Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 13, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Entity File Number | 001-09463 | ||
Entity Registrant Name | RLI CORP | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 37-0889946 | ||
Entity Address, Address Line One | 9025 North Lindbergh Drive | ||
Entity Address, City or Town | Peoria | ||
Entity Address, State or Province | IL | ||
Entity Address, Postal Zip Code | 61615 | ||
City Area Code | 309 | ||
Local Phone Number | 692-1000 | ||
Title of 12(b) Security | Common Stock $0.01 par value | ||
Trading Symbol | RLI | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 5,418,104,534 | ||
Entity Common Stock, Shares Outstanding | 45,514,193 | ||
Documents Incorporated by Reference | Portions of the Registrant’s definitive Proxy Statement for the 2023 annual meeting of shareholders are incorporated herein by reference into Part III of this document. | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0000084246 | ||
Amendment Flag | false | ||
Auditor Name | Deloitte & Touche LLP | ||
Auditor Firm ID | 34 | ||
Auditor Location | Chicago, Illinois |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Available-for-sale, at fair value (amortized cost of $2,945,273 and allowance for credit losses of $339 in 2022) (amortized cost of $2,346,267 and allowance for credit losses of $441 in 2021) | $ 2,666,950 | $ 2,409,887 |
Equity securities, at fair value (cost - $328,019 in 2022 and $324,501 in 2021) | 498,382 | 613,776 |
Short-term investments, at cost which approximates fair value | 36,229 | |
Other invested assets | 47,922 | 50,501 |
Cash | 22,818 | 88,804 |
Total investments and cash | 3,272,301 | 3,162,968 |
Accrued investment income | 21,259 | 17,505 |
Premiums and reinsurance balances receivable, net of allowances for uncollectible amounts of $18,696 in 2022 and $18,067 in 2021 | 189,501 | 167,279 |
Ceded unearned premium | 138,457 | 130,916 |
Reinsurance balances recoverable on unpaid losses and settlement expenses, net of allowances for uncollectible amounts of $11,250 in 2022 and $11,188 in 2021 | 740,089 | 608,086 |
Deferred policy acquisition costs | 127,859 | 103,553 |
Property and equipment, at cost, net of accumulated depreciation of $68,633 in 2022 and $75,236 in 2021 | 49,573 | 52,161 |
Investment in unconsolidated investees | 58,275 | 171,311 |
Goodwill and intangibles | 53,562 | 53,562 |
Income taxes-deferred | 40,269 | |
Other assets | 75,923 | 40,961 |
TOTAL ASSETS | 4,767,068 | 4,508,302 |
Liabilities | ||
Unpaid losses and settlement expenses | 2,315,637 | 2,043,555 |
Unearned premiums | 785,085 | 680,444 |
Reinsurance balances payable | 61,100 | 42,851 |
Funds held | 101,144 | 89,773 |
Income taxes-deferred | 83,509 | |
Current portion of long-term debt | 199,863 | |
Long-term debt | 199,676 | |
Accrued expenses | 94,869 | 98,274 |
Other liabilities | 32,029 | 40,859 |
TOTAL LIABILITIES | 3,589,727 | 3,278,941 |
Shareholders' Equity | ||
Common stock ($0.01 par value) (Shares authorized - 200,000,000) (68,399,966 shares issued and 45,469,752 shares outstanding in 2022) (68,219,551 shares issued and 45,289,337 shares outstanding in 2021) | 684 | 682 |
Paid-in capital | 352,391 | 343,742 |
Accumulated other comprehensive earnings (loss) | (229,076) | 49,826 |
Retained earnings | 1,446,341 | 1,228,110 |
Deferred compensation | 12,015 | 9,642 |
Treasury shares, at cost (22,930,214 shares in 2022 and 2021) | (405,014) | (402,641) |
TOTAL SHAREHOLDERS' EQUITY | 1,177,341 | 1,229,361 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 4,767,068 | $ 4,508,302 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Statement Of Financial Position [Abstract] | ||
Available-for-sale, amortized cost | $ 2,945,273 | $ 2,346,267 |
Available-for-sale, allowance for credit losses | 339 | 441 |
Equity securities, cost | 328,019 | 324,501 |
Premiums and reinsurance balances receivable, allowances for uncollectible amounts | 18,696 | 18,067 |
Reinsurance balances recoverable on unpaid losses and settlement expenses, allowances for uncollectible amounts | 11,250 | 11,188 |
Property and equipment, accumulated depreciation | $ 68,633 | $ 75,236 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 68,399,966 | 68,219,551 |
Common stock, shares outstanding (in shares) | 45,469,752 | 45,289,337 |
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Net premiums earned | $ 1,144,436 | $ 980,903 | $ 865,747 |
Net investment income | 86,078 | 68,862 | 67,893 |
Net realized gains | 588,515 | 64,222 | 17,885 |
Net unrealized gains (losses) on equity securities | (121,037) | 65,258 | 32,101 |
Consolidated revenue | 1,697,992 | 1,179,245 | 983,626 |
Losses and settlement expenses | 514,376 | 456,602 | 442,884 |
Policy acquisition costs | 369,632 | 317,468 | 286,438 |
Insurance operating expenses | 82,212 | 76,907 | 66,828 |
Interest expense on debt | 8,047 | 7,677 | 7,603 |
General corporate expenses | 12,900 | 13,330 | 10,265 |
Total expenses | 987,167 | 871,984 | 814,018 |
Equity in earnings of unconsolidated investees | 9,853 | 37,060 | 20,233 |
Earnings (losses) before income taxes | 720,678 | 344,321 | 189,841 |
Income tax expense (benefit): | |||
Current | 186,906 | 46,040 | 24,174 |
Deferred | (49,639) | 18,927 | 8,576 |
Total tax expense | 137,267 | 64,967 | 32,750 |
Net earnings (losses) | 583,411 | 279,354 | 157,091 |
Other comprehensive earnings (loss), net of tax | (278,902) | (58,888) | 56,219 |
Comprehensive earnings | $ 304,509 | $ 220,466 | $ 213,310 |
Basic net earnings per share | $ 12.86 | $ 6.18 | $ 3.49 |
Diluted net earnings per share | $ 12.74 | $ 6.11 | $ 3.46 |
Weighted average number of common shares outstanding: | |||
Basic | 45,368 | 45,230 | 45,000 |
Diluted | 45,794 | 45,712 | 45,376 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Common stock | Paid-in Capital | Accumulated Other Comprehensive Earnings (Loss) Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Earnings (Loss) | Retained Earnings Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | Deferred Compensation | Treasury Stock at Cost | Cumulative Effect, Period of Adoption, Adjustment | Total |
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2019 | $ 678 | $ 321,190 | $ 22 | $ 52,473 | $ 1,073 | $ 1,014,046 | $ 7,980 | $ (400,979) | $ 1,095 | $ 995,388 |
Shares, Outstanding, Beginning Balance at Dec. 31, 2019 | 44,869,015 | |||||||||
Increase Decrease In Stockholders Equity Roll Forward | ||||||||||
Net earnings (loss) | 157,091 | 157,091 | ||||||||
Other comprehensive earnings (loss), net of tax | 56,219 | 56,219 | ||||||||
Deferred compensation | 312 | (312) | ||||||||
Share-based compensation | $ 3 | 14,175 | 14,178 | |||||||
Share-based compensation (in shares) | 273,565 | |||||||||
Dividends and dividend equivalents | (87,993) | (87,993) | ||||||||
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2020 | $ 681 | 335,365 | 108,714 | 1,084,217 | 8,292 | (401,291) | 1,135,978 | |||
Shares, Outstanding, Ending Balance at Dec. 31, 2020 | 45,142,580 | |||||||||
Increase Decrease In Stockholders Equity Roll Forward | ||||||||||
Net earnings (loss) | 279,354 | 279,354 | ||||||||
Other comprehensive earnings (loss), net of tax | (58,888) | (58,888) | ||||||||
Deferred compensation | 1,350 | (1,350) | ||||||||
Share-based compensation | $ 1 | 8,377 | 8,378 | |||||||
Share-based compensation (in shares) | 146,757 | |||||||||
Dividends and dividend equivalents | (135,461) | (135,461) | ||||||||
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2021 | $ 682 | 343,742 | 49,826 | 1,228,110 | 9,642 | (402,641) | 1,229,361 | |||
Shares, Outstanding, Ending Balance at Dec. 31, 2021 | 45,289,337 | |||||||||
Increase Decrease In Stockholders Equity Roll Forward | ||||||||||
Net earnings (loss) | 583,411 | 583,411 | ||||||||
Other comprehensive earnings (loss), net of tax | (278,902) | (278,902) | ||||||||
Deferred compensation | 2,373 | (2,373) | ||||||||
Share-based compensation | $ 2 | 8,649 | 8,651 | |||||||
Share-based compensation (in shares) | 180,415 | |||||||||
Dividends and dividend equivalents | (365,180) | (365,180) | ||||||||
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2022 | $ 684 | $ 352,391 | $ (229,076) | $ 1,446,341 | $ 12,015 | $ (405,014) | $ 1,177,341 | |||
Shares, Outstanding, Ending Balance at Dec. 31, 2022 | 45,469,752 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement Of Stockholders Equity [Abstract] | |||
Cash dividends paid per common share | $ 8.03 | $ 2.99 | $ 1.95 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net earnings | $ 583,411 | $ 279,354 | $ 157,091 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Net realized gains | (588,515) | (64,222) | (17,885) |
Net unrealized (gains) losses on equity securities | 121,037 | (65,258) | (32,101) |
Depreciation | 7,981 | 7,394 | 7,432 |
Deferred income tax expense (benefit) | (49,639) | 18,927 | 8,576 |
Other items, net | (20,467) | 14,141 | 10,460 |
Change in: | |||
Accrued investment income | (3,754) | (1,379) | (1,539) |
Premiums and reinsurance balances receivable (net of direct write-offs and commutations) | (22,222) | 7,349 | (14,259) |
Reinsurance balances payable | 18,249 | 586 | 16,574 |
Funds held | 11,371 | 8,026 | (1,611) |
Ceded unearned premiums | (7,541) | (17,428) | (19,832) |
Reinsurance balances recoverable on unpaid losses and settlement expenses | (132,003) | (164,357) | (59,212) |
Deferred policy acquisition costs | (24,306) | (15,128) | (3,381) |
Accrued expenses | (3,405) | 22,349 | 9,299 |
Unpaid losses and settlement expenses | 272,082 | 293,506 | 175,697 |
Unearned premiums | 104,641 | 94,058 | 46,173 |
Current income taxes payable | (6,619) | 4,047 | (2,665) |
Changes in investment in unconsolidated investees: | |||
Undistributed earnings | (9,853) | (37,060) | (20,233) |
Dividends received | 0 | 0 | 4,675 |
Net cash provided by operating activities | 250,448 | 384,905 | 263,259 |
Purchase of: | |||
Fixed income securities, available-for-sale | (2,053,359) | (733,811) | (518,362) |
Equity securities | (45,007) | (140,721) | (77,863) |
Property and equipment | (5,889) | (8,310) | (5,768) |
Investment in equity method investee | (3,819) | (8,978) | (4,533) |
Other | (5,704) | (11,428) | (12,851) |
Proceeds from sale of: | |||
Fixed income securities - available-for-sale | 53,300 | 63,811 | 84,587 |
Equity securities | 62,212 | 180,256 | 79,368 |
Equity method investments | 686,666 | ||
Property and equipment | 375 | ||
Other | 2,659 | 7,605 | 4,328 |
Proceeds from call or maturity of: | |||
Fixed income securities - available-for-sale | 1,393,674 | 376,750 | 283,107 |
Net purchase of short-term investments | (36,229) | ||
Net cash provided by (used in) investing activities | 48,879 | (274,826) | (167,987) |
Cash Flows from Financing Activities | |||
Proceeds from issuance of long-term debt | 50,000 | ||
Proceeds from stock option exercises | (465) | 1,838 | 8,648 |
Cash dividends paid | (364,848) | (135,330) | (87,906) |
Net cash used in financing activities | (365,313) | (83,492) | (79,258) |
Net increase (decrease) in cash | (65,986) | 26,587 | 16,014 |
Cash at the beginning of the year | 88,804 | 62,217 | 46,203 |
Cash at the end of the year | $ 22,818 | $ 88,804 | $ 62,217 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. DESCRIPTION OF BUSINESS RLI Corp. is an insurance holding company. References to “the Company,” “we,” “our,” “us” or like terms refer to the business of RLI Corp. and its subsidiaries. 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 excess and 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. PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION 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. Intercompany balances and transactions have been eliminated. Certain reclassifications were made to 2021 and 2020 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. ADOPTED ACCOUNTING STANDARDS No new accounting standards applicable in 2022 materially impacted our financial statements. D. PROSPECTIVE ACCOUNTING STANDARDS There are no prospective accounting standards which would have a material impact on our financial statements as of December 31, 2022. E. INVESTMENTS Equity securities are carried at fair value with unrealized gains and losses recorded within net earnings. Investments in fixed income securities are classified into one of three categories: trading, held-to-maturity or available-for-sale. All of our fixed income securities 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. 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, SHORT-TERM INVESTMENTS AND OTHER INVESTED ASSETS 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 government money market funds. Short-term investments are carried at cost. 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, the LIHTCs 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. REINSURANCE Ceded unearned premiums and reinsurance balances recoverable on unpaid 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 reinsurers’ annual financial statements and SEC filings for those 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 AM 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 its 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 and, if needed, an additional allowance is recognized. H. POLICY ACQUISITION COSTS 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 process contemplates the premiums to be earned, anticipated losses and settlement expenses and certain other costs expected to be incurred, but does not consider investment income. 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 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 J. INVESTMENTS IN UNCONSOLIDATED INVESTEES Our investments accounted for under the equity method are primarily related to Maui Jim, Inc. (Maui Jim) and Prime Holdings Insurance Services, Inc. (Prime). We owned 40 percent interest in the equity and earnings of Maui Jim, a manufacturer of high-quality sunglasses, but sold our interest in 2022. See note 13 for more information on the sale. We carried this investment at the holding company level as it was not core to our insurance operations. Our investment in Maui Jim was $113.1 million at December 31, 2021. In 2022, we recorded $0.4 million in investee earnings for Maui Jim, compared to $22.8 million in 2021 and $10.4 million in 2020. As of December 31, 2022, we had a 23 percent interest in the equity and earnings of Prime. 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 $46.9 million at December 31, 2022 and $47.2 million at December 31, 2021. The decrease was due to the recognition of our share of Prime’s other comprehensive losses, brought on by the impact of rising interest rates on Prime’s fixed income portfolio. In 2022, we recorded $13.0 million in investee earnings for Prime, compared to $17.0 million in 2021 and $10.8 million in 2020. Additionally, we maintain a quota share reinsurance treaty with Prime, which contributed $20.6 million of gross premiums written and $22.6 million of net premiums earned during 2022, compared to $22.2 million of gross premiums written and $19.1 million of net premiums earned during 2021 and $15.7 million of gross premiums written and $14.3 million of net premiums earned during 2020. The increase in net premiums earned reflected growth in written premium from Prime. Our equity method investments recorded net income of $58.8 million in 2022, $125.3 million in 2021 and $70.4 million in 2020. Additional summarized financial information for our equity method investments as of 2022 and 2021 is outlined in the following table: (in millions) 2022 2021 Total assets $ 906.4 $ 1,172.6 Total liabilities 689.9 687.8 Total equity 216.5 484.8 Approximately $51.6 million of undistributed earnings from our equity method investees were included in our retained earnings as of December 31, 2022. We did not receive any dividends from our equity method investees during 2022 or 2021, while $4.7 million of dividends were received in 2020. 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 INTANGIBLE ASSETS The composition of goodwill and intangibles at December 31, 2022 and 2021, is detailed in the following table: (in thousands) 2022 2021 Goodwill Surety $ 40,816 $ 40,816 Casualty 5,246 5,246 Total goodwill $ 46,062 $ 46,062 Indefinite-lived intangibles $ 7,500 $ 7,500 Total goodwill and intangibles $ 53,562 $ 53,562 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 2022. Based upon these reviews, our goodwill and state insurance license indefinite-lived intangible asset were not impaired. In addition, as of December 31, 2022, there were no triggering events on goodwill and intangible assets that would suggest an updated review was necessary. L. UNPAID LOSSES AND SETTLEMENT EXPENSES 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. M. INSURANCE REVENUE RECOGNITION Insurance premiums are recognized ratably over the term of the contracts, net of ceded reinsurance. Our policies are short-term in nature and premium is generally earned over a one-year period. Unearned premiums are calculated on a monthly pro rata basis. N. INCOME TAXES 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. Since the majority of our income on a state basis 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. O. EARNINGS PER SHARE 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, 2022 Basic EPS Income available to common shareholders $ 583,411 45,368 $ 12.86 Stock options — 426 Diluted EPS Income available to common shareholders and assumed conversions $ 583,411 45,794 $ 12.74 Anti-dilutive options excluded from diluted EPS 295 For the year ended December 31, 2021 Basic EPS Income available to common shareholders $ 279,354 45,230 $ 6.18 Stock options — 482 Diluted EPS Income available to common shareholders and assumed conversions $ 279,354 45,712 $ 6.11 Anti-dilutive options excluded from diluted EPS 214 For the year ended December 31, 2020 Basic EPS Income available to common shareholders $ 157,091 45,000 $ 3.49 Stock options — 376 Diluted EPS Income available to common shareholders and assumed conversions $ 157,091 45,376 $ 3.46 Anti-dilutive options excluded from diluted EPS 384 P. COMPREHENSIVE EARNINGS Our comprehensive earnings include net earnings plus after-tax unrealized gains and losses on our available-for-sale fixed income portfolio. In reporting the components of comprehensive earnings, we used the federal statutory tax rate of 21 percent. Other comprehensive income (loss), as shown in the consolidated statements of earnings and comprehensive earnings, is net of tax expense (benefit) of $(74.1) million, $(15.7) million and $14.9 million for 2022, 2021 and 2020, respectively. The table below illustrates the changes in the balance of each component of accumulated other comprehensive earnings for each period presented in the consolidated financial statements. The changes in accumulated other comprehensive earnings also reflect adjustments from the adoption of accounting standards. The adoption of ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which moved less than $0.1 million of net unrealized losses on fixed income securities from accumulated other comprehensive earnings to retained earnings. Unrealized Gains/Losses on Available-for-Sale Securities For the Year Ended December 31, (in thousands) 2022 2021 2020 Beginning balance $ 49,826 $ 108,714 $ 52,473 Cumulative-effect adjustment of ASU 2016-13 — — 22 Adjusted beginning balance $ 49,826 $ 108,714 $ 52,495 Other comprehensive earnings before reclassifications (281,189) (57,454) 58,986 Amounts reclassified from accumulated other comprehensive earnings 2,287 (1,434) (2,767) Net current period other comprehensive earnings (loss) $ (278,902) $ (58,888) $ 56,219 Ending balance $ (229,076) $ 49,826 $ 108,714 Balance of securities for which an allowance for credit losses has not been recognized in net earnings $ 1,693 $ 124 $ 470 Credit losses or the sale of an available-for-sale security resulted 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. 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 2022 2021 2020 Consolidated Statement of Earnings Unrealized gains and losses on available-for-sale securities $ (2,997) $ 1,859 $ 3,872 Net realized gains 102 (44) (369) Credit losses presented within net realized gains $ (2,895) $ 1,815 $ 3,503 Earnings before income taxes 608 (381) (736) Income tax expense $ (2,287) $ 1,434 $ 2,767 Net earnings Q. FAIR VALUE DISCLOSURES 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. Level 1 Level 2 Level 3 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: 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-backed Securities (CMBS) and Asset-backed Securities (ABS): Regulation D Private Placement Securities: For all of our fixed income securities classified as Level 2, 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. If discrepancies are found in our comparisons, 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 fixed income securities provided by our pricing services are reasonable. Equity Securities: 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. R. SHARE-BASED COMPENSATION 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 are made through net earnings. See note 8 for further discussion and related disclosures regarding stock options. S. RISKS AND UNCERTAINTIES Certain risks and uncertainties are inherent in our day-to-day operations and in 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 often highly competitive, which can make it difficult to grow or maintain premium volume without sacrificing underwriting discipline and income. Our profitability can be significantly affected 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, 2022, we had $2.3 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, and windstorms to commercial properties throughout the Gulf and East Coast, as well as to homes we insure in Hawaii. Our catastrophe reinsurance treaty renewed on January 1, 2022. We purchased limits of $600 million in excess of $25 million first-dollar retention for earthquakes in California, $625 million in excess of a $25 million first-dollar retention for earthquakes outside of California and $475 million in excess of a $25 million first-dollar retention for all other perils, including wind. These amounts were subject to certain co-participations by the Company on losses in excess of the $25 million retentions. On May 1, 2022, we purchased $150 million of additional catastrophe reinsurance protection on top of the previously described coverage, to support growth in our catastrophe-exposed business. This increased the limits to $750 million for earthquakes in California, $775 million for earthquakes outside of California and $625 million for all other perils, including wind, all of which were still subject retentions Our catastrophe reinsurance treaty renewed on January 1, 2023. We purchased reinsurance protections of $700 million in excess of $25 million first-dollar retention for earthquakes in California and $700 million in excess of a $50 million first-dollar retention for earthquakes outside of California. For other catastrophe events, such as hurricanes, we purchased reinsurance protection of $600 million in excess of a $50 million first dollar retention. These amounts are subject to certain co-participations by the Company on losses in excess of the 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. Our policies include pollution exclusions that have been continually updated to further strengthen them and our policies primarily cover moderate hazard risks. 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, the allowance for credit losses on fixed income securities, 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 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2022 | |
Investments Debt And Equity Securities [Abstract] | |
Investments | 2. INVESTMENTS Our investments are primarily composed of fixed income debt securities and common stock equity securities. All of our debt securities are classified as available-for-sale, which are carried at fair value. Our equity portfolio consists of common stocks and exchange traded funds (ETF), which are carried at fair value. A summary of net investment income is as follows: (in thousands) 2022 2021 2020 Interest on fixed income securities $ 77,164 $ 60,624 $ 59,755 Dividends on equity securities 11,912 11,787 9,728 Interest on cash, short-term investments and other invested assets 2,467 2,639 3,379 Gross investment income $ 91,543 $ 75,050 $ 72,862 Less investment expenses (5,465) (6,188) (4,969) Net investment income $ 86,078 $ 68,862 $ 67,893 Pretax net realized gains (losses) and net changes in unrealized gains (losses) on investments for the years ended December 31 are summarized below. (in thousands) 2022 2021 2020 Net realized gains (losses): Fixed income: Available-for-sale $ (2,997) $ 1,859 $ 3,872 Equity securities 20,287 62,512 15,796 Investment in unconsolidated investees 570,952 (61) (187) Other 273 (88) (1,596) Total net realized gains (losses) $ 588,515 $ 64,222 $ 17,885 Net changes in unrealized gains (losses) on investments: Equity securities $ (118,912) $ 58,459 $ 32,317 Other invested assets (2,125) 6,799 (216) Total unrealized gains (losses) on equity securities recognized in net earnings $ (121,037) $ 65,258 $ 32,101 Fixed income: Available-for-sale $ (341,944) $ (71,538) $ 67,350 Investment in unconsolidated investees (10,994) (3,047) 3,444 Other (102) 44 369 Total unrealized gains (losses) recognized in other comprehensive earnings $ (353,040) $ (74,541) $ 71,163 Net realized gains (losses) and changes in unrealized gains (losses) on investments $ 114,438 $ 54,939 $ 121,149 The change in unrealized gain (loss) position was due to an increase in interest rates, decreasing the fair value of fixed income securities, as well as a decline in equity market returns during the year. 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: SALES Gross Realized Net Realized (in thousands) Proceeds Gains Losses Gain (Loss) 2022 Available-for-sale $ 51,355 $ 287 $ (2,849) $ (2,562) Equities 62,212 21,623 (1,336) 20,287 2021 Available-for-sale $ 65,262 $ 2,161 $ (815) $ 1,346 Equities 180,256 64,298 (1,786) 62,512 2020 Available-for-sale $ 84,697 $ 5,454 $ (1,777) $ 3,677 Equities 79,368 25,338 (9,542) 15,796 CALLS/MATURITIES Gross Realized Net Realized (in thousands) Proceeds Gains Losses Gain (Loss) 2022 Available-for-sale $ 1,393,704 $ 196 $ (55) $ 141 2021 Available-for-sale $ 376,751 $ 638 $ (125) $ 513 2020 Available-for-sale $ 283,107 $ 821 $ (27) $ 794 FAIR VALUE MEASUREMENTS Assets measured at fair value on a recurring basis as of December 31, 2022 and 2021, are summarized below: 2022 Quoted in Active Significant 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 $ — $ 454,021 $ — $ 454,021 U.S. agency — 73,063 — 73,063 Non-U.S. government & agency — 5,847 — 5,847 Agency MBS — 331,806 — 331,806 ABS/CMBS/MBS* — 240,736 — 240,736 Corporate — 980,676 53,654 1,034,330 Municipal — 527,147 — 527,147 Total fixed income securities - available-for-sale $ — $ 2,613,296 $ 53,654 $ 2,666,950 Equity securities 496,731 39 1,612 498,382 Total $ 496,731 $ 2,613,335 $ 55,266 $ 3,165,332 * Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities 2021 Quoted in Active Significant 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 $ — $ 134,554 $ — $ 134,554 U.S. agency — 32,760 — 32,760 Non-U.S. government & agency — 8,481 — 8,481 Agency MBS — 367,187 — 367,187 ABS/CMBS/MBS* — 264,054 — 264,054 Corporate — 913,577 43,518 957,095 Municipal — 645,756 — 645,756 Total fixed income securities - available-for-sale $ — $ 2,366,369 $ 43,518 $ 2,409,887 Equity securities 613,712 64 — 613,776 Total $ 613,712 $ 2,366,433 $ 43,518 $ 3,023,663 * Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities The following table summarizes changes in the balance of Regulation D private placement securities whose fair value was measured using significant unobservable inputs (Level 3). (in thousands) Level 3 Securities Balance as of January 1, 2022 $ 43,518 Net realized and unrealized gains (losses) Included in net earnings as a part of: Net investment income (693) Net realized gains (432) Included in other comprehensive earnings (7,291) Total net realized and unrealized gains (losses) $ (8,416) Purchases 21,261 Transfers out of Level 3 (1,097) Balance as of December 31, 2022 $ 55,266 Change in unrealized gains (losses) during the period for Level 3 assets held at period-end - included in net realized gains $ (432) Change in unrealized gains (losses) during the period for Level 3 assets held at period-end - included in other comprehensive earnings $ (7,291) The amortized cost and estimated fair value of fixed income securities at December 31, 2022, by contractual maturity, are shown as follows: (in thousands) Amortized Cost Fair Value Due in one year or less $ 332,951 $ 331,761 Due after one year through five years 916,676 873,530 Due after five years through 10 years 522,104 474,025 Due after 10 years 523,729 415,092 ABS/CMBS/MBS* 649,813 572,542 Total available-for-sale $ 2,945,273 $ 2,666,950 * Expected maturities may differ from contractual maturities due to call provisions on some existing securities. The amortized cost and fair value of available-for-sale securities at December 31, 2022 and 2021 are presented in the tables below. Amortized cost does not include the $20.2 million and $16.4 million of accrued interest receivable as of December 31, 2022 and 2021, respectively. 2022 Allowance Gross Gross Amortized for Credit Unrealized Unrealized (in thousands) Cost Losses Gains Losses Fair Value U.S. government $ 462,884 $ — $ 8 $ (8,871) $ 454,021 U.S. agency 75,074 — 26 (2,037) 73,063 Non-U.S. government & agency 6,798 — — (951) 5,847 Agency MBS 373,687 — 336 (42,217) 331,806 ABS/CMBS/MBS* 276,126 (8) 62 (35,444) 240,736 Corporate 1,122,097 (331) 541 (87,977) 1,034,330 Municipal 628,607 — 1,265 (102,725) 527,147 Total fixed income $ 2,945,273 $ (339) $ 2,238 $ (280,222) $ 2,666,950 2021 Allowance Gross Gross Amortized for Credit Unrealized Unrealized (in thousands) Cost Losses Gains Losses Fair Value U.S. government $ 127,752 $ — $ 6,846 $ (44) $ 134,554 U.S. agency 30,403 — 2,374 (17) 32,760 Non-U.S. government & agency 8,297 — 338 (154) 8,481 Agency MBS 362,861 — 9,277 (4,951) 367,187 ABS/CMBS/MBS* 264,273 — 2,120 (2,339) 264,054 Corporate 925,394 (441) 37,247 (5,105) 957,095 Municipal 627,287 — 22,750 (4,281) 645,756 Total fixed income $ 2,346,267 $ (441) $ 80,952 $ (16,891) $ 2,409,887 * Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities Asset-Backed, Commercial Mortgage-Backed and Mortgage-Backed Securities Eighty-three percent 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, 2022, 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. Municipal Bonds As of December 31, 2022, approximately 46 percent of the municipal fixed income securities in the investment portfolio were general obligations of state and local governments and the remaining 54 percent were revenue based. Eighty-eight percent of our municipal fixed income securities were rated AA or better while 99 percent were rated A or better. ALLOWANCE FOR CREDIT LOSSES AND UNREALIZED LOSSES ON FIXED INCOME SECURITIES A reversible allowance for credit losses is required to be recognized on available-for-sale fixed income securities. Available-for-sale securities in the fixed income portfolio are subjected to several criteria to determine if those securities should be included in the allowance for expected credit loss evaluation, including: ● 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 of or non-payment of interest and/or principal, ● 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. If changes in interest rates and credit spreads do not reasonably explain the unrealized loss for an available-for-sale security, or if any of the criteria above indicate a potential credit loss, the security is subjected to a discounted cash flow analysis. Inputs into the discounted cash flow analysis include prepayment assumptions for structured securities, default rates and recoverability rates based on credit rating. The allowance for any security is limited to the amount that the fair value is below amortized cost. As of December 31, 2022, the discounted cash flow analysis resulted in an allowance for credit losses on 14 securities. The following table presents changes in the allowance for expected credit losses on available-for-sale securities: (in thousands) 2022 2021 Beginning balance $ 441 $ 397 Increase to allowance from securities for which credit losses were not previously recorded 337 4 Reduction from securities sold during the period (671) (4) Net increase (decrease) from securities that had an allowance at the beginning of the period 232 44 Ending balance $ 339 $ 441 Net realized gains included $0.1 million of losses on fixed income securities for which we no longer had the intent to hold until recovery and for which the cost basis was written down to fair value. No such losses were recognized in 2021. All fixed income securities continue to pay the expected coupon payments. We believe we will recover the amortized cost basis of available-for-sale securities that remain in an unrealized loss position. As of December 31, 2022, in addition to the securities included in the allowance for credit losses, the fixed income portfolio contained 1,473 securities with an unrealized loss position for which an allowance for credit losses had not been recorded. The $280.2 million in associated unrealized losses represents 9.5 percent of the fixed income portfolio’s cost basis and 8.6 percent of total invested assets. Isolated to these securities, unrealized losses at the end of 2022 increased compared to the previous year due to increasing interest rates which reduce the fair value of fixed income securities. Of the total 1,473 securities, 518 have been in an unrealized loss position for 12 consecutive months or longer. The following table illustrates the total value of fixed income securities that were in an unrealized loss position as of December 31, 2022 and 2021. All fixed income securities continue to pay the expected coupon payments and we believe we will recover the amortized cost basis of available-for-sale securities that remain in an unrealized loss position. December 31, 2022 December 31, 2021 12 Mos. 12 Mos. (in thousands) < 12 Mos. & Greater Total < 12 Mos. & Greater Total U.S. government Fair value $ 399,361 $ 8,828 $ 408,189 $ 2,942 $ — $ 2,942 Amortized cost 407,340 9,720 417,060 2,986 — 2,986 Unrealized loss $ (7,979) $ (892) $ (8,871) $ (44) $ — $ (44) U.S. agency Fair value $ 32,987 $ 2,170 $ 35,157 $ 1,498 $ — $ 1,498 Amortized cost 34,627 2,567 37,194 1,515 — 1,515 Unrealized loss $ (1,640) $ (397) $ (2,037) $ (17) $ — $ (17) Non-U.S. government & agency Fair value $ 3,626 $ 2,221 $ 5,847 $ 4,346 $ — $ 4,346 Amortized cost 3,798 3,000 6,798 4,500 — 4,500 Unrealized loss $ (172) $ (779) $ (951) $ (154) $ — $ (154) Agency MBS Fair value $ 197,252 $ 117,851 $ 315,103 $ 102,145 $ 62,669 $ 164,814 Amortized cost 212,776 144,544 357,320 104,336 65,429 169,765 Unrealized loss $ (15,524) $ (26,693) $ (42,217) $ (2,191) $ (2,760) $ (4,951) ABS/CMBS/MBS* Fair value $ 96,754 $ 136,149 $ 232,903 $ 150,997 $ 3,935 $ 154,932 Amortized cost 104,724 163,623 268,347 153,235 4,036 157,271 Unrealized loss $ (7,970) $ (27,474) $ (35,444) $ (2,238) $ (101) $ (2,339) Corporate Fair value $ 660,830 $ 323,337 $ 984,167 $ 217,791 $ 53,818 $ 271,609 Amortized cost 697,437 374,707 1,072,144 221,010 55,704 276,714 Unrealized loss $ (36,607) $ (51,370) $ (87,977) $ (3,219) $ (1,886) $ (5,105) Municipal Fair value $ 228,827 $ 204,324 $ 433,151 $ 162,998 $ 15,037 $ 178,035 Amortized cost 255,240 280,636 535,876 166,602 15,714 182,316 Unrealized loss $ (26,413) $ (76,312) $ (102,725) $ (3,604) $ (677) $ (4,281) Total fixed income Fair value $ 1,619,637 $ 794,880 $ 2,414,517 $ 642,717 $ 135,459 $ 778,176 Amortized cost 1,715,942 978,797 2,694,739 654,184 140,883 795,067 Unrealized loss $ (96,305) $ (183,917) $ (280,222) $ (11,467) $ (5,424) $ (16,891) * Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities OTHER INVESTED ASSETS We had $47.9 million of other invested assets at December 31, 2022, compared to $50.5 million at the end of 2021. 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 investments’ net asset value. Our LIHTC interests had a balance of $13.5 million at December 31, 2022, compared to $16.6 million at December 31, 2021, and recognized a total tax benefit of $3.4 million during 2022, compared to $3.6 million during 2021 and $3.5 million during 2020. Our unfunded commitment for our LIHTC investments totaled $1.3 million at December 31, 2022 and will be paid out in installments through 2035. Our investments in private funds totaled $28.4 million at December 31, 2022, compared to $28.6 million at December 31, 2021, and we had $4.9 million of associated unfunded commitments at December 31, 2022. Our interest in private funds is generally restricted from being transferred or otherwise redeemed without prior consent by the respective entities and the timed dissolution of the partnerships would trigger redemption. Restricted Assets As of December 31, 2022, $57.3 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. On November 10, 2021 RLI Insurance Company borrowed $50.0 million from the FHLBC, which was outstanding as of December 31, 2022. As of December 31, 2022, fixed income securities with a carrying value of $88.6 million were on deposit with regulatory authorities as required by law. |
Policy Acquisition Costs
Policy Acquisition Costs | 12 Months Ended |
Dec. 31, 2022 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |
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) 2022 2021 2020 Deferred policy acquisition costs (DAC), beginning of year $ 103,553 $ 88,425 $ 85,044 Deferred: Direct commissions $ 277,553 $ 236,145 $ 200,917 Premium taxes 18,616 17,012 14,783 Ceding commissions (39,458) (47,592) (42,115) Net deferred $ 256,711 $ 205,565 $ 173,585 Amortized 232,405 190,437 170,204 DAC, end of year $ 127,859 $ 103,553 $ 88,425 Policy acquisition costs: Amortized to expense - DAC $ 232,405 $ 190,437 $ 170,204 Period costs: Ceding commission - contingent (5,882) (4,303) (4,053) Other underwriting expenses 143,109 131,334 120,287 Total policy acquisition costs $ 369,632 $ 317,468 $ 286,438 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | 4. DEBT As of December 31, 2022, outstanding debt balances totaled $199.9 million, net of unamortized discount and debt issuance costs. 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 carrying value of the senior note was $149.9 million and the estimated fair value was $149.9 million as of December 31, 2022. 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. On November 10, 2021, RLI Ins. borrowed $50.0 million from the Federal Home Loan Bank of Chicago. The borrowing matures on November 10, 2023 and has an option to pay off the debt early beginning on November 10, 2022. Interest is paid monthly at an annualized rate of 0.84 percent. We paid $7.7 million of interest on our debt in 2022 and $7.3 million in 2021 and 2020. The average rate on debt was 3.89 in 2022, 4.77 percent in 2021 and 4.91 percent in 2020. We maintain a revolving line of credit with Bank of Montreal, Chicago Branch, which permits the Company to borrow up to an aggregate principal amount of $60.0 million. This facility was entered into during 2020 and replaced the previous $50.0 million facility with JP Morgan Chase Bank N.A. Under certain conditions, the line may be increased up to an aggregate principal amount of $120.0 million. This facility has a three-year term that expires on March 27, 2023. As of and during the years ended December 31, 2022, 2021 and 2020, no amounts were outstanding on these facilities. |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2022 | |
Reinsurance Disclosures [Abstract] | |
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 limit our net loss on any individual risk to a maximum of $9.7 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) 2022 2021 2020 WRITTEN Direct $ 1,531,656 $ 1,313,093 $ 1,107,303 Reinsurance assumed 33,830 34,261 29,129 Reinsurance ceded (323,950) (289,821) (244,344) Net $ 1,241,536 $ 1,057,533 $ 892,088 EARNED Direct $ 1,425,165 $ 1,222,346 $ 1,062,608 Reinsurance assumed 35,680 30,950 27,651 Reinsurance ceded (316,409) (272,393) (224,512) Net $ 1,144,436 $ 980,903 $ 865,747 LOSSES AND SETTLEMENT EXPENSES INCURRED Direct $ 776,448 $ 703,903 $ 608,638 Reinsurance assumed 22,813 18,087 18,783 Reinsurance ceded (284,885) (265,388) (184,537) Net $ 514,376 $ 456,602 $ 442,884 More than 93 percent of our reinsurance recoverables are due from companies with financial strength ratings of A or better by AM 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, 2022. These reinsurers all have financial strength ratings of A or better by AM Best and S&P’s ratings services. Also shown are the amounts of written premium ceded to these reinsurers during the calendar year 2022. Net Reinsurer Ceded AM Best S&P Exposure as of Percent of Premiums Percent of (dollars in thousands) Rating Rating 12/31/2022 Total Written Total Munich Re / HSB A+, Superior AA-, Very Strong $ 110,142 13.6 % $ 35,040 10.8 % Renaissance Re A+, Superior A+, Strong 82,929 10.3 % 22,865 7.1 % Nationwide Mutual A+, Superior A+, Strong 45,492 5.6 % 21,493 6.6 % Aspen UK Ltd. A, Excellent A-, Strong 43,632 5.4 % 11,021 3.4 % Safety National A++, Superior A+, Strong 42,218 5.2 % 14,971 4.6 % Endurance Re A+, Superior A+, Strong 40,979 5.1 % 5,570 1.7 % Berkley Insurance Co. A+, Superior A+, Strong 36,105 4.5 % 8,931 2.8 % Lloyds of London A, Excellent A+, Strong 34,737 4.3 % 26,677 8.2 % Partner Re A+, Superior A+, Strong 34,322 4.3 % 15,363 4.7 % Hannover Ruckversicherung A+, Superior AA-, Very Strong 33,507 4.2 % 16,746 5.2 % Scor Re A+, Superior A+, Strong 32,153 4.0 % 6,048 1.9 % Toa Re A, Excellent A+, Strong 27,278 3.4 % 13,092 4.0 % Liberty Mutual A, Excellent A, Strong 24,665 3.1 % 6,140 1.9 % Odyssey America Re A, Excellent A, Strong 23,945 3.0 % 9,049 2.8 % All other reinsurers* 194,683 24.0 % 110,944 34.3 % Total ceded exposure $ 806,787 100.0 % $ 323,950 100.0 % * All other reinsurance balances recoverable, when considered by individual reinsurer, are less than 2 percent of shareholders’ equity. The allowances for uncollectible amounts on paid and unpaid recoverables were $16.1 million and $11.3 million, respectively, at December 31, 2022. At December 31, 2021, the amounts were $16.1 million and $11.2 million, respectively. Changes in the allowances during 2022 were due to changes in the amount of reinsurance balances outstanding, the composition of reinsurers from whom the balances were recoverable and their associated S&P default ratings. No write-offs were applied to the allowances in 2022 and less than $0.1 million was recovered. 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, 2022 | |
Historical Loss And L A E Development Disclosure [Abstract] | |
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 2022, 2021 and 2020: (in thousands) 2022 2021 2020 Unpaid losses and LAE at beginning of year: Gross $ 2,043,555 $ 1,750,049 $ 1,574,352 Ceded (608,086) (443,729) (384,517) Net $ 1,435,469 $ 1,306,320 $ 1,189,835 Adoption impact of ASU 2016-13 on reinsurance balances recoverable $ — $ — $ (1,345) Increase (decrease) in incurred losses and LAE: Current accident year $ 636,955 $ 582,065 $ 543,937 Prior accident years (122,579) (125,463) (101,053) Total incurred $ 514,376 $ 456,602 $ 442,884 Loss and LAE payments for claims incurred: Current accident year $ (97,525) $ (101,590) $ (93,077) Prior accident year (276,772) (225,863) (231,977) Total paid $ (374,297) $ (327,453) $ (325,054) Net unpaid losses and LAE at end of year $ 1,575,548 $ 1,435,469 $ 1,306,320 Unpaid losses and LAE at end of year: Gross $ 2,315,637 $ 2,043,555 $ 1,750,049 Ceded (740,089) (608,086) (443,729) Net $ 1,575,548 $ 1,435,469 $ 1,306,320 We adopted ASU 2016-13, Financial Instruments – Credit Losses, on January 1, 2020, which required financial assets, including reinsurance balances recoverable, to be presented at the net amount expected to be collected. We previously maintained an allowance for uncollectible reinsurance balances prior to the adoption of this update. However, in order to comply with the updated requirements, we released $1.3 million of the allowance on uncollectible reinsurance balances upon adoption. The implementation guidance required the cumulative-effect adjustment be made to the beginning balance of retained earnings, rather than through net earnings like historical changes have and ongoing modifications will continue to be recorded. 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 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, 2022, 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, 2022. 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, executive products and other casualty. 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, 2013 to 2021 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, 2022 For the Years Ended December 31, Cumulative Number of Reported AY 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021* 2022 Total IBNR Claims 2013 $ 80,823 $ 67,297 $ 62,882 $ 60,329 $ 60,162 $ 59,556 $ 59,116 $ 57,106 $ 57,519 $ 58,434 $ 1,690 4,326 2014 88,092 79,497 71,592 67,237 66,389 66,702 65,636 63,727 64,449 2,623 4,298 2015 94,835 84,975 83,579 78,675 76,398 75,470 75,438 77,110 4,022 4,408 2016 101,950 96,753 90,611 85,449 83,374 79,440 77,729 6,700 4,332 2017 119,741 111,391 102,583 95,513 90,759 90,344 10,770 4,529 2018 141,513 130,281 125,731 115,076 114,414 21,681 4,873 2019 146,011 135,209 120,570 109,051 38,075 5,273 2020 145,171 137,439 122,785 60,440 4,603 2021 142,797 128,483 81,085 4,368 2022 155,203 119,846 3,856 Total $ 998,002 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021* 2022 2013 $ 6,334 $ 13,021 $ 22,366 $ 34,786 $ 40,609 $ 45,753 $ 47,783 $ 49,411 $ 50,597 $ 53,375 2014 11,436 18,771 29,545 40,270 47,343 52,387 55,965 56,784 58,361 2015 10,157 19,902 33,020 45,056 54,270 58,866 62,997 68,650 2016 10,142 24,186 35,764 48,042 56,152 60,349 65,517 2017 13,154 25,933 38,783 52,823 62,236 71,419 2018 15,066 32,365 48,424 63,980 78,103 2019 15,698 30,673 41,911 57,750 2020 17,096 30,596 45,267 2021 14,428 29,633 2022 17,714 * Presented as unaudited required supplementary information. Total $ 545,789 All outstanding liabilities before 2013, net of reinsurance 9,314 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 461,527 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 13.3% 13.3% 14.4% 16.1% 11.0% 7.6% 5.3% 3.8% 2.2% 4.8% Casualty - Excess Occurrence (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2022 For the Years Ended December 31, Cumulative Number of Reported AY 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021* 2022 Total IBNR Claims 2013 $ 39,984 $ 34,824 $ 26,857 $ 25,425 $ 25,599 $ 24,922 $ 25,496 $ 25,073 $ 24,836 $ 24,306 $ 1,155 950 2014 50,889 39,095 35,119 32,274 33,372 33,458 35,128 35,683 35,918 2,367 928 2015 53,672 50,857 47,392 42,840 43,328 42,446 41,690 41,471 3,017 702 2016 56,341 49,385 37,676 33,125 30,251 29,671 29,940 6,349 651 2017 62,863 55,868 48,363 44,737 43,249 41,620 13,877 646 2018 69,362 62,646 54,626 51,023 49,861 22,833 612 2019 88,078 89,691 79,083 80,147 38,161 659 2020 107,579 98,409 90,274 61,116 558 2021 136,433 136,354 81,568 656 2022 153,895 107,953 447 Total $ 683,786 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021* 2022 2013 $ 1,060 $ 5,701 $ 10,967 $ 14,545 $ 16,967 $ 17,956 $ 18,524 $ 21,229 $ 22,154 $ 22,505 2014 1,899 4,006 11,002 18,852 22,541 23,376 26,068 28,963 30,484 2015 2,048 10,127 19,571 23,184 28,756 31,352 32,752 35,958 2016 1,068 3,396 7,441 10,054 12,703 14,400 17,807 2017 17 5,679 9,275 15,441 18,470 22,835 2018 2,506 5,823 10,801 17,294 22,016 2019 4,213 19,044 25,389 33,375 2020 2,901 13,856 20,988 2021 5,317 23,841 2022 7,479 * Presented as unaudited required supplementary information. Total $ 237,288 All outstanding liabilities before 2013, net of reinsurance 21,094 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 467,592 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 4.0% 13.0% 14.0% 13.1% 9.9% 5.8% 6.1% 9.0% 4.0% 1.4% Casualty - Claims Made (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2022 For the Years Ended December 31, Cumulative Number of Reported AY 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021* 2022 Total IBNR Claims 2013 $ 40,095 $ 41,488 $ 44,054 $ 40,288 $ 38,473 $ 37,959 $ 38,352 $ 37,974 $ 37,950 $ 37,817 $ 463 1,042 2014 53,929 55,386 58,152 55,350 51,554 53,841 53,783 52,619 52,796 1,584 1,305 2015 55,006 47,831 42,206 39,906 39,653 39,619 38,609 37,578 1,248 1,338 2016 59,992 67,760 69,493 67,728 64,730 65,078 61,876 2,451 1,507 2017 60,572 62,450 62,714 57,450 59,907 61,546 4,455 1,647 2018 66,128 62,416 56,468 48,457 47,692 10,412 1,394 2019 62,918 61,712 52,224 46,500 16,958 1,512 2020 60,278 56,785 46,853 29,739 1,294 2021 51,219 45,854 32,103 1,216 2022 58,289 43,827 1,005 Total $ 496,801 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021* 2022 2013 $ 792 $ 7,073 $ 18,425 $ 26,121 $ 29,678 $ 32,789 $ 34,535 $ 35,476 $ 36,078 $ 36,800 2014 1,705 9,775 27,923 35,755 40,080 44,127 46,122 50,714 51,063 2015 2,215 10,738 16,774 20,920 28,795 32,241 33,529 34,671 2016 2,060 14,558 27,465 39,370 47,999 52,846 53,737 2017 2,455 11,350 22,728 36,522 42,918 47,087 2018 1,964 11,965 18,840 24,918 27,351 2019 1,839 8,123 14,117 19,930 2020 1,488 5,687 10,412 2021 999 5,615 2022 2,088 * Presented as unaudited required supplementary information. Total $ 288,754 All outstanding liabilities before 2013, net of reinsurance 3,249 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 211,296 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 3.6% 15.9% 19.6% 16.2% 11.3% 7.9% 3.3% 4.7% 1.1% 1.9% Casualty - Transportation (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2022 For the Years Ended December 31, Cumulative Number of Reported AY 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021* 2022 Total IBNR Claims 2013 $ 32,742 $ 32,853 $ 32,989 $ 37,673 $ 38,811 $ 39,974 $ 39,309 $ 39,183 $ 39,586 $ 39,598 $ 103 2,853 2014 38,361 33,015 36,452 38,590 40,202 40,508 41,156 41,974 42,067 412 3,099 2015 38,561 46,258 47,021 46,395 45,162 45,525 45,807 46,685 684 3,187 2016 50,430 53,519 54,105 52,277 52,818 53,915 55,718 1,152 3,943 2017 55,640 53,641 45,017 43,764 45,351 46,742 1,480 3,640 2018 57,597 54,592 38,719 36,468 35,442 2,428 3,404 2019 58,297 56,129 43,976 41,925 4,182 3,317 2020 43,573 35,524 27,665 5,844 1,647 2021 51,322 51,581 14,902 2,307 2022 60,862 14,645 2,520 Total $ 448,285 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021* 2022 2013 $ 5,306 $ 11,978 $ 19,761 $ 28,220 $ 33,480 $ 35,923 $ 37,327 $ 37,915 $ 38,172 $ 38,531 2014 7,125 13,933 19,676 27,457 33,190 38,282 40,006 40,427 41,528 2015 6,984 20,709 29,554 37,222 39,339 41,345 42,626 45,002 2016 8,923 18,354 30,354 38,001 43,564 47,488 52,555 2017 7,979 17,070 24,090 30,260 36,141 41,064 2018 6,980 12,827 19,216 24,503 28,844 2019 7,148 15,852 21,120 26,422 2020 3,986 7,876 12,035 2021 5,341 15,345 2022 6,442 * Presented as unaudited required supplementary information. Total $ 307,768 All outstanding liabilities before 2013, net of reinsurance 1,220 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 141,737 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 15.0% 18.8% 16.8% 15.8% 11.0% 8.0% 4.9% 2.5% 1.6% 0.9% Property (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2022 For the Years Ended December 31, Cumulative Number of Reported AY 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021* 2022 Total IBNR Claims 2013 $ 63,864 $ 62,090 $ 62,173 $ 62,114 $ 61,914 $ 61,834 $ 61,776 $ 61,623 $ 61,400 $ 61,371 $ 7 2,996 2014 56,587 49,441 48,801 48,761 49,217 49,444 49,479 49,520 49,468 15 4,564 2015 59,863 56,103 53,958 52,720 53,111 52,781 52,878 53,359 25 4,076 2016 62,900 55,594 55,384 55,930 55,424 55,383 55,536 150 3,377 2017 90,803 83,273 84,961 82,671 82,319 81,912 801 2,893 2018 89,091 83,457 79,961 80,470 79,093 1,443 2,337 2019 71,232 65,189 61,116 59,901 1,141 2,453 2020 118,247 110,466 108,546 12,532 2,855 2021 135,447 116,424 16,900 3,071 2022 138,756 53,549 2,505 Total $ 804,366 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021* 2022 2013 $ 32,208 $ 50,840 $ 57,407 $ 59,259 $ 60,520 $ 61,195 $ 61,325 $ 61,335 $ 61,188 $ 61,188 2014 30,550 43,380 46,148 46,528 47,799 49,027 49,259 49,317 49,339 2015 32,184 49,348 50,197 51,290 52,078 52,342 52,400 53,208 2016 33,134 46,921 51,371 53,006 54,328 54,747 55,215 2017 41,314 66,818 74,415 78,360 80,581 80,958 2018 37,048 68,264 72,357 75,253 76,378 2019 30,703 51,740 55,092 57,038 2020 43,192 79,660 88,401 2021 57,272 89,174 2022 44,667 * Presented as unaudited required supplementary information. Total $ 655,566 All outstanding liabilities before 2013, net of reinsurance 1,101 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 149,901 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 50.4% 31.1% 6.7% 2.9% 2.1% 1.1% 0.4% 0.5% (0.1)% 0.0% Surety (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2022 For the Years Ended December 31, Cumulative Number of Reported AY 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021* 2022 Total IBNR Claims 2013 $ 16,080 $ 7,516 $ 6,170 $ 5,399 $ 5,271 $ 5,231 $ 5,209 $ 5,107 $ 5,046 $ 5,139 $ 3 1,411 2014 16,450 8,106 5,225 4,427 4,267 4,319 4,266 4,227 4,230 5 1,357 2015 16,958 12,957 11,113 10,456 9,792 9,521 9,275 8,580 21 1,244 2016 18,928 11,062 9,351 8,895 8,391 7,948 8,134 81 1,389 2017 16,127 8,641 8,798 8,116 8,034 7,769 158 1,826 2018 16,765 7,227 4,564 3,947 3,996 244 1,362 2019 14,785 7,205 5,053 4,062 860 1,178 2020 19,241 14,840 12,378 4,214 895 2021 18,540 11,724 7,826 767 2022 20,185 18,683 527 Total $ 86,197 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021* 2022 2013 $ 1,116 $ 2,856 $ 4,701 $ 4,911 $ 5,098 $ 5,150 $ 5,128 $ 5,061 $ 5,029 $ 5,131 2014 722 4,283 4,166 4,059 4,131 4,234 4,214 4,197 4,218 2015 3,192 6,719 7,695 9,436 9,183 9,186 9,168 8,462 2016 3,087 5,817 6,299 7,640 8,086 7,673 7,946 2017 979 2,862 7,062 7,221 7,362 7,372 2018 1,835 2,588 2,368 2,536 3,020 2019 336 2,433 2,765 3,039 2020 835 2,719 3,828 2021 1,197 3,229 2022 (241) * Presented as unaudited required supplementary information. Total $ 46,004 All outstanding liabilities before 2013, net of reinsurance (77) Liabilities for losses and loss adjustment expenses, net of reinsurance $ 40,116 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 19.6% 35.6% 14.5% 7.3% 3.6% (0.3)% 0.6% (3.3)% (0.1)% 2.0% 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: (in thousands) December 31, 2022 December 31, 2021 Net outstanding liabilities: Casualty - Primary Occurrence $ 461,527 $ 453,142 Casualty - Excess Occurrence 467,592 384,579 Casualty - Claims Made 211,296 209,705 Casualty - Transportation 141,737 131,531 Property 149,901 124,652 Surety 40,116 34,244 Unallocated loss adjustment expenses 61,752 59,391 Allowance for uncollectible reinsurance balances recoverable on unpaid losses and settlement expenses 11,250 11,188 Other 30,377 27,037 Liabilities for unpaid loss and settlement expenses, net of reinsurance $ 1,575,548 $ 1,435,469 Reinsurance recoverable on unpaid claims: Casualty - Primary Occurrence $ 46,674 $ 43,688 Casualty - Excess Occurrence 138,822 122,092 Casualty - Claims Made 298,930 271,259 Casualty - Transportation 78,456 66,283 Property 137,613 65,098 Surety 50,737 50,743 Allowance for uncollectible reinsurance balances recoverable on unpaid losses and settlement expenses (11,250) (11,188) Other 107 111 Total reinsurance balances recoverable on unpaid losses and settlement expenses $ 740,089 $ 608,086 Total gross liability for unpaid loss and settlement expenses $ 2,315,637 $ 2,043,555 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. Actuarial models base future loss emergence on historical experience, with adjustments for current trends. We expect the timing of loss emergence and ultimate loss ratios for certain coverages we underwrite will be affected as a result of COVID-19 and the related economic impact. The industry is experiencing new issues, including the postponement of civil court cases, the extension of various statutes of limitations, claim uncertainty due to supply shortages and changes in settlement trends. Our recorded reserves include consideration of these factors, but the duration and degree to which these issues persist, along with potential legislative, regulatory or judicial actions, could result in loss reserve deficiencies and reduce earnings in future periods. DEVELOPMENT OF IBNR RESERVES The following table summarizes our prior accident years’ loss reserve development by segment for 2022, 2021 and 2020: (in thousands) 2022 2021 2020 Casualty $ (87,225) $ (108,632) $ (75,075) Property (24,927) (10,981) (13,019) Surety (10,427) (5,850) (12,959) Total $ (122,579) $ (125,463) $ (101,053) A discussion of significant components of reserve development for the three most recent calendar years follows: 2022. Marine contributed $17.0 million of the $24.9 million total favorable property development. Accident years 2019 through 2021 contributed to the marine products’ favorable development. Hawaii homeowners contributed $2.3 million of favorable development. The surety segment experienced favorable development of $10.4 million. The majority of the favorable development was from accident years 2019 through 2021. Contract surety had favorable developm |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
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 below. (in thousands) 2022 2021 Deferred tax assets: Tax discounting of unpaid losses and settlement expenses $ 23,788 $ 22,637 Unearned premium offset 27,158 23,080 Net unrealized depreciation of securities 19,839 — Deferred compensation 4,058 3,469 Share-based compensation expense 3,202 3,089 Capitalized research and development costs 2,544 — Lease liability 3,026 3,796 Other 938 367 Deferred tax assets before allowance $ 84,553 $ 56,438 Less valuation allowance — — Total deferred tax assets $ 84,553 $ 56,438 Deferred tax liabilities: Net unrealized appreciation of securities $ — $ 76,533 Deferred policy acquisition costs 26,850 21,746 Lease asset 2,681 3,101 Discounting of unpaid losses and settlement expenses - Tax Cuts and Jobs Act (TCJA) implementation offset 1,909 2,545 Fixed assets 3,083 3,518 Intangible assets 1,543 1,537 Undistributed earnings of unconsolidated investees 7,399 29,515 Other 819 1,452 Total deferred tax liabilities $ 44,284 $ 139,947 Net deferred tax asset (liability) $ 40,269 $ (83,509) Income tax expense (benefit) attributable to income from operations for the years ended December 31, 2022, 2021 and 2020, differed from the amounts computed by applying the U.S. federal tax rate of 21 percent to pretax income from continuing operations as demonstrated in the following table: (in thousands) 2022 2021 2020 Provision for income taxes at the statutory federal tax rates $ 151,342 21.0 % $ 72,307 21.0 % $ 39,867 21.0 % Increase (reduction) in taxes resulting from: Excess tax benefit on share-based compensation (4,491) (0.6) % (3,090) (0.9) % (3,537) (1.8) % Tax-exempt interest income (1,143) (0.2) % (1,219) (0.3) % (1,293) (0.7) % Dividends received deduction (912) (0.1) % (891) (0.3) % (883) (0.5) % Investment tax credit (5,053) (0.7) % (3,491) (1.0) % (2,435) (1.3) % ESOP dividends paid deduction (4,171) (0.6) % (1,566) (0.5) % (1,083) (0.6) % Unconsolidated investee dividends — — % — — % (479) (0.2) % Nondeductible expenses 1,263 0.2 % 3,834 1.1 % 1,878 1.0 % Other items, net 432 0.0 % (917) (0.2) % 715 0.4 % Total $ 137,267 19.0 % $ 64,967 18.9 % $ 32,750 17.3 % Effective rates are dependent upon components of pretax earnings and the related tax effects. The effective rate was higher in 2022 due to higher levels of pretax income, which decreased the impact of tax-favored adjustments on a percentage basis. 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 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. We received a $4.7 million dividend from Prime in 2020 and recognized a $0.5 million tax benefit from applying the lower tax rate applicable to affiliated dividends paid to insurance companies (10.8 percent in 2020), as compared to the corporate capital gains rate on which the deferred tax liabilities were based. Standing alone, the dividends resulted in a 0.2 percent reduction to the 2020 effective tax rate. No dividends were declared from unconsolidated investees in 2022 or 2021, therefore having no impact to the 2022 or 2021 effective tax rates. Dividends paid to our Employee Stock Ownership Plan (ESOP) also result in a tax deduction. Dividends paid to the ESOP in 2022, 2021 and 2020 resulted in tax benefits of $4.2 million, $1.6 million and $1.1 million, respectively. These tax benefits reduced the effective tax rate for 2022, 2021 and 2020 by 0.6 percent, 0.5 percent and 0.6 percent and, 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 projected 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 2022, 2021 and 2020 amounted to $190.3 million, $38.6 million and $23.7 million, respectively. The increase in 2022 is the result of taxes paid on the sale of our investment in Maui Jim. See note 13 for more information on the sale. Although we are not currently under audit by the IRS, tax years 2019 through 2022 remain open and are subject to examination. |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2022 | |
Compensation And Retirement Disclosure [Abstract] | |
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 $18.4 million, $18.0 million and $14.4 million for 2022, 2021 and 2020, respectively. During 2022, the ESOP purchased 87,367 shares of RLI Corp. stock on the open market at an average price of $103.01 ($9.0 million) relating to the contribution for plan year 2021. Shares held by the ESOP as of December 31, 2022, totaled 2,534,646 and are treated as outstanding in computing our earnings per share. During 2021, the ESOP purchased 65,815 shares of RLI Corp. stock on the open market at an average price of $107.95 ($7.1 million) relating to the contribution for plan year 2020. During 2020, the ESOP purchased 94,194 shares of RLI Corp. stock on the open market at an average price of $82.67 ($7.8 million) relating to the contribution for plan year 2019. 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 strategic and financial goals are met. Annual expenses for these incentive plans totaled $23.9 million, $39.1 million and $26.6 million for 2022, 2021 and 2020, respectively. DEFERRED COMPENSATION We maintain rabbi trusts for deferred compensation plans for directors, key employees and executive officers through which contributions can be invested in RLI Corp. stock or mutual funds. The employer stock in the plan cannot be diversified and is accounted for as equity, in a manner consistent with the accounting for treasury stock. At December 31, 2022, the trusts’ assets were valued at $55.9 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, restricted stock units, 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 3,263,788 awards under the 2015 LTIP, including 363,368 in 2022. Compensation expense is based on the probable number of awards expected to vest. The total compensation expense related to equity awards was $8.8 million, $6.4 million and $5.4 million for 2022, 2021 and 2020, respectively. The total income tax benefit was $1.4 million for 2022, $1.0 million for 2021 and $0.9 million for 2020. Total unrecognized compensation expense relating to outstanding and unvested awards was $6.6 million, which will be recognized over the weighted average vesting period of 2.32 years. 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. On November 10, 2022, the board of directors declared a $7.00 special cash dividend to be paid on December 20, 2022, the shareholders of record at the close of business on November 30, 2022. To preserve the intrinsic value of the options, the board also approved, pursuant to the terms of our various stock option plans, a proportional adjustment to the exercise price (equivalent to the special dividend) for all outstanding non-qualified options in relation to the special dividend. These adjustments did not result in any incremental compensation expense as the aggregate fair value, aggregate intrinsic value and the ratio of the exercise price to the market price were approximately equal immediately before and after the adjustments. The following table summarize option activity in 2022: Weighted Aggregate Weighted Average Intrinsic Average Remaining Value Options Exercise Price Contractual Life (in 000’s) Outstanding as of January 1, 2022 1,669,325 $ 78.63 Granted 344,100 109.50 Exercised (308,280) 54.42 Cancelled or forfeited (9,485) 86.40 Outstanding as of December 31, 2022 1,695,660 $ 82.42 4.90 $ 82,835 Exercisable at December 31, 2022 782,067 $ 67.54 3.47 $ 49,839 The intrinsic value, which is the difference between the fair value and the exercise price, of options exercised was $21.8 million, $12.2 million and $15.5 million during 2022, 2021 and 2020, respectively. 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: 2022 2021 2020 Weighted-average fair value of grants $ 21.43 $ 17.11 $ 13.24 Risk-free interest rates 2.95 % 0.75 % 0.39 % Dividend yield 2.50 % 2.06 % 2.30 % Expected volatility 22.89 % 22.73 % 22.67 % Expected option life 5.05 years 4.97 years 4.96 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 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 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 units are granted. For employees, these units generally have a three-year cliff vesting, but have an accelerated vesting feature for participants who are retirement eligible, defined by the plan as those individuals whose age and years of service equals 75. For directors, these units vest on the earlier of one year from the date of grant or the next annual shareholders meeting. In addition, the RSUs have dividend participation, which accrue as additional units and are settled with granted stock units at the end of the vesting period. The total fair value of restricted stock units that vested was $2.5 million, $2.2 million and $1.5 million during 2022, 2021 and 2020, respectively. Weighted Average Grant Date RSUs Fair Value Nonvested at January 1, 2022 45,068 $ 97.67 Granted 19,268 115.71 Reinvested 2,632 127.48 Vested (21,380) 93.07 Forfeited (1,380) 77.92 Nonvested at December 31, 2022 44,208 $ 109.51 |
Statutory Information and Divid
Statutory Information and Dividend Restrictions | 12 Months Ended |
Dec. 31, 2022 | |
Statutory Information And Dividend Restrictions Disclosure [Abstract] | |
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’s statutory accounting principles (SAP). We do not use any permitted SAP that differ from NAIC prescribed SAP. In converting from SAP 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, 2022, 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 $249.7 million, $225.1 million and $203.9 million as of December 31, 2022, 2021 and 2020, respectively, compared to actual statutory capital and surplus of $1.4 billion, $1.2 billion and $1.1 billion, respectively, for these same periods. Year-end statutory surplus for 2022 presented in the table below includes $327.4 million of RLI Corp. stock (cost basis of $64.6 million) held by Mt. Hawley Insurance Company, compared to $271.2 million and $238.0 million in 2021 and 2020, 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 ended and as of December 31: (in thousands) 2022 2021 2020 Consolidated net income, statutory basis $ 229,111 $ 207,550 $ 120,329 Consolidated surplus, statutory basis $ 1,407,925 $ 1,240,649 $ 1,121,592 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, 2022, our holding company had $1.2 billion 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 $240.6 million in liquid assets, which was elevated by the cash proceeds received from the sale of Maui Jim. 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 2022, 2021 and 2020, our principal insurance subsidiary paid ordinary dividends totaling $13.0 million, $70.0 million and $110.0 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 2021, 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 2022 or 2020. As of December 31, 2022, $136.9 million of the net assets of our principal insurance subsidiary are not restricted and could be distributed to RLI Corp. as ordinary dividends. Because the limitations are based upon a rolling 12-month period, the amount and impact of these restrictions vary over time. 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. |
Commitments And Contingent Liab
Commitments And Contingent Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments And Contingent Liabilities | 10. COMMITMENTS AND CONTINGENT LIABILITIES COMMITMENTS As of December 31, 2022, we had $13.5 million of unfunded commitments related to our investments in private funds, low-income housing tax credit investments and equity method investees. See note 2 for more information on our investments in private funds and low-income housing tax credits. LITIGATION We are party to numerous claims, loss and litigation matters that arise in the normal course of our business. Many of such claims, loss or litigation matters involve claims under policies that we underwrite as an insurer. We believe that the resolution of these claims and losses is not reasonably likely to have a material adverse effect on our financial condition, results of operations or cash flows. From time to time, 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 is not reasonably likely to have a material adverse effect on our financial condition, results of operations or cash flows. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | 11. LEASES Right-of-use (ROU) assets are included in the other assets line item and lease liabilities are included in the other liabilities line item of the consolidated balance sheet. We determine if a contract contains a lease at inception and recognize operating lease ROU assets and operating lease liabilities based on the present value of the future minimum lease payments at the commencement date. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Lease agreements may include options to extend or terminate. The options are exercised at our discretion and are included in operating lease liabilities if it is reasonably certain the option will be exercised. Lease agreements have lease and non-lease components, which are accounted for as a single lease component. Operating lease cost for future minimum lease payments is recognized on a straight-line basis over the lease term. Variable lease cost is expensed in the period in which the obligation is incurred. Sublease income is recognized on a straight-line basis over the sublease term. The components of lease expense and other lease information as of and during the years ended December 31, 2022, 2021 and 2020 were as follows: (in thousands) 2022 2021 2020 Operating lease cost $ 4,957 $ 5,131 $ 5,504 Variable lease cost 1,423 1,433 1,346 Sublease income (555) (508) (262) Total lease cost $ 5,825 $ 6,056 $ 6,588 Cash paid for amounts included in measurement of lease liabilities Operating cash flows from operating leases $ 5,435 $ 5,738 $ 5,963 ROU assets obtained in exchange for new operating lease liabilities $ 2,694 $ 4,828 $ 81 Reduction to ROU assets resulting from reduction to lease liabilities $ 2 $ 1,042 $ 18 Other non-cash reductions to ROU assets $ 73 $ 48 $ 1,192 (in thousands) 2022 2021 Operating lease ROU assets $ 12,766 $ 14,765 Operating lease liabilities $ 14,499 $ 16,905 Weighted-average remaining lease term - operating leases 4.21 years 4.52 years Weighted-average discount rate - operating leases 2.11 % 2.02 % Future minimum lease payments under non-cancellable leases as of December 31, 2022 were as follows: (in thousands) 2022 2023 $ 5,578 2024 3,628 2025 2,216 2026 1,311 2027 826 Thereafter 1,587 Total future minimum lease payments $ 15,146 Less imputed interest (647) Total operating lease liability $ 14,499 |
Operating Segment Information
Operating Segment Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Operating Segment Information | 12. 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 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. 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, and windstorms 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 insurance 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 medium-sized contract surety coverages, including payment and performance bonds. We offer a variety of commercial surety bonds for medium to large-sized businesses across a broad spectrum of industries, including the financial, healthcare as well as on and offshore 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 owned 40 percent of Maui Jim, a privately held company which operates in the sunglass and optical goods industries, which we sold in the third quarter of 2022. See note 13 for more information on the sale. Our investment in Maui Jim was carried at the holding company, as it was unrelated to our core insurance operations. Additionally, we own 23 percent of Prime Holdings Insurance Services, Inc., a privately held insurance company which specializes in hard-to-place risks. 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 costs from various support departments. Assets are not managed at the segment level and therefore are not allocated to segments. REVENUES (in thousands) 2022 2021 2020 Casualty $ 711,832 $ 633,639 $ 569,521 Property 307,886 231,837 183,720 Surety 124,718 115,427 112,506 Net premiums earned $ 1,144,436 $ 980,903 $ 865,747 Net investment income 86,078 68,862 67,893 Net realized gains 588,515 64,222 17,885 Net unrealized gains (losses) on equity securities (121,037) 65,258 32,101 Total $ 1,697,992 $ 1,179,245 $ 983,626 INSURANCE EXPENSES (in thousands) 2022 2021 2020 Loss and settlement expenses: Casualty $ 381,436 $ 311,627 $ 322,099 Property 120,745 129,924 111,356 Surety 12,195 15,051 9,429 Total loss and settlement expenses $ 514,376 $ 456,602 $ 442,884 Policy acquisition costs: Casualty $ 204,397 $ 179,354 $ 162,058 Property 95,203 72,008 59,926 Surety 70,032 66,106 64,454 Total policy acquisition costs $ 369,632 $ 317,468 $ 286,438 Other insurance expenses: Casualty $ 52,210 $ 47,139 $ 40,937 Property 19,416 18,605 15,620 Surety 10,586 11,163 10,271 Total other insurance expenses $ 82,212 $ 76,907 $ 66,828 Total $ 966,220 $ 850,977 $ 796,150 NET EARNINGS (in thousands) 2022 2021 2020 Casualty $ 73,789 $ 95,519 $ 44,427 Property 72,522 11,300 (3,182) Surety 31,905 23,107 28,352 Net underwriting income $ 178,216 $ 129,926 $ 69,597 Net investment income 86,078 68,862 67,893 Net realized gains 588,515 64,222 17,885 Net unrealized gains (losses) on equity securities (121,037) 65,258 32,101 Interest on debt (8,047) (7,677) (7,603) General corporate expense (12,900) (13,330) (10,265) Equity in earnings of unconsolidated investees 9,853 37,060 20,233 Total earnings before incomes taxes $ 720,678 $ 344,321 $ 189,841 Income tax expense 137,267 64,967 32,750 Net earnings $ 583,411 $ 279,354 $ 157,091 The following table further summarizes revenues by major product type within each segment: NET PREMIUMS EARNED Year ended December 31, (in thousands) 2022 2021 2020 CASUALTY Commercial excess and personal umbrella $ 253,921 $ 219,437 $ 178,214 General liability 100,374 90,853 91,653 Commercial transportation 96,992 83,352 64,624 Professional services 95,187 88,855 85,196 Small commercial 67,673 64,660 63,357 Executive products 26,606 21,873 26,509 Other casualty 71,079 64,609 59,968 Total $ 711,832 $ 633,639 $ 569,521 PROPERTY Commercial property $ 163,078 $ 107,941 $ 79,406 Marine 113,208 97,745 81,852 Other property 31,600 26,151 22,462 Total $ 307,886 $ 231,837 $ 183,720 SURETY Commercial $ 47,652 $ 43,738 $ 42,872 Miscellaneous 45,826 43,982 42,292 Contract 31,240 27,707 27,342 Total $ 124,718 $ 115,427 $ 112,506 Grand total $ 1,144,436 $ 980,903 $ 865,747 |
Acquisitions and Dispositions
Acquisitions and Dispositions | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions and Dispositions | 13. ACQUISITONS AND DISPOSITIONS On September 30, 2022, RLI Corp. completed the sale of its equity method investment in Maui Jim to Kering Eyewear for cash proceeds of $686.6 million. The sale was part of a larger transaction whereby Kering Eyewear acquired all of the shares of common stock of Maui Jim, consistent with our prior commitments under the terms of a shareholders agreement between RLI and the majority owner of Maui Jim. We recognized a net realized gain of $571.0 million as a result of the sale, which was recorded in the net realized gain line item of the statement of earnings. In addition, we have the right to receive additional consideration based on customary post-closing working capital and other adjustments. Any gain related to the additional consideration will be recognized when received. |
Schedule I-Summary Of Investmen
Schedule I-Summary Of Investments-Other than Investments in Related Parties | 12 Months Ended |
Dec. 31, 2022 | |
Summary Of Investments Other Than Investments In Related Parties [Abstract] | |
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, 2022 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 $ 462,884 $ 454,021 $ 454,021 U.S. agency 75,074 73,063 73,063 Non-U.S. government & agency 6,798 5,847 5,847 Agency MBS 373,687 331,806 331,806 ABS/CMBS/MBS* 276,126 240,736 240,736 Corporate 1,122,097 1,034,330 1,034,330 Municipal 628,607 527,147 527,147 Total available-for-sale $ 2,945,273 $ 2,666,950 $ 2,666,950 Total fixed maturities $ 2,945,273 $ 2,666,950 $ 2,666,950 Equity securities: Common stock: Ind Misc and all other $ 109,530 $ 179,643 $ 179,643 ETFs (Ind/misc) 218,489 318,739 318,739 Total equity securities $ 328,019 $ 498,382 $ 498,382 Cash and short-term investments 59,047 59,047 59,047 Other invested assets 43,980 47,922 47,922 Total investments and cash $ 3,376,319 $ 3,272,301 $ 3,272,301 * Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities Note: See notes 1E and 2 of Notes to Consolidated Financial Statements. See also the accompanying reports of independent registered public accounting firms starting on page 91 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 Financia
Schedule II -Condensed Financial Information of Registrant (Parent Company) | 12 Months Ended |
Dec. 31, 2022 | |
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | |
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) 2022 2021 ASSETS Cash $ 1,051 $ 1,433 Short-term investments, at cost which approximates fair value 2,229 — Accounts receivable, affiliates 1,572 848 Investments in subsidiaries 1,084,055 1,197,997 Investments in unconsolidated investee — 113,052 Fixed income: Available-for-sale, at fair value 237,282 86,483 (amortized cost of $250,904 and allowance for credit losses of $0 in 2022) (amortized cost of $84,823 and allowance for credit losses of $0 in 2021) Property and equipment, at cost, net of accumulated depreciation of $1,340 in 2022 and $1,697 in 2021 1,410 1,711 Income taxes receivable - current — 211 Income taxes - deferred 3,204 — Other assets 3,840 2,907 TOTAL ASSETS $ 1,334,643 $ 1,404,642 LIABILITIES AND SHAREHOLDERS’ EQUITY LIABILITIES Income taxes payable - current $ 1,823 $ — Income taxes - deferred — 21,067 Current portion of long-term debt 149,863 — Long-term debt — 149,676 Interest payable, long-term debt 2,153 2,153 Other liabilities 3,463 2,385 TOTAL LIABILITIES $ 157,302 $ 175,281 SHAREHOLDERS' EQUITY Common stock ($0.01 par value) (Shares authorized - 200,000,000) (68,399,966 shares issued and 45,469,752 shares outstanding in 2022) (68,219,551 shares issued and 45,289,337 shares outstanding in 2021) $ 684 $ 682 Paid-in capital 352,391 343,742 Accumulated other comprehensive earnings (229,076) 49,826 Retained earnings 1,446,341 1,228,110 Deferred compensation 12,015 9,642 Treasury stock, at cost (22,930,214 shares in 2022 and 2021) (405,014) (402,641) TOTAL SHAREHOLDERS’ EQUITY $ 1,177,341 $ 1,229,361 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,334,643 $ 1,404,642 See Notes to Consolidated Financial Statements. See also the accompanying reports of independent registered public accounting firms starting on page 91 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) 2022 2021 2020 Net investment income $ 6,245 $ 2,102 $ 1,412 Net realized gains (losses) 570,888 (625) 501 Equity in earnings of unconsolidated investee 372 22,786 10,368 Selling, general and administrative expenses (12,900) (13,330) (10,265) Interest expense on debt (7,622) (7,616) (7,603) Earnings (loss) before income taxes $ 556,983 $ 3,317 $ (5,587) Income tax expense (benefit) 108,699 (1,585) (2,885) Net earnings (loss) before equity in net earnings of subsidiaries $ 448,284 $ 4,902 $ (2,702) Equity in net earnings of subsidiaries 135,127 274,452 159,793 Net earnings $ 583,411 $ 279,354 $ 157,091 Other comprehensive earnings (loss), net of tax Unrealized gains (losses) on securities: Unrealized holding gains (losses) arising during the period $ (12,188) $ (1,996) $ 994 Less: reclassification adjustment for (gains) losses included in net earnings 115 500 (390) Other comprehensive earnings (loss) - parent only $ (12,073) $ (1,496) $ 604 Equity in other comprehensive earnings (loss) of subsidiaries/investees (266,829) (57,392) 55,615 Other comprehensive earnings (loss) $ (278,902) $ (58,888) $ 56,219 Comprehensive earnings $ 304,509 $ 220,466 $ 213,310 See Notes to Consolidated Financial Statements. See also the accompanying reports of independent registered public accounting firms starting on page 91 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) 2022 2021 2020 Cash flows from operating activities Earnings (loss) before equity in net earnings of subsidiaries $ 448,284 $ 4,902 $ (2,702) Adjustments to reconcile net losses to net cash provided by (used in) operating activities: Net realized (gains) losses (570,888) 625 (501) Depreciation 64 68 67 Other items, net 1,403 3,966 2,270 Change in: Affiliate balances receivable/payable (724) (3,404) 1,246 Federal income taxes (19,484) 5,901 1,399 Changes in investment in unconsolidated investee: Undistributed earnings (372) (22,786) (10,368) Net cash used in operating activities $ (141,717) $ (10,728) $ (8,589) Cash flows from investing activities Purchase of: Fixed income, available-for-sale $ (1,356,177) $ (33,373) $ (24,950) Other (1,420) (2,904) (346) Sale of: Fixed income, available-for-sale 1,373 5,306 3,767 Equity method investee 686,566 — — Other 221 1,245 — Property and equipment 298 — — Call or maturity of: Fixed income, available-for-sale 1,192,050 2,878 3,492 Net purchase of short-term investments (2,229) — — Cash dividends received-subsidiaries 13,000 180,000 110,000 Net cash provided by investing activities $ 533,682 $ 153,152 $ 91,963 Cash flows from financing activities Proceeds from stock option exercises $ (465) $ 1,838 $ 8,648 Cash dividends paid (397,323) (147,422) (95,793) Other 5,441 4,212 3,802 Net cash used in financing activities $ (392,347) $ (141,372) $ (83,343) Net increase (decrease) in cash $ (382) $ 1,052 $ 31 Cash at beginning of year 1,433 381 350 Cash at end of year $ 1,051 $ 1,433 $ 381 Interest paid on outstanding debt amounted to $7.3 million for 2022, 2021 and 2020, respectively. See Notes to Consolidated Financial Statements. See also the accompanying reports of independent registered public accounting firms starting on page 91 of this report. |
Schedule III-Supplementary Insu
Schedule III-Supplementary Insurance Information | 12 Months Ended |
Dec. 31, 2022 | |
Supplementary Insurance Information [Abstract] | |
Schedule III-Supplementary Insurance Information | RLI CORP. AND SUBSIDIARIES SCHEDULE III—SUPPLEMENTARY INSURANCE INFORMATION As of and for the years ended December 31, 2022, 2021 and 2020 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, 2022 Casualty segment $ 66,285 $ 1,929,091 $ 466,178 $ 711,832 $ 468,661 Property segment 36,767 293,737 237,369 307,886 145,672 Surety segment 24,807 92,809 81,538 124,718 22,622 RLI Insurance Group $ 127,859 $ 2,315,637 $ 785,085 $ 1,144,436 $ 636,955 Year ended December 31, 2021 Casualty segment $ 55,760 $ 1,760,469 $ 438,248 $ 633,639 $ 420,259 Property segment 25,764 196,369 168,209 231,837 140,905 Surety segment 22,029 86,717 73,987 115,427 20,901 RLI Insurance Group $ 103,553 $ 2,043,555 $ 680,444 $ 980,903 $ 582,065 Year ended December 31, 2020 Casualty segment $ 48,255 $ 1,567,544 $ 385,736 $ 569,521 $ 397,174 Property segment 19,655 150,008 131,274 183,720 124,375 Surety segment 20,515 32,497 69,376 112,506 22,388 RLI Insurance Group $ 88,425 $ 1,750,049 $ 586,386 $ 865,747 $ 543,937 NOTE 1: Investment income is not allocated to the segments, therefore, net investment income has not been provided. See the accompanying reports of independent registered public accounting firms starting on page 91 of this report. RLI CORP. AND SUBSIDIARIES SCHEDULE III—SUPPLEMENTARY INSURANCE INFORMATION (continued) As of and for the years ended December 31, 2022, 2021 and 2020 Incurred losses and settlement Policy Other Net expenses acquisition operating premiums (in thousands) prior year costs expenses written Year ended December 31, 2022 Casualty segment $ (87,225) $ 204,397 $ 52,210 $ 744,607 Property segment (24,927) 95,203 19,416 364,644 Surety segment (10,427) 70,032 10,586 132,285 RLI Insurance Group $ (122,579) $ 369,632 $ 82,212 $ 1,241,536 Year ended December 31, 2021 Casualty segment $ (108,632) $ 179,354 $ 47,139 $ 674,709 Property segment (10,981) 72,008 18,605 262,816 Surety segment (5,850) 66,106 11,163 120,008 RLI Insurance Group $ (125,463) $ 317,468 $ 76,907 $ 1,057,533 Year ended December 31, 2020 Casualty segment $ (75,075) $ 162,058 $ 40,937 $ 583,244 Property segment (13,019) 59,926 15,620 196,603 Surety segment (12,959) 64,454 10,271 112,241 RLI Insurance Group $ (101,053) $ 286,438 $ 66,828 $ 892,088 See the accompanying reports of independent registered public accounting firms starting on page 91 of this report. |
Schedule IV-Reinsurance
Schedule IV-Reinsurance | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Schedule Of Reinsurance Premiums For Insurance Companies [Abstract] | |
Schedule IV-Reinsurance | RLI CORP. AND SUBSIDIARIES SCHEDULE IV—REINSURANCE Years ended December 31, 2022, 2021 and 2020 Percentage Ceded to Assumed of amount Direct other from other Net assumed (in thousands) amount companies companies amount to net 2022 Casualty segment $ 863,530 $ 186,469 $ 34,771 $ 711,832 4.9 % Property segment 430,010 122,415 291 307,886 0.1 % Surety segment 131,625 7,525 618 124,718 0.5 % RLI Insurance Group premiums earned $ 1,425,165 $ 316,409 $ 35,680 $ 1,144,436 3.1 % 2021 Casualty segment $ 788,741 $ 185,433 $ 30,331 $ 633,639 4.8 % Property segment 310,630 79,094 301 231,837 0.1 % Surety segment 122,975 7,866 318 115,427 0.3 % RLI Insurance Group premiums earned $ 1,222,346 $ 272,393 $ 30,950 $ 980,903 3.2 % 2020 Casualty segment $ 690,718 $ 148,271 $ 27,074 $ 569,521 4.8 % Property segment 253,781 70,398 337 183,720 0.2 % Surety segment 118,109 5,843 240 112,506 0.2 % RLI Insurance Group premiums earned $ 1,062,608 $ 224,512 $ 27,651 $ 865,747 3.2 % See the accompanying reports of independent registered public accounting firms starting on page 91 of this report. |
Schedule V-Valuation and Qualif
Schedule V-Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2022 | |
Valuation And Qualifying Accounts [Abstract] | |
Schedule V-Valuation and Qualifying Accounts | RLI CORP. AND SUBSIDIARIES SCHEDULE V—VALUATION AND QUALIFYING ACCOUNTS Years ended December 31, 2022, 2021 and 2020 Balance Amounts Amounts Balance at beginning charged recovered at end of (in thousands) of period to expense (written off) period 2022 Allowance for uncollectible reinsurance $ 27,243 $ 130 $ (50) $ 27,323 2021 Allowance for uncollectible reinsurance $ 24,539 $ 2,863 $ (159) $ 27,243 2020 Allowance for uncollectible reinsurance $ 25,066 $ (522) $ (5) $ 24,539 See the accompanying reports of independent registered public accounting firms starting on page 91 of this report. |
Schedule VI-Supplementary Infor
Schedule VI-Supplementary Information Concerning Property-Casualty Insurance Operations | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Information For Property Casualty Insurance Underwriters [Abstract] | |
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, 2022, 2021 and 2020 (in thousands) Deferred policy Claims and Unearned Net Net acquisition claim adjustment premiums, premiums investment Affiliation with Registrant (1) costs expense reserves gross earned income 2022 $ 127,859 $ 2,315,637 $ 785,085 $ 1,144,436 $ 86,078 2021 $ 103,553 $ 2,043,555 $ 680,444 $ 980,903 $ 68,862 2020 $ 88,425 $ 1,750,049 $ 586,386 $ 865,747 $ 67,893 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 2022 $ 636,955 $ (122,579) $ 369,632 $ 374,297 $ 1,241,536 2021 $ 582,065 $ (125,463) $ 317,468 $ 327,453 $ 1,057,533 2020 $ 543,937 $ (101,053) $ 286,438 $ 325,054 $ 892,088 (1) Consolidated property-casualty insurance operations. (2) See the accompanying reports of independent registered public accounting firms starting on page 91 of this report. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Description of Business | A. DESCRIPTION OF BUSINESS RLI Corp. is an insurance holding company. References to “the Company,” “we,” “our,” “us” or like terms refer to the business of RLI Corp. and its subsidiaries. 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 excess and 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. PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION 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. Intercompany balances and transactions have been eliminated. Certain reclassifications were made to 2021 and 2020 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. ADOPTED ACCOUNTING STANDARDS No new accounting standards applicable in 2022 materially impacted our financial statements. |
Prospective Accounting Standards | D. PROSPECTIVE ACCOUNTING STANDARDS There are no prospective accounting standards which would have a material impact on our financial statements as of December 31, 2022. |
Investments | E. INVESTMENTS Equity securities are carried at fair value with unrealized gains and losses recorded within net earnings. Investments in fixed income securities are classified into one of three categories: trading, held-to-maturity or available-for-sale. All of our fixed income securities 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. 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, Short-Term Investments and Other Invested Assets | F. CASH, SHORT-TERM INVESTMENTS AND OTHER INVESTED ASSETS 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 government money market funds. Short-term investments are carried at cost. 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, the LIHTCs 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. REINSURANCE Ceded unearned premiums and reinsurance balances recoverable on unpaid 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 reinsurers’ annual financial statements and SEC filings for those 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 AM 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 its 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 and, if needed, an additional allowance is recognized. |
Policy Acquisition Costs | H. POLICY ACQUISITION COSTS 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 process contemplates the premiums to be earned, anticipated losses and settlement expenses and certain other costs expected to be incurred, but does not consider investment income. 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 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 |
Investments in Unconsolidated Investees | J. INVESTMENTS IN UNCONSOLIDATED INVESTEES Our investments accounted for under the equity method are primarily related to Maui Jim, Inc. (Maui Jim) and Prime Holdings Insurance Services, Inc. (Prime). We owned 40 percent interest in the equity and earnings of Maui Jim, a manufacturer of high-quality sunglasses, but sold our interest in 2022. See note 13 for more information on the sale. We carried this investment at the holding company level as it was not core to our insurance operations. Our investment in Maui Jim was $113.1 million at December 31, 2021. In 2022, we recorded $0.4 million in investee earnings for Maui Jim, compared to $22.8 million in 2021 and $10.4 million in 2020. As of December 31, 2022, we had a 23 percent interest in the equity and earnings of Prime. 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 $46.9 million at December 31, 2022 and $47.2 million at December 31, 2021. The decrease was due to the recognition of our share of Prime’s other comprehensive losses, brought on by the impact of rising interest rates on Prime’s fixed income portfolio. In 2022, we recorded $13.0 million in investee earnings for Prime, compared to $17.0 million in 2021 and $10.8 million in 2020. Additionally, we maintain a quota share reinsurance treaty with Prime, which contributed $20.6 million of gross premiums written and $22.6 million of net premiums earned during 2022, compared to $22.2 million of gross premiums written and $19.1 million of net premiums earned during 2021 and $15.7 million of gross premiums written and $14.3 million of net premiums earned during 2020. The increase in net premiums earned reflected growth in written premium from Prime. Our equity method investments recorded net income of $58.8 million in 2022, $125.3 million in 2021 and $70.4 million in 2020. Additional summarized financial information for our equity method investments as of 2022 and 2021 is outlined in the following table: (in millions) 2022 2021 Total assets $ 906.4 $ 1,172.6 Total liabilities 689.9 687.8 Total equity 216.5 484.8 Approximately $51.6 million of undistributed earnings from our equity method investees were included in our retained earnings as of December 31, 2022. We did not receive any dividends from our equity method investees during 2022 or 2021, while $4.7 million of dividends were received in 2020. 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. |
Goodwill and Intangible Assets | K. GOODWILL AND INTANGIBLE ASSETS The composition of goodwill and intangibles at December 31, 2022 and 2021, is detailed in the following table: (in thousands) 2022 2021 Goodwill Surety $ 40,816 $ 40,816 Casualty 5,246 5,246 Total goodwill $ 46,062 $ 46,062 Indefinite-lived intangibles $ 7,500 $ 7,500 Total goodwill and intangibles $ 53,562 $ 53,562 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 2022. Based upon these reviews, our goodwill and state insurance license indefinite-lived intangible asset were not impaired. In addition, as of December 31, 2022, there were no triggering events on goodwill and intangible assets that would suggest an updated review was necessary. |
Unpaid Losses and Settlement Expense | L. UNPAID LOSSES AND SETTLEMENT EXPENSES 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 REVENUE RECOGNITION Insurance premiums are recognized ratably over the term of the contracts, net of ceded reinsurance. Our policies are short-term in nature and premium is generally earned over a one-year period. Unearned premiums are calculated on a monthly pro rata basis. |
Income Taxes | N. INCOME TAXES 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. Since the majority of our income on a state basis 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. EARNINGS PER SHARE 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, 2022 Basic EPS Income available to common shareholders $ 583,411 45,368 $ 12.86 Stock options — 426 Diluted EPS Income available to common shareholders and assumed conversions $ 583,411 45,794 $ 12.74 Anti-dilutive options excluded from diluted EPS 295 For the year ended December 31, 2021 Basic EPS Income available to common shareholders $ 279,354 45,230 $ 6.18 Stock options — 482 Diluted EPS Income available to common shareholders and assumed conversions $ 279,354 45,712 $ 6.11 Anti-dilutive options excluded from diluted EPS 214 For the year ended December 31, 2020 Basic EPS Income available to common shareholders $ 157,091 45,000 $ 3.49 Stock options — 376 Diluted EPS Income available to common shareholders and assumed conversions $ 157,091 45,376 $ 3.46 Anti-dilutive options excluded from diluted EPS 384 |
Comprehensive Earnings | P. COMPREHENSIVE EARNINGS Our comprehensive earnings include net earnings plus after-tax unrealized gains and losses on our available-for-sale fixed income portfolio. In reporting the components of comprehensive earnings, we used the federal statutory tax rate of 21 percent. Other comprehensive income (loss), as shown in the consolidated statements of earnings and comprehensive earnings, is net of tax expense (benefit) of $(74.1) million, $(15.7) million and $14.9 million for 2022, 2021 and 2020, respectively. The table below illustrates the changes in the balance of each component of accumulated other comprehensive earnings for each period presented in the consolidated financial statements. The changes in accumulated other comprehensive earnings also reflect adjustments from the adoption of accounting standards. The adoption of ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which moved less than $0.1 million of net unrealized losses on fixed income securities from accumulated other comprehensive earnings to retained earnings. Unrealized Gains/Losses on Available-for-Sale Securities For the Year Ended December 31, (in thousands) 2022 2021 2020 Beginning balance $ 49,826 $ 108,714 $ 52,473 Cumulative-effect adjustment of ASU 2016-13 — — 22 Adjusted beginning balance $ 49,826 $ 108,714 $ 52,495 Other comprehensive earnings before reclassifications (281,189) (57,454) 58,986 Amounts reclassified from accumulated other comprehensive earnings 2,287 (1,434) (2,767) Net current period other comprehensive earnings (loss) $ (278,902) $ (58,888) $ 56,219 Ending balance $ (229,076) $ 49,826 $ 108,714 Balance of securities for which an allowance for credit losses has not been recognized in net earnings $ 1,693 $ 124 $ 470 Credit losses or the sale of an available-for-sale security resulted 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. 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 2022 2021 2020 Consolidated Statement of Earnings Unrealized gains and losses on available-for-sale securities $ (2,997) $ 1,859 $ 3,872 Net realized gains 102 (44) (369) Credit losses presented within net realized gains $ (2,895) $ 1,815 $ 3,503 Earnings before income taxes 608 (381) (736) Income tax expense $ (2,287) $ 1,434 $ 2,767 Net earnings |
Fair Value Disclosures | Q. FAIR VALUE DISCLOSURES 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. Level 1 Level 2 Level 3 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: 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-backed Securities (CMBS) and Asset-backed Securities (ABS): Regulation D Private Placement Securities: For all of our fixed income securities classified as Level 2, 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. If discrepancies are found in our comparisons, 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 fixed income securities provided by our pricing services are reasonable. Equity Securities: 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. |
Share-Based Compensation | R. SHARE-BASED COMPENSATION 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 are made through net earnings. See note 8 for further discussion and related disclosures regarding stock options. |
Risks and Uncertainties | S. RISKS AND UNCERTAINTIES Certain risks and uncertainties are inherent in our day-to-day operations and in 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 often highly competitive, which can make it difficult to grow or maintain premium volume without sacrificing underwriting discipline and income. Our profitability can be significantly affected 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, 2022, we had $2.3 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, and windstorms to commercial properties throughout the Gulf and East Coast, as well as to homes we insure in Hawaii. Our catastrophe reinsurance treaty renewed on January 1, 2022. We purchased limits of $600 million in excess of $25 million first-dollar retention for earthquakes in California, $625 million in excess of a $25 million first-dollar retention for earthquakes outside of California and $475 million in excess of a $25 million first-dollar retention for all other perils, including wind. These amounts were subject to certain co-participations by the Company on losses in excess of the $25 million retentions. On May 1, 2022, we purchased $150 million of additional catastrophe reinsurance protection on top of the previously described coverage, to support growth in our catastrophe-exposed business. This increased the limits to $750 million for earthquakes in California, $775 million for earthquakes outside of California and $625 million for all other perils, including wind, all of which were still subject retentions Our catastrophe reinsurance treaty renewed on January 1, 2023. We purchased reinsurance protections of $700 million in excess of $25 million first-dollar retention for earthquakes in California and $700 million in excess of a $50 million first-dollar retention for earthquakes outside of California. For other catastrophe events, such as hurricanes, we purchased reinsurance protection of $600 million in excess of a $50 million first dollar retention. These amounts are subject to certain co-participations by the Company on losses in excess of the 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. Our policies include pollution exclusions that have been continually updated to further strengthen them and our policies primarily cover moderate hazard risks. 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, the allowance for credit losses on fixed income securities, 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 and forms 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 and 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, 2022, 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 AM 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, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Summarized Financial Information of Equity Method Investments | (in millions) 2022 2021 Total assets $ 906.4 $ 1,172.6 Total liabilities 689.9 687.8 Total equity 216.5 484.8 |
Schedule of Goodwill and Intangible Assets | (in thousands) 2022 2021 Goodwill Surety $ 40,816 $ 40,816 Casualty 5,246 5,246 Total goodwill $ 46,062 $ 46,062 Indefinite-lived intangibles $ 7,500 $ 7,500 Total goodwill and intangibles $ 53,562 $ 53,562 |
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, 2022 Basic EPS Income available to common shareholders $ 583,411 45,368 $ 12.86 Stock options — 426 Diluted EPS Income available to common shareholders and assumed conversions $ 583,411 45,794 $ 12.74 Anti-dilutive options excluded from diluted EPS 295 For the year ended December 31, 2021 Basic EPS Income available to common shareholders $ 279,354 45,230 $ 6.18 Stock options — 482 Diluted EPS Income available to common shareholders and assumed conversions $ 279,354 45,712 $ 6.11 Anti-dilutive options excluded from diluted EPS 214 For the year ended December 31, 2020 Basic EPS Income available to common shareholders $ 157,091 45,000 $ 3.49 Stock options — 376 Diluted EPS Income available to common shareholders and assumed conversions $ 157,091 45,376 $ 3.46 Anti-dilutive options excluded from diluted EPS 384 |
Schedule of Changes in the Balance of Each Component of Accumulated Other Comprehensive Earnings (Loss) | Unrealized Gains/Losses on Available-for-Sale Securities For the Year Ended December 31, (in thousands) 2022 2021 2020 Beginning balance $ 49,826 $ 108,714 $ 52,473 Cumulative-effect adjustment of ASU 2016-13 — — 22 Adjusted beginning balance $ 49,826 $ 108,714 $ 52,495 Other comprehensive earnings before reclassifications (281,189) (57,454) 58,986 Amounts reclassified from accumulated other comprehensive earnings 2,287 (1,434) (2,767) Net current period other comprehensive earnings (loss) $ (278,902) $ (58,888) $ 56,219 Ending balance $ (229,076) $ 49,826 $ 108,714 Balance of securities for which an allowance for credit losses has not been recognized in net earnings $ 1,693 $ 124 $ 470 |
Schedule of Effects of Reclassifications out of Accumulated Other Comprehensive Earnings (Loss) | 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 2022 2021 2020 Consolidated Statement of Earnings Unrealized gains and losses on available-for-sale securities $ (2,997) $ 1,859 $ 3,872 Net realized gains 102 (44) (369) Credit losses presented within net realized gains $ (2,895) $ 1,815 $ 3,503 Earnings before income taxes 608 (381) (736) Income tax expense $ (2,287) $ 1,434 $ 2,767 Net earnings |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments Debt And Equity Securities [Abstract] | |
Schedule of Net Investment Income | (in thousands) 2022 2021 2020 Interest on fixed income securities $ 77,164 $ 60,624 $ 59,755 Dividends on equity securities 11,912 11,787 9,728 Interest on cash, short-term investments and other invested assets 2,467 2,639 3,379 Gross investment income $ 91,543 $ 75,050 $ 72,862 Less investment expenses (5,465) (6,188) (4,969) Net investment income $ 86,078 $ 68,862 $ 67,893 |
Schedule of Pretax Net Realized Investment Gains (Losses) and Net Changes in Unrealized Gains (Losses) on Investments | (in thousands) 2022 2021 2020 Net realized gains (losses): Fixed income: Available-for-sale $ (2,997) $ 1,859 $ 3,872 Equity securities 20,287 62,512 15,796 Investment in unconsolidated investees 570,952 (61) (187) Other 273 (88) (1,596) Total net realized gains (losses) $ 588,515 $ 64,222 $ 17,885 Net changes in unrealized gains (losses) on investments: Equity securities $ (118,912) $ 58,459 $ 32,317 Other invested assets (2,125) 6,799 (216) Total unrealized gains (losses) on equity securities recognized in net earnings $ (121,037) $ 65,258 $ 32,101 Fixed income: Available-for-sale $ (341,944) $ (71,538) $ 67,350 Investment in unconsolidated investees (10,994) (3,047) 3,444 Other (102) 44 369 Total unrealized gains (losses) recognized in other comprehensive earnings $ (353,040) $ (74,541) $ 71,163 Net realized gains (losses) and changes in unrealized gains (losses) on investments $ 114,438 $ 54,939 $ 121,149 |
Schedule of Disposition of Fixed Income and Equity Securities | SALES Gross Realized Net Realized (in thousands) Proceeds Gains Losses Gain (Loss) 2022 Available-for-sale $ 51,355 $ 287 $ (2,849) $ (2,562) Equities 62,212 21,623 (1,336) 20,287 2021 Available-for-sale $ 65,262 $ 2,161 $ (815) $ 1,346 Equities 180,256 64,298 (1,786) 62,512 2020 Available-for-sale $ 84,697 $ 5,454 $ (1,777) $ 3,677 Equities 79,368 25,338 (9,542) 15,796 CALLS/MATURITIES Gross Realized Net Realized (in thousands) Proceeds Gains Losses Gain (Loss) 2022 Available-for-sale $ 1,393,704 $ 196 $ (55) $ 141 2021 Available-for-sale $ 376,751 $ 638 $ (125) $ 513 2020 Available-for-sale $ 283,107 $ 821 $ (27) $ 794 |
Fair Value, Assets Measured on Recurring Basis | Assets measured at fair value on a recurring basis as of December 31, 2022 and 2021, are summarized below: 2022 Quoted in Active Significant 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 $ — $ 454,021 $ — $ 454,021 U.S. agency — 73,063 — 73,063 Non-U.S. government & agency — 5,847 — 5,847 Agency MBS — 331,806 — 331,806 ABS/CMBS/MBS* — 240,736 — 240,736 Corporate — 980,676 53,654 1,034,330 Municipal — 527,147 — 527,147 Total fixed income securities - available-for-sale $ — $ 2,613,296 $ 53,654 $ 2,666,950 Equity securities 496,731 39 1,612 498,382 Total $ 496,731 $ 2,613,335 $ 55,266 $ 3,165,332 * Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities 2021 Quoted in Active Significant 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 $ — $ 134,554 $ — $ 134,554 U.S. agency — 32,760 — 32,760 Non-U.S. government & agency — 8,481 — 8,481 Agency MBS — 367,187 — 367,187 ABS/CMBS/MBS* — 264,054 — 264,054 Corporate — 913,577 43,518 957,095 Municipal — 645,756 — 645,756 Total fixed income securities - available-for-sale $ — $ 2,366,369 $ 43,518 $ 2,409,887 Equity securities 613,712 64 — 613,776 Total $ 613,712 $ 2,366,433 $ 43,518 $ 3,023,663 * Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities |
Summary of Changes in Balance of Level 3 Securities | (in thousands) Level 3 Securities Balance as of January 1, 2022 $ 43,518 Net realized and unrealized gains (losses) Included in net earnings as a part of: Net investment income (693) Net realized gains (432) Included in other comprehensive earnings (7,291) Total net realized and unrealized gains (losses) $ (8,416) Purchases 21,261 Transfers out of Level 3 (1,097) Balance as of December 31, 2022 $ 55,266 Change in unrealized gains (losses) during the period for Level 3 assets held at period-end - included in net realized gains $ (432) Change in unrealized gains (losses) during the period for Level 3 assets held at period-end - included in other comprehensive earnings $ (7,291) |
Schedule of Contractual Maturity of Securities | (in thousands) Amortized Cost Fair Value Due in one year or less $ 332,951 $ 331,761 Due after one year through five years 916,676 873,530 Due after five years through 10 years 522,104 474,025 Due after 10 years 523,729 415,092 ABS/CMBS/MBS* 649,813 572,542 Total available-for-sale $ 2,945,273 $ 2,666,950 * |
Schedule of Amortized Cost and Fair Value of Available-for-sale Securities | 2022 Allowance Gross Gross Amortized for Credit Unrealized Unrealized (in thousands) Cost Losses Gains Losses Fair Value U.S. government $ 462,884 $ — $ 8 $ (8,871) $ 454,021 U.S. agency 75,074 — 26 (2,037) 73,063 Non-U.S. government & agency 6,798 — — (951) 5,847 Agency MBS 373,687 — 336 (42,217) 331,806 ABS/CMBS/MBS* 276,126 (8) 62 (35,444) 240,736 Corporate 1,122,097 (331) 541 (87,977) 1,034,330 Municipal 628,607 — 1,265 (102,725) 527,147 Total fixed income $ 2,945,273 $ (339) $ 2,238 $ (280,222) $ 2,666,950 2021 Allowance Gross Gross Amortized for Credit Unrealized Unrealized (in thousands) Cost Losses Gains Losses Fair Value U.S. government $ 127,752 $ — $ 6,846 $ (44) $ 134,554 U.S. agency 30,403 — 2,374 (17) 32,760 Non-U.S. government & agency 8,297 — 338 (154) 8,481 Agency MBS 362,861 — 9,277 (4,951) 367,187 ABS/CMBS/MBS* 264,273 — 2,120 (2,339) 264,054 Corporate 925,394 (441) 37,247 (5,105) 957,095 Municipal 627,287 — 22,750 (4,281) 645,756 Total fixed income $ 2,346,267 $ (441) $ 80,952 $ (16,891) $ 2,409,887 * Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities |
Schedule of Debt Securities Available-for-sale Allowance for Credit Loss | (in thousands) 2022 2021 Beginning balance $ 441 $ 397 Increase to allowance from securities for which credit losses were not previously recorded 337 4 Reduction from securities sold during the period (671) (4) Net increase (decrease) from securities that had an allowance at the beginning of the period 232 44 Ending balance $ 339 $ 441 |
Schedule of Securities in an Unrealized Loss Position Segregated by Type and Length of Time in an Unrealized Loss Position | December 31, 2022 December 31, 2021 12 Mos. 12 Mos. (in thousands) < 12 Mos. & Greater Total < 12 Mos. & Greater Total U.S. government Fair value $ 399,361 $ 8,828 $ 408,189 $ 2,942 $ — $ 2,942 Amortized cost 407,340 9,720 417,060 2,986 — 2,986 Unrealized loss $ (7,979) $ (892) $ (8,871) $ (44) $ — $ (44) U.S. agency Fair value $ 32,987 $ 2,170 $ 35,157 $ 1,498 $ — $ 1,498 Amortized cost 34,627 2,567 37,194 1,515 — 1,515 Unrealized loss $ (1,640) $ (397) $ (2,037) $ (17) $ — $ (17) Non-U.S. government & agency Fair value $ 3,626 $ 2,221 $ 5,847 $ 4,346 $ — $ 4,346 Amortized cost 3,798 3,000 6,798 4,500 — 4,500 Unrealized loss $ (172) $ (779) $ (951) $ (154) $ — $ (154) Agency MBS Fair value $ 197,252 $ 117,851 $ 315,103 $ 102,145 $ 62,669 $ 164,814 Amortized cost 212,776 144,544 357,320 104,336 65,429 169,765 Unrealized loss $ (15,524) $ (26,693) $ (42,217) $ (2,191) $ (2,760) $ (4,951) ABS/CMBS/MBS* Fair value $ 96,754 $ 136,149 $ 232,903 $ 150,997 $ 3,935 $ 154,932 Amortized cost 104,724 163,623 268,347 153,235 4,036 157,271 Unrealized loss $ (7,970) $ (27,474) $ (35,444) $ (2,238) $ (101) $ (2,339) Corporate Fair value $ 660,830 $ 323,337 $ 984,167 $ 217,791 $ 53,818 $ 271,609 Amortized cost 697,437 374,707 1,072,144 221,010 55,704 276,714 Unrealized loss $ (36,607) $ (51,370) $ (87,977) $ (3,219) $ (1,886) $ (5,105) Municipal Fair value $ 228,827 $ 204,324 $ 433,151 $ 162,998 $ 15,037 $ 178,035 Amortized cost 255,240 280,636 535,876 166,602 15,714 182,316 Unrealized loss $ (26,413) $ (76,312) $ (102,725) $ (3,604) $ (677) $ (4,281) Total fixed income Fair value $ 1,619,637 $ 794,880 $ 2,414,517 $ 642,717 $ 135,459 $ 778,176 Amortized cost 1,715,942 978,797 2,694,739 654,184 140,883 795,067 Unrealized loss $ (96,305) $ (183,917) $ (280,222) $ (11,467) $ (5,424) $ (16,891) * Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities |
Policy Acquisition Costs (Table
Policy Acquisition Costs (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |
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) 2022 2021 2020 Deferred policy acquisition costs (DAC), beginning of year $ 103,553 $ 88,425 $ 85,044 Deferred: Direct commissions $ 277,553 $ 236,145 $ 200,917 Premium taxes 18,616 17,012 14,783 Ceding commissions (39,458) (47,592) (42,115) Net deferred $ 256,711 $ 205,565 $ 173,585 Amortized 232,405 190,437 170,204 DAC, end of year $ 127,859 $ 103,553 $ 88,425 Policy acquisition costs: Amortized to expense - DAC $ 232,405 $ 190,437 $ 170,204 Period costs: Ceding commission - contingent (5,882) (4,303) (4,053) Other underwriting expenses 143,109 131,334 120,287 Total policy acquisition costs $ 369,632 $ 317,468 $ 286,438 |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Reinsurance Disclosures [Abstract] | |
Schedule of Premiums Written and Earned Along with Losses and Settlement Expenses Incurred | Premiums written and earned along with losses and settlement expenses incurred for the years ended December 31 are summarized as follows: (in thousands) 2022 2021 2020 WRITTEN Direct $ 1,531,656 $ 1,313,093 $ 1,107,303 Reinsurance assumed 33,830 34,261 29,129 Reinsurance ceded (323,950) (289,821) (244,344) Net $ 1,241,536 $ 1,057,533 $ 892,088 EARNED Direct $ 1,425,165 $ 1,222,346 $ 1,062,608 Reinsurance assumed 35,680 30,950 27,651 Reinsurance ceded (316,409) (272,393) (224,512) Net $ 1,144,436 $ 980,903 $ 865,747 LOSSES AND SETTLEMENT EXPENSES INCURRED Direct $ 776,448 $ 703,903 $ 608,638 Reinsurance assumed 22,813 18,087 18,783 Reinsurance ceded (284,885) (265,388) (184,537) Net $ 514,376 $ 456,602 $ 442,884 |
Schedule of Net Reinsurance Balances Recoverable, After Consideration of Collateral, from Top Reinsurers | The following table displays net reinsurance balances recoverable, after consideration of collateral, from our top reinsurers as of December 31, 2022. These reinsurers all have financial strength ratings of A or better by AM Best and S&P’s ratings services. Also shown are the amounts of written premium ceded to these reinsurers during the calendar year 2022. Net Reinsurer Ceded AM Best S&P Exposure as of Percent of Premiums Percent of (dollars in thousands) Rating Rating 12/31/2022 Total Written Total Munich Re / HSB A+, Superior AA-, Very Strong $ 110,142 13.6 % $ 35,040 10.8 % Renaissance Re A+, Superior A+, Strong 82,929 10.3 % 22,865 7.1 % Nationwide Mutual A+, Superior A+, Strong 45,492 5.6 % 21,493 6.6 % Aspen UK Ltd. A, Excellent A-, Strong 43,632 5.4 % 11,021 3.4 % Safety National A++, Superior A+, Strong 42,218 5.2 % 14,971 4.6 % Endurance Re A+, Superior A+, Strong 40,979 5.1 % 5,570 1.7 % Berkley Insurance Co. A+, Superior A+, Strong 36,105 4.5 % 8,931 2.8 % Lloyds of London A, Excellent A+, Strong 34,737 4.3 % 26,677 8.2 % Partner Re A+, Superior A+, Strong 34,322 4.3 % 15,363 4.7 % Hannover Ruckversicherung A+, Superior AA-, Very Strong 33,507 4.2 % 16,746 5.2 % Scor Re A+, Superior A+, Strong 32,153 4.0 % 6,048 1.9 % Toa Re A, Excellent A+, Strong 27,278 3.4 % 13,092 4.0 % Liberty Mutual A, Excellent A, Strong 24,665 3.1 % 6,140 1.9 % Odyssey America Re A, Excellent A, Strong 23,945 3.0 % 9,049 2.8 % All other reinsurers* 194,683 24.0 % 110,944 34.3 % Total ceded exposure $ 806,787 100.0 % $ 323,950 100.0 % * 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, 2022 | |
Historical Loss And L A E Development Disclosure [Abstract] | |
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 2022, 2021 and 2020: (in thousands) 2022 2021 2020 Unpaid losses and LAE at beginning of year: Gross $ 2,043,555 $ 1,750,049 $ 1,574,352 Ceded (608,086) (443,729) (384,517) Net $ 1,435,469 $ 1,306,320 $ 1,189,835 Adoption impact of ASU 2016-13 on reinsurance balances recoverable $ — $ — $ (1,345) Increase (decrease) in incurred losses and LAE: Current accident year $ 636,955 $ 582,065 $ 543,937 Prior accident years (122,579) (125,463) (101,053) Total incurred $ 514,376 $ 456,602 $ 442,884 Loss and LAE payments for claims incurred: Current accident year $ (97,525) $ (101,590) $ (93,077) Prior accident year (276,772) (225,863) (231,977) Total paid $ (374,297) $ (327,453) $ (325,054) Net unpaid losses and LAE at end of year $ 1,575,548 $ 1,435,469 $ 1,306,320 Unpaid losses and LAE at end of year: Gross $ 2,315,637 $ 2,043,555 $ 1,750,049 Ceded (740,089) (608,086) (443,729) Net $ 1,575,548 $ 1,435,469 $ 1,306,320 |
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, 2022 For the Years Ended December 31, Cumulative Number of Reported AY 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021* 2022 Total IBNR Claims 2013 $ 80,823 $ 67,297 $ 62,882 $ 60,329 $ 60,162 $ 59,556 $ 59,116 $ 57,106 $ 57,519 $ 58,434 $ 1,690 4,326 2014 88,092 79,497 71,592 67,237 66,389 66,702 65,636 63,727 64,449 2,623 4,298 2015 94,835 84,975 83,579 78,675 76,398 75,470 75,438 77,110 4,022 4,408 2016 101,950 96,753 90,611 85,449 83,374 79,440 77,729 6,700 4,332 2017 119,741 111,391 102,583 95,513 90,759 90,344 10,770 4,529 2018 141,513 130,281 125,731 115,076 114,414 21,681 4,873 2019 146,011 135,209 120,570 109,051 38,075 5,273 2020 145,171 137,439 122,785 60,440 4,603 2021 142,797 128,483 81,085 4,368 2022 155,203 119,846 3,856 Total $ 998,002 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021* 2022 2013 $ 6,334 $ 13,021 $ 22,366 $ 34,786 $ 40,609 $ 45,753 $ 47,783 $ 49,411 $ 50,597 $ 53,375 2014 11,436 18,771 29,545 40,270 47,343 52,387 55,965 56,784 58,361 2015 10,157 19,902 33,020 45,056 54,270 58,866 62,997 68,650 2016 10,142 24,186 35,764 48,042 56,152 60,349 65,517 2017 13,154 25,933 38,783 52,823 62,236 71,419 2018 15,066 32,365 48,424 63,980 78,103 2019 15,698 30,673 41,911 57,750 2020 17,096 30,596 45,267 2021 14,428 29,633 2022 17,714 * Presented as unaudited required supplementary information. Total $ 545,789 All outstanding liabilities before 2013, net of reinsurance 9,314 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 461,527 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 13.3% 13.3% 14.4% 16.1% 11.0% 7.6% 5.3% 3.8% 2.2% 4.8% Casualty - Excess Occurrence (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2022 For the Years Ended December 31, Cumulative Number of Reported AY 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021* 2022 Total IBNR Claims 2013 $ 39,984 $ 34,824 $ 26,857 $ 25,425 $ 25,599 $ 24,922 $ 25,496 $ 25,073 $ 24,836 $ 24,306 $ 1,155 950 2014 50,889 39,095 35,119 32,274 33,372 33,458 35,128 35,683 35,918 2,367 928 2015 53,672 50,857 47,392 42,840 43,328 42,446 41,690 41,471 3,017 702 2016 56,341 49,385 37,676 33,125 30,251 29,671 29,940 6,349 651 2017 62,863 55,868 48,363 44,737 43,249 41,620 13,877 646 2018 69,362 62,646 54,626 51,023 49,861 22,833 612 2019 88,078 89,691 79,083 80,147 38,161 659 2020 107,579 98,409 90,274 61,116 558 2021 136,433 136,354 81,568 656 2022 153,895 107,953 447 Total $ 683,786 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021* 2022 2013 $ 1,060 $ 5,701 $ 10,967 $ 14,545 $ 16,967 $ 17,956 $ 18,524 $ 21,229 $ 22,154 $ 22,505 2014 1,899 4,006 11,002 18,852 22,541 23,376 26,068 28,963 30,484 2015 2,048 10,127 19,571 23,184 28,756 31,352 32,752 35,958 2016 1,068 3,396 7,441 10,054 12,703 14,400 17,807 2017 17 5,679 9,275 15,441 18,470 22,835 2018 2,506 5,823 10,801 17,294 22,016 2019 4,213 19,044 25,389 33,375 2020 2,901 13,856 20,988 2021 5,317 23,841 2022 7,479 * Presented as unaudited required supplementary information. Total $ 237,288 All outstanding liabilities before 2013, net of reinsurance 21,094 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 467,592 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 4.0% 13.0% 14.0% 13.1% 9.9% 5.8% 6.1% 9.0% 4.0% 1.4% Casualty - Claims Made (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2022 For the Years Ended December 31, Cumulative Number of Reported AY 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021* 2022 Total IBNR Claims 2013 $ 40,095 $ 41,488 $ 44,054 $ 40,288 $ 38,473 $ 37,959 $ 38,352 $ 37,974 $ 37,950 $ 37,817 $ 463 1,042 2014 53,929 55,386 58,152 55,350 51,554 53,841 53,783 52,619 52,796 1,584 1,305 2015 55,006 47,831 42,206 39,906 39,653 39,619 38,609 37,578 1,248 1,338 2016 59,992 67,760 69,493 67,728 64,730 65,078 61,876 2,451 1,507 2017 60,572 62,450 62,714 57,450 59,907 61,546 4,455 1,647 2018 66,128 62,416 56,468 48,457 47,692 10,412 1,394 2019 62,918 61,712 52,224 46,500 16,958 1,512 2020 60,278 56,785 46,853 29,739 1,294 2021 51,219 45,854 32,103 1,216 2022 58,289 43,827 1,005 Total $ 496,801 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021* 2022 2013 $ 792 $ 7,073 $ 18,425 $ 26,121 $ 29,678 $ 32,789 $ 34,535 $ 35,476 $ 36,078 $ 36,800 2014 1,705 9,775 27,923 35,755 40,080 44,127 46,122 50,714 51,063 2015 2,215 10,738 16,774 20,920 28,795 32,241 33,529 34,671 2016 2,060 14,558 27,465 39,370 47,999 52,846 53,737 2017 2,455 11,350 22,728 36,522 42,918 47,087 2018 1,964 11,965 18,840 24,918 27,351 2019 1,839 8,123 14,117 19,930 2020 1,488 5,687 10,412 2021 999 5,615 2022 2,088 * Presented as unaudited required supplementary information. Total $ 288,754 All outstanding liabilities before 2013, net of reinsurance 3,249 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 211,296 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 3.6% 15.9% 19.6% 16.2% 11.3% 7.9% 3.3% 4.7% 1.1% 1.9% Casualty - Transportation (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2022 For the Years Ended December 31, Cumulative Number of Reported AY 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021* 2022 Total IBNR Claims 2013 $ 32,742 $ 32,853 $ 32,989 $ 37,673 $ 38,811 $ 39,974 $ 39,309 $ 39,183 $ 39,586 $ 39,598 $ 103 2,853 2014 38,361 33,015 36,452 38,590 40,202 40,508 41,156 41,974 42,067 412 3,099 2015 38,561 46,258 47,021 46,395 45,162 45,525 45,807 46,685 684 3,187 2016 50,430 53,519 54,105 52,277 52,818 53,915 55,718 1,152 3,943 2017 55,640 53,641 45,017 43,764 45,351 46,742 1,480 3,640 2018 57,597 54,592 38,719 36,468 35,442 2,428 3,404 2019 58,297 56,129 43,976 41,925 4,182 3,317 2020 43,573 35,524 27,665 5,844 1,647 2021 51,322 51,581 14,902 2,307 2022 60,862 14,645 2,520 Total $ 448,285 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021* 2022 2013 $ 5,306 $ 11,978 $ 19,761 $ 28,220 $ 33,480 $ 35,923 $ 37,327 $ 37,915 $ 38,172 $ 38,531 2014 7,125 13,933 19,676 27,457 33,190 38,282 40,006 40,427 41,528 2015 6,984 20,709 29,554 37,222 39,339 41,345 42,626 45,002 2016 8,923 18,354 30,354 38,001 43,564 47,488 52,555 2017 7,979 17,070 24,090 30,260 36,141 41,064 2018 6,980 12,827 19,216 24,503 28,844 2019 7,148 15,852 21,120 26,422 2020 3,986 7,876 12,035 2021 5,341 15,345 2022 6,442 * Presented as unaudited required supplementary information. Total $ 307,768 All outstanding liabilities before 2013, net of reinsurance 1,220 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 141,737 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 15.0% 18.8% 16.8% 15.8% 11.0% 8.0% 4.9% 2.5% 1.6% 0.9% Property (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2022 For the Years Ended December 31, Cumulative Number of Reported AY 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021* 2022 Total IBNR Claims 2013 $ 63,864 $ 62,090 $ 62,173 $ 62,114 $ 61,914 $ 61,834 $ 61,776 $ 61,623 $ 61,400 $ 61,371 $ 7 2,996 2014 56,587 49,441 48,801 48,761 49,217 49,444 49,479 49,520 49,468 15 4,564 2015 59,863 56,103 53,958 52,720 53,111 52,781 52,878 53,359 25 4,076 2016 62,900 55,594 55,384 55,930 55,424 55,383 55,536 150 3,377 2017 90,803 83,273 84,961 82,671 82,319 81,912 801 2,893 2018 89,091 83,457 79,961 80,470 79,093 1,443 2,337 2019 71,232 65,189 61,116 59,901 1,141 2,453 2020 118,247 110,466 108,546 12,532 2,855 2021 135,447 116,424 16,900 3,071 2022 138,756 53,549 2,505 Total $ 804,366 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021* 2022 2013 $ 32,208 $ 50,840 $ 57,407 $ 59,259 $ 60,520 $ 61,195 $ 61,325 $ 61,335 $ 61,188 $ 61,188 2014 30,550 43,380 46,148 46,528 47,799 49,027 49,259 49,317 49,339 2015 32,184 49,348 50,197 51,290 52,078 52,342 52,400 53,208 2016 33,134 46,921 51,371 53,006 54,328 54,747 55,215 2017 41,314 66,818 74,415 78,360 80,581 80,958 2018 37,048 68,264 72,357 75,253 76,378 2019 30,703 51,740 55,092 57,038 2020 43,192 79,660 88,401 2021 57,272 89,174 2022 44,667 * Presented as unaudited required supplementary information. Total $ 655,566 All outstanding liabilities before 2013, net of reinsurance 1,101 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 149,901 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 50.4% 31.1% 6.7% 2.9% 2.1% 1.1% 0.4% 0.5% (0.1)% 0.0% Surety (in thousands, except number of claims) Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance As of December 31, 2022 For the Years Ended December 31, Cumulative Number of Reported AY 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021* 2022 Total IBNR Claims 2013 $ 16,080 $ 7,516 $ 6,170 $ 5,399 $ 5,271 $ 5,231 $ 5,209 $ 5,107 $ 5,046 $ 5,139 $ 3 1,411 2014 16,450 8,106 5,225 4,427 4,267 4,319 4,266 4,227 4,230 5 1,357 2015 16,958 12,957 11,113 10,456 9,792 9,521 9,275 8,580 21 1,244 2016 18,928 11,062 9,351 8,895 8,391 7,948 8,134 81 1,389 2017 16,127 8,641 8,798 8,116 8,034 7,769 158 1,826 2018 16,765 7,227 4,564 3,947 3,996 244 1,362 2019 14,785 7,205 5,053 4,062 860 1,178 2020 19,241 14,840 12,378 4,214 895 2021 18,540 11,724 7,826 767 2022 20,185 18,683 527 Total $ 86,197 Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, AY 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2021* 2022 2013 $ 1,116 $ 2,856 $ 4,701 $ 4,911 $ 5,098 $ 5,150 $ 5,128 $ 5,061 $ 5,029 $ 5,131 2014 722 4,283 4,166 4,059 4,131 4,234 4,214 4,197 4,218 2015 3,192 6,719 7,695 9,436 9,183 9,186 9,168 8,462 2016 3,087 5,817 6,299 7,640 8,086 7,673 7,946 2017 979 2,862 7,062 7,221 7,362 7,372 2018 1,835 2,588 2,368 2,536 3,020 2019 336 2,433 2,765 3,039 2020 835 2,719 3,828 2021 1,197 3,229 2022 (241) * Presented as unaudited required supplementary information. Total $ 46,004 All outstanding liabilities before 2013, net of reinsurance (77) Liabilities for losses and loss adjustment expenses, net of reinsurance $ 40,116 Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance* Years 1 2 3 4 5 6 7 8 9 10 19.6% 35.6% 14.5% 7.3% 3.6% (0.3)% 0.6% (3.3)% (0.1)% 2.0% |
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 | 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: (in thousands) December 31, 2022 December 31, 2021 Net outstanding liabilities: Casualty - Primary Occurrence $ 461,527 $ 453,142 Casualty - Excess Occurrence 467,592 384,579 Casualty - Claims Made 211,296 209,705 Casualty - Transportation 141,737 131,531 Property 149,901 124,652 Surety 40,116 34,244 Unallocated loss adjustment expenses 61,752 59,391 Allowance for uncollectible reinsurance balances recoverable on unpaid losses and settlement expenses 11,250 11,188 Other 30,377 27,037 Liabilities for unpaid loss and settlement expenses, net of reinsurance $ 1,575,548 $ 1,435,469 Reinsurance recoverable on unpaid claims: Casualty - Primary Occurrence $ 46,674 $ 43,688 Casualty - Excess Occurrence 138,822 122,092 Casualty - Claims Made 298,930 271,259 Casualty - Transportation 78,456 66,283 Property 137,613 65,098 Surety 50,737 50,743 Allowance for uncollectible reinsurance balances recoverable on unpaid losses and settlement expenses (11,250) (11,188) Other 107 111 Total reinsurance balances recoverable on unpaid losses and settlement expenses $ 740,089 $ 608,086 Total gross liability for unpaid loss and settlement expenses $ 2,315,637 $ 2,043,555 |
Schedule of Prior Accident Years' Loss Reserve Development by Segment | The following table summarizes our prior accident years’ loss reserve development by segment for 2022, 2021 and 2020: (in thousands) 2022 2021 2020 Casualty $ (87,225) $ (108,632) $ (75,075) Property (24,927) (10,981) (13,019) Surety (10,427) (5,850) (12,959) Total $ (122,579) $ (125,463) $ (101,053) |
Schedule of Paid and Unpaid Environmental, Asbestos and Mass Tort Claims Data (Including Incurred but not Reported Losses) | The following table represents paid and unpaid environmental, asbestos and mass tort claims data (including incurred but not reported losses) as of December 31, 2022, 2021 and 2020: (in thousands) 2022 2021 2020 Loss and LAE Payments (Cumulative): Gross $ 142,377 $ 141,768 $ 139,804 Ceded (69,696) (69,576) (69,219) Net $ 72,681 $ 72,192 $ 70,585 Unpaid Losses and LAE at End of Year: Gross $ 26,871 $ 25,747 $ 22,485 Ceded (5,786) (5,718) (4,619) Net $ 21,085 $ 20,029 $ 17,866 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Deferred Tax Liabilities | (in thousands) 2022 2021 Deferred tax assets: Tax discounting of unpaid losses and settlement expenses $ 23,788 $ 22,637 Unearned premium offset 27,158 23,080 Net unrealized depreciation of securities 19,839 — Deferred compensation 4,058 3,469 Share-based compensation expense 3,202 3,089 Capitalized research and development costs 2,544 — Lease liability 3,026 3,796 Other 938 367 Deferred tax assets before allowance $ 84,553 $ 56,438 Less valuation allowance — — Total deferred tax assets $ 84,553 $ 56,438 Deferred tax liabilities: Net unrealized appreciation of securities $ — $ 76,533 Deferred policy acquisition costs 26,850 21,746 Lease asset 2,681 3,101 Discounting of unpaid losses and settlement expenses - Tax Cuts and Jobs Act (TCJA) implementation offset 1,909 2,545 Fixed assets 3,083 3,518 Intangible assets 1,543 1,537 Undistributed earnings of unconsolidated investees 7,399 29,515 Other 819 1,452 Total deferred tax liabilities $ 44,284 $ 139,947 Net deferred tax asset (liability) $ 40,269 $ (83,509) |
Schedule of Reconciliation of Income Tax Expense Attributable to Income from Operations with Amounts Computed by Applying U.S. Federal Tax Rate to Pretax Income from Continuing Operations | (in thousands) 2022 2021 2020 Provision for income taxes at the statutory federal tax rates $ 151,342 21.0 % $ 72,307 21.0 % $ 39,867 21.0 % Increase (reduction) in taxes resulting from: Excess tax benefit on share-based compensation (4,491) (0.6) % (3,090) (0.9) % (3,537) (1.8) % Tax-exempt interest income (1,143) (0.2) % (1,219) (0.3) % (1,293) (0.7) % Dividends received deduction (912) (0.1) % (891) (0.3) % (883) (0.5) % Investment tax credit (5,053) (0.7) % (3,491) (1.0) % (2,435) (1.3) % ESOP dividends paid deduction (4,171) (0.6) % (1,566) (0.5) % (1,083) (0.6) % Unconsolidated investee dividends — — % — — % (479) (0.2) % Nondeductible expenses 1,263 0.2 % 3,834 1.1 % 1,878 1.0 % Other items, net 432 0.0 % (917) (0.2) % 715 0.4 % Total $ 137,267 19.0 % $ 64,967 18.9 % $ 32,750 17.3 % |
Employee Benefits (Tables)
Employee Benefits (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Compensation And Retirement Disclosure [Abstract] | |
Summary of Option Activity | Weighted Aggregate Weighted Average Intrinsic Average Remaining Value Options Exercise Price Contractual Life (in 000’s) Outstanding as of January 1, 2022 1,669,325 $ 78.63 Granted 344,100 109.50 Exercised (308,280) 54.42 Cancelled or forfeited (9,485) 86.40 Outstanding as of December 31, 2022 1,695,660 $ 82.42 4.90 $ 82,835 Exercisable at December 31, 2022 782,067 $ 67.54 3.47 $ 49,839 |
Summary of Weighted Average Grant-date Assumptions and Weighted Average Fair Values | 2022 2021 2020 Weighted-average fair value of grants $ 21.43 $ 17.11 $ 13.24 Risk-free interest rates 2.95 % 0.75 % 0.39 % Dividend yield 2.50 % 2.06 % 2.30 % Expected volatility 22.89 % 22.73 % 22.67 % Expected option life 5.05 years 4.97 years 4.96 years |
Schedule of Restricted Stock Units Activity | Weighted Average Grant Date RSUs Fair Value Nonvested at January 1, 2022 45,068 $ 97.67 Granted 19,268 115.71 Reinvested 2,632 127.48 Vested (21,380) 93.07 Forfeited (1,380) 77.92 Nonvested at December 31, 2022 44,208 $ 109.51 |
Statutory Information and Div_2
Statutory Information and Dividend Restrictions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Statutory Information And Dividend Restrictions Disclosure [Abstract] | |
Schedule of Selected Information for Insurance Subsidiaries | (in thousands) 2022 2021 2020 Consolidated net income, statutory basis $ 229,111 $ 207,550 $ 120,329 Consolidated surplus, statutory basis $ 1,407,925 $ 1,240,649 $ 1,121,592 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Components of Lease Expense and Other lease Information | The components of lease expense and other lease information as of and during the years ended December 31, 2022, 2021 and 2020 were as follows: (in thousands) 2022 2021 2020 Operating lease cost $ 4,957 $ 5,131 $ 5,504 Variable lease cost 1,423 1,433 1,346 Sublease income (555) (508) (262) Total lease cost $ 5,825 $ 6,056 $ 6,588 Cash paid for amounts included in measurement of lease liabilities Operating cash flows from operating leases $ 5,435 $ 5,738 $ 5,963 ROU assets obtained in exchange for new operating lease liabilities $ 2,694 $ 4,828 $ 81 Reduction to ROU assets resulting from reduction to lease liabilities $ 2 $ 1,042 $ 18 Other non-cash reductions to ROU assets $ 73 $ 48 $ 1,192 (in thousands) 2022 2021 Operating lease ROU assets $ 12,766 $ 14,765 Operating lease liabilities $ 14,499 $ 16,905 Weighted-average remaining lease term - operating leases 4.21 years 4.52 years Weighted-average discount rate - operating leases 2.11 % 2.02 % |
Schedule of Future Minimum Lease Payments under Non-cancellable Leases | Future minimum lease payments under non-cancellable leases as of December 31, 2022 were as follows: (in thousands) 2022 2023 $ 5,578 2024 3,628 2025 2,216 2026 1,311 2027 826 Thereafter 1,587 Total future minimum lease payments $ 15,146 Less imputed interest (647) Total operating lease liability $ 14,499 |
Operating Segment Information (
Operating Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Summary of Selected Information by Operating Segment | REVENUES (in thousands) 2022 2021 2020 Casualty $ 711,832 $ 633,639 $ 569,521 Property 307,886 231,837 183,720 Surety 124,718 115,427 112,506 Net premiums earned $ 1,144,436 $ 980,903 $ 865,747 Net investment income 86,078 68,862 67,893 Net realized gains 588,515 64,222 17,885 Net unrealized gains (losses) on equity securities (121,037) 65,258 32,101 Total $ 1,697,992 $ 1,179,245 $ 983,626 INSURANCE EXPENSES (in thousands) 2022 2021 2020 Loss and settlement expenses: Casualty $ 381,436 $ 311,627 $ 322,099 Property 120,745 129,924 111,356 Surety 12,195 15,051 9,429 Total loss and settlement expenses $ 514,376 $ 456,602 $ 442,884 Policy acquisition costs: Casualty $ 204,397 $ 179,354 $ 162,058 Property 95,203 72,008 59,926 Surety 70,032 66,106 64,454 Total policy acquisition costs $ 369,632 $ 317,468 $ 286,438 Other insurance expenses: Casualty $ 52,210 $ 47,139 $ 40,937 Property 19,416 18,605 15,620 Surety 10,586 11,163 10,271 Total other insurance expenses $ 82,212 $ 76,907 $ 66,828 Total $ 966,220 $ 850,977 $ 796,150 NET EARNINGS (in thousands) 2022 2021 2020 Casualty $ 73,789 $ 95,519 $ 44,427 Property 72,522 11,300 (3,182) Surety 31,905 23,107 28,352 Net underwriting income $ 178,216 $ 129,926 $ 69,597 Net investment income 86,078 68,862 67,893 Net realized gains 588,515 64,222 17,885 Net unrealized gains (losses) on equity securities (121,037) 65,258 32,101 Interest on debt (8,047) (7,677) (7,603) General corporate expense (12,900) (13,330) (10,265) Equity in earnings of unconsolidated investees 9,853 37,060 20,233 Total earnings before incomes taxes $ 720,678 $ 344,321 $ 189,841 Income tax expense 137,267 64,967 32,750 Net earnings $ 583,411 $ 279,354 $ 157,091 |
Summary of Revenue by Major Product Type | The following table further summarizes revenues by major product type within each segment: NET PREMIUMS EARNED Year ended December 31, (in thousands) 2022 2021 2020 CASUALTY Commercial excess and personal umbrella $ 253,921 $ 219,437 $ 178,214 General liability 100,374 90,853 91,653 Commercial transportation 96,992 83,352 64,624 Professional services 95,187 88,855 85,196 Small commercial 67,673 64,660 63,357 Executive products 26,606 21,873 26,509 Other casualty 71,079 64,609 59,968 Total $ 711,832 $ 633,639 $ 569,521 PROPERTY Commercial property $ 163,078 $ 107,941 $ 79,406 Marine 113,208 97,745 81,852 Other property 31,600 26,151 22,462 Total $ 307,886 $ 231,837 $ 183,720 SURETY Commercial $ 47,652 $ 43,738 $ 42,872 Miscellaneous 45,826 43,982 42,292 Contract 31,240 27,707 27,342 Total $ 124,718 $ 115,427 $ 112,506 Grand total $ 1,144,436 $ 980,903 $ 865,747 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Description of Business - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2022 state company | |
DESCRIPTION OF BUSINESS | |
Number of insurance companies through which the entity conducts operations | company | 3 |
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 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Property and Equipment - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2022 | |
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_6
Summary of Significant Accounting Policies - Investment in Unconsolidated Investees (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Sep. 29, 2022 | |
INVESTMENT IN UNCONSOLIDATED INVESTEES: | ||||
Investment in unconsolidated investees | $ 58,275 | $ 171,311 | ||
Investee earnings recorded in income | 9,853 | 37,060 | $ 20,233 | |
Reinsurance assumed | 33,830 | 34,261 | 29,129 | |
Net premiums earned | 1,144,436 | 980,903 | 865,747 | |
Undistributed earnings from equity method investees included in retained earnings | 51,600 | |||
Dividends received | 0 | $ 0 | 4,675 | |
Maui Jim Inc. | ||||
INVESTMENT IN UNCONSOLIDATED INVESTEES: | ||||
Equity ownership interest (as a percent) | 40% | 40% | ||
Investment in unconsolidated investees | $ 113,100 | |||
Investee earnings recorded in income | $ 400 | 22,800 | 10,400 | |
Prime Holdings Insurance Services, Inc. (Prime) | ||||
INVESTMENT IN UNCONSOLIDATED INVESTEES: | ||||
Equity ownership interest (as a percent) | 23% | |||
Investment in unconsolidated investees | $ 46,900 | 47,200 | ||
Investee earnings recorded in income | $ 13,000 | 17,000 | 10,800 | |
Number of insurance carriers Company writes through | item | 2 | |||
Reinsurance assumed | $ 20,600 | 22,200 | 15,700 | |
Net premiums earned | $ 22,600 | $ 19,100 | 14,300 | |
Dividends received | $ 4,700 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Summarized Financial Information of Equity Method Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
INVESTMENT IN UNCONSOLIDATED INVESTEES: | ||||
Net income | $ 583,411 | $ 279,354 | $ 157,091 | |
Total assets | 4,767,068 | 4,508,302 | ||
Total liabilities | 3,589,727 | 3,278,941 | ||
Total equity | 1,177,341 | 1,229,361 | 1,135,978 | $ 995,388 |
Investments in Unconsolidated Investees | ||||
INVESTMENT IN UNCONSOLIDATED INVESTEES: | ||||
Net income | 58,800 | 125,300 | $ 70,400 | |
Total assets | 906,400 | 1,172,600 | ||
Total liabilities | 689,900 | 687,800 | ||
Total equity | $ 216,500 | $ 484,800 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Goodwill and Intangible Assets - Schedule of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Business Acquisition | ||
Goodwill | $ 46,062 | $ 46,062 |
Indefinite-lived intangibles | 7,500 | 7,500 |
Total goodwill and intangibles | 53,562 | 53,562 |
Surety | ||
Business Acquisition | ||
Goodwill | 40,816 | 40,816 |
Casualty | ||
Business Acquisition | ||
Goodwill | $ 5,246 | $ 5,246 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Schedule of Reconciliation of Numerator and Denominator of the Basic and Diluted Earnings Per Share Computations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Basic EPS, Income (Numerator) | |||
Earnings available to common shareholders | $ 583,411 | $ 279,354 | $ 157,091 |
Diluted EPS, Income (Numerator) | |||
Earnings available to common shareholders | $ 583,411 | $ 279,354 | $ 157,091 |
Basic EPS, Weighted Average Shares (Denominator) | |||
Number of shares outstanding | 45,368 | 45,230 | 45,000 |
Effect of Dilutive Securities, Shares (Denominator) | |||
Stock options and restricted stock units | 426 | 482 | 376 |
Diluted EPS, Weighted Average Shares (Denominator) | |||
Number of shares outstanding | 45,794 | 45,712 | 45,376 |
Earnings Per Share, Diluted, Other Disclosures | |||
Anti-dilutive securities excluded from diluted EPS | 295 | 214 | 384 |
Basic EPS, Per Share Amount | |||
Basic net earnings per share (in dollars per share) | $ 12.86 | $ 6.18 | $ 3.49 |
Diluted EPS, Per Share Amount | |||
Diluted earnings per share (in dollars per share) | $ 12.74 | $ 6.11 | $ 3.46 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Comprehensive Earnings - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2020 | |
COMPREHENSIVE EARNINGS (LOSS) | ||||
Tax rate used (as a percent) | 21% | 21% | 21% | |
Other comprehensive income (loss), tax | $ (74,100) | $ (15,700) | $ 14,900 | |
Accumulated other comprehensive earnings | $ (229,076) | $ 49,826 | ||
Cumulative Effect, Period of Adoption, Adjustment | ASU 2016-13 | Maximum | ||||
COMPREHENSIVE EARNINGS (LOSS) | ||||
Accumulated other comprehensive earnings | $ (100) |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Schedule of Changes in the Balance of Each Component of Accumulated Other Comprehensive Earnings (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Changes in the balance of each component of accumulated other comprehensive earnings (loss) | |||
Beginning balance | $ 49,826 | ||
Net current-period other comprehensive earnings (loss) | (278,902) | $ (58,888) | $ 56,219 |
Ending balance | (229,076) | 49,826 | |
Balance of securities for which an allowance for credit losses has not been recognized in net earnings | 1,693 | 124 | 470 |
Unrealized Gains and Losses on Available-for-Sale Securities | |||
Changes in the balance of each component of accumulated other comprehensive earnings (loss) | |||
Beginning balance | 49,826 | 108,714 | 52,473 |
Other comprehensive earnings before reclassifications | (281,189) | (57,454) | 58,986 |
Amounts reclassified from accumulated other comprehensive earnings | 2,287 | (1,434) | (2,767) |
Ending balance | (229,076) | 49,826 | 108,714 |
Unrealized Gains and Losses on Available-for-Sale Securities | Cumulative Effect, Period of Adoption, Adjustment | ASU 2016-13 | |||
Changes in the balance of each component of accumulated other comprehensive earnings (loss) | |||
Beginning balance | 22 | ||
Unrealized Gains and Losses on Available-for-Sale Securities | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Changes in the balance of each component of accumulated other comprehensive earnings (loss) | |||
Beginning balance | $ 49,826 | 108,714 | 52,495 |
Ending balance | $ 49,826 | $ 108,714 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Schedule of Effects of Reclassifications out of Accumulated Other Comprehensive Earnings (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reclassification Adjustment Out of Accumulated Other Comprehensive Income (Loss) | |||
Net realized gains (losses) - Available-for-sale | $ (2,997) | $ 1,859 | $ 3,872 |
Earnings (losses) before income taxes | 720,678 | 344,321 | 189,841 |
Income tax (expense) benefit | (137,267) | (64,967) | (32,750) |
Net earnings (losses) | 583,411 | 279,354 | 157,091 |
Unrealized Gains and Losses on Available-for-Sale Securities | Reclassification out of Accumulated Other Comprehensive Income | |||
Reclassification Adjustment Out of Accumulated Other Comprehensive Income (Loss) | |||
Net realized gains (losses) - Available-for-sale | (2,997) | 1,859 | 3,872 |
Credit gains (losses) presented within net realized gains | 102 | (44) | (369) |
Earnings (losses) before income taxes | (2,895) | 1,815 | 3,503 |
Income tax (expense) benefit | 608 | (381) | (736) |
Net earnings (losses) | $ (2,287) | $ 1,434 | $ 2,767 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Insurance Risk - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||||
Unpaid losses and settlement expenses | $ 2,315,637 | $ 2,043,555 | $ 1,750,049 | $ 1,574,352 |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Catastrophe Exposures - Additional Information (Details) - USD ($) $ in Millions | Jan. 01, 2023 | May 01, 2022 | Jan. 01, 2022 |
California Earthquake | |||
Liability For Catastrophe Claims [Line Items] | |||
Catastrophe reinsurance | $ 750 | $ 600 | |
First-dollar retention | 25 | 25 | |
California Earthquake | Subsequent Event | |||
Liability For Catastrophe Claims [Line Items] | |||
Catastrophe reinsurance | $ 700 | ||
First-dollar retention | 25 | ||
Outside of California Earthquake | |||
Liability For Catastrophe Claims [Line Items] | |||
Catastrophe reinsurance | 775 | 625 | |
First-dollar retention | 25 | 25 | |
Outside of California Earthquake | Subsequent Event | |||
Liability For Catastrophe Claims [Line Items] | |||
Catastrophe reinsurance | 700 | ||
First-dollar retention | 50 | ||
Other Perils including Wind | |||
Liability For Catastrophe Claims [Line Items] | |||
Catastrophe reinsurance | 625 | 475 | |
First-dollar retention | 25 | 25 | |
Other Perils including Wind | Subsequent Event | |||
Liability For Catastrophe Claims [Line Items] | |||
Catastrophe reinsurance | 600 | ||
First-dollar retention | $ 50 | ||
Catastrophe | |||
Liability For Catastrophe Claims [Line Items] | |||
First-dollar retention | $ 25 | ||
Additional catastrophe reinsurance | $ 150 |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | $ 91,543 | $ 75,050 | $ 72,862 |
Less investment expenses | (5,465) | (6,188) | (4,969) |
Net investment income | 86,078 | 68,862 | 67,893 |
Fixed Income Securities | |||
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | 77,164 | 60,624 | 59,755 |
Equity Securities | |||
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | 11,912 | 11,787 | 9,728 |
Cash, Short-term Investments and Other Invested Assets | |||
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | $ 2,467 | $ 2,639 | $ 3,379 |
Investments - Schedule of Preta
Investments - Schedule of Pretax Net Realized Investment Gains (Losses) and Net Changes in Unrealized Gains (Losses) on Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Net realized gains (losses): | |||
Net realized gains (losses) - Available-for-sale | $ (2,997) | $ 1,859 | $ 3,872 |
Net realized gains (losses) - Equity securities | 20,287 | 62,512 | 15,796 |
Net realized gains (losses) - Investment in unconsolidated investees | 570,952 | (61) | (187) |
Net realized gains (losses) - Other | 273 | (88) | (1,596) |
Total net realized gains (losses) | 588,515 | 64,222 | 17,885 |
Net unrealized gains (losses) on equity securities | (121,037) | 65,258 | 32,101 |
Unrealized gains (losses) recognized in other comprehensive earnings - Available-for-sale | (341,944) | (71,538) | 67,350 |
Unrealized gains (losses) recognized in other comprehensive earnings - Investment in unconsolidated investees | (10,994) | (3,047) | 3,444 |
Unrealized gains (losses) recognized in other comprehensive earnings - Other | (102) | 44 | 369 |
Total unrealized gains (losses) recognized in other comprehensive earnings | (353,040) | (74,541) | 71,163 |
Net realized gains (losses) and changes in unrealized gains (losses) on investments | 114,438 | 54,939 | 121,149 |
Equity Securities | |||
Net realized gains (losses): | |||
Net unrealized gains (losses) on equity securities | (118,912) | 58,459 | 32,317 |
Other | |||
Net realized gains (losses): | |||
Net unrealized gains (losses) on equity securities | $ (2,125) | $ 6,799 | $ (216) |
Investments - Disposition of Fi
Investments - Disposition of Fixed Income and Equity Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of the disposition of fixed income and equity securities | |||
Fixed income securities - available-for-sale | $ 53,300 | $ 63,811 | $ 84,587 |
Fixed income securities - available-for-sale | 1,393,674 | 376,750 | 283,107 |
Net Realized Gain (Loss) - Equity securities | 20,287 | 62,512 | 15,796 |
SALES | |||
Summary of the disposition of fixed income and equity securities | |||
Fixed income securities - available-for-sale | 51,355 | 65,262 | 84,697 |
Gross Realized Gains - Fixed income securities - available-for-sale | 287 | 2,161 | 5,454 |
Gross Realized Losses - Fixed income securities - available-for-sale | (2,849) | (815) | (1,777) |
Net Realized Gain (Loss) - Fixed income securities - available-for-sale | (2,562) | 1,346 | 3,677 |
Proceeds from Sales - Equity securities | 62,212 | 180,256 | 79,368 |
Gross Realized Gains - Equity securities | 21,623 | 64,298 | 25,338 |
Gross Realized Losses - Equity securities | (1,336) | (1,786) | (9,542) |
Net Realized Gain (Loss) - Equity securities | 20,287 | 62,512 | 15,796 |
Calls And Maturities Of Marketable Securities | |||
Summary of the disposition of fixed income and equity securities | |||
Fixed income securities - available-for-sale | 1,393,704 | 376,751 | 283,107 |
Gross Realized Gains - Fixed income securities - available-for-sale | 196 | 638 | 821 |
Gross Realized Losses - Fixed income securities - available-for-sale | (55) | (125) | (27) |
Net Realized Gain (Loss) - Fixed income securities - available-for-sale | $ 141 | $ 513 | $ 794 |
Investments - Assets Measured a
Investments - Assets Measured at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets measured at Fair Value | ||
Available-for-sale fixed income | $ 2,666,950 | $ 2,409,887 |
Equity securities | 498,382 | 613,776 |
U.S. government | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 454,021 | 134,554 |
U.S. Agency | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 73,063 | 32,760 |
Non-U.S. government & agency | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 5,847 | 8,481 |
Agency MBS | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 331,806 | 367,187 |
ABS/CMBS/MBS | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 240,736 | 264,054 |
Corporate Debt | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 1,034,330 | 957,095 |
Municipal | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 527,147 | 645,756 |
Fair Value Measured on Recurring Basis | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 2,666,950 | 2,409,887 |
Equity securities | 498,382 | 613,776 |
Total assets at fair value | 3,165,332 | 3,023,663 |
Fair Value Measured on Recurring Basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets measured at Fair Value | ||
Equity securities | 496,731 | 613,712 |
Total assets at fair value | 496,731 | 613,712 |
Fair Value Measured on Recurring Basis | Significant Other Observable Inputs (Level 2) | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 2,613,296 | 2,366,369 |
Equity securities | 39 | 64 |
Total assets at fair value | 2,613,335 | 2,366,433 |
Fair Value Measured on Recurring Basis | Significant Unobservable Inputs (Level 3) | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 53,654 | 43,518 |
Equity securities | 1,612 | |
Total assets at fair value | 55,266 | 43,518 |
Fair Value Measured on Recurring Basis | U.S. government | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 454,021 | 134,554 |
Fair Value Measured on Recurring Basis | U.S. government | Significant Other Observable Inputs (Level 2) | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 454,021 | 134,554 |
Fair Value Measured on Recurring Basis | U.S. Agency | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 73,063 | 32,760 |
Fair Value Measured on Recurring Basis | U.S. Agency | Significant Other Observable Inputs (Level 2) | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 73,063 | 32,760 |
Fair Value Measured on Recurring Basis | Non-U.S. government & agency | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 5,847 | 8,481 |
Fair Value Measured on Recurring Basis | Non-U.S. government & agency | Significant Other Observable Inputs (Level 2) | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 5,847 | 8,481 |
Fair Value Measured on Recurring Basis | Agency MBS | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 331,806 | 367,187 |
Fair Value Measured on Recurring Basis | Agency MBS | Significant Other Observable Inputs (Level 2) | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 331,806 | 367,187 |
Fair Value Measured on Recurring Basis | ABS/CMBS/MBS | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 240,736 | 264,054 |
Fair Value Measured on Recurring Basis | ABS/CMBS/MBS | Significant Other Observable Inputs (Level 2) | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 240,736 | 264,054 |
Fair Value Measured on Recurring Basis | Corporate Debt | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 1,034,330 | 957,095 |
Fair Value Measured on Recurring Basis | Corporate Debt | Significant Other Observable Inputs (Level 2) | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 980,676 | 913,577 |
Fair Value Measured on Recurring Basis | Corporate Debt | Significant Unobservable Inputs (Level 3) | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 53,654 | 43,518 |
Fair Value Measured on Recurring Basis | Municipal | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | 527,147 | 645,756 |
Fair Value Measured on Recurring Basis | Municipal | Significant Other Observable Inputs (Level 2) | ||
Assets measured at Fair Value | ||
Available-for-sale fixed income | $ 527,147 | $ 645,756 |
Investments - Summary of Change
Investments - Summary of Changes in Balance of Level 3 securities (Details) - Regulation D Private Placement Fixed Income Securities $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Summary of changes in Level 3 securities | |
Beginning balance | $ 43,518 |
Net investment income | (693) |
Net realized gains | (432) |
Included in other comprehensive earnings (loss) | (7,291) |
Total net realized and unrealized gains (losses) | (8,416) |
Purchases | 21,261 |
Transfers out of Level 3 | (1,097) |
Ending balance | 55,266 |
Change in unrealized gains (losses) during the period for Level 3 assets held at period-end - Income | $ (432) |
Fair Value, Asset, Recurring Basis, Still Held, Unrealized Gain (Loss), Statement of Income | Net realized (gains) losses |
Change in unrealized gains (losses) during the period for Level 3 assets held at period-end - OCI | $ (7,291) |
Fair Value, Asset, Recurring Basis, Still Held, Unrealized Gain (Loss), Other Comprehensive Income | Other comprehensive earnings (loss), net of tax |
Investments - Amortized Cost an
Investments - Amortized Cost and Fair Value of Available-for-sale Fixed Income Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Amortized Cost | ||
Due in one year or less | $ 332,951 | |
Due after one year through five years | 916,676 | |
Due after five years through 10 years | 522,104 | |
Due after 10 years | 523,729 | |
ABS/CMBS/MBS | 649,813 | |
Total available-for-sale | 2,945,273 | $ 2,346,267 |
Fair Value | ||
Due in one year or less | 331,761 | |
Due after one year through five years | 873,530 | |
Due after five years through 10 years | 474,025 | |
Due after 10 years | 415,092 | |
ABS/CMBS/MBS | 572,542 | |
Total available-for-sale | $ 2,666,950 | $ 2,409,887 |
Investments - Additional Inform
Investments - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) security | Dec. 31, 2021 USD ($) | |
Investment Holdings [Line Items] | ||
Accrued investment income | $ 21,259,000 | $ 17,505,000 |
Unrealized loss | 280,222,000 | 16,891,000 |
Fixed Income Securities | ||
Investment Holdings [Line Items] | ||
Accrued investment income | $ 20,200 | 16,400 |
Number of debt securities for which there is an allowance for credit losses | security | 14 | |
Losses on fixed income securities | $ 100,000 | 0 |
Number of debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded | security | 1,473 | |
Unrealized loss | $ 280,200,000 | |
Unrealized losses as percentage of fixed income portfolio cost basis | 9.50% | |
Unrealized losses relative to total invested assets (as a percent) | 8.60% | |
Number of unrealized loss positions | security | 1,473 | |
Number of securities in unrealized loss positions for 12 months or longer | security | 518 | |
ABS/CMBS/MBS | ||
Investment Holdings [Line Items] | ||
Percentage of securities of portfolio rated with highest credit rating by by one or more major rating agency | 83% | |
Unrealized loss | $ 35,444,000 | 2,339,000 |
Municipal | ||
Investment Holdings [Line Items] | ||
General obligations to state and local governments Percentage | 46% | |
Revenue based obligations percentage | 54% | |
Percentage of securities of portfolio rated as AA or better | 88% | |
Percentage of securities of portfolio rated as A or better | 99% | |
Unrealized loss | $ 102,725,000 | $ 4,281,000 |
Investments - Amortized Cost _2
Investments - Amortized Cost and Fair Value of Available-for-sale Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule Of Available For Sale Securities [Line Items] | |||
Cost or Amortized Cost | $ 2,945,273 | $ 2,346,267 | |
Allowance for Credit Losses | (339) | (441) | $ (397) |
Gross Unrealized Gains | 2,238 | 80,952 | |
Gross Unrealized Losses | (280,222) | (16,891) | |
Fair Value | 2,666,950 | 2,409,887 | |
U.S. government | |||
Schedule Of Available For Sale Securities [Line Items] | |||
Cost or Amortized Cost | 462,884 | 127,752 | |
Gross Unrealized Gains | 8 | 6,846 | |
Gross Unrealized Losses | (8,871) | (44) | |
Fair Value | 454,021 | 134,554 | |
U.S. Agency | |||
Schedule Of Available For Sale Securities [Line Items] | |||
Cost or Amortized Cost | 75,074 | 30,403 | |
Gross Unrealized Gains | 26 | 2,374 | |
Gross Unrealized Losses | (2,037) | (17) | |
Fair Value | 73,063 | 32,760 | |
Non-U.S. government & agency | |||
Schedule Of Available For Sale Securities [Line Items] | |||
Cost or Amortized Cost | 6,798 | 8,297 | |
Gross Unrealized Gains | 338 | ||
Gross Unrealized Losses | (951) | (154) | |
Fair Value | 5,847 | 8,481 | |
Agency MBS | |||
Schedule Of Available For Sale Securities [Line Items] | |||
Cost or Amortized Cost | 373,687 | 362,861 | |
Gross Unrealized Gains | 336 | 9,277 | |
Gross Unrealized Losses | (42,217) | (4,951) | |
Fair Value | 331,806 | 367,187 | |
ABS/CMBS/MBS | |||
Schedule Of Available For Sale Securities [Line Items] | |||
Cost or Amortized Cost | 276,126 | 264,273 | |
Allowance for Credit Losses | (8) | ||
Gross Unrealized Gains | 62 | 2,120 | |
Gross Unrealized Losses | (35,444) | (2,339) | |
Fair Value | 240,736 | 264,054 | |
Corporate Debt | |||
Schedule Of Available For Sale Securities [Line Items] | |||
Cost or Amortized Cost | 1,122,097 | 925,394 | |
Allowance for Credit Losses | (331) | (441) | |
Gross Unrealized Gains | 541 | 37,247 | |
Gross Unrealized Losses | (87,977) | (5,105) | |
Fair Value | 1,034,330 | 957,095 | |
Municipal | |||
Schedule Of Available For Sale Securities [Line Items] | |||
Cost or Amortized Cost | 628,607 | 627,287 | |
Gross Unrealized Gains | 1,265 | 22,750 | |
Gross Unrealized Losses | (102,725) | (4,281) | |
Fair Value | $ 527,147 | $ 645,756 |
Investments - Schedule of Debt
Investments - Schedule of Debt Securities Available-for-sale Allowance for Credit Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Investments Debt And Equity Securities [Abstract] | ||
Beginning balance | $ 441 | $ 397 |
Increase to allowance from securities for which credit losses were not previously recorded | 337 | 4 |
Reduction from securities sold during the period | (671) | (4) |
Net increase (decrease) from securities that had an allowance at the beginning of the period | 232 | 44 |
Ending balance | $ 339 | $ 441 |
Investments - Schedule of Secur
Investments - Schedule of Securities in an Unrealized Loss Position Segregated by Type and Length of Time in an Unrealized Loss Position (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair value | ||
Less than 12 months | $ 1,619,637 | $ 642,717 |
12 months and greater | 794,880 | 135,459 |
Total Fair Value | 2,414,517 | 778,176 |
Amortized Cost | ||
Amortized cost, less than 12 months | 1,715,942 | 654,184 |
12 months and greater | 978,797 | 140,883 |
Total Cost or Amortized Cost | 2,694,739 | 795,067 |
Unrealized Loss | ||
Less than 12 months | (96,305) | (11,467) |
12 months and greater | (183,917) | (5,424) |
Total Unrealized Loss | (280,222) | (16,891) |
U.S. government | ||
Fair value | ||
Less than 12 months | 399,361 | 2,942 |
12 months and greater | 8,828 | |
Total Fair Value | 408,189 | 2,942 |
Amortized Cost | ||
Amortized cost, less than 12 months | 407,340 | 2,986 |
12 months and greater | 9,720 | |
Total Cost or Amortized Cost | 417,060 | 2,986 |
Unrealized Loss | ||
Less than 12 months | (7,979) | (44) |
12 months and greater | (892) | |
Total Unrealized Loss | (8,871) | (44) |
U.S. Agency | ||
Fair value | ||
Less than 12 months | 32,987 | 1,498 |
12 months and greater | 2,170 | |
Total Fair Value | 35,157 | 1,498 |
Amortized Cost | ||
Amortized cost, less than 12 months | 34,627 | 1,515 |
12 months and greater | 2,567 | |
Total Cost or Amortized Cost | 37,194 | 1,515 |
Unrealized Loss | ||
Less than 12 months | (1,640) | (17) |
12 months and greater | (397) | |
Total Unrealized Loss | (2,037) | (17) |
Non-U.S. government & agency | ||
Fair value | ||
Less than 12 months | 3,626 | 4,346 |
12 months and greater | 2,221 | |
Total Fair Value | 5,847 | 4,346 |
Amortized Cost | ||
Amortized cost, less than 12 months | 3,798 | 4,500 |
12 months and greater | 3,000 | |
Total Cost or Amortized Cost | 6,798 | 4,500 |
Unrealized Loss | ||
Less than 12 months | (172) | (154) |
12 months and greater | (779) | |
Total Unrealized Loss | (951) | (154) |
Agency MBS | ||
Fair value | ||
Less than 12 months | 197,252 | 102,145 |
12 months and greater | 117,851 | 62,669 |
Total Fair Value | 315,103 | 164,814 |
Amortized Cost | ||
Amortized cost, less than 12 months | 212,776 | 104,336 |
12 months and greater | 144,544 | 65,429 |
Total Cost or Amortized Cost | 357,320 | 169,765 |
Unrealized Loss | ||
Less than 12 months | (15,524) | (2,191) |
12 months and greater | (26,693) | (2,760) |
Total Unrealized Loss | (42,217) | (4,951) |
ABS/CMBS/MBS | ||
Fair value | ||
Less than 12 months | 96,754 | 150,997 |
12 months and greater | 136,149 | 3,935 |
Total Fair Value | 232,903 | 154,932 |
Amortized Cost | ||
Amortized cost, less than 12 months | 104,724 | 153,235 |
12 months and greater | 163,623 | 4,036 |
Total Cost or Amortized Cost | 268,347 | 157,271 |
Unrealized Loss | ||
Less than 12 months | (7,970) | (2,238) |
12 months and greater | (27,474) | (101) |
Total Unrealized Loss | (35,444) | (2,339) |
Corporate Debt | ||
Fair value | ||
Less than 12 months | 660,830 | 217,791 |
12 months and greater | 323,337 | 53,818 |
Total Fair Value | 984,167 | 271,609 |
Amortized Cost | ||
Amortized cost, less than 12 months | 697,437 | 221,010 |
12 months and greater | 374,707 | 55,704 |
Total Cost or Amortized Cost | 1,072,144 | 276,714 |
Unrealized Loss | ||
Less than 12 months | (36,607) | (3,219) |
12 months and greater | (51,370) | (1,886) |
Total Unrealized Loss | (87,977) | (5,105) |
Municipal | ||
Fair value | ||
Less than 12 months | 228,827 | 162,998 |
12 months and greater | 204,324 | 15,037 |
Total Fair Value | 433,151 | 178,035 |
Amortized Cost | ||
Amortized cost, less than 12 months | 255,240 | 166,602 |
12 months and greater | 280,636 | 15,714 |
Total Cost or Amortized Cost | 535,876 | 182,316 |
Unrealized Loss | ||
Less than 12 months | (26,413) | (3,604) |
12 months and greater | (76,312) | (677) |
Total Unrealized Loss | $ (102,725) | $ (4,281) |
Investments - Debt and Short-te
Investments - Debt and Short-term Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Nov. 10, 2021 | |
Investment Holdings [Line Items] | ||||
Other investments | $ 47,922 | $ 50,501 | ||
Fixed maturities and short-term investments on deposit with either regulatory authorities or banks | 88,600 | |||
FHLBC | ||||
Investment Holdings [Line Items] | ||||
Investments pledged as collateral | $ 57,300 | |||
Investment in federal home loan bank stock | us-gaap:AssetPledgedAsCollateralMember | us-gaap:AssetPledgedAsCollateralMember | ||
Federal home loan bank borrowings fair value disclosure | $ 50,000 | $ 50,000 | ||
Investment In Low Income Housing Tax Credit Partnership Net Of Amortization | ||||
Investment Holdings [Line Items] | ||||
Other investments | 13,500 | $ 16,600 | ||
Total tax benefit on investments in housing tax credit partnership | 3,400 | 3,600 | $ 3,500 | |
Qualified affordable housing project investments, commitment | 1,300 | |||
Investment in Private Funds | ||||
Investment Holdings [Line Items] | ||||
Other investments | 28,400 | $ 28,600 | ||
Fair value investments entities that calculate net asset value per share unfunded commitments | $ 4,900 |
Policy Acquisition Costs - Sche
Policy Acquisition Costs - Schedule of Policy Acquisition Costs Deferred and Amortized to Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Policy acquisition costs deferred and amortized to income | |||
Deferred policy acquisition costs (DAC), beginning of year | $ 103,553 | $ 88,425 | $ 85,044 |
Deferred: | |||
Direct commissions | 277,553 | 236,145 | 200,917 |
Premium taxes | 18,616 | 17,012 | 14,783 |
Ceding commissions | (39,458) | (47,592) | (42,115) |
Net deferred | 256,711 | 205,565 | 173,585 |
Amortized | 232,405 | 190,437 | 170,204 |
DAC, end of year | 127,859 | 103,553 | 88,425 |
Policy acquisition costs: | |||
Amortized | 232,405 | 190,437 | 170,204 |
Period costs: | |||
Ceding commission - contingent | (5,882) | (4,303) | (4,053) |
Other underwriting expenses | 143,109 | 131,334 | 120,287 |
Total policy acquisition costs | $ 369,632 | $ 317,468 | $ 286,438 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Nov. 10, 2021 | Oct. 02, 2013 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | |||||
Current portion of long-term debt | $ 199,863 | ||||
Interest paid | $ 7,700 | $ 7,300 | $ 7,300 | ||
Average interest rate on debt (as a percent) | 3.89% | 4.77% | 4.91% | ||
FHLBC | RLI Ins. | |||||
Debt Instrument [Line Items] | |||||
Debt instrument maturity date | Nov. 10, 2023 | ||||
Amount borrowed from FHLB | $ 50,000 | ||||
Interest paid monthly at an annualized rate | 0.84% | ||||
Frequency of interest payment | monthly | ||||
Senior Notes Maturing September 15, 2023 | |||||
Debt Instrument [Line Items] | |||||
Issue of senior notes by public debt offering | $ 150,000 | ||||
Debt instrument maturity date | Sep. 15, 2023 | ||||
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 | $ 149,900 | ||||
Long-term debt | 149,900 | ||||
Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Borrowing capacity under revolving line of credit facility | 60,000 | $ 50,000 | |||
Maximum borrowing capacity conditional expansion | $ 120,000 | ||||
Term of facility | 3 years | ||||
Line of credit facility expiration date | Mar. 27, 2023 | ||||
Amount outstanding on this facility | $ 0 | $ 0 | $ 0 |
Reinsurance - Additional Inform
Reinsurance - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Amount of allowance for uncollectible amounts on paid recoverables | $ 16,100,000 | $ 16,100,000 |
Reinsurance balances recoverable on unpaid losses and settlement expenses, allowances for uncollectible amounts | 11,250,000 | $ 11,188,000 |
Financing receivable, allowance for credit Loss, write-off | 0 | |
Amount of allowance for uncollectible amounts due beyond one year | $ 0 | |
Threshold period for including reinsurance receivables in the allowance for uncollectible amounts | 1 year | |
Minimum | ||
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% | |
Maximum | ||
Maximum amount beyond which net loss on any individual risk is limited through the purchase of reinsurance | $ 9,700,000 | |
Financing receivable, allowance for credit loss, recovery | $ 100,000 |
Reinsurance - Schedule of Premi
Reinsurance - Schedule of Premiums Written and Earned Along with Losses and Settlement Expenses Incurred (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
WRITTEN | |||
Direct | $ 1,531,656 | $ 1,313,093 | $ 1,107,303 |
Reinsurance assumed | 33,830 | 34,261 | 29,129 |
Reinsurance ceded | (323,950) | (289,821) | (244,344) |
Net | 1,241,536 | 1,057,533 | 892,088 |
EARNED | |||
Direct | 1,425,165 | 1,222,346 | 1,062,608 |
Reinsurance assumed | 35,680 | 30,950 | 27,651 |
Reinsurance ceded | (316,409) | (272,393) | (224,512) |
Net | 1,144,436 | 980,903 | 865,747 |
LOSSES AND SETTLEMENT EXPENSES INCURRED | |||
Direct | 776,448 | 703,903 | 608,638 |
Reinsurance assumed | 22,813 | 18,087 | 18,783 |
Reinsurance ceded | (284,885) | (265,388) | (184,537) |
Net | $ 514,376 | $ 456,602 | $ 442,884 |
Reinsurance - Schedule of Net R
Reinsurance - Schedule of Net Reinsurance Balances Recoverable, After Consideration of Collateral, from Top Reinsurers (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 806,787 | ||
Ceded Premiums Written | $ 323,950 | $ 289,821 | $ 244,344 |
Percent of Total Ceded Premium Written | 100% | ||
Reinsurance balances recoverable as a percentage of shareholder's equity, threshold for disclosure | 2% | ||
Reinsurer Concentration Risk | Reinsurance Recoverable | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 100% | ||
Munich Re / HSB | AM Best Rating, A+, Superior | S&P Rating, AA-, Very Strong | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 110,142 | ||
Ceded Premiums Written | $ 35,040 | ||
Percent of Total Ceded Premium Written | 10.80% | ||
Munich Re / HSB | Reinsurer Concentration Risk | AM Best Rating, A+, Superior | Reinsurance Recoverable | S&P Rating, AA-, Very Strong | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 13.60% | ||
Renaissance Re | AM Best Rating, A+, Superior | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 82,929 | ||
Ceded Premiums Written | $ 22,865 | ||
Percent of Total Ceded Premium Written | 7.10% | ||
Renaissance Re | Reinsurer Concentration Risk | AM Best Rating, A+, Superior | Reinsurance Recoverable | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 10.30% | ||
Nationwide Mutual | AM Best Rating, A+, Superior | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 45,492 | ||
Ceded Premiums Written | $ 21,493 | ||
Percent of Total Ceded Premium Written | 6.60% | ||
Nationwide Mutual | Reinsurer Concentration Risk | AM Best Rating, A+, Superior | Reinsurance Recoverable | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 5.60% | ||
Aspen UK Ltd. | AM Best Rating, A, Excellent | S&P Rating, A-, Strong | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 43,632 | ||
Ceded Premiums Written | $ 11,021 | ||
Percent of Total Ceded Premium Written | 3.40% | ||
Aspen UK Ltd. | Reinsurer Concentration Risk | AM Best Rating, A, Excellent | Reinsurance Recoverable | S&P Rating, A-, Strong | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 5.40% | ||
Safety National | AM Best Rating, A++, Superior | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 42,218 | ||
Ceded Premiums Written | $ 14,971 | ||
Percent of Total Ceded Premium Written | 4.60% | ||
Safety National | Reinsurer Concentration Risk | AM Best Rating, A++, Superior | Reinsurance Recoverable | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 5.20% | ||
Endurance Re | AM Best Rating, A+, Superior | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 40,979 | ||
Ceded Premiums Written | $ 5,570 | ||
Percent of Total Ceded Premium Written | 1.70% | ||
Endurance Re | Reinsurer Concentration Risk | AM Best Rating, A+, Superior | Reinsurance Recoverable | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 5.10% | ||
Berkley Insurance Co. | AM Best Rating, A+, Superior | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 36,105 | ||
Ceded Premiums Written | $ 8,931 | ||
Percent of Total Ceded Premium Written | 2.80% | ||
Berkley Insurance Co. | Reinsurer Concentration Risk | AM Best Rating, A+, Superior | Reinsurance Recoverable | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 4.50% | ||
Lloyds of London | AM Best Rating, A, Excellent | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 34,737 | ||
Ceded Premiums Written | $ 26,677 | ||
Percent of Total Ceded Premium Written | 8.20% | ||
Lloyds of London | Reinsurer Concentration Risk | AM Best Rating, A, Excellent | Reinsurance Recoverable | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 4.30% | ||
Partner Re | AM Best Rating, A+, Superior | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 34,322 | ||
Ceded Premiums Written | $ 15,363 | ||
Percent of Total Ceded Premium Written | 4.70% | ||
Partner Re | Reinsurer Concentration Risk | AM Best Rating, A+, Superior | Reinsurance Recoverable | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 4.30% | ||
Hannover Ruckversicherung | AM Best Rating, A+, Superior | S&P Rating, AA-, Very Strong | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 33,507 | ||
Ceded Premiums Written | $ 16,746 | ||
Percent of Total Ceded Premium Written | 5.20% | ||
Hannover Ruckversicherung | Reinsurer Concentration Risk | AM Best Rating, A+, Superior | Reinsurance Recoverable | S&P Rating, AA-, Very Strong | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 4.20% | ||
Scor Re | AM Best Rating, A+, Superior | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 32,153 | ||
Ceded Premiums Written | $ 6,048 | ||
Percent of Total Ceded Premium Written | 1.90% | ||
Scor Re | Reinsurer Concentration Risk | AM Best Rating, A+, Superior | Reinsurance Recoverable | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 4% | ||
Toa Re | AM Best Rating, A, Excellent | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 27,278 | ||
Ceded Premiums Written | $ 13,092 | ||
Percent of Total Ceded Premium Written | 4% | ||
Toa Re | Reinsurer Concentration Risk | AM Best Rating, A, Excellent | Reinsurance Recoverable | S&P Rating, A+, Strong | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 3.40% | ||
Liberty Mutual | AM Best Rating, A, Excellent | S&P Rating, A, Strong | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 24,665 | ||
Ceded Premiums Written | $ 6,140 | ||
Percent of Total Ceded Premium Written | 1.90% | ||
Liberty Mutual | Reinsurer Concentration Risk | AM Best Rating, A, Excellent | Reinsurance Recoverable | S&P Rating, A, Strong | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 3.10% | ||
Odyssey America Re | AM Best Rating, A, Excellent | S&P Rating, A, Strong | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 23,945 | ||
Ceded Premiums Written | $ 9,049 | ||
Percent of Total Ceded Premium Written | 2.80% | ||
Odyssey America Re | Reinsurer Concentration Risk | AM Best Rating, A, Excellent | Reinsurance Recoverable | S&P Rating, A, Strong | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 3% | ||
All Other Reinsurers | |||
Ceded Credit Risk [Line Items] | |||
Net Reinsurer Exposure | $ 194,683 | ||
Ceded Premiums Written | $ 110,944 | ||
Percent of Total Ceded Premium Written | 34.30% | ||
All Other Reinsurers | Reinsurer Concentration Risk | Reinsurance Recoverable | |||
Ceded Credit Risk [Line Items] | |||
Percent of Total Net Reinsurer Exposure | 24% |
Historical Loss and LAE Devel_3
Historical Loss and LAE Development - Schedule of Reconciliation of Unpaid Losses and Settlement Expenses (LAE) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Unpaid losses and LAE at beginning of year | |||
Gross | $ 2,043,555 | $ 1,750,049 | $ 1,574,352 |
Ceded | (608,086) | (443,729) | (384,517) |
Net | 1,435,469 | 1,306,320 | 1,189,835 |
Increase (decrease) in incurred losses and LAE | |||
Current accident year | 636,955 | 582,065 | 543,937 |
Prior accident years | (122,579) | (125,463) | (101,053) |
Total incurred | 514,376 | 456,602 | 442,884 |
Loss and LAE payments for claims incurred | |||
Current accident year | (97,525) | (101,590) | (93,077) |
Prior accident years | (276,772) | (225,863) | (231,977) |
Total paid | (374,297) | (327,453) | (325,054) |
Net unpaid losses and LAE at end of year | 1,575,548 | 1,435,469 | 1,306,320 |
Unpaid losses and LAE at end of year | |||
Gross | 2,315,637 | 2,043,555 | 1,750,049 |
Ceded | (740,089) | (608,086) | (443,729) |
Net unpaid losses and LAE at end of year | $ 1,575,548 | $ 1,435,469 | 1,306,320 |
ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||
Unpaid losses and LAE at beginning of year | |||
Ceded | $ (1,345) |
Historical Loss and LAE Devel_4
Historical Loss and LAE Development - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
(Favorable)/Unfavorable Reserve Development | |||
Prior accident years | $ (122,579) | $ (125,463) | $ (101,053) |
Casualty Segment | |||
(Favorable)/Unfavorable Reserve Development | |||
Prior accident years | (87,225) | (108,632) | (75,075) |
Property segment | |||
(Favorable)/Unfavorable Reserve Development | |||
Prior accident years | (24,927) | (10,981) | (13,019) |
Property segment | Marine | |||
(Favorable)/Unfavorable Reserve Development | |||
Prior accident years | (17,000) | (6,600) | (6,500) |
Property segment | Commercial Property | |||
(Favorable)/Unfavorable Reserve Development | |||
Prior accident years | (2,000) | (5,200) | |
Property segment | Homeowners Property | |||
(Favorable)/Unfavorable Reserve Development | |||
Prior accident years | (2,300) | ||
Surety Segment | |||
(Favorable)/Unfavorable Reserve Development | |||
Prior accident years | (10,427) | (5,850) | (12,959) |
Surety Segment | Contract | |||
(Favorable)/Unfavorable Reserve Development | |||
Prior accident years | (4,900) | (4,600) | (5,900) |
Surety Segment | Commercial | |||
(Favorable)/Unfavorable Reserve Development | |||
Prior accident years | (4,200) | (3,800) | |
Primary Occurrence | Casualty Segment | General liability | |||
(Favorable)/Unfavorable Reserve Development | |||
Prior accident years | (28,300) | (25,300) | (17,900) |
Primary Occurrence | Casualty Segment | Small commercial | |||
(Favorable)/Unfavorable Reserve Development | |||
Prior accident years | (4,600) | (7,500) | |
Excess Occurrence | Casualty Segment | Commercial Products | |||
(Favorable)/Unfavorable Reserve Development | |||
Prior accident years | (6,300) | (10,500) | (12,500) |
Excess Occurrence | Casualty Segment | Personal Umbrella | |||
(Favorable)/Unfavorable Reserve Development | |||
Prior accident years | (3,800) | (10,400) | |
Claims Made | Casualty Segment | Miscellaneous Professional Liability | |||
(Favorable)/Unfavorable Reserve Development | |||
Prior accident years | (18,800) | (14,200) | (7,800) |
Claims Made | Casualty Segment | Executive products | |||
(Favorable)/Unfavorable Reserve Development | |||
Prior accident years | (4,100) | (5,900) | |
Claims Made | Casualty Segment | Medical Professional Liability | |||
(Favorable)/Unfavorable Reserve Development | |||
Prior accident years | (6,100) | ||
Transportation | Casualty Segment | |||
(Favorable)/Unfavorable Reserve Development | |||
Prior accident years | $ (6,400) | $ (20,100) | $ (19,100) |
Historical Loss and LAE Devel_5
Historical Loss and LAE Development - Incurred Losses and Loss Adjustment Expenses, Net of Reinsurance (Details) $ in Thousands | Dec. 31, 2022 USD ($) claim | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | Dec. 31, 2018 USD ($) | Dec. 31, 2017 USD ($) | Dec. 31, 2016 USD ($) | Dec. 31, 2015 USD ($) | Dec. 31, 2014 USD ($) | Dec. 31, 2013 USD ($) |
Claims Development | ||||||||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | $ 1,575,548 | $ 1,435,469 | ||||||||
Casualty Segment | Primary Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 998,002 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | 545,789 | |||||||||
All outstanding liabilities before 2013, net of reinsurance | 9,314 | |||||||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 461,527 | 453,142 | ||||||||
Casualty Segment | Excess Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 683,786 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | 237,288 | |||||||||
All outstanding liabilities before 2013, net of reinsurance | 21,094 | |||||||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 467,592 | 384,579 | ||||||||
Casualty Segment | Claims Made | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 496,801 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | 288,754 | |||||||||
All outstanding liabilities before 2013, net of reinsurance | 3,249 | |||||||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 211,296 | 209,705 | ||||||||
Casualty Segment | Transportation | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 448,285 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | 307,768 | |||||||||
All outstanding liabilities before 2013, net of reinsurance | 1,220 | |||||||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 141,737 | 131,531 | ||||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2013 | Primary Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 58,434 | 57,519 | $ 57,106 | $ 59,116 | $ 59,556 | $ 60,162 | $ 60,329 | $ 62,882 | $ 67,297 | $ 80,823 |
Total IBNR | $ 1,690 | |||||||||
Cumulative number of reported claims | claim | 4,326 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 53,375 | 50,597 | 49,411 | 47,783 | 45,753 | 40,609 | 34,786 | 22,366 | 13,021 | 6,334 |
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2013 | Excess Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 24,306 | 24,836 | 25,073 | 25,496 | 24,922 | 25,599 | 25,425 | 26,857 | 34,824 | 39,984 |
Total IBNR | $ 1,155 | |||||||||
Cumulative number of reported claims | claim | 950 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 22,505 | 22,154 | 21,229 | 18,524 | 17,956 | 16,967 | 14,545 | 10,967 | 5,701 | 1,060 |
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2013 | Claims Made | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 37,817 | 37,950 | 37,974 | 38,352 | 37,959 | 38,473 | 40,288 | 44,054 | 41,488 | 40,095 |
Total IBNR | $ 463 | |||||||||
Cumulative number of reported claims | claim | 1,042 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 36,800 | 36,078 | 35,476 | 34,535 | 32,789 | 29,678 | 26,121 | 18,425 | 7,073 | 792 |
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2013 | Transportation | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 39,598 | 39,586 | 39,183 | 39,309 | 39,974 | 38,811 | 37,673 | 32,989 | 32,853 | 32,742 |
Total IBNR | $ 103 | |||||||||
Cumulative number of reported claims | claim | 2,853 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 38,531 | 38,172 | 37,915 | 37,327 | 35,923 | 33,480 | 28,220 | 19,761 | 11,978 | 5,306 |
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2014 | Primary Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 64,449 | 63,727 | 65,636 | 66,702 | 66,389 | 67,237 | 71,592 | 79,497 | 88,092 | |
Total IBNR | $ 2,623 | |||||||||
Cumulative number of reported claims | claim | 4,298 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 58,361 | 56,784 | 55,965 | 52,387 | 47,343 | 40,270 | 29,545 | 18,771 | 11,436 | |
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2014 | Excess Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 35,918 | 35,683 | 35,128 | 33,458 | 33,372 | 32,274 | 35,119 | 39,095 | 50,889 | |
Total IBNR | $ 2,367 | |||||||||
Cumulative number of reported claims | claim | 928 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 30,484 | 28,963 | 26,068 | 23,376 | 22,541 | 18,852 | 11,002 | 4,006 | 1,899 | |
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2014 | Claims Made | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 52,796 | 52,619 | 53,783 | 53,841 | 51,554 | 55,350 | 58,152 | 55,386 | 53,929 | |
Total IBNR | $ 1,584 | |||||||||
Cumulative number of reported claims | claim | 1,305 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 51,063 | 50,714 | 46,122 | 44,127 | 40,080 | 35,755 | 27,923 | 9,775 | 1,705 | |
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2014 | Transportation | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 42,067 | 41,974 | 41,156 | 40,508 | 40,202 | 38,590 | 36,452 | 33,015 | 38,361 | |
Total IBNR | $ 412 | |||||||||
Cumulative number of reported claims | claim | 3,099 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 41,528 | 40,427 | 40,006 | 38,282 | 33,190 | 27,457 | 19,676 | 13,933 | 7,125 | |
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2015 | Primary Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 77,110 | 75,438 | 75,470 | 76,398 | 78,675 | 83,579 | 84,975 | 94,835 | ||
Total IBNR | $ 4,022 | |||||||||
Cumulative number of reported claims | claim | 4,408 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 68,650 | 62,997 | 58,866 | 54,270 | 45,056 | 33,020 | 19,902 | 10,157 | ||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2015 | Excess Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 41,471 | 41,690 | 42,446 | 43,328 | 42,840 | 47,392 | 50,857 | 53,672 | ||
Total IBNR | $ 3,017 | |||||||||
Cumulative number of reported claims | claim | 702 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 35,958 | 32,752 | 31,352 | 28,756 | 23,184 | 19,571 | 10,127 | 2,048 | ||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2015 | Claims Made | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 37,578 | 38,609 | 39,619 | 39,653 | 39,906 | 42,206 | 47,831 | 55,006 | ||
Total IBNR | $ 1,248 | |||||||||
Cumulative number of reported claims | claim | 1,338 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 34,671 | 33,529 | 32,241 | 28,795 | 20,920 | 16,774 | 10,738 | 2,215 | ||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2015 | Transportation | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 46,685 | 45,807 | 45,525 | 45,162 | 46,395 | 47,021 | 46,258 | 38,561 | ||
Total IBNR | $ 684 | |||||||||
Cumulative number of reported claims | claim | 3,187 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 45,002 | 42,626 | 41,345 | 39,339 | 37,222 | 29,554 | 20,709 | 6,984 | ||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2016 | Primary Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 77,729 | 79,440 | 83,374 | 85,449 | 90,611 | 96,753 | 101,950 | |||
Total IBNR | $ 6,700 | |||||||||
Cumulative number of reported claims | claim | 4,332 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 65,517 | 60,349 | 56,152 | 48,042 | 35,764 | 24,186 | 10,142 | |||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2016 | Excess Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 29,940 | 29,671 | 30,251 | 33,125 | 37,676 | 49,385 | 56,341 | |||
Total IBNR | $ 6,349 | |||||||||
Cumulative number of reported claims | claim | 651 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 17,807 | 14,400 | 12,703 | 10,054 | 7,441 | 3,396 | 1,068 | |||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2016 | Claims Made | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 61,876 | 65,078 | 64,730 | 67,728 | 69,493 | 67,760 | 59,992 | |||
Total IBNR | $ 2,451 | |||||||||
Cumulative number of reported claims | claim | 1,507 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 53,737 | 52,846 | 47,999 | 39,370 | 27,465 | 14,558 | 2,060 | |||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2016 | Transportation | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 55,718 | 53,915 | 52,818 | 52,277 | 54,105 | 53,519 | 50,430 | |||
Total IBNR | $ 1,152 | |||||||||
Cumulative number of reported claims | claim | 3,943 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 52,555 | 47,488 | 43,564 | 38,001 | 30,354 | 18,354 | 8,923 | |||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2017 | Primary Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 90,344 | 90,759 | 95,513 | 102,583 | 111,391 | 119,741 | ||||
Total IBNR | $ 10,770 | |||||||||
Cumulative number of reported claims | claim | 4,529 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 71,419 | 62,236 | 52,823 | 38,783 | 25,933 | 13,154 | ||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2017 | Excess Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 41,620 | 43,249 | 44,737 | 48,363 | 55,868 | 62,863 | ||||
Total IBNR | $ 13,877 | |||||||||
Cumulative number of reported claims | claim | 646 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 22,835 | 18,470 | 15,441 | 9,275 | 5,679 | 17 | ||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2017 | Claims Made | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 61,546 | 59,907 | 57,450 | 62,714 | 62,450 | 60,572 | ||||
Total IBNR | $ 4,455 | |||||||||
Cumulative number of reported claims | claim | 1,647 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 47,087 | 42,918 | 36,522 | 22,728 | 11,350 | 2,455 | ||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2017 | Transportation | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 46,742 | 45,351 | 43,764 | 45,017 | 53,641 | 55,640 | ||||
Total IBNR | $ 1,480 | |||||||||
Cumulative number of reported claims | claim | 3,640 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 41,064 | 36,141 | 30,260 | 24,090 | 17,070 | 7,979 | ||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2018 | Primary Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 114,414 | 115,076 | 125,731 | 130,281 | 141,513 | |||||
Total IBNR | $ 21,681 | |||||||||
Cumulative number of reported claims | claim | 4,873 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 78,103 | 63,980 | 48,424 | 32,365 | 15,066 | |||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2018 | Excess Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 49,861 | 51,023 | 54,626 | 62,646 | 69,362 | |||||
Total IBNR | $ 22,833 | |||||||||
Cumulative number of reported claims | claim | 612 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 22,016 | 17,294 | 10,801 | 5,823 | 2,506 | |||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2018 | Claims Made | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 47,692 | 48,457 | 56,468 | 62,416 | 66,128 | |||||
Total IBNR | $ 10,412 | |||||||||
Cumulative number of reported claims | claim | 1,394 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 27,351 | 24,918 | 18,840 | 11,965 | 1,964 | |||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2018 | Transportation | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 35,442 | 36,468 | 38,719 | 54,592 | 57,597 | |||||
Total IBNR | $ 2,428 | |||||||||
Cumulative number of reported claims | claim | 3,404 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 28,844 | 24,503 | 19,216 | 12,827 | 6,980 | |||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2019 | Primary Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 109,051 | 120,570 | 135,209 | 146,011 | ||||||
Total IBNR | $ 38,075 | |||||||||
Cumulative number of reported claims | claim | 5,273 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 57,750 | 41,911 | 30,673 | 15,698 | ||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2019 | Excess Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 80,147 | 79,083 | 89,691 | 88,078 | ||||||
Total IBNR | $ 38,161 | |||||||||
Cumulative number of reported claims | claim | 659 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 33,375 | 25,389 | 19,044 | 4,213 | ||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2019 | Claims Made | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 46,500 | 52,224 | 61,712 | 62,918 | ||||||
Total IBNR | $ 16,958 | |||||||||
Cumulative number of reported claims | claim | 1,512 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 19,930 | 14,117 | 8,123 | 1,839 | ||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2019 | Transportation | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 41,925 | 43,976 | 56,129 | 58,297 | ||||||
Total IBNR | $ 4,182 | |||||||||
Cumulative number of reported claims | claim | 3,317 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 26,422 | 21,120 | 15,852 | 7,148 | ||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2020 | Primary Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 122,785 | 137,439 | 145,171 | |||||||
Total IBNR | $ 60,440 | |||||||||
Cumulative number of reported claims | claim | 4,603 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 45,267 | 30,596 | 17,096 | |||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2020 | Excess Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 90,274 | 98,409 | 107,579 | |||||||
Total IBNR | $ 61,116 | |||||||||
Cumulative number of reported claims | claim | 558 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 20,988 | 13,856 | 2,901 | |||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2020 | Claims Made | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 46,853 | 56,785 | 60,278 | |||||||
Total IBNR | $ 29,739 | |||||||||
Cumulative number of reported claims | claim | 1,294 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 10,412 | 5,687 | 1,488 | |||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2020 | Transportation | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 27,665 | 35,524 | 43,573 | |||||||
Total IBNR | $ 5,844 | |||||||||
Cumulative number of reported claims | claim | 1,647 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 12,035 | 7,876 | 3,986 | |||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2021 | Primary Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 128,483 | 142,797 | ||||||||
Total IBNR | $ 81,085 | |||||||||
Cumulative number of reported claims | claim | 4,368 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 29,633 | 14,428 | ||||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2021 | Excess Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 136,354 | 136,433 | ||||||||
Total IBNR | $ 81,568 | |||||||||
Cumulative number of reported claims | claim | 656 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 23,841 | 5,317 | ||||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2021 | Claims Made | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 45,854 | 51,219 | ||||||||
Total IBNR | $ 32,103 | |||||||||
Cumulative number of reported claims | claim | 1,216 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 5,615 | 999 | ||||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2021 | Transportation | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 51,581 | 51,322 | ||||||||
Total IBNR | $ 14,902 | |||||||||
Cumulative number of reported claims | claim | 2,307 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 15,345 | 5,341 | ||||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2022 | Primary Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 155,203 | |||||||||
Total IBNR | $ 119,846 | |||||||||
Cumulative number of reported claims | claim | 3,856 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 17,714 | |||||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2022 | Excess Occurrence | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 153,895 | |||||||||
Total IBNR | $ 107,953 | |||||||||
Cumulative number of reported claims | claim | 447 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 7,479 | |||||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2022 | Claims Made | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 58,289 | |||||||||
Total IBNR | $ 43,827 | |||||||||
Cumulative number of reported claims | claim | 1,005 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 2,088 | |||||||||
Casualty Segment | Short-duration Insurance Contracts, Accident Year 2022 | Transportation | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 60,862 | |||||||||
Total IBNR | $ 14,645 | |||||||||
Cumulative number of reported claims | claim | 2,520 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 6,442 | |||||||||
Property segment | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 804,366 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | 655,566 | |||||||||
All outstanding liabilities before 2013, net of reinsurance | 1,101 | |||||||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 149,901 | 124,652 | ||||||||
Property segment | Short-duration Insurance Contracts, Accident Year 2013 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 61,371 | 61,400 | 61,623 | 61,776 | 61,834 | 61,914 | 62,114 | 62,173 | 62,090 | 63,864 |
Total IBNR | $ 7 | |||||||||
Cumulative number of reported claims | claim | 2,996 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 61,188 | 61,188 | 61,335 | 61,325 | 61,195 | 60,520 | 59,259 | 57,407 | 50,840 | 32,208 |
Property segment | Short-duration Insurance Contracts, Accident Year 2014 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 49,468 | 49,520 | 49,479 | 49,444 | 49,217 | 48,761 | 48,801 | 49,441 | 56,587 | |
Total IBNR | $ 15 | |||||||||
Cumulative number of reported claims | claim | 4,564 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 49,339 | 49,317 | 49,259 | 49,027 | 47,799 | 46,528 | 46,148 | 43,380 | 30,550 | |
Property segment | Short-duration Insurance Contracts, Accident Year 2015 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 53,359 | 52,878 | 52,781 | 53,111 | 52,720 | 53,958 | 56,103 | 59,863 | ||
Total IBNR | $ 25 | |||||||||
Cumulative number of reported claims | claim | 4,076 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 53,208 | 52,400 | 52,342 | 52,078 | 51,290 | 50,197 | 49,348 | 32,184 | ||
Property segment | Short-duration Insurance Contracts, Accident Year 2016 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 55,536 | 55,383 | 55,424 | 55,930 | 55,384 | 55,594 | 62,900 | |||
Total IBNR | $ 150 | |||||||||
Cumulative number of reported claims | claim | 3,377 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 55,215 | 54,747 | 54,328 | 53,006 | 51,371 | 46,921 | 33,134 | |||
Property segment | Short-duration Insurance Contracts, Accident Year 2017 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 81,912 | 82,319 | 82,671 | 84,961 | 83,273 | 90,803 | ||||
Total IBNR | $ 801 | |||||||||
Cumulative number of reported claims | claim | 2,893 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 80,958 | 80,581 | 78,360 | 74,415 | 66,818 | 41,314 | ||||
Property segment | Short-duration Insurance Contracts, Accident Year 2018 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 79,093 | 80,470 | 79,961 | 83,457 | 89,091 | |||||
Total IBNR | $ 1,443 | |||||||||
Cumulative number of reported claims | claim | 2,337 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 76,378 | 75,253 | 72,357 | 68,264 | 37,048 | |||||
Property segment | Short-duration Insurance Contracts, Accident Year 2019 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 59,901 | 61,116 | 65,189 | 71,232 | ||||||
Total IBNR | $ 1,141 | |||||||||
Cumulative number of reported claims | claim | 2,453 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 57,038 | 55,092 | 51,740 | 30,703 | ||||||
Property segment | Short-duration Insurance Contracts, Accident Year 2020 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 108,546 | 110,466 | 118,247 | |||||||
Total IBNR | $ 12,532 | |||||||||
Cumulative number of reported claims | claim | 2,855 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 88,401 | 79,660 | 43,192 | |||||||
Property segment | Short-duration Insurance Contracts, Accident Year 2021 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 116,424 | 135,447 | ||||||||
Total IBNR | $ 16,900 | |||||||||
Cumulative number of reported claims | claim | 3,071 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 89,174 | 57,272 | ||||||||
Property segment | Short-duration Insurance Contracts, Accident Year 2022 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 138,756 | |||||||||
Total IBNR | $ 53,549 | |||||||||
Cumulative number of reported claims | claim | 2,505 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 44,667 | |||||||||
Surety Segment | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 86,197 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | 46,004 | |||||||||
All outstanding liabilities before 2013, net of reinsurance | (77) | |||||||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 40,116 | 34,244 | ||||||||
Surety Segment | Short-duration Insurance Contracts, Accident Year 2013 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 5,139 | 5,046 | 5,107 | 5,209 | 5,231 | 5,271 | 5,399 | 6,170 | 7,516 | 16,080 |
Total IBNR | $ 3 | |||||||||
Cumulative number of reported claims | claim | 1,411 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 5,131 | 5,029 | 5,061 | 5,128 | 5,150 | 5,098 | 4,911 | 4,701 | 2,856 | $ 1,116 |
Surety Segment | Short-duration Insurance Contracts, Accident Year 2014 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 4,230 | 4,227 | 4,266 | 4,319 | 4,267 | 4,427 | 5,225 | 8,106 | 16,450 | |
Total IBNR | $ 5 | |||||||||
Cumulative number of reported claims | claim | 1,357 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 4,218 | 4,197 | 4,214 | 4,234 | 4,131 | 4,059 | 4,166 | 4,283 | $ 722 | |
Surety Segment | Short-duration Insurance Contracts, Accident Year 2015 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 8,580 | 9,275 | 9,521 | 9,792 | 10,456 | 11,113 | 12,957 | 16,958 | ||
Total IBNR | $ 21 | |||||||||
Cumulative number of reported claims | claim | 1,244 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 8,462 | 9,168 | 9,186 | 9,183 | 9,436 | 7,695 | 6,719 | $ 3,192 | ||
Surety Segment | Short-duration Insurance Contracts, Accident Year 2016 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 8,134 | 7,948 | 8,391 | 8,895 | 9,351 | 11,062 | 18,928 | |||
Total IBNR | $ 81 | |||||||||
Cumulative number of reported claims | claim | 1,389 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 7,946 | 7,673 | 8,086 | 7,640 | 6,299 | 5,817 | $ 3,087 | |||
Surety Segment | Short-duration Insurance Contracts, Accident Year 2017 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 7,769 | 8,034 | 8,116 | 8,798 | 8,641 | 16,127 | ||||
Total IBNR | $ 158 | |||||||||
Cumulative number of reported claims | claim | 1,826 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 7,372 | 7,362 | 7,221 | 7,062 | 2,862 | $ 979 | ||||
Surety Segment | Short-duration Insurance Contracts, Accident Year 2018 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 3,996 | 3,947 | 4,564 | 7,227 | 16,765 | |||||
Total IBNR | $ 244 | |||||||||
Cumulative number of reported claims | claim | 1,362 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 3,020 | 2,536 | 2,368 | 2,588 | $ 1,835 | |||||
Surety Segment | Short-duration Insurance Contracts, Accident Year 2019 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 4,062 | 5,053 | 7,205 | 14,785 | ||||||
Total IBNR | $ 860 | |||||||||
Cumulative number of reported claims | claim | 1,178 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 3,039 | 2,765 | 2,433 | $ 336 | ||||||
Surety Segment | Short-duration Insurance Contracts, Accident Year 2020 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 12,378 | 14,840 | 19,241 | |||||||
Total IBNR | $ 4,214 | |||||||||
Cumulative number of reported claims | claim | 895 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 3,828 | 2,719 | $ 835 | |||||||
Surety Segment | Short-duration Insurance Contracts, Accident Year 2021 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 11,724 | 18,540 | ||||||||
Total IBNR | $ 7,826 | |||||||||
Cumulative number of reported claims | claim | 767 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 3,229 | $ 1,197 | ||||||||
Surety Segment | Short-duration Insurance Contracts, Accident Year 2022 | ||||||||||
Claims Development | ||||||||||
Incurred losses and loss adjustment expenses, net of reinsurance | 20,185 | |||||||||
Total IBNR | $ 18,683 | |||||||||
Cumulative number of reported claims | claim | 527 | |||||||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ (241) |
Historical Loss and LAE Devel_6
Historical Loss and LAE Development - Cumulative Paid Loss and Loss Adjustment Expenses, Net of Reinsurance (Details) | Dec. 31, 2022 |
Property segment | |
Shortduration Insurance Contracts Historical Claims Duration [Line Items] | |
Average annual percentage payout of incurred losses by age, Year 1 | 50.40% |
Average annual percentage payout of incurred losses by age, Year 2 | 31.10% |
Average annual percentage payout of incurred losses by age, Year 3 | 6.70% |
Average annual percentage payout of incurred losses by age, Year 4 | 2.90% |
Average annual percentage payout of incurred losses by age, Year 5 | 2.10% |
Average annual percentage payout of incurred losses by age, Year 6 | 1.10% |
Average annual percentage payout of incurred losses by age, Year 7 | 0.40% |
Average annual percentage payout of incurred losses by age, Year 8 | 0.50% |
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% |
Surety Segment | |
Shortduration Insurance Contracts Historical Claims Duration [Line Items] | |
Average annual percentage payout of incurred losses by age, Year 1 | 19.60% |
Average annual percentage payout of incurred losses by age, Year 2 | 35.60% |
Average annual percentage payout of incurred losses by age, Year 3 | 14.50% |
Average annual percentage payout of incurred losses by age, Year 4 | 7.30% |
Average annual percentage payout of incurred losses by age, Year 5 | 3.60% |
Average annual percentage payout of incurred losses by age, Year 6 | (0.30%) |
Average annual percentage payout of incurred losses by age, Year 7 | 0.60% |
Average annual percentage payout of incurred losses by age, Year 8 | (3.30%) |
Average annual percentage payout of incurred losses by age, Year 9 | (0.10%) |
Average annual percentage payout of incurred losses by age, Year 10 | 2% |
Primary Occurrence | Casualty Segment | |
Shortduration Insurance Contracts Historical Claims Duration [Line Items] | |
Average annual percentage payout of incurred losses by age, Year 1 | 13.30% |
Average annual percentage payout of incurred losses by age, Year 2 | 13.30% |
Average annual percentage payout of incurred losses by age, Year 3 | 14.40% |
Average annual percentage payout of incurred losses by age, Year 4 | 16.10% |
Average annual percentage payout of incurred losses by age, Year 5 | 11% |
Average annual percentage payout of incurred losses by age, Year 6 | 7.60% |
Average annual percentage payout of incurred losses by age, Year 7 | 5.30% |
Average annual percentage payout of incurred losses by age, Year 8 | 3.80% |
Average annual percentage payout of incurred losses by age, Year 9 | 2.20% |
Average annual percentage payout of incurred losses by age, Year 10 | 4.80% |
Excess Occurrence | Casualty Segment | |
Shortduration Insurance Contracts Historical Claims Duration [Line Items] | |
Average annual percentage payout of incurred losses by age, Year 1 | 4% |
Average annual percentage payout of incurred losses by age, Year 2 | 13% |
Average annual percentage payout of incurred losses by age, Year 3 | 14% |
Average annual percentage payout of incurred losses by age, Year 4 | 13.10% |
Average annual percentage payout of incurred losses by age, Year 5 | 9.90% |
Average annual percentage payout of incurred losses by age, Year 6 | 5.80% |
Average annual percentage payout of incurred losses by age, Year 7 | 6.10% |
Average annual percentage payout of incurred losses by age, Year 8 | 9% |
Average annual percentage payout of incurred losses by age, Year 9 | 4% |
Average annual percentage payout of incurred losses by age, Year 10 | 1.40% |
Claims Made | Casualty Segment | |
Shortduration Insurance Contracts Historical Claims Duration [Line Items] | |
Average annual percentage payout of incurred losses by age, Year 1 | 3.60% |
Average annual percentage payout of incurred losses by age, Year 2 | 15.90% |
Average annual percentage payout of incurred losses by age, Year 3 | 19.60% |
Average annual percentage payout of incurred losses by age, Year 4 | 16.20% |
Average annual percentage payout of incurred losses by age, Year 5 | 11.30% |
Average annual percentage payout of incurred losses by age, Year 6 | 7.90% |
Average annual percentage payout of incurred losses by age, Year 7 | 3.30% |
Average annual percentage payout of incurred losses by age, Year 8 | 4.70% |
Average annual percentage payout of incurred losses by age, Year 9 | 1.10% |
Average annual percentage payout of incurred losses by age, Year 10 | 1.90% |
Transportation | Casualty Segment | |
Shortduration Insurance Contracts Historical Claims Duration [Line Items] | |
Average annual percentage payout of incurred losses by age, Year 1 | 15% |
Average annual percentage payout of incurred losses by age, Year 2 | 18.80% |
Average annual percentage payout of incurred losses by age, Year 3 | 16.80% |
Average annual percentage payout of incurred losses by age, Year 4 | 15.80% |
Average annual percentage payout of incurred losses by age, Year 5 | 11% |
Average annual percentage payout of incurred losses by age, Year 6 | 8% |
Average annual percentage payout of incurred losses by age, Year 7 | 4.90% |
Average annual percentage payout of incurred losses by age, Year 8 | 2.50% |
Average annual percentage payout of incurred losses by age, Year 9 | 1.60% |
Average annual percentage payout of incurred losses by age, Year 10 | 0.90% |
Historical Loss and LAE Devel_7
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Unpaid losses and settlement expenses | $ 2,315,637 | $ 2,043,555 | $ 1,750,049 | $ 1,574,352 |
Liabilities for losses and loss adjustment expenses, net of reinsurance | 1,575,548 | 1,435,469 | ||
Unallocated loss adjustment expenses | 61,752 | 59,391 | ||
Reinsurance balances recoverable on unpaid losses and settlement expenses, allowances for uncollectible amounts | 11,250 | 11,188 | ||
Other | 30,377 | 27,037 | ||
Reinsurance recoverable on unpaid claims | 740,089 | 608,086 | $ 443,729 | $ 384,517 |
Other | 107 | 111 | ||
Total gross liability for unpaid loss and settlement expenses | 2,315,637 | 2,043,555 | ||
Casualty Segment | Primary Occurrence | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 461,527 | 453,142 | ||
Reinsurance recoverable on unpaid claims | 46,674 | 43,688 | ||
Casualty Segment | Excess Occurrence | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 467,592 | 384,579 | ||
Reinsurance recoverable on unpaid claims | 138,822 | 122,092 | ||
Casualty Segment | Claims Made | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 211,296 | 209,705 | ||
Reinsurance recoverable on unpaid claims | 298,930 | 271,259 | ||
Casualty Segment | Transportation | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 141,737 | 131,531 | ||
Reinsurance recoverable on unpaid claims | 78,456 | 66,283 | ||
Property segment | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 149,901 | 124,652 | ||
Reinsurance recoverable on unpaid claims | 137,613 | 65,098 | ||
Surety Segment | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | ||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 40,116 | 34,244 | ||
Reinsurance recoverable on unpaid claims | $ 50,737 | $ 50,743 |
Historical Loss and LAE Devel_8
Historical Loss and LAE Development - Reserve Development (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
(Favorable)/Unfavorable Reserve Development | |||
Prior accident years | $ (122,579) | $ (125,463) | $ (101,053) |
Casualty Segment | |||
(Favorable)/Unfavorable Reserve Development | |||
Prior accident years | (87,225) | (108,632) | (75,075) |
Property segment | |||
(Favorable)/Unfavorable Reserve Development | |||
Prior accident years | (24,927) | (10,981) | (13,019) |
Surety Segment | |||
(Favorable)/Unfavorable Reserve Development | |||
Prior accident years | $ (10,427) | $ (5,850) | $ (12,959) |
Historical Loss and LAE Devel_9
Historical Loss and LAE Development - Environmental, Asbestos and Mass Tort Exposures (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Unpaid losses and LAE at beginning of year | ||||
Gross | $ 2,315,637 | $ 2,043,555 | $ 1,750,049 | $ 1,574,352 |
Net | 1,575,548 | 1,435,469 | 1,306,320 | $ 1,189,835 |
Asbestos and Environmental Exposures | ||||
Loss and LAE Payments (Cumulative): | ||||
Gross | 142,377 | 141,768 | 139,804 | |
Ceded | (69,696) | (69,576) | (69,219) | |
Net | 72,681 | 72,192 | 70,585 | |
Unpaid losses and LAE at beginning of year | ||||
Gross | 26,871 | 25,747 | 22,485 | |
Ceded | (5,786) | (5,718) | (4,619) | |
Net | $ 21,085 | $ 20,029 | $ 17,866 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Deferred Tax Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Tax discounting of unpaid losses and settlement expenses | $ 23,788 | $ 22,637 |
Unearned premium offset | 27,158 | 23,080 |
Net unrealized depreciation of securities | 19,839 | |
Deferred compensation | 4,058 | 3,469 |
Stock option expense | 3,202 | 3,089 |
Capitalized research and development costs | 2,544 | |
Lease liability | 3,026 | 3,796 |
Other | 938 | 367 |
Deferred tax assets before allowance | 84,553 | 56,438 |
Total deferred tax assets | 84,553 | 56,438 |
Deferred tax liabilities: | ||
Net unrealized appreciation of securities | 76,533 | |
Deferred policy acquisition costs | 26,850 | 21,746 |
Lease asset | 2,681 | 3,101 |
Discounting of unpaid losses and settlement expenses - Tax Cuts and Jobs Act (TCJA) implementation offset | 1,909 | 2,545 |
Fixed assets | 3,083 | 3,518 |
Intangible assets | 1,543 | 1,537 |
Undistributed earnings of unconsolidated investees | 7,399 | 29,515 |
Other | 819 | 1,452 |
Total deferred tax liabilities | 44,284 | 139,947 |
Net deferred tax asset | $ 40,269 | |
Net deferred tax liability | $ (83,509) |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Income Tax Expense (Benefit) Attributable to Income from Operations with Amounts Computed by Applying U.S. Federal Tax Rate to Pretax Income from Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of income tax expense reported to amount computed by applying the U.S. federal tax rate | |||
Provision for income taxes at the statutory rate | $ 151,342 | $ 72,307 | $ 39,867 |
Increase (reduction) in taxes resulting from: | |||
Excess tax benefit on share-based compensation | (4,491) | (3,090) | (3,537) |
Tax exempt interest income | (1,143) | (1,219) | (1,293) |
Dividends received deduction | (912) | (891) | (883) |
Investment tax credit | (5,053) | (3,491) | (2,435) |
ESOP dividends paid deduction | (4,171) | (1,566) | (1,083) |
Unconsolidated investee dividends | (479) | ||
Nondeductible expenses | 1,263 | 3,834 | 1,878 |
Other items, net | 432 | (917) | 715 |
Total tax expense | $ 137,267 | $ 64,967 | $ 32,750 |
Reconciliation of income tax expense rate to the U.S. federal tax rate | |||
Tax rate used (as a percent) | 21% | 21% | 21% |
Excess tax benefit on share-based compensation (as a percent) | (0.60%) | (0.90%) | (1.80%) |
Effective rate reduction due to tax exempt interest income (as a percent) | (0.20%) | (0.30%) | (0.70%) |
Effective rate reduction due to dividend received (as a percent) | (0.10%) | (0.30%) | (0.50%) |
Effective rate reduction due to investment tax credit (as a percent) | (0.70%) | (1.00%) | (1.30%) |
Effective rate reduction due to dividend paid to ESOP (as a percent) | (0.60%) | (0.50%) | (0.60%) |
Effective rate reduction due to unconsolidated investee dividends (as a percent) | 0% | 0% | (0.20%) |
Effective rate reduction due to nondeductible expenses (as a percent) | 0.20% | 1.10% | 1% |
Effective rate reduction due to other items, net (as a percent) | 0% | (0.20%) | 0.40% |
Total tax expense | 19% | 18.90% | 17.30% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax [Line Items] | |||
U.S. federal tax rate | 21% | 21% | 21% |
Capital gains rate (as a percent) | 21% | ||
Dividends received | $ 0 | $ 0 | $ 4,675 |
Unconsolidated investee dividends | $ 479 | ||
Effective rate reduction due to unconsolidated investee dividends (as a percent) | 0% | 0% | 0.20% |
ESOP dividends paid deduction | $ 4,171 | $ 1,566 | $ 1,083 |
Effective rate reduction due to dividends paid to ESOP (as a percent) | 0.60% | 0.50% | 0.60% |
Expected effective tax rate when deferred items reverse in future years (as a percent) | 21% | ||
Federal and state income taxes paid | $ 190,300 | $ 38,600 | $ 23,700 |
Prime Holdings Insurance Services, Inc. (Prime) | |||
Income Tax [Line Items] | |||
Dividends received | 4,700 | ||
Unconsolidated investee dividends | $ 500 | ||
Lower tax rate (as a percent) | 10.80% |
Employee Benefits - Employee St
Employee Benefits - Employee Stock Ownership, 401(K) and Deferred Compensation Plan - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Stock Ownership, 401(K) And Deferred Compensation Plan | |||
Annual expenses for incentive plans | $ 23.9 | $ 39.1 | $ 26.6 |
ESOP and 401(k) Plans | |||
Employee Stock Ownership, 401(K) And Deferred Compensation Plan | |||
Vesting period of profit sharing contributions | 3 years | ||
Expenses recognized | $ 18.4 | $ 18 | $ 14.4 |
Employee Stock Ownership Plan (ESOP) | |||
Employee Stock Ownership, 401(K) And Deferred Compensation Plan | |||
Shares purchased under defined contribution plan | 87,367 | 65,815 | 94,194 |
Average price of shares purchased (in dollars per share) | $ 103.01 | $ 107.95 | $ 82.67 |
Aggregate price of shares purchased | $ 9 | $ 7.1 | $ 7.8 |
Shares held by the ESOP | 2,534,646 | ||
Employee 401(K) Plan | |||
Employee Stock Ownership, 401(K) And Deferred Compensation Plan | |||
Employer contribution as a percent of eligible compensation | 3% | ||
Vesting percentage in basic and voluntary contributions | 100% | ||
Deferred Compensation Plan | |||
Employee Stock Ownership, 401(K) And Deferred Compensation Plan | |||
Assets held under trust | $ 55.9 |
Employee Benefits - Stock Plans
Employee Benefits - Stock Plans - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | 60 Months Ended | 92 Months Ended | |||
Nov. 10, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | May 06, 2015 | Dec. 31, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Options granted (in shares) | 344,100 | |||||
Special cash dividend declared | $ 7 | |||||
Intrinsic value of options | $ 21.8 | $ 12.2 | $ 15.5 | |||
RLI Corp. Long-Term Incentive Plan (2010 LTIP) | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Shares authorized for grant | 4,000,000 | |||||
Options granted (in shares) | 2,878,000 | |||||
RLI Corp. Long-Term Incentive Plan (2015 LTIP) | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Shares authorized for grant | 4,000,000 | 4,000,000 | ||||
Options granted (in shares) | 363,368 | 3,263,788 | ||||
Stock-based compensation expenses | $ 8.8 | 6.4 | 5.4 | |||
Income tax benefit from stock-based compensation | 1.4 | $ 1 | $ 0.9 | |||
Unrecognized stock-based compensation expense | $ 6.6 | $ 6.6 | ||||
Stock-based compensation expenses, recognition period | 2 years 3 months 25 days | |||||
RLI Corp. Long-Term Incentive Plan (LTIP 2010 and LTIP 2015) | Stock Options | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
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 |
Employee Benefits - Summary of
Employee Benefits - Summary of Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Weighted Number of Options Outstanding | |||
Outstanding options, Beginning Balance | 1,669,325 | ||
Options Granted (in shares) | 344,100 | ||
Options exercised | (308,280) | ||
Options canceled/forfeited | (9,485) | ||
Outstanding options, Ending Balance | 1,695,660 | 1,669,325 | |
Exercisable options, Ending Balance | 782,067 | ||
Weighted Average Exercise Price | |||
Weighted Average Exercise Price, Outstanding options, Beginning Balance | $ 78.63 | ||
Weighted Average Exercise Price, Options granted | 109.50 | ||
Weighted Average Exercise Price, Options exercised | 54.42 | ||
Weighted Average Exercise Price, Options canceled/forfeited | 86.40 | ||
Weighted Average Exercise Price, Outstanding options, Ending Balance | 82.42 | $ 78.63 | |
Weighted Average Exercise Price, Exercisable options | $ 67.54 | ||
Weighted Average Remaining Contractual Life | |||
Weighted Average Remaining Contractual Life, Outstanding options | 4 years 10 months 24 days | ||
Weighted Average Remaining Contractual Life, Exercisable options | 3 years 5 months 19 days | ||
Aggregate Intrinsic Value | |||
Aggregate Intrinsic Value, Options exercised | $ 21,800 | $ 12,200 | $ 15,500 |
Aggregate Intrinsic Value, Outstanding options | 82,835 | ||
Aggregate Intrinsic Value, Exercisable options | $ 49,839 |
Employee Benefits - Summary o_2
Employee Benefits - Summary of Weighted Average Grant-date Assumptions and Weighted Average Fair Values (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Weighted average grant date assumptions and weighted average fair value | |||
Weighted-average fair value of grants | $ 21.43 | $ 17.11 | $ 13.24 |
Risk-free interest rates | 2.95% | 0.75% | 0.39% |
Dividend yield | 2.50% | 2.06% | 2.30% |
Expected volatility | 22.89% | 22.73% | 22.67% |
Expected option life | 5 years 18 days | 4 years 11 months 19 days | 4 years 11 months 15 days |
Employee Benefits - Restricted
Employee Benefits - Restricted Stock Units - Additional Information (Details) - Restricted Stock Units (RSUs) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Age and period of service of the participant to be eligible for retirement | 75 years | ||
Fair value of restricted stock units vested | $ 2.5 | $ 2.2 | $ 1.5 |
Employees | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Directors | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Award vesting period | 1 year |
Employee Benefits - Schedule of
Employee Benefits - Schedule of Restricted Stock Units Activity (Details) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Number of RSUs | |
RSUs Nonvested, Beginning Balance | shares | 45,068 |
RSUs Granted | shares | 19,268 |
RSUs Reinvested | shares | 2,632 |
RSUs Vested | shares | (21,380) |
RSUs Forfeited | shares | (1,380) |
RSUs Nonvested, Ending Balance | shares | 44,208 |
Weighted Average Grant Date Fair Value | |
Weighted Average Grant Date Fair Value, Nonvested, Beginning Balance | $ / shares | $ 97.67 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 115.71 |
Weighted Average Grant Date Fair Value, Reinvested | $ / shares | 127.48 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 93.07 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 77.92 |
Weighted Average Grant Date Fair Value, Nonvested, Ending Balance | $ / shares | $ 109.51 |
Statutory Information and Div_3
Statutory Information and Dividend Restrictions - Additional Information (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 USD ($) company | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | |
Statutory Accounting Practices [Line Items] | ||||
Number of insurance companies | company | 3 | |||
Fair value of investment in affiliate included in statutory surplus | $ 327,400 | $ 271,200 | $ 238,000 | |
Cost basis of investment in affiliate included in statutory surplus | 64,600 | |||
Equity | 1,177,341 | 1,229,361 | 1,135,978 | $ 995,388 |
Liquid assets | 240,600 | |||
RLI Ins. | ||||
Statutory Accounting Practices [Line Items] | ||||
Authorized control level RBC | 249,700 | 225,100 | 203,900 | |
Consolidated surplus, statutory basis | $ 1,400,000 | 1,200,000 | 1,100,000 | |
Dividend restriction as percentage of policyholder surplus | 10% | |||
Payments of Ordinary Dividends | $ 13,000 | 70,000 | 110,000 | |
Extraordinary dividend paid after seeking and receiving approval from the Illinois regulatory authorities | 0 | $ 110,000 | $ 0 | |
Non restricted net assets | $ 136,900 |
Statutory Information and Div_4
Statutory Information and Dividend Restrictions - Schedule of Selected Information for Insurance Subsidiaries (Details) - Insurance Subsidiaries - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Selected information for insurance subsidiaries | |||
Consolidated net income, statutory basis | $ 229,111 | $ 207,550 | $ 120,329 |
Consolidated surplus, statutory basis | $ 1,407,925 | $ 1,240,649 | $ 1,121,592 |
Commitments And Contingent Li_2
Commitments And Contingent Liabilities (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Other Assets | |
Unfunded commitments related to investments in private funds, low-income housing tax credit investments, and equity method investees. | $ 13.5 |
Leases - Schedule of Components
Leases - Schedule of Components of Lease Expense and Other lease Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | |||
Operating lease cost | $ 4,957,000 | $ 5,131,000 | $ 5,504,000 |
Variable lease cost | 1,423,000 | 1,433,000 | 1,346,000 |
Sublease income | (555,000) | (508,000) | (262,000) |
Total lease cost | 5,825,000 | 6,056,000 | 6,588,000 |
Cash paid for amounts included in measurement of lease liabilities | |||
Operating cash outflows from operating leases | 5,435,000 | 5,738,000 | 5,963,000 |
ROU assets obtained in exchange for new operating lease liabilities | 2,694,000 | 4,828,000 | 81,000 |
Reduction to ROU assets resulting from reduction to lease liabilities | 2,000 | 1,042,000 | 18,000 |
Other non-cash reductions to ROU assets | 73,000 | 48,000 | $ 1,192,000 |
Operating lease ROU assets | $ 12,766,000 | $ 14,765,000 | |
Operating Lease, Right-of-Use Asset, Statement of Financial Position | Other assets | Other assets | |
Operating lease liabilities | $ 14,499,000 | $ 16,905,000 | |
Operating Lease, Liability, Statement of Financial Position | Other liabilities | Other liabilities | |
Weighted-average remaining lease term - operating leases | 4 years 2 months 15 days | 4 years 6 months 7 days | |
Weighted-average discount rate - operating leases | 2.11% | 2.02% |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments under Non-cancellable Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Future minimum lease payments under non-cancellable leases | ||
2023 | $ 5,578 | |
2024 | 3,628 | |
2025 | 2,216 | |
2026 | 1,311 | |
2027 | 826 | |
Thereafter | 1,587 | |
Total future minimum lease payments | 15,146 | |
Less imputed interest | (647) | |
Operating lease liabilities | $ 14,499 | $ 16,905 |
Operating Segment Information -
Operating Segment Information - Additional Information (Details) | Dec. 31, 2022 | Sep. 29, 2022 | Dec. 31, 2021 |
Maui Jim Inc. | |||
Segment Reporting Information [Line Items] | |||
Ownership percentage | 40% | 40% | |
Prime Holdings Insurance Services, Inc. (Prime) | |||
Segment Reporting Information [Line Items] | |||
Ownership percentage | 23% |
Operating Segment Information_2
Operating Segment Information - Summary of Segments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | |||
Net premiums earned | $ 1,144,436 | $ 980,903 | $ 865,747 |
Net investment income | 86,078 | 68,862 | 67,893 |
Net realized gains | 588,515 | 64,222 | 17,885 |
Net unrealized gains (losses) on equity securities | (121,037) | 65,258 | 32,101 |
Consolidated revenue | 1,697,992 | 1,179,245 | 983,626 |
INSURANCE EXPENSES | |||
Loss and settlement expenses | 514,376 | 456,602 | 442,884 |
Policy acquisition costs | 369,632 | 317,468 | 286,438 |
Other insurance expenses | 82,212 | 76,907 | 66,828 |
Insurance expenses | 966,220 | 850,977 | 796,150 |
Net Earnings | |||
Net underwriting income | 178,216 | 129,926 | 69,597 |
Net investment income | 86,078 | 68,862 | 67,893 |
Net realized gains | 588,515 | 64,222 | 17,885 |
Net unrealized gains (losses) on equity securities | (121,037) | 65,258 | 32,101 |
Interest on debt | (8,047) | (7,677) | (7,603) |
General corporate expense | (12,900) | (13,330) | (10,265) |
Equity in earnings of unconsolidated investees | 9,853 | 37,060 | 20,233 |
Earnings (losses) before income taxes | 720,678 | 344,321 | 189,841 |
Income tax expense | 137,267 | 64,967 | 32,750 |
Net earnings (losses) | 583,411 | 279,354 | 157,091 |
Casualty Segment | |||
Revenues | |||
Net premiums earned | 711,832 | 633,639 | 569,521 |
INSURANCE EXPENSES | |||
Loss and settlement expenses | 381,436 | 311,627 | 322,099 |
Policy acquisition costs | 204,397 | 179,354 | 162,058 |
Other insurance expenses | 52,210 | 47,139 | 40,937 |
Net Earnings | |||
Net underwriting income | 73,789 | 95,519 | 44,427 |
Property segment | |||
Revenues | |||
Net premiums earned | 307,886 | 231,837 | 183,720 |
INSURANCE EXPENSES | |||
Loss and settlement expenses | 120,745 | 129,924 | 111,356 |
Policy acquisition costs | 95,203 | 72,008 | 59,926 |
Other insurance expenses | 19,416 | 18,605 | 15,620 |
Net Earnings | |||
Net underwriting income | 72,522 | 11,300 | (3,182) |
Surety Segment | |||
Revenues | |||
Net premiums earned | 124,718 | 115,427 | 112,506 |
INSURANCE EXPENSES | |||
Loss and settlement expenses | 12,195 | 15,051 | 9,429 |
Policy acquisition costs | 70,032 | 66,106 | 64,454 |
Other insurance expenses | 10,586 | 11,163 | 10,271 |
Net Earnings | |||
Net underwriting income | $ 31,905 | $ 23,107 | $ 28,352 |
Operating Segment Information_3
Operating Segment Information - Summary of Revenue by Major Product Type (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Net premiums earned | $ 1,144,436 | $ 980,903 | $ 865,747 |
Casualty Segment | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 711,832 | 633,639 | 569,521 |
Casualty Segment | Commercial excess and personal umbrella | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 253,921 | 219,437 | 178,214 |
Casualty Segment | General liability | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 100,374 | 90,853 | 91,653 |
Casualty Segment | Commercial transportation | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 96,992 | 83,352 | 64,624 |
Casualty Segment | Professional services | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 95,187 | 88,855 | 85,196 |
Casualty Segment | Small commercial | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 67,673 | 64,660 | 63,357 |
Casualty Segment | Executive products | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 26,606 | 21,873 | 26,509 |
Casualty Segment | Other casualty | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 71,079 | 64,609 | 59,968 |
Property Segment | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 307,886 | 231,837 | 183,720 |
Property Segment | Commercial property | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 163,078 | 107,941 | 79,406 |
Property Segment | Marine | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 113,208 | 97,745 | 81,852 |
Property Segment | Other property | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 31,600 | 26,151 | 22,462 |
Surety Segment | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 124,718 | 115,427 | 112,506 |
Surety Segment | Commercial property | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 47,652 | 43,738 | 42,872 |
Surety Segment | Miscellaneous | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | 45,826 | 43,982 | 42,292 |
Surety Segment | Contract | |||
Segment Reporting Information [Line Items] | |||
Net premiums earned | $ 31,240 | $ 27,707 | $ 27,342 |
Acquisitions and Dispositions (
Acquisitions and Dispositions (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Dispositions | ||||
Cash proceeds from sale | $ 686,666 | |||
Recognized gain on sale | $ 570,952 | $ (61) | $ (187) | |
Maui Jim Inc. | ||||
Dispositions | ||||
Cash proceeds from sale | $ 686,600 | |||
Maui Jim Inc. | Net Realized Gain (Loss) | ||||
Dispositions | ||||
Recognized gain on sale | $ 571,000 |
Schedule I-Summary Of Investm_2
Schedule I-Summary Of Investments-Other than Investments in Related Parties (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | $ 3,376,319 |
Fair Value | 3,272,301 |
Amount at which shown in the balance sheet | 3,272,301 |
Available for sale securities | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 2,945,273 |
Fair Value | 2,666,950 |
Amount at which shown in the balance sheet | 2,666,950 |
Fixed Income Securities | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 2,945,273 |
Fair Value | 2,666,950 |
Amount at which shown in the balance sheet | 2,666,950 |
Equity Securities | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 328,019 |
Fair Value | 498,382 |
Amount at which shown in the balance sheet | 498,382 |
Ind Misc & All Other | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 109,530 |
Fair Value | 179,643 |
Amount at which shown in the balance sheet | 179,643 |
ETFs (Ind/misc) | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 218,489 |
Fair Value | 318,739 |
Amount at which shown in the balance sheet | 318,739 |
Cash and Short-term Investments | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 59,047 |
Fair Value | 59,047 |
Amount at which shown in the balance sheet | 59,047 |
Other Invested Assets | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 43,980 |
Fair Value | 47,922 |
Amount at which shown in the balance sheet | 47,922 |
U.S. government | Available for sale securities | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 462,884 |
Fair Value | 454,021 |
Amount at which shown in the balance sheet | 454,021 |
U.S. Agency | Available for sale securities | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 75,074 |
Fair Value | 73,063 |
Amount at which shown in the balance sheet | 73,063 |
Non-U.S. government & agency | Available for sale securities | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 6,798 |
Fair Value | 5,847 |
Amount at which shown in the balance sheet | 5,847 |
Agency MBS | Available for sale securities | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 373,687 |
Fair Value | 331,806 |
Amount at which shown in the balance sheet | 331,806 |
ABS/CMBS/MBS | Available for sale securities | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 276,126 |
Fair Value | 240,736 |
Amount at which shown in the balance sheet | 240,736 |
Corporate Debt | Available for sale securities | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 1,122,097 |
Fair Value | 1,034,330 |
Amount at which shown in the balance sheet | 1,034,330 |
Municipal | Available for sale securities | |
SCHEDULE I - SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |
Cost | 628,607 |
Fair Value | 527,147 |
Amount at which shown in the balance sheet | $ 527,147 |
Schedule II - Condensed Financi
Schedule II - Condensed Financial Information of Registrant (Parent Company) - Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||||
Cash | $ 22,818 | $ 88,804 | ||
Short-term investments, at cost which approximates fair value | 36,229 | |||
Investment in unconsolidated investees | 58,275 | 171,311 | ||
Fixed income: | ||||
Available-for-sale, at fair value (amortized cost of $250,904 and allowance for credit losses of $0 in 2022) (amortized cost of $84,823 and allowance for credit losses of $0 in 2021) | 2,666,950 | 2,409,887 | ||
Property and equipment, at cost, net of accumulated depreciation of $1,340 in 2022 and $1,697 in 2021 | 49,573 | 52,161 | ||
Income taxes-deferred | 40,269 | |||
TOTAL ASSETS | 4,767,068 | 4,508,302 | ||
Liabilities | ||||
Current portion of long-term debt | 199,863 | |||
Long-term debt | 199,676 | |||
TOTAL LIABILITIES | 3,589,727 | 3,278,941 | ||
Shareholders' Equity | ||||
Common stock ($0.01 par value) (Shares authorized - 200,000,000) (68,399,966 shares issued and 45,469,752 shares outstanding in 2022) (68,399,966 shares issued and 45,469,752 shares outstanding in 2022) | 684 | 682 | ||
Paid-in capital | 352,391 | 343,742 | ||
Accumulated other comprehensive earnings (loss) | (229,076) | 49,826 | ||
Retained earnings | 1,446,341 | 1,228,110 | ||
Deferred compensation | 12,015 | 9,642 | ||
Treasury shares, at cost (22,930,214 shares in 2022 and 2021) | (405,014) | (402,641) | ||
TOTAL SHAREHOLDERS' EQUITY | 1,177,341 | 1,229,361 | $ 1,135,978 | $ 995,388 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 4,767,068 | 4,508,302 | ||
Parent Company | ||||
ASSETS | ||||
Cash | 1,051 | 1,433 | ||
Short-term investments, at cost which approximates fair value | 2,229 | |||
Accounts receivable, affiliates | 1,572 | 848 | ||
Investments in subsidiaries | 1,084,055 | 1,197,997 | ||
Investment in unconsolidated investees | 113,052 | |||
Fixed income: | ||||
Available-for-sale, at fair value (amortized cost of $250,904 and allowance for credit losses of $0 in 2022) (amortized cost of $84,823 and allowance for credit losses of $0 in 2021) | 237,282 | 86,483 | ||
Property and equipment, at cost, net of accumulated depreciation of $1,340 in 2022 and $1,697 in 2021 | 1,410 | 1,711 | ||
Income taxes receivable - current | 211 | |||
Income taxes-deferred | 3,204 | |||
Other assets | 3,840 | 2,907 | ||
TOTAL ASSETS | 1,334,643 | 1,404,642 | ||
Liabilities | ||||
Income taxes-current | 1,823 | |||
Income taxes - deferred | 21,067 | |||
Current portion of long-term debt | 149,863 | |||
Long-term debt | 149,676 | |||
Interest payable, long-term debt | 2,153 | 2,153 | ||
Other liabilities | 3,463 | 2,385 | ||
TOTAL LIABILITIES | 157,302 | 175,281 | ||
Shareholders' Equity | ||||
Common stock ($0.01 par value) (Shares authorized - 200,000,000) (68,399,966 shares issued and 45,469,752 shares outstanding in 2022) (68,399,966 shares issued and 45,469,752 shares outstanding in 2022) | 684 | 682 | ||
Paid-in capital | 352,391 | 343,742 | ||
Accumulated other comprehensive earnings (loss) | (229,076) | 49,826 | ||
Retained earnings | 1,446,341 | 1,228,110 | ||
Deferred compensation | 12,015 | 9,642 | ||
Treasury shares, at cost (22,930,214 shares in 2022 and 2021) | (405,014) | (402,641) | ||
TOTAL SHAREHOLDERS' EQUITY | 1,177,341 | 1,229,361 | ||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 1,334,643 | $ 1,404,642 |
Schedule II - Condensed Finan_2
Schedule II - Condensed Financial Information of Registrant (Parent Company) - Balance Sheet Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Condensed Balance Sheet Statements Captions [Line Items] | |||
Available-for-sale, amortized cost | $ 2,945,273 | $ 2,346,267 | |
Available-for-sale, allowance for credit losses | 339 | 441 | $ 397 |
Property and equipment, accumulated depreciation | $ 68,633 | $ 75,236 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 | |
Common stock, shares issued (in shares) | 68,399,966 | 68,219,551 | |
Common stock, shares outstanding (in shares) | 45,469,752 | 45,289,337 | |
Treasury stock, shares (in shares) | 22,930,214 | 22,930,214 | |
Parent Company | |||
Condensed Balance Sheet Statements Captions [Line Items] | |||
Available-for-sale, amortized cost | $ 250,904 | $ 84,823 | |
Available-for-sale, allowance for credit losses | 0 | 0 | |
Property and equipment, accumulated depreciation | $ 1,340 | $ 1,697 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 | |
Common stock, shares issued (in shares) | 68,399,966 | 68,219,551 | |
Common stock, shares outstanding (in shares) | 45,469,752 | 45,289,337 | |
Treasury stock, shares (in shares) | 22,930,214 | 22,930,214 |
Schedule II - Condensed Finan_3
Schedule II - Condensed Financial Information of Registrant (Parent Company) - Condensed Statements of Earnings and Comprehensive Earnings (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Statement Of Income Captions [Line Items] | |||
Net investment income | $ 86,078 | $ 68,862 | $ 67,893 |
Net realized (gains) losses | 588,515 | 64,222 | 17,885 |
Equity in earnings of unconsolidated investees | 9,853 | 37,060 | 20,233 |
Interest on debt | (8,047) | (7,677) | (7,603) |
Earnings (losses) before income taxes | 720,678 | 344,321 | 189,841 |
Income tax expense | 137,267 | 64,967 | 32,750 |
Net earnings (losses) | 583,411 | 279,354 | 157,091 |
Unrealized gains (losses) on securities: | |||
Net current-period other comprehensive earnings (loss) | (278,902) | (58,888) | 56,219 |
Comprehensive earnings | 304,509 | 220,466 | 213,310 |
Parent Company | |||
Condensed Statement Of Income Captions [Line Items] | |||
Net investment income | 6,245 | 2,102 | 1,412 |
Net realized (gains) losses | 570,888 | (625) | 501 |
Equity in earnings of unconsolidated investees | 372 | 22,786 | 10,368 |
Selling, general and administrative expenses | (12,900) | (13,330) | (10,265) |
Interest on debt | (7,622) | (7,616) | (7,603) |
Earnings (losses) before income taxes | 556,983 | 3,317 | (5,587) |
Income tax expense | 108,699 | (1,585) | (2,885) |
Net earnings (loss) before equity in net earnings of subsidiaries | 448,284 | 4,902 | (2,702) |
Equity in net earnings of subsidiaries | 135,127 | 274,452 | 159,793 |
Net earnings (losses) | 583,411 | 279,354 | 157,091 |
Unrealized gains (losses) on securities: | |||
Unrealized holding gains (losses) arising during the period | (12,188) | (1,996) | 994 |
Less: reclassification adjustment for (gains) losses included in net earnings | 115 | 500 | (390) |
Other comprehensive earnings (loss) - parent only | (12,073) | (1,496) | 604 |
Equity in other comprehensive earnings (loss) of subsidiaries/investees | (266,829) | (57,392) | 55,615 |
Net current-period other comprehensive earnings (loss) | (278,902) | (58,888) | 56,219 |
Comprehensive earnings | $ 304,509 | $ 220,466 | $ 213,310 |
Schedule II - Condensed Finan_4
Schedule II - Condensed Financial Information of Registrant (Parent Company) - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net earnings | $ 583,411 | $ 279,354 | $ 157,091 |
Adjustments to reconcile net losses to net cash provided by (used in) operating activities: | |||
Net realized (gains) losses | (588,515) | (64,222) | (17,885) |
Depreciation | 7,981 | 7,394 | 7,432 |
Other items, net | (20,467) | 14,141 | 10,460 |
Changes in investment in unconsolidated investees: | |||
Undistributed earnings | (9,853) | (37,060) | (20,233) |
Dividends received | 0 | 0 | 4,675 |
Net cash provided by operating activities | 250,448 | 384,905 | 263,259 |
Purchase of: | |||
Fixed income securities, available-for-sale | (2,053,359) | (733,811) | (518,362) |
Other | (5,704) | (11,428) | (12,851) |
Sale of: | |||
Fixed income securities - available-for-sale | 53,300 | 63,811 | 84,587 |
Equity method investments | 686,666 | ||
Property and equipment | 375 | ||
Call or maturity of: | |||
Fixed income securities - available-for-sale | 1,393,674 | 376,750 | 283,107 |
Net purchase of short-term investments | (36,229) | ||
Net cash provided by (used in) investing activities | 48,879 | (274,826) | (167,987) |
Cash Flows from Financing Activities | |||
Proceeds from stock option exercises | (465) | 1,838 | 8,648 |
Net cash used in financing activities | (365,313) | (83,492) | (79,258) |
Net increase (decrease) in cash | (65,986) | 26,587 | 16,014 |
Cash at the beginning of the year | 88,804 | 62,217 | 46,203 |
Cash at the end of the year | 22,818 | 88,804 | 62,217 |
Parent Company | |||
Cash flows from operating activities: | |||
Net earnings | 448,284 | 4,902 | (2,702) |
Adjustments to reconcile net losses to net cash provided by (used in) operating activities: | |||
Net realized (gains) losses | (570,888) | 625 | (501) |
Depreciation | 64 | 68 | 67 |
Other items, net | 1,403 | 3,966 | 2,270 |
Change in: | |||
Affiliate balances receivable/payable | (724) | (3,404) | 1,246 |
Federal income taxes | (19,484) | 5,901 | 1,399 |
Changes in investment in unconsolidated investees: | |||
Undistributed earnings | (372) | (22,786) | (10,368) |
Net cash provided by operating activities | (141,717) | (10,728) | (8,589) |
Purchase of: | |||
Fixed income securities, available-for-sale | (1,356,177) | (33,373) | (24,950) |
Other | (1,420) | (2,904) | (346) |
Sale of: | |||
Fixed income securities - available-for-sale | 1,373 | 5,306 | 3,767 |
Equity method investments | 686,566 | ||
Property and equipment | 298 | ||
Other | 221 | 1,245 | |
Call or maturity of: | |||
Fixed income securities - available-for-sale | 1,192,050 | 2,878 | 3,492 |
Net purchase of short-term investments | (2,229) | ||
Cash dividends received-subsidiaries | 13,000 | 180,000 | 110,000 |
Net cash provided by (used in) investing activities | 533,682 | 153,152 | 91,963 |
Cash Flows from Financing Activities | |||
Proceeds from stock option exercises | (465) | 1,838 | 8,648 |
Cash dividends paid | (397,323) | (147,422) | (95,793) |
Other | 5,441 | 4,212 | 3,802 |
Net cash used in financing activities | (392,347) | (141,372) | (83,343) |
Net increase (decrease) in cash | (382) | 1,052 | 31 |
Cash at the beginning of the year | 1,433 | 381 | 350 |
Cash at the end of the year | $ 1,051 | $ 1,433 | $ 381 |
Schedule II - Condensed Finan_5
Schedule II - Condensed Financial Information of Registrant (Parent Company) - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Cash Flow Statements Captions [Line Items] | |||
Interest paid | $ 7.7 | $ 7.3 | $ 7.3 |
Parent Company | |||
Condensed Cash Flow Statements Captions [Line Items] | |||
Interest paid | $ 7.3 | $ 7.3 | $ 7.3 |
Schedule III-Supplementary In_2
Schedule III-Supplementary Insurance Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Supplementary insurance information | |||
Deferred policy acquisition costs | $ 127,859 | $ 103,553 | $ 88,425 |
Unpaid losses and settlement expenses, gross | 2,315,637 | 2,043,555 | 1,750,049 |
Unearned premiums, gross | 785,085 | 680,444 | 586,386 |
Net premiums earned | 1,144,436 | 980,903 | 865,747 |
Incurred losses and settlement expenses | |||
Current accident year | 636,955 | 582,065 | 543,937 |
Prior accident years | (122,579) | (125,463) | (101,053) |
Policy acquisition costs | 369,632 | 317,468 | 286,438 |
Other operating expenses | 82,212 | 76,907 | 66,828 |
Net premiums written | 1,241,536 | 1,057,533 | 892,088 |
Casualty Segment | |||
Supplementary insurance information | |||
Deferred policy acquisition costs | 66,285 | 55,760 | 48,255 |
Unpaid losses and settlement expenses, gross | 1,929,091 | 1,760,469 | 1,567,544 |
Unearned premiums, gross | 466,178 | 438,248 | 385,736 |
Net premiums earned | 711,832 | 633,639 | 569,521 |
Incurred losses and settlement expenses | |||
Current accident year | 468,661 | 420,259 | 397,174 |
Prior accident years | (87,225) | (108,632) | (75,075) |
Policy acquisition costs | 204,397 | 179,354 | 162,058 |
Other operating expenses | 52,210 | 47,139 | 40,937 |
Net premiums written | 744,607 | 674,709 | 583,244 |
Property segment | |||
Supplementary insurance information | |||
Deferred policy acquisition costs | 36,767 | 25,764 | 19,655 |
Unpaid losses and settlement expenses, gross | 293,737 | 196,369 | 150,008 |
Unearned premiums, gross | 237,369 | 168,209 | 131,274 |
Net premiums earned | 307,886 | 231,837 | 183,720 |
Incurred losses and settlement expenses | |||
Current accident year | 145,672 | 140,905 | 124,375 |
Prior accident years | (24,927) | (10,981) | (13,019) |
Policy acquisition costs | 95,203 | 72,008 | 59,926 |
Other operating expenses | 19,416 | 18,605 | 15,620 |
Net premiums written | 364,644 | 262,816 | 196,603 |
Surety Segment | |||
Supplementary insurance information | |||
Deferred policy acquisition costs | 24,807 | 22,029 | 20,515 |
Unpaid losses and settlement expenses, gross | 92,809 | 86,717 | 32,497 |
Unearned premiums, gross | 81,538 | 73,987 | 69,376 |
Net premiums earned | 124,718 | 115,427 | 112,506 |
Incurred losses and settlement expenses | |||
Current accident year | 22,622 | 20,901 | 22,388 |
Prior accident years | (10,427) | (5,850) | (12,959) |
Policy acquisition costs | 70,032 | 66,106 | 64,454 |
Other operating expenses | 10,586 | 11,163 | 10,271 |
Net premiums written | $ 132,285 | $ 120,008 | $ 112,241 |
Schedule IV-Reinsurance (Detail
Schedule IV-Reinsurance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
RLI Insurance Group Premiums earned | |||
Direct amount | $ 1,425,165 | $ 1,222,346 | $ 1,062,608 |
Ceded to other companies | 316,409 | 272,393 | 224,512 |
Assumed from other companies | 35,680 | 30,950 | 27,651 |
Net | $ 1,144,436 | $ 980,903 | $ 865,747 |
Percentage of amount assumed to net | 3.10% | 3.20% | 3.20% |
Casualty Segment | |||
RLI Insurance Group Premiums earned | |||
Direct amount | $ 863,530 | $ 788,741 | $ 690,718 |
Ceded to other companies | 186,469 | 185,433 | 148,271 |
Assumed from other companies | 34,771 | 30,331 | 27,074 |
Net | $ 711,832 | $ 633,639 | $ 569,521 |
Percentage of amount assumed to net | 4.90% | 4.80% | 4.80% |
Property Segment | |||
RLI Insurance Group Premiums earned | |||
Direct amount | $ 430,010 | $ 310,630 | $ 253,781 |
Ceded to other companies | 122,415 | 79,094 | 70,398 |
Assumed from other companies | 291 | 301 | 337 |
Net | $ 307,886 | $ 231,837 | $ 183,720 |
Percentage of amount assumed to net | 0.10% | 0.10% | 0.20% |
Surety Segment | |||
RLI Insurance Group Premiums earned | |||
Direct amount | $ 131,625 | $ 122,975 | $ 118,109 |
Ceded to other companies | 7,525 | 7,866 | 5,843 |
Assumed from other companies | 618 | 318 | 240 |
Net | $ 124,718 | $ 115,427 | $ 112,506 |
Percentage of amount assumed to net | 0.50% | 0.30% | 0.20% |
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Valuation allowances and qualifying accounts | |||
Balance at beginning of period | $ 27,243 | $ 24,539 | $ 25,066 |
Amounts charged to expense | 130 | 2,863 | (522) |
Amounts recovered (written off) | (50) | (159) | (5) |
Balance at end of period | $ 27,323 | $ 27,243 | $ 24,539 |
Schedule VI-Supplementary Inf_2
Schedule VI-Supplementary Information Concerning Property-Casualty Insurance Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Claims and claim adjustment expenses incurred related to: | |||
Current accident year | $ 636,955 | $ 582,065 | $ 543,937 |
Prior accident years | (122,579) | (125,463) | (101,053) |
Amortization of deferred acquisition costs | 369,632 | 317,468 | 286,438 |
Consolidated Property-Casualty Insurance Operations | |||
Supplemental Information For Property Casualty Insurance Underwriters [Line Items] | |||
Deferred policy acquisition costs | 127,859 | 103,553 | 88,425 |
Claims and claim adjustment expense reserves | 2,315,637 | 2,043,555 | 1,750,049 |
Unearned premiums, gross | 785,085 | 680,444 | 586,386 |
Net premiums earned | 1,144,436 | 980,903 | 865,747 |
Net investment income | 86,078 | 68,862 | 67,893 |
Claims and claim adjustment expenses incurred related to: | |||
Current accident year | 636,955 | 582,065 | 543,937 |
Prior accident years | (122,579) | (125,463) | (101,053) |
Amortization of deferred acquisition costs | 369,632 | 317,468 | 286,438 |
Paid claims and claims adjustment expenses | 374,297 | 327,453 | 325,054 |
Net premiums written | $ 1,241,536 | $ 1,057,533 | $ 892,088 |