RLI (RLI) 10-Q 23 Oct 20 2020 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2020	Oct. 15, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2020
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 Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		45,055,164
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Entity Central Index Key	0000084246
Amendment Flag	false

Condensed Consolidated Statemen

Condensed Consolidated Statements of Earnings and Comprehensive Earnings - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Statement [Abstract]
Net premiums earned	$ 216,630	$ 211,255	$ 640,946	$ 623,485
Net investment income	16,543	17,532	51,238	51,095
Net realized gains	1,512	3,211	14,555	17,043
Net unrealized gains (losses) on equity securities	28,126	4,906	(27,564)	47,214
Consolidated revenue	262,811	236,904	679,175	738,837
Losses and settlement expenses	127,596	108,990	339,819	307,206
Policy acquisition costs	71,032	71,552	213,436	214,586
Insurance operating expenses	16,850	16,982	45,137	50,597
Interest expense on debt	1,901	1,861	5,701	5,583
General corporate expenses	2,668	2,583	6,417	9,142
Total expenses	220,047	201,968	610,510	587,114
Equity in earnings of unconsolidated investees	8,745	4,011	18,359	17,793
Earnings before income taxes	51,509	38,947	87,024	169,516
Income tax expense:
Income tax expense	9,122	6,623	13,738	31,252
Net earnings	42,387	32,324	73,286	138,264
Other comprehensive earnings, net of tax	9,550	15,341	50,090	72,506
Comprehensive earnings	$ 51,937	$ 47,665	$ 123,376	$ 210,770
Basic:
Basic net earnings per share	$ 0.94	$ 0.72	$ 1.63	$ 3.09
Basic comprehensive earnings per share	1.15	1.06	2.74	4.72
Diluted:
Diluted net earnings per share	0.93	0.71	1.62	3.06
Diluted comprehensive earnings per share	$ 1.14	$ 1.05	$ 2.72	$ 4.66
Weighted average number of common shares outstanding:
Basic	45,014	44,823	44,962	44,689
Diluted	45,426	45,349	45,339	45,192

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
ASSETS
Available-for-sale, at fair value (amortized cost of $2,030,979 and allowance for credit losses of $632 at 9/30/20) (amortized cost of $1,915,278 and allowance for credit losses of $0 at 12/31/19)	$ 2,159,795	$ 1,983,086
Equity securities, at fair value (cost - $280,337 at 9/30/20 and $262,131 at 12/31/19)	455,956	460,630
Other invested assets	59,988	70,441
Cash	70,589	46,203
Total investments and cash	2,746,328	2,560,360
Accrued investment income	15,685	14,587
Premiums and reinsurance balances receivable, net of allowances for uncollectible amounts of $17,246 at 9/30/20 and $16,682 at 12/31/19	159,427	160,369
Ceded unearned premium	102,902	93,656
Reinsurance balances recoverable on unpaid losses and settlement expenses, net of allowances for uncollectible amounts of $8,097 at 9/30/20 and $9,402 at 12/31/19	399,960	384,517
Deferred policy acquisition costs	89,818	85,044
Property and equipment, at cost, net of accumulated depreciation of $67,555 at 9/30/20 and $62,703 at 12/31/19	52,113	53,121
Investment in unconsolidated investees	128,154	103,836
Goodwill and intangibles	53,821	54,127
Other assets	44,293	36,104
TOTAL ASSETS	3,792,501	3,545,721
Liabilities
Unpaid losses and settlement expenses	1,686,876	1,574,352
Unearned premiums	570,754	540,213
Reinsurance balances payable	31,646	25,691
Funds held	79,774	83,358
Income taxes-deferred	66,008	56,727
Bonds payable, long-term debt	149,442	149,302
Accrued expenses	46,516	66,626
Other liabilities	62,145	54,064
TOTAL LIABILITIES	2,693,161	2,550,333
Shareholders’ Equity
Common stock ($0.01 par value) (Shares authorized - 200,000,000 at 9/30/20 and 100,000,000 at 12/31/19) (67,985,378 shares issued, 45,055,164 shares outstanding at 9/30/20) (67,799,229 shares issued, 44,869,015 shares outstanding at 12/31/19)	680	678
Paid-in capital	332,629	321,190
Accumulated other comprehensive earnings	102,585	52,473
Retained earnings	1,056,445	1,014,046
Deferred compensation	7,703	7,980
Less: Treasury shares at cost (22,930,214 shares at 9/30/20 and 12/31/19)	(400,702)	(400,979)
TOTAL SHAREHOLDERS’ EQUITY	1,099,340	995,388
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 3,792,501	$ 3,545,721

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Statement Of Financial Position [Abstract]
Available-for-sale, amortized cost	$ 2,030,979	$ 1,915,278
Available-for-sale, allowance for credit losses	632	0
Equity securities, cost	280,337	262,131
Premiums and reinsurance balances receivable, allowances for uncollectible amounts	17,246	16,682
Reinsurance balances recoverable on unpaid losses and settlement expenses, allowances for uncollectible amounts	8,097	9,402
Property and equipment, accumulated depreciation	$ 67,555	$ 62,703
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	200,000,000	100,000,000
Common stock, shares issued (in shares)	67,985,378	67,799,229
Common stock, shares outstanding (in shares)	45,055,164	44,869,015
Treasury stock, shares (in shares)	22,930,214	22,930,214

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment	Common stock	Paid-in Capital	Accumulated Other Comprehensive Earnings (Loss)	Accumulated Other Comprehensive Earnings (Loss)Cumulative Effect, Period of Adoption, Adjustment	Retained Earnings	Retained EarningsCumulative Effect, Period of Adoption, Adjustment	Deferred Compensation	Treasury Stock at Cost
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2018	$ 806,842		$ 674	$ 305,660	$ (14,572)		$ 908,079		$ 8,354	$ (401,353)
Shares, Outstanding, Beginning Balance at Dec. 31, 2018			44,504,043
Increase (Decrease) in Shareholders' Equity
Net earnings (loss)	65,473						65,473
Other comprehensive earnings (loss), net of tax	29,301				29,301
Deferred compensation									(1,039)	1,039
Share-based compensation	2,892		$ 1	2,891
Share-based compensation (in shares)			50,213
Dividends and dividend equivalents	(9,803)						(9,803)
Stockholders' Equity Attributable to Parent, Ending Balance at Mar. 31, 2019	894,705		$ 675	308,551	14,729		963,749		7,315	(400,314)
Shares, Outstanding, Ending Balance at Mar. 31, 2019			44,554,256
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2018	806,842		$ 674	305,660	(14,572)		908,079		8,354	(401,353)
Shares, Outstanding, Beginning Balance at Dec. 31, 2018			44,504,043
Increase (Decrease) in Shareholders' Equity
Net earnings (loss)	138,264
Other comprehensive earnings (loss), net of tax	72,506
Stockholders' Equity Attributable to Parent, Ending Balance at Sep. 30, 2019	999,620		$ 678	318,092	57,934		1,015,915		7,788	(400,787)
Shares, Outstanding, Ending Balance at Sep. 30, 2019			44,832,088
Stockholders' Equity Attributable to Parent, Beginning Balance at Mar. 31, 2019	894,705		$ 675	308,551	14,729		963,749		7,315	(400,314)
Shares, Outstanding, Beginning Balance at Mar. 31, 2019			44,554,256
Increase (Decrease) in Shareholders' Equity
Net earnings (loss)	40,467						40,467
Other comprehensive earnings (loss), net of tax	27,864				27,864
Deferred compensation									215	(215)
Share-based compensation	7,217		$ 2	7,215
Share-based compensation (in shares)			232,941
Dividends and dividend equivalents	(10,305)						(10,305)
Stockholders' Equity Attributable to Parent, Ending Balance at Jun. 30, 2019	959,948		$ 677	315,766	42,593		993,911		7,530	(400,529)
Shares, Outstanding, Ending Balance at Jun. 30, 2019			44,787,197
Increase (Decrease) in Shareholders' Equity
Net earnings (loss)	32,324						32,324
Other comprehensive earnings (loss), net of tax	15,341				15,341
Deferred compensation									258	(258)
Share-based compensation	2,327		$ 1	2,326
Share-based compensation (in shares)			44,891
Dividends and dividend equivalents	(10,320)						(10,320)
Stockholders' Equity Attributable to Parent, Ending Balance at Sep. 30, 2019	999,620		$ 678	318,092	57,934		1,015,915		7,788	(400,787)
Shares, Outstanding, Ending Balance at Sep. 30, 2019			44,832,088
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2019	$ 995,388	$ 1,095	$ 678	321,190	52,473	$ 22	1,014,046	$ 1,073	7,980	(400,979)
Shares, Outstanding, Beginning Balance at Dec. 31, 2019			44,869,015
Increase (Decrease) in Shareholders' Equity
Accounting Standards Update [Extensible List]	us-gaap:AccountingStandardsUpdate201613Member
Net earnings (loss)	$ (61,267)						(61,267)
Other comprehensive earnings (loss), net of tax	(13,031)				(13,031)
Deferred compensation									(1,010)	1,010
Share-based compensation	3,863		$ 1	3,862
Share-based compensation (in shares)			53,641
Dividends and dividend equivalents	(10,343)						(10,343)
Stockholders' Equity Attributable to Parent, Ending Balance at Mar. 31, 2020	915,705		$ 679	325,052	39,464		943,509		6,970	(399,969)
Shares, Outstanding, Ending Balance at Mar. 31, 2020			44,922,656
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2019	995,388	$ 1,095	$ 678	321,190	52,473	$ 22	1,014,046	$ 1,073	7,980	(400,979)
Shares, Outstanding, Beginning Balance at Dec. 31, 2019			44,869,015
Increase (Decrease) in Shareholders' Equity
Net earnings (loss)	73,286
Other comprehensive earnings (loss), net of tax	50,090
Stockholders' Equity Attributable to Parent, Ending Balance at Sep. 30, 2020	1,099,340		$ 680	332,629	102,585		1,056,445		7,703	(400,702)
Shares, Outstanding, Ending Balance at Sep. 30, 2020			45,055,164
Stockholders' Equity Attributable to Parent, Beginning Balance at Mar. 31, 2020	915,705		$ 679	325,052	39,464		943,509		6,970	(399,969)
Shares, Outstanding, Beginning Balance at Mar. 31, 2020			44,922,656
Increase (Decrease) in Shareholders' Equity
Net earnings (loss)	92,166						92,166
Other comprehensive earnings (loss), net of tax	53,571				53,571
Deferred compensation									630	(630)
Share-based compensation	810			810
Share-based compensation (in shares)			29,946
Dividends and dividend equivalents	(10,794)						(10,794)
Stockholders' Equity Attributable to Parent, Ending Balance at Jun. 30, 2020	1,051,458		$ 679	325,862	93,035		1,024,881		7,600	(400,599)
Shares, Outstanding, Ending Balance at Jun. 30, 2020			44,952,602
Increase (Decrease) in Shareholders' Equity
Net earnings (loss)	42,387						42,387
Other comprehensive earnings (loss), net of tax	9,550				9,550
Deferred compensation									103	(103)
Share-based compensation	6,768		$ 1	6,767
Share-based compensation (in shares)			102,562
Dividends and dividend equivalents	(10,823)						(10,823)
Stockholders' Equity Attributable to Parent, Ending Balance at Sep. 30, 2020	$ 1,099,340		$ 680	$ 332,629	$ 102,585		$ 1,056,445		$ 7,703	$ (400,702)
Shares, Outstanding, Ending Balance at Sep. 30, 2020			45,055,164

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares	3 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019
Statement Of Stockholders Equity [Abstract]
Cash dividends paid per common share	$ 0.24	$ 0.24	$ 0.23	$ 0.23	$ 0.23	$ 0.22

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Statement Of Cash Flows [Abstract]
Net cash provided by operating activities	$ 163,244	$ 186,762
Purchase of:
Fixed income securities, available-for-sale	(368,586)	(380,813)
Equity securities	(62,643)	(73,072)
Property and equipment	(4,969)	(4,056)
Other	(15,095)	(12,154)
Proceeds from sale of:
Fixed income securities, available-for-sale	68,229	173,120
Equity securities	66,185	47,799
Other	3,136	2,057
Proceeds from call or maturity of:
Fixed income securities, available-for-sale	199,036	106,241
Net proceeds from sale (purchase) of short-term investments		6,016
Net cash used in investing activities	(114,707)	(134,862)
Cash Flows from Financing Activities
Cash dividends paid	(31,931)	(30,428)
Proceeds from stock option exercises	7,780	12,436
Net cash used in financing activities	(24,151)	(17,992)
Net increase in cash	24,386	33,908
Cash at the beginning of the period	46,203	30,140
Cash at the end of the period	$ 70,589	$ 64,048

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. BASIS OF PRESENTATION The unaudited condensed consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) for interim financial reporting and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all the disclosures required by GAAP for complete financial statements. As such, these unaudited condensed consolidated interim financial statements should be read in conjunction with our 2019 Annual Report on Form 10-K. Management believes that the disclosures are adequate to make the information presented not misleading, and all normal and recurring adjustments necessary to present fairly the financial position at September 30, 2020 and the results of operations of RLI Corp. (the Company) and subsidiaries for all periods presented have been made. The results of operations for any interim period are not necessarily indicative of the operating results for a full year. Certain reclassifications were made to 2019 to conform to the classifications used in the current year. The preparation of the unaudited condensed consolidated interim financial statements requires management to make estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated interim financial statements and the reported amounts of revenue and expenses during the period. These estimates are inherently subject to change and actual results could differ significantly from these estimates. B. ADOPTED ACCOUNTING STANDARDS ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ASU 2016-13 was issued to provide more decision-useful information about the expected credit losses on financial instruments. Previous guidance delayed the recognition of credit losses until it was probable a loss had been incurred. This update requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected by means of an allowance for credit losses that is included in net earnings. Credit losses relating to available-for-sale debt securities are also required to be recorded through a reversible allowance for credit losses, but is limited to the amount by which fair value is less than amortized cost. We adopted ASU 2016-13 on January 1, 2020 using the modified-retrospective approach. The standard applied to three of the Company’s balance sheet accounts: available-for-sale fixed income securities, premiums receivable and reinsurance balances recoverable. The impact of this standard was and is expected to continue to be immaterial, as our fixed income portfolio is weighted towards higher rated bonds (83 percent rated A or better at September 30, 2020 and 85 percent at December 31, 2019), we purchase reinsurance from financially strong reinsurers, we have a long history of collecting premium receivables through various economic cycles and we had previously maintained an allowance for uncollectible premium and reinsurance balances. In total, the cumulative-effect adjustment made to the balance sheet as of the beginning of the year resulted in a $1.1 million increase to retained earnings and an increase to accumulated other comprehensive earnings of less than $0.1 million. C. REINSURANCE Ceded unearned premiums and reinsurance balances recoverable on paid and unpaid losses and settlement expenses are reported separately as assets, instead of being netted with the related liabilities, since reinsurance does not relieve the Company of our legal liability to our policyholders. Such balances are subject to the credit risk associated with the individual reinsurer. We continuously monitor the financial condition of our reinsurers and actively follow up on any past due or disputed amounts. As part of our monitoring efforts, we review their annual financial statements, quarterly disclosures and Securities and Exchange Commission (SEC) filings for those reinsurers that are publicly traded. We also review insurance industry developments that may impact the financial condition of our reinsurers. We analyze the credit risk associated with our reinsurance balances recoverable by monitoring the AM Best and Standard & Poor’s (S&P) ratings of our reinsurers. Additionally, we perform an in-depth reinsurer financial condition analysis prior to the renewal of our reinsurance placements. 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 balances recoverable from the reinsurer are specifically identified and charged to earnings in the form of an allowance for uncollectible amounts. We subject our remaining reinsurance balances receivable to detailed recoverability tests, including a segment-based analysis using the average default rating percentage by S&P rating, and record an additional allowance for unrecoverable amounts from reinsurers. This credit 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. The allowances for uncollectible amounts on paid and unpaid reinsurance recoverables were $15.9 million and $8.1 million, respectively, at September 30, 2020. At December 31, 2019, the amounts were $15.7 million and $9.4 million, respectively. Adoption of ASU 2016-13 resulted in a $1.3 million decrease to the allowance for uncollectible amounts on reinsurance recoverables in 2020, while other changes in the allowances 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 or recoveries were applied to the allowances in the first nine months of 2020. D. INTANGIBLE ASSETS The composition of goodwill and intangible assets at September 30, 2020 and December 31, 2019 is detailed in the following table: September 30, December 31, (in thousands) 2020 2019 Goodwill Surety $ 40,816 $ 40,816 Casualty 5,246 5,246 Total goodwill $ 46,062 $ 46,062 Intangibles Indefinite-lived intangibles - state insurance licenses 7,500 7,500 Definite-lived intangibles, net of accumulated amortization of $3,776 at 9/30/20 and $3,470 at 12/31/19 259 565 Total intangibles $ 7,759 $ 8,065 Total goodwill and intangibles $ 53,821 $ 54,127 All definite-lived intangible assets are amortized based on their estimated useful lives. Amortization of intangible assets was $0.1 million for the third quarter of 2020 and $0.3 million for the nine months ended September 30, 2020, the same as for the comparable periods in 2019. Annual impairment assessments were performed on our goodwill and state insurance license indefinite-lived intangible asset during the second quarter of 2020. Based upon these reviews, none of the assets were impaired. In addition, there were no triggering events as of September 30, 2020 that would suggest an updated impairment test would be needed for our goodwill and intangible assets. E. EARNINGS PER SHARE Basic earnings per share (EPS) excludes dilution and 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 common stock equivalents 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 the common stock equivalents. The following represents a reconciliation of the numerator and denominator of the basic and diluted EPS computations contained in the unaudited condensed consolidated interim financial statements: For the Three Months For the Three Months Ended September 30, 2020 Ended September 30, 2019 Income Shares Per Share Income Shares Per Share (in thousands, except per share data) (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic EPS Earnings available to common shareholders $ 42,387 45,014 $ 0.94 $ 32,324 44,823 $ 0.72 Effect of Dilutive Securities Stock options and restricted stock units — 412 — 526 Diluted EPS Earnings available to common shareholders $ 42,387 45,426 $ 0.93 $ 32,324 45,349 $ 0.71 Anti-dilutive options excluded from diluted EPS 339 — For the Nine Months For the Nine Months Ended September 30, 2020 Ended September 30, 2019 Income Shares Per Share Income Shares Per Share (in thousands, except per share data) (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic EPS Earnings available to common shareholders $ 73,286 44,962 $ 1.63 $ 138,264 44,689 $ 3.09 Effect of Dilutive Securities Stock options and restricted stock units — 377 — 503 Diluted EPS Earnings available to common shareholders $ 73,286 45,339 $ 1.62 $ 138,264 45,192 $ 3.06 Anti-dilutive options excluded from diluted EPS 339 277 F. COMPREHENSIVE EARNINGS Our comprehensive earnings include net earnings plus after-tax unrealized gains and losses on our fixed income portfolio. In reporting other comprehensive earnings on a net basis, we used the federal statutory tax rate of 21 percent. Other comprehensive earnings, as shown in the consolidated statements of earnings and comprehensive earnings, is net of tax expense of $2.5 million and $4.1 million for the third quarter of 2020 and 2019, respectively. For the nine-month periods ended September 30, 2020 and 2019, other comprehensive earnings is net of tax expense of $13.3 million and $19.3 million, respectively. Unrealized gains, net of tax, on the fixed income portfolio were $50.1 million for the first nine months of 2020, compared to $72.5 million during the same period last year. The unrealized gains were attributable to declining interest rates in both periods, which increased the fair value of securities held in the fixed income portfolio. The following table illustrates the changes in the balance of each component of accumulated other comprehensive earnings for each period presented in the unaudited condensed consolidated interim financial statements: (in thousands) For the Three Months For the Nine Months Ended September 30, Ended September 30, Unrealized Gains/Losses on Available-for-Sale Securities 2020 2019 2020 2019 Beginning balance $ 93,035 $ 42,593 $ 52,473 $ (14,572 ) Cumulative-effect adjustment of ASU 2016-13 (see note 1.B.) — — 22 — Adjusted beginning balance $ 93,035 $ 42,593 $ 52,495 $ (14,572 ) Other comprehensive earnings before reclassifications 10,412 16,231 52,264 74,414 Amounts reclassified from accumulated other comprehensive earnings (862 ) (890 ) (2,174 ) (1,908 ) Net current-period other comprehensive earnings $ 9,550 $ 15,341 $ 50,090 $ 72,506 Ending balance $ 102,585 $ 57,934 $ 102,585 $ 57,934 Balance of securities for which an allowance for credit losses has been recognized in net earnings $ 795 $ — Credit losses on or the sale of an available-for-sale security results in amounts being reclassified from accumulated other comprehensive earnings to current period net earnings. The effects of reclassifications out of accumulated other comprehensive earnings by the respective line items of net earnings are presented in the following table: Amount Reclassified from Accumulated Other (in thousands) Comprehensive Earnings For the Three Months For the Nine Months Component of Accumulated Ended September 30, Ended September 30, Affected line item in the Other Comprehensive Earnings 2020 2019 2020 2019 Statement of Earnings Unrealized gains and losses on available-for-sale securities $ 738 $ 1,126 $ 3,356 $ 2,415 Net realized gains 353 — (604 ) — Credit losses presented within net realized gains $ 1,091 $ 1,126 $ 2,752 $ 2,415 Earnings before income taxes (229 ) (236 ) (578 ) (507 ) Income tax expense $ 862 $ 890 $ 2,174 $ 1,908 Net earnings G. FAIR VALUE MEASUREMENTS Fair value is defined as the price in the principal market that would be received for an asset to facilitate an orderly transaction between market participants on the measurement date. We determined the fair value of certain financial instruments based on their underlying characteristics and relevant transactions in the marketplace. We maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following are the levels of the fair value hierarchy and a brief description of the type of valuation inputs that are used to establish each level. Financial assets are classified based upon the lowest level of significant input that is used to determine fair value. Pricing Level 1 is applied to valuations based on readily available, unadjusted quoted prices in active markets for identical assets. Pricing Level 2 is applied to valuations based upon quoted prices for similar assets in active markets, quoted prices for identical or similar assets in inactive markets, or valuations based on models where the significant inputs are observable (e.g. interest rates, yield curves, prepayment speeds, default rates, loss severities) or can be corroborated by observable market data. Pricing Level 3 is applied to valuations that are derived from techniques in which one or more of the significant inputs are unobservable. As a part of management’s process to determine fair value, we utilize widely recognized, third-party pricing sources to determine our fair values. We have obtained an understanding of the third-party pricing sources’ valuation methodologies and inputs. The following is a description of the valuation techniques used for financial assets that are measured at fair value, including the general classification of such assets pursuant to the fair value hierarchy. Corporate, Agencies, Government and Municipal Bonds: The pricing vendor employs a multi-dimensional model which uses standard inputs including (listed in approximate order of priority for use) benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, market bids/offers and other reference data. The pricing vendor also monitors market indicators, as well as industry and economic events. All bonds valued using these techniques are classified as Level 2. All corporate, agency, government and municipal securities are deemed Level 2. Mortgage-backed Securities (MBS)/Commercial Mortgage-backed Securities (CMBS) and Asset-backed Securities (ABS): The pricing vendor evaluation methodology includes principally interest rate movements and new issue data. Evaluation of the tranches (non-volatile, volatile or credit sensitivity) is based on the pricing vendors’ interpretation of accepted modeling and pricing conventions. This information is used to determine the cash flows for each tranche, benchmark yields, pre-payment assumptions and to incorporate collateral performance. To evaluate MBS and CMBS volatility, an option adjusted spread model is used in combination with models that simulate interest rate paths to determine market price information. This process allows the pricing vendor to obtain evaluations of a broad universe of securities in a way that reflects changes in yield curve, index rates, implied volatility, mortgage rates and recent trade activity. MBS/CMBS and ABS with corroborated, observable inputs are classified as Level 2. All of our MBS/CMBS and ABS are deemed Level 2. Regulation D Private Placement Securities: All Regulation D privately placed bonds are classified as corporate securities and deemed Level 3. The pricing vendor evaluation methodology for these securities includes a combination of observable and unobservable inputs. Observable inputs include public corporate spread matrices classified by sector, rating and average life, as well as investment and non-investment grade matrices created from fixed income indices. Unobservable inputs include a liquidity spread premium calculated based on public corporate spread and private corporate spread matrices. The quantitative detail of the liquidity spread premium is neither provided nor reasonably available to the Company. An increase to the credit spread assumptions would result in a lower fair value measurement. For all of our fixed income securities classified as Level 2, as described above, we periodically conduct a review to assess the reasonableness of the fair values provided by our pricing services. Our review consists of a two-pronged approach. First, we compare prices provided by our pricing services to those provided by an additional source. In some cases, we obtain prices from securities brokers and compare them to the prices provided by our pricing services. 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 securities provided by our pricing services are reasonable. Common Stock: As of September 30, 2020, all of our common stock holdings were traded on an exchange. Exchange traded equities have readily observable price levels and are classified as Level 1 (fair value based on quoted market prices). 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. H. RISKS AND UNCERTAINTIES Certain risks and uncertainties are inherent to our day-to-day operations. Adverse changes in the economy could lower demand for our insurance products or negatively impact our investment results, both of which could have an adverse effect on the revenue and profitability of our operations. The COVID-19 pandemic may continue to result in significant disruptions in economic activity and financial markets. The cumulative effects of any public health outbreak could reduce demand for our insurance policies, result in increased level of losses, settlement expenses or other operating costs, reduce the market value of invested assets held by the Company or negatively impact the fair value of our goodwill. Catastrophe Exposures Our catastrophe reinsurance treaty renewed on January 1, 2020. We purchased limits of $400 million in excess of $25 million first-dollar retention for earthquakes in California, $425 million in excess of $25 million first-dollar retention for earthquakes outside of California and $275 million in excess of $25 million first-dollar retention for all other perils. These amounts are subject to certain co-participations by the Company on losses in excess of the $25 million retentions. On March 1, 2020, we purchased $100 million of additional catastrophe reinsurance protection on top of the previously described coverage. This increases the limits to $500 million for earthquakes in California, $525 million for earthquakes outside of California and $375 for all other perils, all of which are still subject to $25 million first-dollar retentions and certain co-participations in excess of the retentions.

Investments

Investments	9 Months Ended
	Sep. 30, 2020
Investments Debt And Equity Securities [Abstract]
Investments	2. INVESTMENTS Our investments are primarily composed of fixed income debt securities and common stock equity securities. We carry our equity securities at fair value and categorize all of our debt securities as available-for-sale, which are carried at fair value. Realized gains and losses on disposition of investments are based on specific identification of the investments sold on the settlement date. The following is a summary of the disposition of fixed income and equity securities for the nine-month periods ended September 30, 2020 and 2019: Sales Proceeds Gross Realized Net Realized (in thousands) From Sales Gains Losses Gain (Loss) 2020 Available-for-sale $ 68,621 $ 4,959 $ (1,518 ) $ 3,441 Equities 66,185 22,172 (8,756 ) 13,416 2019 Available-for-sale $ 174,767 $ 3,689 $ (1,393 ) $ 2,296 Equities 48,650 15,575 (1,184 ) 14,391 Calls/Maturities Gross Realized Net Realized (in thousands) Proceeds Gains Losses Gain (Loss) 2020 Available-for-sale $ 199,036 $ 525 $ (10 ) $ 515 2019 Available-for-sale $ 106,241 $ 133 $ (14 ) $ 119 FAIR VALUE MEASUREMENTS Assets measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019 are summarized below: As of September 30, 2020 Fair Value Measurements Using Quoted Prices in Significant Other Significant Active 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 $ — $ 190,204 $ — $ 190,204 U.S. agency — 33,180 — 33,180 Non-U.S. govt. & agency — 10,831 — 10,831 Agency MBS — 396,852 — 396,852 ABS/CMBS* — 208,282 — 208,282 Corporate — 793,012 11,925 804,937 Municipal — 515,509 — 515,509 Total fixed income securities - available-for-sale $ — $ 2,147,870 $ 11,925 $ 2,159,795 Equity securities 455,956 — — 455,956 Other invested assets 10,620 — — 10,620 Total $ 466,576 $ 2,147,870 $ 11,925 $ 2,626,371 As of December 31, 2019 Fair Value Measurements Using Quoted Prices in Significant Other Significant Active 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 $ — $ 193,661 $ — $ 193,661 U.S. agency — 38,855 — 38,855 Non-U.S. govt. & agency — 7,628 — 7,628 Agency MBS — 420,165 — 420,165 ABS/CMBS* — 224,870 — 224,870 Corporate — 690,297 1,770 692,067 Municipal — 405,840 — 405,840 Total fixed income securities - available-for-sale $ — $ 1,981,316 $ 1,770 $ 1,983,086 Equity securities 460,630 — — 460,630 Total $ 460,630 $ 1,981,316 $ 1,770 $ 2,443,716 * Non-agency asset-backed and commercial mortgage-backed The following table summarizes changes in the balance of Regulation D private placement fixed income securities whose fair value was measured using significant unobservable inputs (Level 3). (in thousands) Level 3 Securities Balance as of January 1, 2020 $ 1,770 Net realized and unrealized gains (losses) Included in net earnings as a part of: Net investment income (15 ) Net realized gains (109 ) Included in other comprehensive earnings (76 ) Total net realized and unrealized gains (losses) $ (200 ) Purchases 10,355 Balance as of September 30, 2020 $ 11,925 Change in unrealized gains (losses) during the period for Level 3 assets held at period-end - included in net realized gains $ (109 ) Change in unrealized gains (losses) during the period for Level 3 assets held at period-end - included in other comprehensive earnings $ (76 ) The amortized cost and fair value of available-for-sale fixed income securities by contractual maturity as of September 30, 2020 were as follows: September 30, 2020 (in thousands) Amortized Cost Fair Value Due in one year or less $ 85,018 $ 86,151 Due after one year through five years 475,999 502,636 Due after five years through 10 years 548,599 597,377 Due after 10 years 341,315 368,497 Mtge/ABS/CMBS* 580,048 605,134 Total available-for-sale $ 2,030,979 $ 2,159,795 * Mortgage-backed, asset-backed and commercial mortgage-backed The amortized cost and fair value of available-for-sale securities at September 30, 2020 and December 31, 2019 are presented in the tables below. Amortized cost does not include the $14.5 million and $13.5 million of accrued interest receivable as of September 30, 2020 and December 31, 2019, respectively. September 30, 2020 Cost or Allowance Gross Gross Amortized for Credit Unrealized Unrealized Fair (in thousands) Cost Losses Gains Losses Value U.S. government $ 175,259 $ — $ 14,981 $ (36 ) $ 190,204 U.S. agency 28,921 — 4,259 — 33,180 Non-U.S. govt. & agency 10,307 — 524 — 10,831 Agency MBS 376,536 — 20,617 (301 ) 396,852 ABS/CMBS* 203,511 (19 ) 5,347 (557 ) 208,282 Corporate 750,250 (613 ) 58,731 (3,431 ) 804,937 Municipal 486,195 — 29,587 (273 ) 515,509 Total Fixed Income $ 2,030,979 $ (632 ) $ 134,046 $ (4,598 ) $ 2,159,795 * Non-agency asset-backed and commercial mortgage-backed December 31, 2019 Cost or Allowance Gross Gross Amortized for Credit Unrealized Unrealized Fair (in thousands) Cost Losses Gains Losses Value U.S. government $ 186,699 $ — $ 6,994 $ (32 ) $ 193,661 U.S. agency 36,535 — 2,362 (42 ) 38,855 Non-U.S. govt. & agency 7,333 — 295 — 7,628 Agency MBS 411,808 — 8,920 (563 ) 420,165 ABS/CMBS* 222,832 — 2,514 (476 ) 224,870 Corporate 659,640 — 33,245 (818 ) 692,067 Municipal 390,431 — 16,131 (722 ) 405,840 Total Fixed Income $ 1,915,278 $ — $ 70,461 $ (2,653 ) $ 1,983,086 * Non-agency asset-backed and commercial mortgage-backed Allowance for Credit Losses and Unrealized Losses on Fixed Income Securities We adopted ASU 2016-13, Financial Instruments – Credit Losses, on January 1, 2020, which required the recognition of a reversible allowance for credit losses on available-for-sale fixed income securities. See note 1. B. for more information on the adoption of the ASU. 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 securities fair value is below amortized cost. As of September 30, 2020, the discounted cash flow analysis resulted in an allowance for credit losses on 29 securities. The following table presents changes in the allowance for expected credit losses on available-for-sale securities: Three Months Ended Nine Months Ended (in thousands) September 30, 2020 September 30, 2020 Beginning balance $ 985 $ — Increase to allowance from securities for which credit losses were not previously recorded 17 780 Reduction from securities sold during the period (6 ) (117 ) Reductions from intent to sell securities (186 ) (186 ) Net increase (decrease) from securities that had an allowance at the beginning of the period (178 ) 155 Balance as of September 30, $ 632 $ 632 Net realized gains included $0.6 million of losses on fixed income securities for which we no longer had the intent to hold until recovery and the cost basis was written down to fair value. 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. Prior to the adoption of ASU 2016-13, we conducted reviews of fixed income securities with unrealized losses to evaluate whether an impairment was other-than-temporary. Any credit-related impairment on fixed income securities we did not plan to sell and we were not more likely than not to be required to sell were recognized in net earnings, with the non-credit related impairment recognized in comprehensive earnings. We did not recognize any other-than-temporary impairment losses in earnings on the fixed income portfolio in the first nine months of 2019. As of September 30, 2020, in addition to the securities included in the allowance for credit losses, the fixed income portfolio contained 234 securities with an unrealized loss position for which an allowance for credit losses had not been recorded. The $4.6 million in associated unrealized losses represents 0.2 percent of the fixed income portfolio’s cost basis and 0.2 nrealized losses increased through the first nine months of 2020, as increased credit spreads more than offset declines in interest rates during the period, primarily in the corporate portfolio. The following table illustrates the total value of fixed income securities that were in an unrealized loss position as of September 30, 2020, after factoring in the allowance for credit losses, and December 31, 2019. September 30, 2020 December 31, 2019 (in thousands) < 12 Mos. 12 Mos. & Greater Total < 12 Mos. 12 Mos. & Greater Total U.S. government Fair value $ 5,900 $ — $ 5,900 $ 2,505 $ 8,463 $ 10,968 Amortized cost 5,936 — 5,936 2,506 8,494 11,000 Unrealized loss $ (36 ) $ — $ (36 ) $ (1 ) $ (31 ) $ (32 ) U.S. agency Fair value $ — $ — $ — $ 6,794 $ — $ 6,794 Amortized cost — — — 6,836 — 6,836 Unrealized loss $ — $ — $ — $ (42 ) $ — $ (42 ) Agency MBS Fair value $ 45,929 $ 244 $ 46,173 $ 21,548 $ 41,718 $ 63,266 Amortized cost 46,229 245 46,474 21,664 42,165 63,829 Unrealized loss $ (300 ) $ (1 ) $ (301 ) $ (116 ) $ (447 ) $ (563 ) ABS/CMBS* Fair value $ 35,837 $ 14,586 $ 50,423 $ 74,968 $ 18,036 $ 93,004 Amortized cost 36,236 14,744 50,980 75,332 18,148 93,480 Unrealized loss $ (399 ) $ (158 ) $ (557 ) $ (364 ) $ (112 ) $ (476 ) Corporate Fair value $ 107,521 $ 4,669 $ 112,190 $ 16,478 $ 9,348 $ 25,826 Amortized cost 110,664 4,957 115,621 16,950 9,694 26,644 Unrealized loss $ (3,143 ) $ (288 ) $ (3,431 ) $ (472 ) $ (346 ) $ (818 ) Municipal Fair value $ 32,681 $ — $ 32,681 $ 47,018 $ — $ 47,018 Amortized cost 32,954 — 32,954 47,740 — 47,740 Unrealized loss $ (273 ) $ — $ (273 ) $ (722 ) $ — $ (722 ) Total fixed income Fair value $ 227,868 $ 19,499 $ 247,367 $ 169,311 $ 77,565 $ 246,876 Amortized cost 232,019 19,946 251,965 171,028 78,501 249,529 Unrealized loss $ (4,151 ) $ (447 ) $ (4,598 ) $ (1,717 ) $ (936 ) $ (2,653 ) * Non-agency asset-backed and commercial mortgage-backed The following table shows the composition of the fixed income securities in unrealized loss positions, after factoring in the allowance for credit losses, at September 30, 2020 by the National Association of Insurance Commissioners (NAIC) rating and the generally equivalent Standard & Poor’s (S&P) and Moody’s ratings. The vast majority of the securities are rated by S&P and/or Moody’s. Equivalent Equivalent (dollars in thousands) NAIC S&P Moody’s Amortized Unrealized Percent Rating Rating Rating Cost Fair Value Loss to Total 1 AAA/AA/A Aaa/Aa/A $ 152,119 $ 150,542 $ (1,577 ) 34.3 % 2 BBB Baa 25,884 25,436 (448 ) 9.7 % 3 BB Ba 26,706 26,052 (654 ) 14.2 % 4 B B 42,998 41,372 (1,626 ) 35.4 % 5 CCC Caa 4,086 3,810 (276 ) 6.0 % 6 CC or lower Ca or lower 172 155 (17 ) 0.4 % Total $ 251,965 $ 247,367 $ (4,598 ) 100.0 % Unrealized Gains and Losses on Equity Securities Unrealized gains recognized on equity securities still held as of September 30, 2020 were $28.7 million during the third quarter, while unrealized losses were $14.1 million during the first nine months of 2020. Comparatively, unrealized gains recognized on equity securities still held as of September 30, 2019 were $6.9 million during the third quarter and $61.7 million during the first nine months of 2019. Other Invested Assets We had $60.0 million of other invested assets at September 30, 2020, compared to $70.4 million at the end of 2019. Other invested assets include investments in low income housing tax credit partnerships (LIHTC), membership in the Federal Home Loan Bank of Chicago (FHLBC), investments in private funds and investments in restricted stock. Our LIHTC investments are carried at amortized cost and our investment in FHLBC stock is carried at cost. Due to the nature of the LIHTC and our membership in the FHLBC, their carrying amounts approximate fair value. The private funds are carried at fair value, using each investment’s net asset value. Restricted stock is carried at quoted market prices, as the restrictions expire within one year. Our LIHTC interests had a balance of $21.0 million at September 30, 2020, compared to $23.3 million at December 31, 2019 and recognized a total tax benefit of $0.9 million during the third quarter of 2020, compared to $0.6 million in the prior year. For the nine-month periods ended September 30, 2020 and 2019, our LIHTC interest recognized a total benefit of $2.6 million and $1.9 million, respectively. Our unfunded commitment for our LIHTC investments totaled $4.7 million at September 30, 2020 and will be paid out in installments through 2035. As of September 30, 2020, $13.7 million of investments were pledged as collateral with the FHLBC to ensure timely access to the secured lending facility that ownership of FHLBC stock provides. As of and during the nine-month period ended September 30, 2020, there were no outstanding borrowings with the FHLBC. Our investments in private funds totaled $26.5 million at September 30, 2020, compared to $46.0 million at December 31, 2019, and we had $8.3 million of associated unfunded commitments at September 30, 2020. Our interest in private funds is generally restricted from being transferred or otherwise redeemed without prior consent by the respective entities. During the first quarter of 2020, one of the private funds transitioned into a publicly traded common stock. Short-term restrictions, limiting our ability to sell without prior approval, were established and remain in place. Our investment in restricted stock was $10.6 million as of September 30, 2020. For our remaining investments in private funds, the timed dissolution of the partnerships would trigger redemption. Cash Cash consists of uninvested balances in bank accounts. We had a cash balance of $70.6 million at September 30, 2020, compared to $46.2 million at the end of 2019.

Historical Loss And LAE Develop

Historical Loss And LAE Development	9 Months Ended
	Sep. 30, 2020
Historical Loss And L A E Development Disclosure [Abstract]
HISTORICAL LOSS AND LAE DEVELOPMENT	3. HISTORICAL LOSS AND LAE DEVELOPMENT The following table is a reconciliation of our unpaid losses and settlement expenses (LAE) for the first nine months of 2020 and 2019: For the Nine Months Ended September 30, (in thousands) 2020 2019 Unpaid losses and LAE at beginning of year Gross $ 1,574,352 $ 1,461,348 Ceded (384,517 ) (364,999 ) Net $ 1,189,835 $ 1,096,349 Adoption impact of ASU 2016-13 on reinsurance balances recoverable $ (1,345 ) $ — Increase (decrease) in incurred losses and LAE Current accident year $ 409,867 $ 362,395 Prior accident years (70,048 ) (55,189 ) Total incurred $ 339,819 $ 307,206 Loss and LAE payments for claims incurred Current accident year $ (49,337 ) $ (51,270 ) Prior accident years (192,056 ) (176,957 ) Total paid $ (241,393 ) $ (228,227 ) Net unpaid losses and LAE at September 30 $ 1,286,916 $ 1,175,328 Unpaid losses and LAE at September 30 Gross $ 1,686,876 $ 1,557,358 Ceded (399,960 ) (382,030 ) Net $ 1,286,916 $ 1,175,328 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. See note 1. B. for more information on the adoption of the ASU. For the first nine months of 2020, incurred losses and LAE included $70.0 million of favorable development on prior years’ loss reserves. The majority of products experienced modest amounts of favorable development on prior accident years, with notable contributions from transportation, general liability, executive products, marine and surety. No products experienced significant adverse development. For the first nine months of 2019, incurred losses and LAE included $55.2 million of favorable development on prior years’ loss reserves. Transportation, general liability, commercial excess and personal umbrella, professional services, small commercial and surety were drivers of the favorable development. Executive products experienced adverse development. Actuarial models base future emergence on historic experience, with adjustments for current trends, and the appropriateness of these assumptions involved more uncertainty as of September 30, 2020. We expect there will be impacts to the timing of loss emergence and ultimate loss ratios for certain coverages we underwrite as a result of the spread of COVID-19 and the related economic shutdown. The industry is experiencing new issues, including the postponement of civil court cases, the extension of various statutes of limitations, changes in settlement trends and a significant reduction in economic activity and insured exposure in some classes. Our booked 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.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2020
Income Tax Disclosure [Abstract]
INCOME TAXES	4. INCOME TAXES Our effective tax rate for the three and nine months ended September 30, 2020 was 17.7 percent and 15.8 percent, respectively, compared to 17.0 percent and 18.4 percent, respectively, for the same periods in 2019. Effective rates are dependent upon components of pretax earnings and the related tax effects. The effective rate was lower for the nine-month period in 2020 due to investment tax credits recognized using the flow-through method of accounting, whereby income taxes payable and income tax expense were reduced. Additionally, lower levels of pretax earnings caused tax-favored adjustments to be larger on a percentage basis in 2020 compared to the prior year. For the three-month period, a higher level of pretax earnings in 2020 resulted in a higher effective tax rate. Income tax expense attributable to income from operations for the three and nine-month periods ended September 30, 2020 and 2019 differed from the amounts computed by applying the U.S. federal tax rate of 21 percent to pretax income by the items detailed in the below table. In interim periods, income taxes are adjusted to reflect the effective tax rate we anticipate for the year, with adjustments flowing through the other items, net line. For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Amount % Amount % Amount % Amount % Provision for income taxes at the statutory rate of 21% $ 10,817 21.0 % $ 8,179 21.0 % $ 18,275 21.0 % $ 35,598 21.0 % Increase (reduction) in taxes resulting from: Excess tax benefit on share-based compensation (848 ) (1.6 ) % (614 ) (1.6 ) % (2,141 ) (2.4 ) % (3,546 ) (2.1 ) % Tax exempt interest income (324 ) (0.6 ) % (276 ) (0.7 ) % (960 ) (1.1 ) % (930 ) (0.6 ) % Dividends received deduction (221 ) (0.4 ) % (218 ) (0.6 ) % (705 ) (0.8 ) % (635 ) (0.4 ) % Investment tax credit (316 ) (0.6 ) % — 0.0 % (1,766 ) (2.0 ) % — 0.0 % ESOP dividends paid deduction (134 ) (0.3 ) % (136 ) (0.3 ) % (403 ) (0.5 ) % (413 ) (0.2 ) % Nondeductible expenses 275 0.5 % 243 0.6 % 639 0.7 % 1,166 0.7 % Other items, net (127 ) (0.3 ) % (555 ) (1.4 ) % 799 0.9 % 12 0.0 % Total tax expense $ 9,122 17.7 % $ 6,623 17.0 % $ 13,738 15.8 % $ 31,252 18.4 %

Stock Based Compensation

Stock Based Compensation	9 Months Ended
	Sep. 30, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
STOCK BASED COMPENSATION	5. STOCK BASED COMPENSATION 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 awarded 2,576,867 stock options and restricted stock units under the 2015 LTIP. 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, special dividends and other events as set forth in such plans). Options generally vest and become exercisable ratably over a five-year 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. The following tables summarize option activity for the nine-month periods ended September 30, 2020 and 2019: Weighted Weighted Average Aggregate Number of Average Remaining Intrinsic Options Exercise Contractual Value Outstanding Price Life (in 000’s) Outstanding options at January 1, 2020 1,667,290 $ 62.52 Options granted 275,977 93.39 Options exercised (177,045 ) 49.13 $ 7,639 Options canceled/forfeited (6,410 ) 73.42 Outstanding options at September 30, 2020 1,759,812 $ 68.67 5.14 $ 29,740 Exercisable options at September 30, 2020 807,570 $ 59.03 3.82 $ 20,054 Weighted Weighted Average Aggregate Number of Average Remaining Intrinsic Options Exercise Contractual Value Outstanding Price Life (in 000’s) Outstanding options at January 1, 2019 1,964,880 $ 54.24 Options granted 324,525 81.27 Options exercised (493,615 ) 45.61 $ 18,157 Options canceled/forfeited (59,050 ) 60.92 Outstanding options at September 30, 2019 1,736,740 $ 61.52 5.43 $ 54,515 Exercisable options at September 30, 2019 622,290 $ 52.78 4.03 $ 24,975 Through 2019, the majority of our annual stock option grants were authorized at our regular board meeting in May. In addition, quarterly grants to certain retirement eligible employees were historically authorized at the May meeting. Since stock option grants to retirement eligible employees are fully expensed when issued, the approach allowed for a more even expense distribution throughout the year. In 2020, the annual stock option grants and quarterly grants to retirement eligible employees were authorized at the August board meeting to allow the Company additional time to assess the financial impact of the COVID-19 pandemic. In the first nine months of 2020, 275,977 stock options were granted with a weighted average exercise price of $93.39 and a weighted average fair value of $13.33. We recognized $1.3 million of expense in the third quarter of 2020 and $2.8 million in the first nine months of 2020 related to options vesting. Since options granted under our 2015 LTIP are non-qualified, we recorded a tax benefit of $0.3 million in the third quarter of 2020 and $0.6 million in the first nine months of 2020 related to this compensation expense. Total unrecognized compensation expense relating to outstanding and unvested options was $5.6 million, which will be recognized over the remainder of the vesting period. Comparatively, we recognized $1.2 million of compensation expense in the third quarter of 2019 and $3.6 million in the first nine months of 2019. We recorded a tax benefit of $0.2 million in the third quarter of 2019 and $0.7 million in the first nine months of 2019 related to this compensation expense. The fair value of options was estimated using a Black-Scholes based option pricing model with the following weighted average grant-date assumptions and weighted average fair values as of September 30: 2020 2019 Weighted-average fair value of grants $ 13.33 $ 13.47 Risk-free interest rates 0.41 % 2.41 % Dividend yield 2.30 % 2.69 % Expected volatility 22.67 % 22.71 % Expected option life 4.96 years 4.95 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. These units generally have a three-year As of September 30, 2020, 58,420 RSUs have been granted to employees under the 2015 LTIP and 41,826 remain outstanding. We recognized $0.2 million of expense on these units in the third quarter of 2020 and $0.5 million in the first nine months of 2020. Total unrecognized compensation expense relating to outstanding and unvested RSUs was $1.6 million, which will be recognized over the remainder of the vesting period. Comparatively, we recognized $0.3 million in the third quarter of 2019 and $0.6 million in the first nine months of 2019. In 2020 and 2019, each outside director was granted a whole number of RSUs with a fair market value corresponding to $50,000 on the date of grant as part of annual director compensation. Director RSUs vest on the earlier of one year from the date of grant or the next annual shareholders meeting. As of September 30, 2020, 20,445 restricted stock units have been granted to directors under the 2015 LTIP and 5,375 remain outstanding. We recognized $0.1 million of compensation expense on these units in the third quarter of 2020 and $0.2 million in the first nine months of 2020. Comparatively, we recognized $0.1 million of compensation expense on these units in the third quarter of 2019 and $0.5 million in the first nine months of 2019.

Operating Segment Information

Operating Segment Information	9 Months Ended
	Sep. 30, 2020
Segment Reporting [Abstract]
Operating Segment Information	6. OPERATING SEGMENT INFORMATION Selected information by operating segment is presented in the table below. Additionally, the table reconciles segment totals to total earnings and total revenues. For the Three Months For the Nine Months Revenues Ended September 30, Ended September 30, (in thousands) 2020 2019 2020 2019 Casualty $ 143,002 $ 140,423 $ 421,637 $ 415,667 Property 45,380 41,476 135,115 120,194 Surety 28,248 29,356 84,194 87,624 Net premiums earned $ 216,630 $ 211,255 $ 640,946 $ 623,485 Net investment income 16,543 17,532 51,238 51,095 Net realized gains 1,512 3,211 14,555 17,043 Net unrealized gains (losses) on equity securities 28,126 4,906 (27,564 ) 47,214 Total consolidated revenue $ 262,811 $ 236,904 $ 679,175 $ 738,837 Net Earnings (in thousands) 2020 2019 2020 2019 Casualty $ 13,993 $ 2,370 $ 22,403 $ 14,652 Property (19,951 ) 6,202 (3,876 ) 14,012 Surety 7,110 5,159 24,027 22,432 Net underwriting income $ 1,152 $ 13,731 $ 42,554 $ 51,096 Net investment income 16,543 17,532 51,238 51,095 Net realized gains 1,512 3,211 14,555 17,043 Net unrealized gains (losses) on equity securities 28,126 4,906 (27,564 ) 47,214 General corporate expense and interest on debt (4,569 ) (4,444 ) (12,118 ) (14,725 ) Equity in earnings of unconsolidated investees 8,745 4,011 18,359 17,793 Earnings before income taxes $ 51,509 $ 38,947 $ 87,024 $ 169,516 Income tax expense 9,122 6,623 13,738 31,252 Net earnings $ 42,387 $ 32,324 $ 73,286 $ 138,264 The following table further summarizes revenues by major product type within each operating segment: For the Three Months For the Nine Months Net Premiums Earned Ended September 30, Ended September 30, (in thousands) 2020 2019 2020 2019 Casualty Commercial excess and personal umbrella $ 46,404 $ 35,959 $ 128,813 $ 102,580 General liability 22,747 25,005 69,396 74,240 Professional services 21,422 20,816 63,501 60,390 Commercial transportation 15,130 21,067 47,454 61,979 Small commercial 16,009 13,927 47,433 40,430 Executive products 6,387 7,026 20,693 19,476 Other casualty 14,903 16,623 44,347 56,572 Total $ 143,002 $ 140,423 $ 421,637 $ 415,667 Property Marine $ 19,687 $ 19,033 $ 59,976 $ 54,633 Commercial property 20,168 17,098 58,371 50,248 Specialty personal 4,794 4,948 14,730 14,324 Other property 731 397 2,038 989 Total $ 45,380 $ 41,476 $ 135,115 $ 120,194 Surety Commercial $ 10,543 $ 10,851 $ 32,287 $ 32,638 Miscellaneous 10,547 10,998 31,562 33,880 Contract 7,158 7,507 20,345 21,106 Total $ 28,248 $ 29,356 $ 84,194 $ 87,624 Grand Total $ 216,630 $ 211,255 $ 640,946 $ 623,485

Leases

Leases	9 Months Ended
	Sep. 30, 2020
Leases [Abstract]
Leases	7. 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 Company’s operating lease obligations are for branch office facilities. The components of lease expense and other lease information as of and during the three and nine-month periods ended September 30, 2020 and 2019 are as follows: For the Three Months For the Nine Months Ended September 30, Ended September 30, (in thousands) 2020 2019 2020 2019 Operating lease cost $ 1,364 $ 1,423 $ 4,140 $ 4,349 Variable lease cost 338 321 1,014 1,530 Sublease income (96 ) — (139 ) — Total lease cost $ 1,606 $ 1,744 $ 5,015 $ 5,879 Cash paid for amounts included in measurement of lease liabilities Operating cash outflows from operating leases $ 1,480 $ 1,438 $ 4,470 $ 4,234 ROU assets obtained in exchange for new operating lease liabilities $ — $ 427 $ 15 $ 1,378 Reduction to ROU assets resulting from reduction to lease liabilities $ 18 $ — $ 18 $ 1,279 Other non-cash reductions to ROU assets $ — $ — $ 1,192 $ — (in thousands) September 30, 2020 December 31, 2019 Operating lease ROU assets $ 17,385 $ 22,335 Operating lease liabilities $ 20,388 $ 24,475 Weighted-average remaining lease term - operating leases 4.07 years 4.69 years Weighted-average discount rate - operating leases 2.32 % 2.33 % Future minimum lease payments under non-cancellable leases as of September 30, 2020 were as follows: (in thousands) September 30, 2020 2020 $ 1,494 2021 5,937 2022 5,904 2023 4,424 2024 2,334 2025 802 Thereafter 564 Total future minimum lease payments $ 21,459 Less imputed interest (1,071 ) Total operating lease liability $ 20,388

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
Basis of Presentation	A. BASIS OF PRESENTATION The unaudited condensed consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) for interim financial reporting and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all the disclosures required by GAAP for complete financial statements. As such, these unaudited condensed consolidated interim financial statements should be read in conjunction with our 2019 Annual Report on Form 10-K. Management believes that the disclosures are adequate to make the information presented not misleading, and all normal and recurring adjustments necessary to present fairly the financial position at September 30, 2020 and the results of operations of RLI Corp. (the Company) and subsidiaries for all periods presented have been made. The results of operations for any interim period are not necessarily indicative of the operating results for a full year. Certain reclassifications were made to 2019 to conform to the classifications used in the current year. The preparation of the unaudited condensed consolidated interim financial statements requires management to make estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated interim financial statements and the reported amounts of revenue and expenses during the period. These estimates are inherently subject to change and actual results could differ significantly from these estimates.
Adopted Accounting Standards	B. ADOPTED ACCOUNTING STANDARDS ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ASU 2016-13 was issued to provide more decision-useful information about the expected credit losses on financial instruments. Previous guidance delayed the recognition of credit losses until it was probable a loss had been incurred. This update requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected by means of an allowance for credit losses that is included in net earnings. Credit losses relating to available-for-sale debt securities are also required to be recorded through a reversible allowance for credit losses, but is limited to the amount by which fair value is less than amortized cost. We adopted ASU 2016-13 on January 1, 2020 using the modified-retrospective approach. The standard applied to three of the Company’s balance sheet accounts: available-for-sale fixed income securities, premiums receivable and reinsurance balances recoverable. The impact of this standard was and is expected to continue to be immaterial, as our fixed income portfolio is weighted towards higher rated bonds (83 percent rated A or better at September 30, 2020 and 85 percent at December 31, 2019), we purchase reinsurance from financially strong reinsurers, we have a long history of collecting premium receivables through various economic cycles and we had previously maintained an allowance for uncollectible premium and reinsurance balances. In total, the cumulative-effect adjustment made to the balance sheet as of the beginning of the year resulted in a $1.1 million increase to retained earnings and an increase to accumulated other comprehensive earnings of less than $0.1 million.
Reinsurance	C. REINSURANCE Ceded unearned premiums and reinsurance balances recoverable on paid and unpaid losses and settlement expenses are reported separately as assets, instead of being netted with the related liabilities, since reinsurance does not relieve the Company of our legal liability to our policyholders. Such balances are subject to the credit risk associated with the individual reinsurer. We continuously monitor the financial condition of our reinsurers and actively follow up on any past due or disputed amounts. As part of our monitoring efforts, we review their annual financial statements, quarterly disclosures and Securities and Exchange Commission (SEC) filings for those reinsurers that are publicly traded. We also review insurance industry developments that may impact the financial condition of our reinsurers. We analyze the credit risk associated with our reinsurance balances recoverable by monitoring the AM Best and Standard & Poor’s (S&P) ratings of our reinsurers. Additionally, we perform an in-depth reinsurer financial condition analysis prior to the renewal of our reinsurance placements. 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 balances recoverable from the reinsurer are specifically identified and charged to earnings in the form of an allowance for uncollectible amounts. We subject our remaining reinsurance balances receivable to detailed recoverability tests, including a segment-based analysis using the average default rating percentage by S&P rating, and record an additional allowance for unrecoverable amounts from reinsurers. This credit 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. The allowances for uncollectible amounts on paid and unpaid reinsurance recoverables were $15.9 million and $8.1 million, respectively, at September 30, 2020. At December 31, 2019, the amounts were $15.7 million and $9.4 million, respectively. Adoption of ASU 2016-13 resulted in a $1.3 million decrease to the allowance for uncollectible amounts on reinsurance recoverables in 2020, while other changes in the allowances 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 or recoveries were applied to the allowances in the first nine months of 2020.
Intangible Assets	D. INTANGIBLE ASSETS The composition of goodwill and intangible assets at September 30, 2020 and December 31, 2019 is detailed in the following table: September 30, December 31, (in thousands) 2020 2019 Goodwill Surety $ 40,816 $ 40,816 Casualty 5,246 5,246 Total goodwill $ 46,062 $ 46,062 Intangibles Indefinite-lived intangibles - state insurance licenses 7,500 7,500 Definite-lived intangibles, net of accumulated amortization of $3,776 at 9/30/20 and $3,470 at 12/31/19 259 565 Total intangibles $ 7,759 $ 8,065 Total goodwill and intangibles $ 53,821 $ 54,127 All definite-lived intangible assets are amortized based on their estimated useful lives. Amortization of intangible assets was $0.1 million for the third quarter of 2020 and $0.3 million for the nine months ended September 30, 2020, the same as for the comparable periods in 2019. Annual impairment assessments were performed on our goodwill and state insurance license indefinite-lived intangible asset during the second quarter of 2020. Based upon these reviews, none of the assets were impaired. In addition, there were no triggering events as of September 30, 2020 that would suggest an updated impairment test would be needed for our goodwill and intangible assets.
Earnings Per Share	E. EARNINGS PER SHARE Basic earnings per share (EPS) excludes dilution and 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 common stock equivalents 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 the common stock equivalents. The following represents a reconciliation of the numerator and denominator of the basic and diluted EPS computations contained in the unaudited condensed consolidated interim financial statements: For the Three Months For the Three Months Ended September 30, 2020 Ended September 30, 2019 Income Shares Per Share Income Shares Per Share (in thousands, except per share data) (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic EPS Earnings available to common shareholders $ 42,387 45,014 $ 0.94 $ 32,324 44,823 $ 0.72 Effect of Dilutive Securities Stock options and restricted stock units — 412 — 526 Diluted EPS Earnings available to common shareholders $ 42,387 45,426 $ 0.93 $ 32,324 45,349 $ 0.71 Anti-dilutive options excluded from diluted EPS 339 — For the Nine Months For the Nine Months Ended September 30, 2020 Ended September 30, 2019 Income Shares Per Share Income Shares Per Share (in thousands, except per share data) (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic EPS Earnings available to common shareholders $ 73,286 44,962 $ 1.63 $ 138,264 44,689 $ 3.09 Effect of Dilutive Securities Stock options and restricted stock units — 377 — 503 Diluted EPS Earnings available to common shareholders $ 73,286 45,339 $ 1.62 $ 138,264 45,192 $ 3.06 Anti-dilutive options excluded from diluted EPS 339 277
Comprehensive Earnings	F. COMPREHENSIVE EARNINGS Our comprehensive earnings include net earnings plus after-tax unrealized gains and losses on our fixed income portfolio. In reporting other comprehensive earnings on a net basis, we used the federal statutory tax rate of 21 percent. Other comprehensive earnings, as shown in the consolidated statements of earnings and comprehensive earnings, is net of tax expense of $2.5 million and $4.1 million for the third quarter of 2020 and 2019, respectively. For the nine-month periods ended September 30, 2020 and 2019, other comprehensive earnings is net of tax expense of $13.3 million and $19.3 million, respectively. Unrealized gains, net of tax, on the fixed income portfolio were $50.1 million for the first nine months of 2020, compared to $72.5 million during the same period last year. The unrealized gains were attributable to declining interest rates in both periods, which increased the fair value of securities held in the fixed income portfolio. The following table illustrates the changes in the balance of each component of accumulated other comprehensive earnings for each period presented in the unaudited condensed consolidated interim financial statements: (in thousands) For the Three Months For the Nine Months Ended September 30, Ended September 30, Unrealized Gains/Losses on Available-for-Sale Securities 2020 2019 2020 2019 Beginning balance $ 93,035 $ 42,593 $ 52,473 $ (14,572 ) Cumulative-effect adjustment of ASU 2016-13 (see note 1.B.) — — 22 — Adjusted beginning balance $ 93,035 $ 42,593 $ 52,495 $ (14,572 ) Other comprehensive earnings before reclassifications 10,412 16,231 52,264 74,414 Amounts reclassified from accumulated other comprehensive earnings (862 ) (890 ) (2,174 ) (1,908 ) Net current-period other comprehensive earnings $ 9,550 $ 15,341 $ 50,090 $ 72,506 Ending balance $ 102,585 $ 57,934 $ 102,585 $ 57,934 Balance of securities for which an allowance for credit losses has been recognized in net earnings $ 795 $ — Credit losses on or the sale of an available-for-sale security results in amounts being reclassified from accumulated other comprehensive earnings to current period net earnings. The effects of reclassifications out of accumulated other comprehensive earnings by the respective line items of net earnings are presented in the following table: Amount Reclassified from Accumulated Other (in thousands) Comprehensive Earnings For the Three Months For the Nine Months Component of Accumulated Ended September 30, Ended September 30, Affected line item in the Other Comprehensive Earnings 2020 2019 2020 2019 Statement of Earnings Unrealized gains and losses on available-for-sale securities $ 738 $ 1,126 $ 3,356 $ 2,415 Net realized gains 353 — (604 ) — Credit losses presented within net realized gains $ 1,091 $ 1,126 $ 2,752 $ 2,415 Earnings before income taxes (229 ) (236 ) (578 ) (507 ) Income tax expense $ 862 $ 890 $ 2,174 $ 1,908 Net earnings
Fair Value Measurements	G. FAIR VALUE MEASUREMENTS Fair value is defined as the price in the principal market that would be received for an asset to facilitate an orderly transaction between market participants on the measurement date. We determined the fair value of certain financial instruments based on their underlying characteristics and relevant transactions in the marketplace. We maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following are the levels of the fair value hierarchy and a brief description of the type of valuation inputs that are used to establish each level. Financial assets are classified based upon the lowest level of significant input that is used to determine fair value. Pricing Level 1 is applied to valuations based on readily available, unadjusted quoted prices in active markets for identical assets. Pricing Level 2 is applied to valuations based upon quoted prices for similar assets in active markets, quoted prices for identical or similar assets in inactive markets, or valuations based on models where the significant inputs are observable (e.g. interest rates, yield curves, prepayment speeds, default rates, loss severities) or can be corroborated by observable market data. Pricing Level 3 is applied to valuations that are derived from techniques in which one or more of the significant inputs are unobservable. As a part of management’s process to determine fair value, we utilize widely recognized, third-party pricing sources to determine our fair values. We have obtained an understanding of the third-party pricing sources’ valuation methodologies and inputs. The following is a description of the valuation techniques used for financial assets that are measured at fair value, including the general classification of such assets pursuant to the fair value hierarchy. Corporate, Agencies, Government and Municipal Bonds: The pricing vendor employs a multi-dimensional model which uses standard inputs including (listed in approximate order of priority for use) benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, market bids/offers and other reference data. The pricing vendor also monitors market indicators, as well as industry and economic events. All bonds valued using these techniques are classified as Level 2. All corporate, agency, government and municipal securities are deemed Level 2. Mortgage-backed Securities (MBS)/Commercial Mortgage-backed Securities (CMBS) and Asset-backed Securities (ABS): The pricing vendor evaluation methodology includes principally interest rate movements and new issue data. Evaluation of the tranches (non-volatile, volatile or credit sensitivity) is based on the pricing vendors’ interpretation of accepted modeling and pricing conventions. This information is used to determine the cash flows for each tranche, benchmark yields, pre-payment assumptions and to incorporate collateral performance. To evaluate MBS and CMBS volatility, an option adjusted spread model is used in combination with models that simulate interest rate paths to determine market price information. This process allows the pricing vendor to obtain evaluations of a broad universe of securities in a way that reflects changes in yield curve, index rates, implied volatility, mortgage rates and recent trade activity. MBS/CMBS and ABS with corroborated, observable inputs are classified as Level 2. All of our MBS/CMBS and ABS are deemed Level 2. Regulation D Private Placement Securities: All Regulation D privately placed bonds are classified as corporate securities and deemed Level 3. The pricing vendor evaluation methodology for these securities includes a combination of observable and unobservable inputs. Observable inputs include public corporate spread matrices classified by sector, rating and average life, as well as investment and non-investment grade matrices created from fixed income indices. Unobservable inputs include a liquidity spread premium calculated based on public corporate spread and private corporate spread matrices. The quantitative detail of the liquidity spread premium is neither provided nor reasonably available to the Company. An increase to the credit spread assumptions would result in a lower fair value measurement. For all of our fixed income securities classified as Level 2, as described above, we periodically conduct a review to assess the reasonableness of the fair values provided by our pricing services. Our review consists of a two-pronged approach. First, we compare prices provided by our pricing services to those provided by an additional source. In some cases, we obtain prices from securities brokers and compare them to the prices provided by our pricing services. 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 securities provided by our pricing services are reasonable. Common Stock: As of September 30, 2020, all of our common stock holdings were traded on an exchange. Exchange traded equities have readily observable price levels and are classified as Level 1 (fair value based on quoted market prices). 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.
Risk And Uncertainties	H. RISKS AND UNCERTAINTIES Certain risks and uncertainties are inherent to our day-to-day operations. Adverse changes in the economy could lower demand for our insurance products or negatively impact our investment results, both of which could have an adverse effect on the revenue and profitability of our operations. The COVID-19 pandemic may continue to result in significant disruptions in economic activity and financial markets. The cumulative effects of any public health outbreak could reduce demand for our insurance policies, result in increased level of losses, settlement expenses or other operating costs, reduce the market value of invested assets held by the Company or negatively impact the fair value of our goodwill. Catastrophe Exposures Our catastrophe reinsurance treaty renewed on January 1, 2020. We purchased limits of $400 million in excess of $25 million first-dollar retention for earthquakes in California, $425 million in excess of $25 million first-dollar retention for earthquakes outside of California and $275 million in excess of $25 million first-dollar retention for all other perils. These amounts are subject to certain co-participations by the Company on losses in excess of the $25 million retentions. On March 1, 2020, we purchased $100 million of additional catastrophe reinsurance protection on top of the previously described coverage. This increases the limits to $500 million for earthquakes in California, $525 million for earthquakes outside of California and $375 for all other perils, all of which are still subject to $25 million first-dollar retentions and certain co-participations in excess of the retentions.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
Schedule of Goodwill and Intangible Assets	September 30, December 31, (in thousands) 2020 2019 Goodwill Surety $ 40,816 $ 40,816 Casualty 5,246 5,246 Total goodwill $ 46,062 $ 46,062 Intangibles Indefinite-lived intangibles - state insurance licenses 7,500 7,500 Definite-lived intangibles, net of accumulated amortization of $3,776 at 9/30/20 and $3,470 at 12/31/19 259 565 Total intangibles $ 7,759 $ 8,065 Total goodwill and intangibles $ 53,821 $ 54,127
Schedule of Reconciliation of Numerator and Denominator of the Basic and Diluted Earnings Per Share Computations	For the Three Months For the Three Months Ended September 30, 2020 Ended September 30, 2019 Income Shares Per Share Income Shares Per Share (in thousands, except per share data) (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic EPS Earnings available to common shareholders $ 42,387 45,014 $ 0.94 $ 32,324 44,823 $ 0.72 Effect of Dilutive Securities Stock options and restricted stock units — 412 — 526 Diluted EPS Earnings available to common shareholders $ 42,387 45,426 $ 0.93 $ 32,324 45,349 $ 0.71 Anti-dilutive options excluded from diluted EPS 339 — For the Nine Months For the Nine Months Ended September 30, 2020 Ended September 30, 2019 Income Shares Per Share Income Shares Per Share (in thousands, except per share data) (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic EPS Earnings available to common shareholders $ 73,286 44,962 $ 1.63 $ 138,264 44,689 $ 3.09 Effect of Dilutive Securities Stock options and restricted stock units — 377 — 503 Diluted EPS Earnings available to common shareholders $ 73,286 45,339 $ 1.62 $ 138,264 45,192 $ 3.06 Anti-dilutive options excluded from diluted EPS 339 277
Schedule of Changes in the Balance of Each Component of Accumulated Other Comprehensive Earnings	(in thousands) For the Three Months For the Nine Months Ended September 30, Ended September 30, Unrealized Gains/Losses on Available-for-Sale Securities 2020 2019 2020 2019 Beginning balance $ 93,035 $ 42,593 $ 52,473 $ (14,572 ) Cumulative-effect adjustment of ASU 2016-13 (see note 1.B.) — — 22 — Adjusted beginning balance $ 93,035 $ 42,593 $ 52,495 $ (14,572 ) Other comprehensive earnings before reclassifications 10,412 16,231 52,264 74,414 Amounts reclassified from accumulated other comprehensive earnings (862 ) (890 ) (2,174 ) (1,908 ) Net current-period other comprehensive earnings $ 9,550 $ 15,341 $ 50,090 $ 72,506 Ending balance $ 102,585 $ 57,934 $ 102,585 $ 57,934 Balance of securities for which an allowance for credit losses has been recognized in net earnings $ 795 $ —
Schedule of Effects of Reclassifications out of Accumulated Other Comprehensive Earnings	Amount Reclassified from Accumulated Other (in thousands) Comprehensive Earnings For the Three Months For the Nine Months Component of Accumulated Ended September 30, Ended September 30, Affected line item in the Other Comprehensive Earnings 2020 2019 2020 2019 Statement of Earnings Unrealized gains and losses on available-for-sale securities $ 738 $ 1,126 $ 3,356 $ 2,415 Net realized gains 353 — (604 ) — Credit losses presented within net realized gains $ 1,091 $ 1,126 $ 2,752 $ 2,415 Earnings before income taxes (229 ) (236 ) (578 ) (507 ) Income tax expense $ 862 $ 890 $ 2,174 $ 1,908 Net earnings

Investments (Tables)

Investments (Tables)	9 Months Ended
	Sep. 30, 2020
Investments Debt And Equity Securities [Abstract]
Schedule of Disposition of Fixed Maturities and Equities	Sales Proceeds Gross Realized Net Realized (in thousands) From Sales Gains Losses Gain (Loss) 2020 Available-for-sale $ 68,621 $ 4,959 $ (1,518 ) $ 3,441 Equities 66,185 22,172 (8,756 ) 13,416 2019 Available-for-sale $ 174,767 $ 3,689 $ (1,393 ) $ 2,296 Equities 48,650 15,575 (1,184 ) 14,391 Calls/Maturities Gross Realized Net Realized (in thousands) Proceeds Gains Losses Gain (Loss) 2020 Available-for-sale $ 199,036 $ 525 $ (10 ) $ 515 2019 Available-for-sale $ 106,241 $ 133 $ (14 ) $ 119
Fair Value, Assets Measured on Recurring Basis	As of September 30, 2020 Fair Value Measurements Using Quoted Prices in Significant Other Significant Active 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 $ — $ 190,204 $ — $ 190,204 U.S. agency — 33,180 — 33,180 Non-U.S. govt. & agency — 10,831 — 10,831 Agency MBS — 396,852 — 396,852 ABS/CMBS* — 208,282 — 208,282 Corporate — 793,012 11,925 804,937 Municipal — 515,509 — 515,509 Total fixed income securities - available-for-sale $ — $ 2,147,870 $ 11,925 $ 2,159,795 Equity securities 455,956 — — 455,956 Other invested assets 10,620 — — 10,620 Total $ 466,576 $ 2,147,870 $ 11,925 $ 2,626,371 As of December 31, 2019 Fair Value Measurements Using Quoted Prices in Significant Other Significant Active 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 $ — $ 193,661 $ — $ 193,661 U.S. agency — 38,855 — 38,855 Non-U.S. govt. & agency — 7,628 — 7,628 Agency MBS — 420,165 — 420,165 ABS/CMBS* — 224,870 — 224,870 Corporate — 690,297 1,770 692,067 Municipal — 405,840 — 405,840 Total fixed income securities - available-for-sale $ — $ 1,981,316 $ 1,770 $ 1,983,086 Equity securities 460,630 — — 460,630 Total $ 460,630 $ 1,981,316 $ 1,770 $ 2,443,716 * Non-agency asset-backed and commercial mortgage-backed
Summary of Changes in Balance of Level 3 Securities	(in thousands) Level 3 Securities Balance as of January 1, 2020 $ 1,770 Net realized and unrealized gains (losses) Included in net earnings as a part of: Net investment income (15 ) Net realized gains (109 ) Included in other comprehensive earnings (76 ) Total net realized and unrealized gains (losses) $ (200 ) Purchases 10,355 Balance as of September 30, 2020 $ 11,925 Change in unrealized gains (losses) during the period for Level 3 assets held at period-end - included in net realized gains $ (109 ) Change in unrealized gains (losses) during the period for Level 3 assets held at period-end - included in other comprehensive earnings $ (76 )
Schedule of Contractual Maturity of Securities	September 30, 2020 (in thousands) Amortized Cost Fair Value Due in one year or less $ 85,018 $ 86,151 Due after one year through five years 475,999 502,636 Due after five years through 10 years 548,599 597,377 Due after 10 years 341,315 368,497 Mtge/ABS/CMBS* 580,048 605,134 Total available-for-sale $ 2,030,979 $ 2,159,795 * Mortgage-backed, asset-backed and commercial mortgage-backed
Schedule of Amortized Cost and Fair Value of Available-for-sale Securities	September 30, 2020 Cost or Allowance Gross Gross Amortized for Credit Unrealized Unrealized Fair (in thousands) Cost Losses Gains Losses Value U.S. government $ 175,259 $ — $ 14,981 $ (36 ) $ 190,204 U.S. agency 28,921 — 4,259 — 33,180 Non-U.S. govt. & agency 10,307 — 524 — 10,831 Agency MBS 376,536 — 20,617 (301 ) 396,852 ABS/CMBS* 203,511 (19 ) 5,347 (557 ) 208,282 Corporate 750,250 (613 ) 58,731 (3,431 ) 804,937 Municipal 486,195 — 29,587 (273 ) 515,509 Total Fixed Income $ 2,030,979 $ (632 ) $ 134,046 $ (4,598 ) $ 2,159,795 * Non-agency asset-backed and commercial mortgage-backed December 31, 2019 Cost or Allowance Gross Gross Amortized for Credit Unrealized Unrealized Fair (in thousands) Cost Losses Gains Losses Value U.S. government $ 186,699 $ — $ 6,994 $ (32 ) $ 193,661 U.S. agency 36,535 — 2,362 (42 ) 38,855 Non-U.S. govt. & agency 7,333 — 295 — 7,628 Agency MBS 411,808 — 8,920 (563 ) 420,165 ABS/CMBS* 222,832 — 2,514 (476 ) 224,870 Corporate 659,640 — 33,245 (818 ) 692,067 Municipal 390,431 — 16,131 (722 ) 405,840 Total Fixed Income $ 1,915,278 $ — $ 70,461 $ (2,653 ) $ 1,983,086 * Non-agency asset-backed and commercial mortgage-backed
Schedule of Debt Securities Available-for-sale Allowance for Credit Loss	Three Months Ended Nine Months Ended (in thousands) September 30, 2020 September 30, 2020 Beginning balance $ 985 $ — Increase to allowance from securities for which credit losses were not previously recorded 17 780 Reduction from securities sold during the period (6 ) (117 ) Reductions from intent to sell securities (186 ) (186 ) Net increase (decrease) from securities that had an allowance at the beginning of the period (178 ) 155 Balance as of September 30, $ 632 $ 632
Schedule of Securities in an Unrealized Loss Position Segregated by Type and Length of Time in an Unrealized Loss Position	September 30, 2020 December 31, 2019 (in thousands) < 12 Mos. 12 Mos. & Greater Total < 12 Mos. 12 Mos. & Greater Total U.S. government Fair value $ 5,900 $ — $ 5,900 $ 2,505 $ 8,463 $ 10,968 Amortized cost 5,936 — 5,936 2,506 8,494 11,000 Unrealized loss $ (36 ) $ — $ (36 ) $ (1 ) $ (31 ) $ (32 ) U.S. agency Fair value $ — $ — $ — $ 6,794 $ — $ 6,794 Amortized cost — — — 6,836 — 6,836 Unrealized loss $ — $ — $ — $ (42 ) $ — $ (42 ) Agency MBS Fair value $ 45,929 $ 244 $ 46,173 $ 21,548 $ 41,718 $ 63,266 Amortized cost 46,229 245 46,474 21,664 42,165 63,829 Unrealized loss $ (300 ) $ (1 ) $ (301 ) $ (116 ) $ (447 ) $ (563 ) ABS/CMBS* Fair value $ 35,837 $ 14,586 $ 50,423 $ 74,968 $ 18,036 $ 93,004 Amortized cost 36,236 14,744 50,980 75,332 18,148 93,480 Unrealized loss $ (399 ) $ (158 ) $ (557 ) $ (364 ) $ (112 ) $ (476 ) Corporate Fair value $ 107,521 $ 4,669 $ 112,190 $ 16,478 $ 9,348 $ 25,826 Amortized cost 110,664 4,957 115,621 16,950 9,694 26,644 Unrealized loss $ (3,143 ) $ (288 ) $ (3,431 ) $ (472 ) $ (346 ) $ (818 ) Municipal Fair value $ 32,681 $ — $ 32,681 $ 47,018 $ — $ 47,018 Amortized cost 32,954 — 32,954 47,740 — 47,740 Unrealized loss $ (273 ) $ — $ (273 ) $ (722 ) $ — $ (722 ) Total fixed income Fair value $ 227,868 $ 19,499 $ 247,367 $ 169,311 $ 77,565 $ 246,876 Amortized cost 232,019 19,946 251,965 171,028 78,501 249,529 Unrealized loss $ (4,151 ) $ (447 ) $ (4,598 ) $ (1,717 ) $ (936 ) $ (2,653 ) * Non-agency asset-backed and commercial mortgage-backed
Schedule of Credit Quality Indicators for Investments in Unrealized Loss Positions	Equivalent Equivalent (dollars in thousands) NAIC S&P Moody’s Amortized Unrealized Percent Rating Rating Rating Cost Fair Value Loss to Total 1 AAA/AA/A Aaa/Aa/A $ 152,119 $ 150,542 $ (1,577 ) 34.3 % 2 BBB Baa 25,884 25,436 (448 ) 9.7 % 3 BB Ba 26,706 26,052 (654 ) 14.2 % 4 B B 42,998 41,372 (1,626 ) 35.4 % 5 CCC Caa 4,086 3,810 (276 ) 6.0 % 6 CC or lower Ca or lower 172 155 (17 ) 0.4 % Total $ 251,965 $ 247,367 $ (4,598 ) 100.0 %

Historical Loss And LAE Devel_2

Historical Loss And LAE Development (Tables)	9 Months Ended
	Sep. 30, 2020
Historical Loss And L A E Development Disclosure [Abstract]
Schedule of Reconciliation of Unpaid Losses and Settlement Expenses (LAE)	For the Nine Months Ended September 30, (in thousands) 2020 2019 Unpaid losses and LAE at beginning of year Gross $ 1,574,352 $ 1,461,348 Ceded (384,517 ) (364,999 ) Net $ 1,189,835 $ 1,096,349 Adoption impact of ASU 2016-13 on reinsurance balances recoverable $ (1,345 ) $ — Increase (decrease) in incurred losses and LAE Current accident year $ 409,867 $ 362,395 Prior accident years (70,048 ) (55,189 ) Total incurred $ 339,819 $ 307,206 Loss and LAE payments for claims incurred Current accident year $ (49,337 ) $ (51,270 ) Prior accident years (192,056 ) (176,957 ) Total paid $ (241,393 ) $ (228,227 ) Net unpaid losses and LAE at September 30 $ 1,286,916 $ 1,175,328 Unpaid losses and LAE at September 30 Gross $ 1,686,876 $ 1,557,358 Ceded (399,960 ) (382,030 ) Net $ 1,286,916 $ 1,175,328

Income Taxes (Tables)

Income Taxes (Tables)	9 Months Ended
	Sep. 30, 2020
Income Tax Disclosure [Abstract]
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	For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Amount % Amount % Amount % Amount % Provision for income taxes at the statutory rate of 21% $ 10,817 21.0 % $ 8,179 21.0 % $ 18,275 21.0 % $ 35,598 21.0 % Increase (reduction) in taxes resulting from: Excess tax benefit on share-based compensation (848 ) (1.6 ) % (614 ) (1.6 ) % (2,141 ) (2.4 ) % (3,546 ) (2.1 ) % Tax exempt interest income (324 ) (0.6 ) % (276 ) (0.7 ) % (960 ) (1.1 ) % (930 ) (0.6 ) % Dividends received deduction (221 ) (0.4 ) % (218 ) (0.6 ) % (705 ) (0.8 ) % (635 ) (0.4 ) % Investment tax credit (316 ) (0.6 ) % — 0.0 % (1,766 ) (2.0 ) % — 0.0 % ESOP dividends paid deduction (134 ) (0.3 ) % (136 ) (0.3 ) % (403 ) (0.5 ) % (413 ) (0.2 ) % Nondeductible expenses 275 0.5 % 243 0.6 % 639 0.7 % 1,166 0.7 % Other items, net (127 ) (0.3 ) % (555 ) (1.4 ) % 799 0.9 % 12 0.0 % Total tax expense $ 9,122 17.7 % $ 6,623 17.0 % $ 13,738 15.8 % $ 31,252 18.4 %

Stock Based Compensation (Table

Stock Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Summary of Option Activity	The following tables summarize option activity for the nine-month periods ended September 30, 2020 and 2019: Weighted Weighted Average Aggregate Number of Average Remaining Intrinsic Options Exercise Contractual Value Outstanding Price Life (in 000’s) Outstanding options at January 1, 2020 1,667,290 $ 62.52 Options granted 275,977 93.39 Options exercised (177,045 ) 49.13 $ 7,639 Options canceled/forfeited (6,410 ) 73.42 Outstanding options at September 30, 2020 1,759,812 $ 68.67 5.14 $ 29,740 Exercisable options at September 30, 2020 807,570 $ 59.03 3.82 $ 20,054 Weighted Weighted Average Aggregate Number of Average Remaining Intrinsic Options Exercise Contractual Value Outstanding Price Life (in 000’s) Outstanding options at January 1, 2019 1,964,880 $ 54.24 Options granted 324,525 81.27 Options exercised (493,615 ) 45.61 $ 18,157 Options canceled/forfeited (59,050 ) 60.92 Outstanding options at September 30, 2019 1,736,740 $ 61.52 5.43 $ 54,515 Exercisable options at September 30, 2019 622,290 $ 52.78 4.03 $ 24,975
Summary of Weighted Average Grant-date Assumptions and Weighted Average Fair Values	The fair value of options was estimated using a Black-Scholes based option pricing model with the following weighted average grant-date assumptions and weighted average fair values as of September 30: 2020 2019 Weighted-average fair value of grants $ 13.33 $ 13.47 Risk-free interest rates 0.41 % 2.41 % Dividend yield 2.30 % 2.69 % Expected volatility 22.67 % 22.71 % Expected option life 4.96 years 4.95 years

Operating Segment Information (

Operating Segment Information (Tables)	9 Months Ended
	Sep. 30, 2020
Segment Reporting [Abstract]
Summary of Selected Information by Operating Segment	Selected information by operating segment is presented in the table below. Additionally, the table reconciles segment totals to total earnings and total revenues. For the Three Months For the Nine Months Revenues Ended September 30, Ended September 30, (in thousands) 2020 2019 2020 2019 Casualty $ 143,002 $ 140,423 $ 421,637 $ 415,667 Property 45,380 41,476 135,115 120,194 Surety 28,248 29,356 84,194 87,624 Net premiums earned $ 216,630 $ 211,255 $ 640,946 $ 623,485 Net investment income 16,543 17,532 51,238 51,095 Net realized gains 1,512 3,211 14,555 17,043 Net unrealized gains (losses) on equity securities 28,126 4,906 (27,564 ) 47,214 Total consolidated revenue $ 262,811 $ 236,904 $ 679,175 $ 738,837 Net Earnings (in thousands) 2020 2019 2020 2019 Casualty $ 13,993 $ 2,370 $ 22,403 $ 14,652 Property (19,951 ) 6,202 (3,876 ) 14,012 Surety 7,110 5,159 24,027 22,432 Net underwriting income $ 1,152 $ 13,731 $ 42,554 $ 51,096 Net investment income 16,543 17,532 51,238 51,095 Net realized gains 1,512 3,211 14,555 17,043 Net unrealized gains (losses) on equity securities 28,126 4,906 (27,564 ) 47,214 General corporate expense and interest on debt (4,569 ) (4,444 ) (12,118 ) (14,725 ) Equity in earnings of unconsolidated investees 8,745 4,011 18,359 17,793 Earnings before income taxes $ 51,509 $ 38,947 $ 87,024 $ 169,516 Income tax expense 9,122 6,623 13,738 31,252 Net earnings $ 42,387 $ 32,324 $ 73,286 $ 138,264
Summary of Revenue by Major Product Type	The following table further summarizes revenues by major product type within each operating segment: For the Three Months For the Nine Months Net Premiums Earned Ended September 30, Ended September 30, (in thousands) 2020 2019 2020 2019 Casualty Commercial excess and personal umbrella $ 46,404 $ 35,959 $ 128,813 $ 102,580 General liability 22,747 25,005 69,396 74,240 Professional services 21,422 20,816 63,501 60,390 Commercial transportation 15,130 21,067 47,454 61,979 Small commercial 16,009 13,927 47,433 40,430 Executive products 6,387 7,026 20,693 19,476 Other casualty 14,903 16,623 44,347 56,572 Total $ 143,002 $ 140,423 $ 421,637 $ 415,667 Property Marine $ 19,687 $ 19,033 $ 59,976 $ 54,633 Commercial property 20,168 17,098 58,371 50,248 Specialty personal 4,794 4,948 14,730 14,324 Other property 731 397 2,038 989 Total $ 45,380 $ 41,476 $ 135,115 $ 120,194 Surety Commercial $ 10,543 $ 10,851 $ 32,287 $ 32,638 Miscellaneous 10,547 10,998 31,562 33,880 Contract 7,158 7,507 20,345 21,106 Total $ 28,248 $ 29,356 $ 84,194 $ 87,624 Grand Total $ 216,630 $ 211,255 $ 640,946 $ 623,485

Leases (Tables)

Leases (Tables)	9 Months Ended
	Sep. 30, 2020
Leases [Abstract]
Schedule of Components of Lease Expense and Other lease Information	The Company’s operating lease obligations are for branch office facilities. The components of lease expense and other lease information as of and during the three and nine-month periods ended September 30, 2020 and 2019 are as follows: For the Three Months For the Nine Months Ended September 30, Ended September 30, (in thousands) 2020 2019 2020 2019 Operating lease cost $ 1,364 $ 1,423 $ 4,140 $ 4,349 Variable lease cost 338 321 1,014 1,530 Sublease income (96 ) — (139 ) — Total lease cost $ 1,606 $ 1,744 $ 5,015 $ 5,879 Cash paid for amounts included in measurement of lease liabilities Operating cash outflows from operating leases $ 1,480 $ 1,438 $ 4,470 $ 4,234 ROU assets obtained in exchange for new operating lease liabilities $ — $ 427 $ 15 $ 1,378 Reduction to ROU assets resulting from reduction to lease liabilities $ 18 $ — $ 18 $ 1,279 Other non-cash reductions to ROU assets $ — $ — $ 1,192 $ — (in thousands) September 30, 2020 December 31, 2019 Operating lease ROU assets $ 17,385 $ 22,335 Operating lease liabilities $ 20,388 $ 24,475 Weighted-average remaining lease term - operating leases 4.07 years 4.69 years Weighted-average discount rate - operating leases 2.32 % 2.33 %
Schedule of Future Minimum Lease Payments under Non-cancellable Leases	Future minimum lease payments under non-cancellable leases as of September 30, 2020 were as follows: (in thousands) September 30, 2020 2020 $ 1,494 2021 5,937 2022 5,904 2023 4,424 2024 2,334 2025 802 Thereafter 564 Total future minimum lease payments $ 21,459 Less imputed interest (1,071 ) Total operating lease liability $ 20,388

Summary of Significant Accoun_4

Summary of Significant Accounting Policies - Accounting Standards - Additional Information (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Percentage Of Fixed Income Portfolio Rated A Or Better	83.00%	85.00%
Accumulated other comprehensive earnings	$ 102,585,000	$ 52,473,000
Retained earnings	$ 1,056,445,000	1,014,046,000
Accounting Standards Update 2016-13 | Cumulative Effect, Period of Adoption, Adjustment
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Retained earnings		1,100,000
Maximum | Accounting Standards Update 2016-13 | Cumulative Effect, Period of Adoption, Adjustment
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Accumulated other comprehensive earnings		$ 100,000

Summary of Significant Accoun_5

Summary of Significant Accounting Policies - Reinsurance - Additional Information (Details) - USD ($)	9 Months Ended
	Sep. 30, 2020	Jan. 01, 2020	Dec. 31, 2019
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Amount of allowance for uncollectible amounts on paid recoverables	$ 15,900,000		$ 15,700,000
Reinsurance balances recoverable on unpaid losses and settlement expenses, allowances for uncollectible amounts	8,097,000		$ 9,402,000
Financing Receivable, Allowance for Credit Loss, Writeoff	0
Financing Receivable, Allowance for Credit Loss, Recovery	$ 0
Accounting Standards Update 2016-13
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Adoption impact of ASU 2016-13 on reinsurance balances recoverable		$ 1,345,000
Accounting Standards Update 2016-13 | Cumulative Effect, Period of Adoption, Adjustment
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Adoption impact of ASU 2016-13 on reinsurance balances recoverable		$ 1,300,000

Summary of Significant Accoun_6

Summary of Significant Accounting Policies - Intangible Assets - Additional Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Business Acquisition [Line Items]
Goodwill	$ 46,062,000		$ 46,062,000		$ 46,062,000
Indefinite-lived intangibles - state insurance licenses	7,500,000		7,500,000		7,500,000
Definite-lived intangibles, net of accumulated amortization of $3,776 at 9/30/20 and $3,470 at 12/31/19	259,000		259,000		565,000
Total intangibles	7,759,000		7,759,000		8,065,000
Goodwill and intangibles	53,821,000		53,821,000		54,127,000
Amortization of intangible assets	100,000	$ 100,000	300,000	$ 300,000
Impairment of indefinite-lived intangible assets			0
Surety Segment
Business Acquisition [Line Items]
Goodwill	40,816,000		40,816,000		40,816,000
Goodwill, Impairment Loss			0
Casualty
Business Acquisition [Line Items]
Goodwill	$ 5,246,000		5,246,000		$ 5,246,000
Goodwill, Impairment Loss			$ 0

Summary of Significant Accoun_7

Summary of Significant Accounting Policies - Intangible Assets - Schedule of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Business Acquisition [Line Items]
Goodwill	$ 46,062	$ 46,062
Indefinite-lived intangibles - state insurance licenses	7,500	7,500
Definite-lived intangibles, net of accumulated amortization of $3,776 at 9/30/20 and $3,470 at 12/31/19	259	565
Total intangibles	7,759	8,065
Goodwill and intangibles	53,821	54,127
Surety Segment
Business Acquisition [Line Items]
Goodwill	40,816	40,816
Casualty
Business Acquisition [Line Items]
Goodwill	$ 5,246	$ 5,246

Summary of Significant Accoun_8

Summary of Significant Accounting Policies - Intangible Assets - Schedule of Goodwill and Intangible Assets (Parenthetical) (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Accounting Policies [Abstract]
Accumulated amortization of definite-lived intangibles	$ 3,776	$ 3,470

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	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Basic EPS, Income (Numerator)
Income available to common shareholders	$ 42,387	$ 32,324	$ 73,286	$ 138,264
Diluted EPS, Income (Numerator)
Income available to common shareholders	$ 42,387	$ 32,324	$ 73,286	$ 138,264
Basic EPS, Weighted Average Shares (Denominator)
Number of shares outstanding	45,014	44,823	44,962	44,689
Effect of Dilutive Securities, Shares (Denominator)
Stock options and restricted stock units	412	526	377	503
Diluted EPS, Weighted Average Shares (Denominator)
Number of shares outstanding	45,426	45,349	45,339	45,192
Earnings Per Share, Diluted, Other Disclosures
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	339		339	277
Basic EPS, Per Share Amount
Basic net earnings per share (in dollars per share)	$ 0.94	$ 0.72	$ 1.63	$ 3.09
Diluted EPS, Per Share Amount
Diluted earnings per share (in dollars per share)	$ 0.93	$ 0.71	$ 1.62	$ 3.06

Summary of Significant Accou_10

Summary of Significant Accounting Policies - Comprehensive Earnings - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019
COMPREHENSIVE EARNINGS
Tax rate used (as a percent)	21.00%			21.00%			21.00%	21.00%
Other comprehensive income (loss), tax	$ 2,500			$ 4,100			$ 13,300	$ 19,300
Changes in the balance of each component of accumulated other comprehensive earnings
Net current-period other comprehensive earnings (loss)	$ 9,550	$ 53,571	$ (13,031)	$ 15,341	$ 27,864	$ 29,301	$ 50,090	$ 72,506

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	3 Months Ended						9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019
Changes in the balance of each component of accumulated other comprehensive earnings
Beginning balance			$ 52,473				$ 52,473
Accounting Standards Update [Extensible List]			us-gaap:AccountingStandardsUpdate201613Member
Net current-period other comprehensive earnings	$ 9,550	$ 53,571	$ (13,031)	$ 15,341	$ 27,864	$ 29,301	50,090	$ 72,506
Ending balance	102,585						102,585
Balance of securities for which an allowance for credit losses has been recognized in net earnings	795						795
Unrealized Gains and Losses on Available-for-Sale Securities
Changes in the balance of each component of accumulated other comprehensive earnings
Beginning balance	93,035		52,473	42,593		(14,572)	52,473	(14,572)
Other comprehensive earnings before reclassifications	10,412			16,231			52,264	74,414
Amounts reclassified from accumulated other comprehensive earnings	(862)			(890)			(2,174)	(1,908)
Ending balance	102,585	93,035		57,934	42,593		102,585	57,934
Unrealized Gains and Losses on Available-for-Sale Securities | Cumulative Effect, Period of Adoption, Adjustment
Changes in the balance of each component of accumulated other comprehensive earnings
Beginning balance			22				$ 22
Accounting Standards Update [Extensible List]							us-gaap:AccountingStandardsUpdate201613Member
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
Beginning balance	$ 93,035		$ 52,495	$ 42,593		$ (14,572)	$ 52,495	$ (14,572)
Ending balance		$ 93,035			$ 42,593

Summary of Significant Accou_12

Summary of Significant Accounting Policies - Schedule of Effects of Reclassifications out of Accumulated Other Comprehensive Earnings (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019
Reclassification Adjustment Out of Accumulated Other Comprehensive Income
Net realized gains	$ 1,512			$ 3,211			$ 14,555	$ 17,043
Credit losses on available-for-sale securities	178						(155)
Earnings before income taxes	51,509			38,947			87,024	169,516
Income tax expense	(9,122)			(6,623)			(13,738)	(31,252)
Net earnings	42,387	$ 92,166	$ (61,267)	32,324	$ 40,467	$ 65,473	73,286	138,264
Unrealized Gains and Losses on Available-for-Sale Securities | Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment Out of Accumulated Other Comprehensive Income
Net realized gains	738			1,126			3,356	2,415
Credit losses on available-for-sale securities	353						(604)
Earnings before income taxes	1,091			1,126			2,752	2,415
Income tax expense	(229)			(236)			(578)	(507)
Net earnings	$ 862			$ 890			$ 2,174	$ 1,908

Summary of Significant Accou_13

Summary of Significant Accounting Policies - Catastrophe Exposures - Additional Information (Details) - USD ($) $ in Millions	Mar. 01, 2020	Feb. 29, 2020
Liability For Catastrophe Claims [Line Items]
First-dollar retention	$ 25	$ 25
Additional catastrophe reinsurance	100
California Earthquake
Liability For Catastrophe Claims [Line Items]
Catastrophe reinsurance	500	400
First-dollar retention		25
Non-California Earthquake
Liability For Catastrophe Claims [Line Items]
Catastrophe reinsurance	525	425
First-dollar retention		25
Other Perils
Liability For Catastrophe Claims [Line Items]
Catastrophe reinsurance	$ 375	275
First-dollar retention		$ 25

Investments - Disposition of Fi

Investments - Disposition of Fixed Income and Equity Securities (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
SALES | Debt Securities | Available for sale securities
Summary of the disposition of fixed income and equity securities
Proceeds From Sales	$ 68,621	$ 174,767
Gross Realized Gains	4,959	3,689
Gross Realized Losses	(1,518)	(1,393)
Net Realized Gain (Loss)	3,441	2,296
SALES | Equity Securities
Summary of the disposition of fixed income and equity securities
Proceeds From Sales	66,185	48,650
Gross Realized Gains	22,172	15,575
Gross Realized Losses	(8,756)	(1,184)
Net Realized Gain (Loss)	13,416	14,391
CALLS/MATURITIES | Debt Securities | Available for sale securities
Summary of the disposition of fixed income and equity securities
Proceeds From Sales	199,036	106,241
Gross Realized Gains	525	133
Gross Realized Losses	(10)	(14)
Net Realized Gain (Loss)	$ 515	$ 119

Investments - Assets Measured a

Investments - Assets Measured at Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Assets measured at Fair Value
Available-for-sale fixed income	$ 2,159,795	$ 1,983,086
Equity securities	455,956	460,630
Municipal
Assets measured at Fair Value
Available-for-sale fixed income	515,509	405,840
Fair Value Measured on Recurring Basis
Assets measured at Fair Value
Available-for-sale fixed income	2,159,795	1,983,086
Equity securities	455,956	460,630
Other invested assets	10,620
Total assets at fair value	2,626,371	2,443,716
Fair Value Measured on Recurring Basis | Quoted Prices in Active Markets for Identical Assets (Level 1)
Assets measured at Fair Value
Equity securities	455,956	460,630
Other invested assets	10,620
Total assets at fair value	466,576	460,630
Fair Value Measured on Recurring Basis | Significant Other Observable Inputs (Level 2)
Assets measured at Fair Value
Available-for-sale fixed income	2,147,870	1,981,316
Total assets at fair value	2,147,870	1,981,316
Fair Value Measured on Recurring Basis | Significant Unobservable Inputs (Level 3)
Assets measured at Fair Value
Available-for-sale fixed income	11,925	1,770
Total assets at fair value	11,925	1,770
Fair Value Measured on Recurring Basis | U.S. government
Assets measured at Fair Value
Available-for-sale fixed income	190,204	193,661
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	190,204	193,661
Fair Value Measured on Recurring Basis | U.S. Agency
Assets measured at Fair Value
Available-for-sale fixed income	33,180	38,855
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	33,180	38,855
Fair Value Measured on Recurring Basis | Non-U.S. govt. & agency
Assets measured at Fair Value
Available-for-sale fixed income	10,831	7,628
Fair Value Measured on Recurring Basis | Non-U.S. govt. & agency | Significant Other Observable Inputs (Level 2)
Assets measured at Fair Value
Available-for-sale fixed income	10,831	7,628
Fair Value Measured on Recurring Basis | Agency MBS
Assets measured at Fair Value
Available-for-sale fixed income	396,852	420,165
Fair Value Measured on Recurring Basis | Agency MBS | Significant Other Observable Inputs (Level 2)
Assets measured at Fair Value
Available-for-sale fixed income	396,852	420,165
Fair Value Measured on Recurring Basis | ABS/CMBS
Assets measured at Fair Value
Available-for-sale fixed income	208,282	224,870
Fair Value Measured on Recurring Basis | ABS/CMBS | Significant Other Observable Inputs (Level 2)
Assets measured at Fair Value
Available-for-sale fixed income	208,282	224,870
Fair Value Measured on Recurring Basis | Corporate Debt
Assets measured at Fair Value
Available-for-sale fixed income	804,937	692,067
Fair Value Measured on Recurring Basis | Corporate Debt | Significant Other Observable Inputs (Level 2)
Assets measured at Fair Value
Available-for-sale fixed income	793,012	690,297
Fair Value Measured on Recurring Basis | Corporate Debt | Significant Unobservable Inputs (Level 3)
Assets measured at Fair Value
Available-for-sale fixed income	11,925	1,770
Fair Value Measured on Recurring Basis | Municipal
Assets measured at Fair Value
Available-for-sale fixed income	515,509	405,840
Fair Value Measured on Recurring Basis | Municipal | Significant Other Observable Inputs (Level 2)
Assets measured at Fair Value
Available-for-sale fixed income	$ 515,509	$ 405,840

Investments - Summary of Change

Investments - Summary of Changes in Balance of Level 3 securities (Details) - Regulation D Private Placement Fixed Income Securities $ in Thousands	9 Months Ended
	Sep. 30, 2020USD ($)
Summary of changes in Level 3 securities
Beginning balance	$ 1,770
Net investment income	(15)
Net realized gains	(109)
Included in other comprehensive earnings	(76)
Total net realized and unrealized gains (losses)	(200)
Purchases	10,355
Ending balance	11,925
Other Comprehensive Earnings (Loss)
Summary of changes in Level 3 securities
Change in unrealized gains (losses) during the period for Level 3 assets held at period-end	(76)
Net Realized Gains (Losses)
Summary of changes in Level 3 securities
Change in unrealized gains (losses) during the period for Level 3 assets held at period-end	$ (109)

Investments - Amortized Cost an

Investments - Amortized Cost and Fair Value of Available-for-sale Fixed Income Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Amortized Cost
Due in one year or less	$ 85,018
Due after one year through five years	475,999
Due after five years through 10 years	548,599
Due after 10 years	341,315
Mtge/ABS/CMBS*	580,048
Total available-for-sale	2,030,979	$ 1,915,278
Fair Value
Due in one year or less	86,151
Due after one year through five years	502,636
Due after five years through 10 years	597,377
Due after 10 years	368,497
Mtge/ABS/CMBS*	605,134
Total available-for-sale	$ 2,159,795	$ 1,983,086

Investments - Additional Inform

Investments - Additional Information (Details)	9 Months Ended
	Sep. 30, 2020USD ($)security	Sep. 30, 2019USD ($)	Dec. 31, 2019USD ($)
Investment Holdings [Line Items]
Accrued investment income	$ 15,685,000		$ 14,587,000
Debt Securities
Investment Holdings [Line Items]
Accrued investment income	$ 14,500,000		13,500,000
Number of debt securities for which there is an allowance for credit losses | security	29
Net realized gains	$ 600,000
Other-than-temporary impairment loss, debt securities, available-for-sale, recognized in earnings		$ 0
Number of debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded | security	234
Unrealized loss	$ 4,598,000		$ 2,653,000
Unrealized losses as percentage of fixed income portfolio cost basis	0.20%
Unrealized losses relative to total invested assets (as a percent)	0.20%
Number of unrealized loss positions | security	263
Number of securities in unrealized loss positions for 12 months or longer | security	29

Investments - Amortized Cost _2

Investments - Amortized Cost and Fair Value of Available-for-sale Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019
Schedule Of Available For Sale Securities [Line Items]
Total available-for-sale	$ 2,030,979		$ 1,915,278
Allowance for Credit Losses	(632)	$ (985)	0
Gross Unrealized Gains	134,046		70,461
Gross Unrealized Losses	(4,598)		(2,653)
Fair Value	2,159,795		1,983,086
U.S. government
Schedule Of Available For Sale Securities [Line Items]
Total available-for-sale	175,259		186,699
Gross Unrealized Gains	14,981		6,994
Gross Unrealized Losses	(36)		(32)
Fair Value	190,204		193,661
U.S. Agency
Schedule Of Available For Sale Securities [Line Items]
Total available-for-sale	28,921		36,535
Gross Unrealized Gains	4,259		2,362
Gross Unrealized Losses			(42)
Fair Value	33,180		38,855
Non-U.S. govt. & agency
Schedule Of Available For Sale Securities [Line Items]
Total available-for-sale	10,307		7,333
Gross Unrealized Gains	524		295
Fair Value	10,831		7,628
Agency MBS
Schedule Of Available For Sale Securities [Line Items]
Total available-for-sale	376,536		411,808
Gross Unrealized Gains	20,617		8,920
Gross Unrealized Losses	(301)		(563)
Fair Value	396,852		420,165
ABS/CMBS
Schedule Of Available For Sale Securities [Line Items]
Total available-for-sale	203,511		222,832
Allowance for Credit Losses	(19)
Gross Unrealized Gains	5,347		2,514
Gross Unrealized Losses	(557)		(476)
Fair Value	208,282		224,870
Corporate Debt
Schedule Of Available For Sale Securities [Line Items]
Total available-for-sale	750,250		659,640
Allowance for Credit Losses	(613)
Gross Unrealized Gains	58,731		33,245
Gross Unrealized Losses	(3,431)		(818)
Fair Value	804,937		692,067
Municipal
Schedule Of Available For Sale Securities [Line Items]
Total available-for-sale	486,195		390,431
Gross Unrealized Gains	29,587		16,131
Gross Unrealized Losses	(273)		(722)
Fair Value	$ 515,509		$ 405,840

Investments - Schedule of Debt

Investments - Schedule of Debt Securities Available-for-sale Allowance for Credit Loss (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2020
Investments Debt And Equity Securities [Abstract]
Beginning balance	$ 985	$ 0
Increase to allowance from securities for which credit losses were not previously recorded	17	780
Reduction from securities sold during the period	(6)	(117)
Reductions from intent to sell securities	(186)	(186)
Net increase (decrease) from securities that had an allowance at the beginning of the period	(178)	155
Balance as of September 30,	$ 632	$ 632

Investments - Summary of the To

Investments - Summary of the Total Value of Fixed Income Securities (Details) - USD ($) $ in Thousands		Sep. 30, 2020	Dec. 31, 2019
U.S. government
Fair value
Less than 12 months		$ 5,900	$ 2,505
12 months and greater			8,463
Total Fair Value		5,900	10,968
Cost or amortized Cost
Amortized cost, less than 12 months		5,936	2,506
12 months and greater			8,494
Total Cost or Amortized Cost		5,936	11,000
Unrealized loss
Less than 12 months		(36)	(1)
12 months and greater			(31)
Total Unrealized Loss		(36)	(32)
U.S. Agency
Fair value
Less than 12 months			6,794
Total Fair Value			6,794
Cost or amortized Cost
Amortized cost, less than 12 months			6,836
Total Cost or Amortized Cost			6,836
Unrealized loss
Less than 12 months			(42)
Total Unrealized Loss			(42)
Agency MBS
Fair value
Less than 12 months		45,929	21,548
12 months and greater		244	41,718
Total Fair Value		46,173	63,266
Cost or amortized Cost
Amortized cost, less than 12 months		46,229	21,664
12 months and greater		245	42,165
Total Cost or Amortized Cost		46,474	63,829
Unrealized loss
Less than 12 months		(300)	(116)
12 months and greater		(1)	(447)
Total Unrealized Loss		(301)	(563)
ABS/CMBS
Fair value
Less than 12 months	[1]	35,837	74,968
12 months and greater	[1]	14,586	18,036
Total Fair Value	[1]	50,423	93,004
Cost or amortized Cost
Amortized cost, less than 12 months	[1]	36,236	75,332
12 months and greater	[1]	14,744	18,148
Total Cost or Amortized Cost	[1]	50,980	93,480
Unrealized loss
Less than 12 months	[1]	(399)	(364)
12 months and greater	[1]	(158)	(112)
Total Unrealized Loss	[1]	(557)	(476)
Corporate Debt
Fair value
Less than 12 months		107,521	16,478
12 months and greater		4,669	9,348
Total Fair Value		112,190	25,826
Cost or amortized Cost
Amortized cost, less than 12 months		110,664	16,950
12 months and greater		4,957	9,694
Total Cost or Amortized Cost		115,621	26,644
Unrealized loss
Less than 12 months		(3,143)	(472)
12 months and greater		(288)	(346)
Total Unrealized Loss		(3,431)	(818)
Municipal
Fair value
Less than 12 months		32,681	47,018
Total Fair Value		32,681	47,018
Cost or amortized Cost
Amortized cost, less than 12 months		32,954	47,740
Total Cost or Amortized Cost		32,954	47,740
Unrealized loss
Less than 12 months		(273)	(722)
Total Unrealized Loss		(273)	(722)
Debt Securities
Fair value
Less than 12 months		227,868	169,311
12 months and greater		19,499	77,565
Total Fair Value		247,367	246,876
Cost or amortized Cost
Amortized cost, less than 12 months		232,019	171,028
12 months and greater		19,946	78,501
Total Cost or Amortized Cost		251,965	249,529
Unrealized loss
Less than 12 months		(4,151)	(1,717)
12 months and greater		(447)	(936)
Total Unrealized Loss		$ (4,598)	$ (2,653)
[1]	Non-agency asset-backed and commercial mortgage-backed

Investments - Unrealized Losses

Investments - Unrealized Losses (Details) - Debt Securities - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Cost or amortized Cost
Total Cost or Amortized Cost	$ 251,965	$ 249,529
Fair value
Total Fair Value	247,367	246,876
Unrealized Loss
Total Unrealized Loss	$ (4,598)	$ (2,653)
Percent to Total	100.00%
NAIC Rating 1 | AAA/AA/A | Aaa/Aa/A
Cost or amortized Cost
Total Cost or Amortized Cost	$ 152,119
Fair value
Total Fair Value	150,542
Unrealized Loss
Total Unrealized Loss	$ (1,577)
Percent to Total	34.30%
NAIC Rating 2 | BBB | Baa
Cost or amortized Cost
Total Cost or Amortized Cost	$ 25,884
Fair value
Total Fair Value	25,436
Unrealized Loss
Total Unrealized Loss	$ (448)
Percent to Total	9.70%
NAIC Rating 3 | BB | Ba
Cost or amortized Cost
Total Cost or Amortized Cost	$ 26,706
Fair value
Total Fair Value	26,052
Unrealized Loss
Total Unrealized Loss	$ (654)
Percent to Total	14.20%
NAIC Rating 4 | B | B
Cost or amortized Cost
Total Cost or Amortized Cost	$ 42,998
Fair value
Total Fair Value	41,372
Unrealized Loss
Total Unrealized Loss	$ (1,626)
Percent to Total	35.40%
NAIC Rating 5 | CCC | Caa
Cost or amortized Cost
Total Cost or Amortized Cost	$ 4,086
Fair value
Total Fair Value	3,810
Unrealized Loss
Total Unrealized Loss	$ (276)
Percent to Total	6.00%
NAIC Six Rating Member | Standard Poors CC Or Lower Member | Ca
Cost or amortized Cost
Total Cost or Amortized Cost	$ 172
Fair value
Total Fair Value	155
Unrealized Loss
Total Unrealized Loss	$ (17)
Percent to Total	0.40%

Investments - Allowance for Cre

Investments - Allowance for Credit Losses, Unrealized Losses on Securities (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Equity Securities
Investment Holdings [Line Items]
Unrealized gains (losses) on equity securities still held	$ 28.7	$ 6.9	$ (14.1)	$ 61.7

Investments - Debt and Short-te

Investments - Debt and Short-term Investments (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Investment Holdings [Line Items]
Other Investments	$ 59,988,000		$ 59,988,000		$ 70,441,000
Investment in Federal Home Loan Bank Stock	us-gaap:AssetPledgedAsCollateralMember		us-gaap:AssetPledgedAsCollateralMember
Cash and Short-term Investments
Cash	$ 70,589,000		$ 70,589,000		46,203,000
FHLBC
Investment Holdings [Line Items]
Investments pledged as collateral	13,700,000		13,700,000
Federal Home Loan Bank Borrowings, Fair Value Disclosure	0		0
Investment In Low Income Housing Tax Credit Partnership Net Of Amortization
Investment Holdings [Line Items]
Other Investments	21,000,000		21,000,000		23,300,000
Total tax benefit on investments in housing tax credit partnership	900,000	$ 600,000	2,600,000	$ 1,900,000
Qualified Affordable Housing Project Investments, Commitment	4,700,000		4,700,000
Investment in Private Funds
Investment Holdings [Line Items]
Other Investments	26,500,000		26,500,000		$ 46,000,000
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Unfunded Commitments	8,300,000		8,300,000
Investment in Restricted Stock
Investment Holdings [Line Items]
Other Investments	$ 10,600,000		$ 10,600,000

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	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Jan. 01, 2020
Unpaid losses and LAE at beginning of year
Gross	$ 1,574,352	$ 1,461,348
Ceded	(384,517)	(364,999)
Net	1,189,835	1,096,349
Increase (decrease) in incurred losses and LAE
Current accident year	409,867	362,395
Prior accident years	(70,048)	(55,189)
Total incurred	339,819	307,206
Loss and LAE payments for claims incurred
Current accident year	(49,337)	(51,270)
Prior accident years	(192,056)	(176,957)
Total paid	(241,393)	(228,227)
Net	1,286,916	1,175,328
Unpaid losses and LAE at September 30
Gross	1,686,876	1,557,358
Ceded	(399,960)	(382,030)
Net	$ 1,286,916	$ 1,175,328
Accounting Standards Update 2016-13
Adoption impact of ASU 2016-13
Adoption impact of ASU 2016-13 on reinsurance balances recoverable			$ (1,345)

Historical Loss and LAE Devel_4

Historical Loss and LAE Development - Additional Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Jan. 01, 2020
Ceded Credit Risk [Line Items]
Favorable development on prior years’ loss reserves	$ 70,048	$ 55,189
Accounting Standards Update 2016-13
Ceded Credit Risk [Line Items]
Allowance on uncollectible reinsurance balances released upon adoption			$ (1,345)

Income Taxes - Additional Infor

Income Taxes - Additional Information (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Tax Disclosure [Abstract]
Effective income tax rate reconciliation, percent, total	17.70%	17.00%	15.80%	18.40%
U.S. federal tax rate	21.00%	21.00%	21.00%	21.00%

Income Taxes - Schedule of Reco

Income Taxes - 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 (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
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	$ 10,817	$ 8,179	$ 18,275	$ 35,598
Excess tax benefit on share-based compensation	(848)	(614)	(2,141)	(3,546)
Tax exempt interest income	(324)	(276)	(960)	(930)
Dividends received deduction	(221)	(218)	(705)	(635)
Investment tax credit	(316)		(1,766)
ESOP dividends paid deduction	(134)	(136)	(403)	(413)
Nondeductible expenses	275	243	639	1,166
Other items, net	(127)	(555)	799	12
Total tax expense	$ 9,122	$ 6,623	$ 13,738	$ 31,252
Reconciliation of income tax expense rate to the U.S. federal tax rate
Tax rate used (as a percent)	21.00%	21.00%	21.00%	21.00%
Excess tax benefit on share-based compensation (as a percent)	(1.60%)	(1.60%)	(2.40%)	(2.10%)
Effective rate reduction due to tax exempt interest income (as a percent)	(0.60%)	(0.70%)	(1.10%)	(0.60%)
Effective rate reduction due to dividend received (as a percent)	(0.40%)	(0.60%)	(0.80%)	(0.40%)
Effective rate reduction due to investment tax credit (as a percent)	(0.60%)	(0.00%)	(2.00%)	(0.00%)
Effective rate reduction due to dividend paid to ESOP (as a percent)	(0.30%)	(0.30%)	(0.50%)	(0.20%)
Effective rate reduction due to nondeductible expenses (as a percent)	0.50%	0.60%	0.70%	0.70%
Effective rate reduction due to other items, net (as a percent)	(0.30%)	(1.40%)	0.90%	0.00%
Total tax expense	17.70%	17.00%	15.80%	18.40%

Stock Based Compensation - Addi

Stock Based Compensation - Additional Information (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended	60 Months Ended	65 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019	May 06, 2015	Sep. 30, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Options granted (in shares)			275,977	324,525
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
Weighted average exercise price			$ 93.39	$ 81.27
Weighted-average fair value			$ 13.33	$ 13.47
Stock-based compensation expenses	$ 1,300,000	$ 1,200,000	$ 2,800,000	$ 3,600,000
Income tax benefit from stock-based compensation	300,000	200,000	600,000	700,000
Unrecognized stock-based compensation expense	5,600,000		$ 5,600,000				$ 5,600,000
Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting period			3 years
Age and period of service of the participant to be eligible for retirement			75 years
Stock-based compensation expenses	200,000	300,000	$ 500,000	600,000
Unrecognized stock-based compensation expense	$ 1,600,000		$ 1,600,000				$ 1,600,000
RSUs Granted							58,420
RSUs Outstanding	41,826		41,826				41,826
Restricted Stock Units (RSUs) | Outside director
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting period			1 year
Stock-based compensation expenses	$ 100,000	$ 100,000	$ 200,000	$ 500,000
RSUs Granted							20,445
RSUs Outstanding	5,375		5,375				5,375
Grant date fair value of RSUs			$ 50,000		$ 50,000
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				4,000,000
Options granted (in shares)							2,576,867

Stock Based Compensation - Summ

Stock Based Compensation - Summary of Option Activity (Details) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2020USD ($)$ / sharesshares	Sep. 30, 2019USD ($)$ / sharesshares
Weighted Number of Options Outstanding
Outstanding options, Beginning Balance | shares	1,667,290	1,964,880
Options granted (in shares) | shares	275,977	324,525
Options exercised | shares	(177,045)	(493,615)
Options canceled/forfeited | shares	(6,410)	(59,050)
Outstanding options, Ending Balance | shares	1,759,812	1,736,740
Exercisable options, Ending Balance | shares	807,570	622,290
Weighted Average Exercise Price
Weighted Average Exercise Price, Outstanding options | $ / shares	$ 62.52	$ 54.24
Weighted Average Exercise Price, Options granted | $ / shares	93.39	81.27
Weighted Average Exercise Price, Options exercised | $ / shares	49.13	45.61
Weighted Average Exercise Price, Options canceled/forfeited | $ / shares	73.42	60.92
Weighted Average Exercise Price, Outstanding options | $ / shares	68.67	61.52
Weighted Average Exercise Price, Exercisable options | $ / shares	$ 59.03	$ 52.78
Weighted Average Remaining Contractual Life
Weighted Average Remaining Contractual Life, Outstanding options	5 years 1 month 20 days	5 years 5 months 4 days
Weighted Average Remaining Contractual Life, Exercisable options	3 years 9 months 25 days	4 years 10 days
Aggregate Intrinsic Value
Aggregate Intrinsic Value, Options exercised | $	$ 7,639	$ 18,157
Aggregate Intrinsic Value, Outstanding options | $	29,740	54,515
Aggregate Intrinsic Value, Exercisable options | $	$ 20,054	$ 24,975

Stock Based Compensation - Su_2

Stock Based Compensation - Summary of Weighted Average Grant-date Assumptions and Weighted Average Fair Values (Details) - $ / shares	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Weighted average grant date assumptions and weighted average fair value
Weighted-average fair value of grants	$ 13.33	$ 13.47
Risk-free interest rates	0.41%	2.41%
Dividend yield	2.30%	2.69%
Expected volatility	22.67%	22.71%
Expected option life	4 years 11 months 15 days	4 years 11 months 12 days

Operating Segment Information -

Operating Segment Information - Summary of Selected Information by Operating Segment (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenues
Net premiums earned	$ 216,630			$ 211,255			$ 640,946	$ 623,485
Net investment income	16,543			17,532			51,238	51,095
Net realized gains	1,512			3,211			14,555	17,043
Net unrealized gains (losses) on equity securities	28,126			4,906			(27,564)	47,214
Consolidated revenue	262,811			236,904			679,175	738,837
Net Earnings
Net underwriting income	1,152			13,731			42,554	51,096
Net investment income	16,543			17,532			51,238	51,095
Net realized gains	1,512			3,211			14,555	17,043
Net unrealized gains (losses) on equity securities	28,126			4,906			(27,564)	47,214
General corporate expense and interest on debt	(4,569)			(4,444)			(12,118)	(14,725)
Equity in earnings of unconsolidated investees	8,745			4,011			18,359	17,793
Earnings before income taxes	51,509			38,947			87,024	169,516
Income tax expense	9,122			6,623			13,738	31,252
Net earnings	42,387	$ 92,166	$ (61,267)	32,324	$ 40,467	$ 65,473	73,286	138,264
Casualty Segment
Revenues
Net premiums earned	143,002			140,423			421,637	415,667
Net Earnings
Net underwriting income	13,993			2,370			22,403	14,652
Property Segment
Revenues
Net premiums earned	45,380			41,476			135,115	120,194
Net Earnings
Net underwriting income	(19,951)			6,202			(3,876)	14,012
Surety Segment
Revenues
Net premiums earned	28,248			29,356			84,194	87,624
Net Earnings
Net underwriting income	$ 7,110			$ 5,159			$ 24,027	$ 22,432

Operating Segment Information_2

Operating Segment Information - Summary of Revenue by Major Product Type (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Segment Reporting Information [Line Items]
Net premiums earned	$ 216,630	$ 211,255	$ 640,946	$ 623,485
Casualty Segment
Segment Reporting Information [Line Items]
Net premiums earned	143,002	140,423	421,637	415,667
Casualty Segment | Commercial excess and personal umbrella
Segment Reporting Information [Line Items]
Net premiums earned	46,404	35,959	128,813	102,580
Casualty Segment | General liability
Segment Reporting Information [Line Items]
Net premiums earned	22,747	25,005	69,396	74,240
Casualty Segment | Professional services
Segment Reporting Information [Line Items]
Net premiums earned	21,422	20,816	63,501	60,390
Casualty Segment | Commercial transportation
Segment Reporting Information [Line Items]
Net premiums earned	15,130	21,067	47,454	61,979
Casualty Segment | Small commercial
Segment Reporting Information [Line Items]
Net premiums earned	16,009	13,927	47,433	40,430
Casualty Segment | Executive products
Segment Reporting Information [Line Items]
Net premiums earned	6,387	7,026	20,693	19,476
Casualty Segment | Other casualty
Segment Reporting Information [Line Items]
Net premiums earned	14,903	16,623	44,347	56,572
Property Segment
Segment Reporting Information [Line Items]
Net premiums earned	45,380	41,476	135,115	120,194
Property Segment | Marine
Segment Reporting Information [Line Items]
Net premiums earned	19,687	19,033	59,976	54,633
Property Segment | Commercial property
Segment Reporting Information [Line Items]
Net premiums earned	20,168	17,098	58,371	50,248
Property Segment | Specialty personal
Segment Reporting Information [Line Items]
Net premiums earned	4,794	4,948	14,730	14,324
Property Segment | Other property
Segment Reporting Information [Line Items]
Net premiums earned	731	397	2,038	989
Surety Segment
Segment Reporting Information [Line Items]
Net premiums earned	28,248	29,356	84,194	87,624
Surety Segment | Commercial
Segment Reporting Information [Line Items]
Net premiums earned	10,543	10,851	32,287	32,638
Surety Segment | Miscellaneous
Segment Reporting Information [Line Items]
Net premiums earned	10,547	10,998	31,562	33,880
Surety Segment | Contract
Segment Reporting Information [Line Items]
Net premiums earned	$ 7,158	$ 7,507	$ 20,345	$ 21,106

Leases - Schedule of Components

Leases - Schedule of Components of Lease Expense and Other lease Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Leases [Abstract]
Operating lease cost	$ 1,364	$ 1,423	$ 4,140	$ 4,349
Variable lease cost	338	321	1,014	1,530
Sublease income	(96)		(139)
Total lease cost	1,606	1,744	5,015	5,879
Cash paid for amounts included in measurement of lease liabilities
Operating cash outflows from operating leases	1,480	1,438	4,470	4,234
ROU assets obtained in exchange for new operating lease liabilities		$ 427	15	1,378
Reduction to ROU assets resulting from reduction to lease liabilities	18		18	$ 1,279
Other non-cash reductions to ROU assets			1,192
Operating lease ROU assets	$ 17,385		$ 17,385		$ 22,335
Operating Lease, Right-of-Use Asset, Statement of Financial Position	us-gaap:OtherAssets		us-gaap:OtherAssets		us-gaap:OtherAssets
Operating lease liabilities	$ 20,388		$ 20,388		$ 24,475
Operating Lease, Liability, Statement of Financial Position	us-gaap:OtherLiabilities		us-gaap:OtherLiabilities		us-gaap:OtherLiabilities
Weighted-average remaining lease term - operating leases	4 years 25 days		4 years 25 days		4 years 8 months 8 days
Weighted-average discount rate - operating leases	2.32%		2.32%		2.33%

Leases - Schedule of Future Min

Leases - Schedule of Future Minimum Lease Payments under Non-cancellable Leases (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Future minimum lease payments under non-cancellable leases
2020	$ 1,494
2021	5,937
2022	5,904
2023	4,424
2024	2,334
2025	802
Thereafter	564
Total future minimum lease payments	21,459
Less imputed interest	(1,071)
Operating lease liabilities	$ 20,388	$ 24,475