ (18,647,000)	$ (20,849,000)	$ (8,404,000)	$ (5,111,000)	$ (35,000)	$ 1,359,000	$ (624,000)	$ (63,407,000)	$ (4,411,000)	$ (34,645,000)
Depreciation									7,042,000	6,944,000	6,430,000
Other items, net									6,171,000	16,368,000	17,699,000
Change in:
Stock option excess tax benefit											(9,576,000)
Changes in investment in unconsolidated investees:
Undistributed earnings									(16,056,000)	(17,224,000)	(10,833,000)
Dividends received									9,900,000	0	9,900,000
Net Cash Provided by Operating Activities									217,102,000	197,525,000	174,463,000
Purchase of:
Fixed income, available-for-sale									(725,675,000)	(430,727,000)	(557,067,000)
Short-term investments, net									(1,570,000)	(4,965,000)
Property and equipment									(6,087,000)	(9,238,000)	(16,155,000)
Sale of:
Fixed income, available-for-sale									395,019,000	168,760,000	329,091,000
Short-term investments, net											2,564,000
Property and equipment									167,000	128,000	1,688,000
Call or maturity of:
Fixed income, available-for-sale									187,380,000	195,617,000	141,255,000
Net Cash Used in Investing Activities, Total									(134,209,000)	(81,212,000)	(53,622,000)
Cash flows from financing activities
Excess tax benefit from exercise of stock options											9,576,000
Stock plan share issuance									(6,076,000)	(3,502,000)	741,000
Net Cash Used in Financing Activities, Total									(77,024,000)	(110,311,000)	(113,653,000)
Net increase (decrease) in cash									5,869,000	6,002,000	7,188,000
Cash at the beginning of the period				24,271,000				18,269,000	24,271,000	18,269,000	11,081,000
Cash at the end of the period	30,140,000				24,271,000				30,140,000	24,271,000	18,269,000
Interest paid on outstanding debt									7,300,000	7,300,000	7,300,000
PARENT COMPANY
Cash flows from operating activities
Earnings (loss) before equity in net earnings of subsidiaries									(1,528,000)	12,882,000	1,217,000
Adjustments to reconcile net losses to net cash provided by (used in) operating activities:
Net realized gains (losses)									142,000	36,000	360,000
Depreciation									68,000	77,000	196,000
Other items, net									(471,000)	595,000	560,000
Change in:
Affiliate balances receivable/payable									1,187,000	(930,000)	(535,000)
Federal income taxes									3,430,000	(6,874,000)	9,762,000
Stock option excess tax benefit											(9,576,000)
Changes in investment in unconsolidated investees:
Undistributed earnings									(12,471,000)	(14,436,000)	(9,764,000)
Dividends received									9,900,000		9,900,000
Net Cash Provided by Operating Activities									257,000	(8,650,000)	2,120,000
Purchase of:
Fixed income, available-for-sale									(73,812,000)	(5,773,000)	(12,844,000)
Short-term investments, net										(47,000)
Sale of:
Fixed income, available-for-sale									12,056,000	24,771,000	4,981,000
Short-term investments, net									70,000		63,000
Property and equipment										128,000
Call or maturity of:
Fixed income, available-for-sale									75,662,000	3,499,000	6,859,000
Cash dividends received-subsidiaries									73,363,000	107,000,000	123,600,000
Net Cash Used in Investing Activities, Total									87,339,000	129,578,000	122,659,000
Cash flows from financing activities
Excess tax benefit from exercise of stock options											9,576,000
Stock plan share issuance									(6,076,000)	(3,502,000)	741,000
Cash dividends paid									(90,662,000)	(124,247,000)	(133,771,000)
Net Cash Used in Financing Activities, Total									(84,586,000)	(120,745,000)	(124,936,000)
Net increase (decrease) in cash									3,010,000	183,000	(157,000)
Cash at the beginning of the period				$ 204,000				$ 21,000	204,000	21,000	178,000
Cash at the end of the period	$ 3,214,000				$ 204,000				3,214,000	204,000	21,000
Interest paid on outstanding debt									$ 7,300,000	$ 7,300,000	$ 7,300,000

SCHEDULE III-SUPPLEMENTARY IN_2

SCHEDULE III-SUPPLEMENTARY INSURANCE INFORMATION (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Supplementary insurance information
Deferred policy acquisition costs	$ 84,934	$ 77,716	$ 73,147
Unpaid losses and settlement expenses, gross	1,461,348	1,271,503	1,139,337
Unearned premiums, gross	496,505	451,449	433,777
Net premiums earned	791,366	737,937	728,608
Incurred losses and settlement expenses
Current accident year	478,143	440,452	391,772
Prior accident years	(49,950)	(38,868)	(41,994)
Policy acquisition costs	267,738	252,515	249,612
Other operating expenses	53,803	56,994	53,093
Net premiums written	823,175	749,854	740,952
Casualty segment
Supplementary insurance information
Deferred policy acquisition costs	50,040	44,358	39,131
Unpaid losses and settlement expenses, gross	1,283,204	1,127,787	1,021,506
Unearned premiums, gross	330,836	296,751	276,096
Net premiums earned	523,472	478,603	454,843
Incurred losses and settlement expenses
Current accident year	363,015	323,141	292,308
Prior accident years	(33,252)	(17,462)	(32,401)
Policy acquisition costs	151,007	136,135	128,566
Other operating expenses	31,562	32,885	30,040
Net premiums written	547,177	494,649	470,082
Property segment
Supplementary insurance information
Deferred policy acquisition costs	14,090	13,029	13,115
Unpaid losses and settlement expenses, gross	134,822	107,304	76,989
Unearned premiums, gross	93,032	84,010	84,425
Net premiums earned	149,261	138,346	152,167
Incurred losses and settlement expenses
Current accident year	94,635	97,161	76,143
Prior accident years	(10,813)	(12,134)	(4,793)
Policy acquisition costs	51,830	51,070	54,167
Other operating expenses	12,725	14,108	13,819
Net premiums written	155,601	137,031	149,170
Surety segment
Supplementary insurance information
Deferred policy acquisition costs	20,804	20,329	20,901
Unpaid losses and settlement expenses, gross	43,322	36,412	40,842
Unearned premiums, gross	72,637	70,688	73,256
Net premiums earned	118,633	120,988	121,598
Incurred losses and settlement expenses
Current accident year	20,493	20,150	23,321
Prior accident years	(5,885)	(9,272)	(4,800)
Policy acquisition costs	64,901	65,310	66,879
Other operating expenses	9,516	10,001	9,234
Net premiums written	$ 120,397	$ 118,174	$ 121,700

SCHEDULE IV-REINSURANCE (Detail

SCHEDULE IV-REINSURANCE (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
RLI Insurance Group Premiums earned
Direct amount									$ 896,234	$ 835,118	$ 835,294
Ceded to other companies									146,794	129,702	134,572
Assumed from other companies									41,926	32,521	27,886
Net amount	$ 204,002	$ 200,815	$ 196,522	$ 190,027	$ 188,296	$ 182,025	$ 184,331	$ 183,285	$ 791,366	$ 737,937	$ 728,608
Percentage of amount assumed to net									5.30%	4.40%	3.80%
Casualty segment
RLI Insurance Group Premiums earned
Direct amount									$ 578,643	$ 536,085	$ 528,691
Ceded to other companies									96,639	86,190	89,635
Assumed from other companies									41,468	28,708	15,787
Net amount									$ 523,472	$ 478,603	$ 454,843
Percentage of amount assumed to net									7.90%	6.00%	3.50%
Property segment
RLI Insurance Group Premiums earned
Direct amount									$ 193,855	$ 172,668	$ 179,460
Ceded to other companies									44,634	37,607	38,353
Assumed from other companies									40	3,285	11,060
Net amount									$ 149,261	$ 138,346	$ 152,167
Percentage of amount assumed to net									0.00%	2.40%	7.30%
Surety segment
RLI Insurance Group Premiums earned
Direct amount									$ 123,736	$ 126,365	$ 127,143
Ceded to other companies									5,521	5,905	6,584
Assumed from other companies									418	528	1,039
Net amount									$ 118,633	$ 120,988	$ 121,598
Percentage of amount assumed to net									0.40%	0.40%	0.90%

SCHEDULE V-VALUATION AND QUAL_2

SCHEDULE V-VALUATION AND QUALIFYING ACCOUNTS (Details) - Allowance for uncollectible reinsurance - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Allowance for uncollectible reinsurance
Balance at beginning of period	$ 25,911	$ 25,911	$ 25,911
Amounts charged to expense
Amounts recovered (written off)
Balance at end of period	$ 25,911	$ 25,911	$ 25,911

SCHEDULE VI-SUPPLEMENTARY INF_2

SCHEDULE VI-SUPPLEMENTARY INFORMATION CONCERNING PROPERTY-CASUALTY INSURANCE OPERATIONS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Claims and claim adjustment expenses incurred related to:
Current accident year	$ 478,143	$ 440,452	$ 391,772
Prior accident years	(49,950)	(38,868)	(41,994)
Amortization of deferred acquisition costs	267,738	252,515	249,612
Consolidated property-casualty insurance operations
SUPPLEMENTARY INFORMATION CONCERNING PROPERTY-CASUALTY INSURANCE OPERATIONS
Deferred policy acquisition costs	84,934	77,716	73,147
Claims and claim adjustment expense reserves	1,461,348	1,271,503	1,139,337
Unearned premiums, gross	496,505	451,449	433,777
Net premiums earned	791,366	737,937	728,608
Net investment income	62,085	54,876	53,075
Claims and claim adjustment expenses incurred related to:
Current accident year	478,143	440,452	391,772
Prior accident years	(49,950)	(38,868)	(41,994)
Amortization of deferred acquisition costs	267,738	252,515	249,612
Paid claims and claims adjustment expenses	301,356	283,185	304,606
Net premiums written	$ 823,175	$ 749,854	$ 740,952