Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Feb. 21, 2014 | Jun. 30, 2013 |
Document Information [Line Items] | ' | ' | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Trading Symbol | 'HMN | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 40,570,366 | ' |
Entity Registrant Name | 'HORACE MANN EDUCATORS CORP /DE/ | ' | ' |
Entity Central Index Key | '0000850141 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $973 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Investments | ' | ' | ||
Fixed maturities, available for sale, at fair value (amortized cost 2013, $5,784,205; 2012, $5,311,457 | $6,009,573 | $5,962,232 | ||
Equity securities, available for sale, at fair value (cost 2013, $84,754; 2012, $52,396) | 91,858 | 53,503 | ||
Short-term and other investments | 438,042 | 276,362 | ||
Total investments | 6,539,473 | 6,292,097 | ||
Cash | 18,189 | 15,181 | ||
Deferred policy acquisition costs | 245,355 | 196,885 | ||
Goodwill | 47,396 | 47,396 | ||
Other assets | 228,264 | 217,886 | ||
Separate Account (variable annuity) assets | 1,747,995 | 1,398,281 | ||
Total assets | 8,826,672 | 8,167,726 | ||
Policy liabilities | ' | ' | ||
Fixed annuity contract liabilities | 3,515,865 | 3,257,758 | ||
Interest-sensitive life contract liabilities | 777,292 | 761,671 | ||
Unpaid claims and claim expenses | 291,627 | 289,395 | ||
Future policy benefits | 223,295 | 214,562 | ||
Unearned premiums | 221,114 | 213,268 | ||
Total policy liabilities | 5,029,193 | 4,736,654 | ||
Other policyholder funds | 346,292 | 103,227 | ||
Other liabilities | 366,013 | 445,952 | ||
Short-term debt | 38,000 | 38,000 | ||
Long-term debt | 199,874 | 199,809 | ||
Separate Account (variable annuity) liabilities | 1,747,995 | 1,398,281 | ||
Total liabilities | 7,727,367 | 6,921,923 | ||
Preferred stock, $0.001 par value, authorized 1,000,000 shares; none issued | 0 | 0 | ||
Common stock, $0.001 par value, authorized 75,000,000 shares; issued, 2013, 63,629,105; 2012, 62,311,787 | 64 | 62 | ||
Additional paid-in capital | 407,056 | 383,135 | ||
Retained earnings | 1,000,312 | 921,969 | ||
Accumulated other comprehensive income (loss), net of taxes: | ' | ' | ||
Net unrealized gains on fixed maturities and equity securities | 133,990 | [1],[2] | 382,400 | [1],[2] |
Net funded status of pension and other postretirement benefit obligations | -11,776 | [1] | -15,311 | [1] |
Treasury stock, at cost, 2013, 23,117,554 shares; 2012, 22,943,925 shares | -430,341 | -426,452 | ||
Total shareholders' equity | 1,099,305 | 1,245,803 | ||
Total liabilities and shareholders' equity | $8,826,672 | $8,167,726 | ||
[1] | All amounts are net of tax. | |||
[2] | The $22,245 pretax amount reclassified from accumulated other comprehensive income is included in net realized investment gains and losses and the $7,786 related tax expense (benefit) is included in income tax expense in the Consolidated Statement of Operations for the year ended December 31, 2013. |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Thousands, except Share data, unless otherwise specified | ||||
Consolidated Balance Sheets [Abstract] | ' | ' | ' | ' |
Fixed maturities, available for sale, amortized cost | $5,784,205 | $5,311,457 | ' | ' |
Equity securities, available for sale, cost | $84,754 | $52,396 | ' | ' |
Preferred stock, par value | $0.00 | $0.00 | ' | ' |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | ' | ' |
Preferred stock, shares issued | 0 | 0 | ' | ' |
Common stock, par value | $0.00 | $0.00 | ' | ' |
Common stock, shares authorized | 75,000,000 | 75,000,000 | ' | ' |
Common stock, shares issued | 63,629,105 | 62,311,787 | ' | ' |
Treasury stock, shares | 23,117,554 | 22,943,925 | 22,028,030 | 21,813,196 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenues | ' | ' | ' |
Insurance premiums and contract charges earned | $690,938 | $670,527 | $667,120 |
Net investment income | 313,610 | 306,003 | 288,311 |
Net realized investment gains | 22,245 | 27,298 | 37,663 |
Other income | 4,474 | 6,986 | 5,208 |
Total revenues | 1,031,267 | 1,010,814 | 998,302 |
Benefits, losses and expenses | ' | ' | ' |
Benefits, claims and settlement expenses | 448,317 | 448,250 | 502,434 |
Interest credited | 169,893 | 163,565 | 154,910 |
Policy acquisition expenses amortized | 84,643 | 79,519 | 83,398 |
Operating expenses | 160,112 | 156,058 | 148,635 |
Interest expense | 14,236 | 14,249 | 14,007 |
Total benefits, losses and expenses | 877,201 | 861,641 | 903,384 |
Income before income taxes | 154,066 | 149,173 | 94,918 |
Income tax expense | 43,173 | 45,307 | 24,412 |
Net income | 110,893 | 103,866 | 70,506 |
Net income per share | ' | ' | ' |
Basic | $2.75 | $2.63 | $1.77 |
Diluted | $2.66 | $2.51 | $1.70 |
Weighted average number of shares and equivalent shares | ' | ' | ' |
Basic | 40,376,562 | 39,513,540 | 39,865,815 |
Diluted | 41,633,240 | 41,388,368 | 41,436,512 |
Net realized investment gains | ' | ' | ' |
Total other-than-temporary impairment losses on securities | -1,532 | 0 | -72 |
Portion of losses recognized in other comprehensive income (loss) | 0 | 0 | 0 |
Net other-than-temporary impairment losses on securities recognized in earnings | -1,532 | 0 | -72 |
Realized gains, net | 23,777 | 27,298 | 37,735 |
Total | $22,245 | $27,298 | $37,663 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2011 | Jun. 30, 2011 | Mar. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Comprehensive income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Net income | $34,287 | $23,599 | $25,995 | $27,012 | $31,826 | $32,266 | $13,103 | $26,671 | $32,913 | $23,637 | ($11,851) | $25,807 | $110,893 | $103,866 | $70,506 | |
Other comprehensive income (loss), net of taxes: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Change in net unrealized gains and losses on fixed maturities and equity securities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -248,410 | [1],[2] | 114,178 | 156,954 |
Change in net funded status of pension and other postretirement benefit obligations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,535 | 931 | -3,087 | |
Other comprehensive income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -244,875 | [1] | 115,109 | 153,867 |
Total | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ($133,982) | $218,975 | $224,373 | |
[1] | All amounts are net of tax. | |||||||||||||||
[2] | The $22,245 pretax amount reclassified from accumulated other comprehensive income is included in net realized investment gains and losses and the $7,786 related tax expense (benefit) is included in income tax expense in the Consolidated Statement of Operations for the year ended December 31, 2013. |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $) | Total | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss), net of taxes | Treasury stock, at cost | |
In Thousands | |||||||
Beginning balance at Dec. 31, 2010 | ' | $61 | $367,448 | $789,128 | $98,113 | ($407,663) | |
Options exercised, 2013, 1,158,537 shares; 2012, 389,089 shares; 2011, 136,290 shares | ' | 1 | ' | ' | ' | ' | |
Conversion of common stock units,2013, 11,851 shares; 2012, 15,084 shares; 2011, 15,715 shares | ' | 0 | ' | ' | ' | ' | |
Conversion of restricted stock units, 2013, 146,930 shares; 2012, 104,152 shares; 2011, 182,309 shares | ' | 0 | ' | ' | ' | ' | |
Options exercised and conversion of common stock units and restricted stock units | ' | ' | 4,485 | ' | ' | ' | |
Share-based compensation expense | ' | ' | 1,451 | ' | ' | ' | |
Net income | 70,506 | ' | ' | 70,506 | ' | ' | |
Cash dividends, 2013, $0.78 per share; 2012, $0.55 per share; 2011, $0.46 per share | ' | ' | ' | -18,990 | ' | ' | |
Change in net unrealized gains on fixed maturities and equity securities | 156,954 | ' | ' | ' | 156,954 | ' | |
Change in net funded status of pension and other postretirement benefit obligations | -3,087 | ' | ' | ' | -3,087 | ' | |
Acquisition of 173,629 shares in 2013; 915,895 shares in 2012; 214,834 shares in 2011 | ' | ' | ' | ' | ' | -3,054 | |
Ending balance at Dec. 31, 2011 | 1,055,353 | 62 | 373,384 | 840,644 | 251,980 | -410,717 | |
Options exercised, 2013, 1,158,537 shares; 2012, 389,089 shares; 2011, 136,290 shares | ' | 0 | ' | ' | ' | ' | |
Conversion of common stock units,2013, 11,851 shares; 2012, 15,084 shares; 2011, 15,715 shares | ' | 0 | ' | ' | ' | ' | |
Conversion of restricted stock units, 2013, 146,930 shares; 2012, 104,152 shares; 2011, 182,309 shares | ' | 0 | ' | ' | ' | ' | |
Options exercised and conversion of common stock units and restricted stock units | ' | ' | 7,275 | ' | ' | ' | |
Share-based compensation expense | ' | ' | 2,476 | ' | ' | ' | |
Net income | 103,866 | ' | ' | 103,866 | ' | ' | |
Cash dividends, 2013, $0.78 per share; 2012, $0.55 per share; 2011, $0.46 per share | ' | ' | ' | -22,541 | ' | ' | |
Change in net unrealized gains on fixed maturities and equity securities | 114,178 | ' | ' | ' | 114,178 | ' | |
Change in net funded status of pension and other postretirement benefit obligations | 931 | ' | ' | ' | 931 | ' | |
Acquisition of 173,629 shares in 2013; 915,895 shares in 2012; 214,834 shares in 2011 | ' | ' | ' | ' | ' | -15,735 | |
Ending balance at Dec. 31, 2012 | 1,245,803 | 62 | 383,135 | 921,969 | 367,089 | -426,452 | |
Options exercised, 2013, 1,158,537 shares; 2012, 389,089 shares; 2011, 136,290 shares | ' | 2 | ' | ' | ' | ' | |
Conversion of common stock units,2013, 11,851 shares; 2012, 15,084 shares; 2011, 15,715 shares | ' | 0 | ' | ' | ' | ' | |
Conversion of restricted stock units, 2013, 146,930 shares; 2012, 104,152 shares; 2011, 182,309 shares | ' | 0 | ' | ' | ' | ' | |
Options exercised and conversion of common stock units and restricted stock units | ' | ' | 22,502 | ' | ' | ' | |
Share-based compensation expense | ' | ' | 1,419 | ' | ' | ' | |
Net income | 110,893 | ' | ' | 110,893 | ' | ' | |
Cash dividends, 2013, $0.78 per share; 2012, $0.55 per share; 2011, $0.46 per share | ' | ' | ' | -32,550 | ' | ' | |
Change in net unrealized gains on fixed maturities and equity securities | -248,410 | [1],[2] | ' | ' | ' | -248,410 | ' |
Change in net funded status of pension and other postretirement benefit obligations | 3,535 | ' | ' | ' | 3,535 | ' | |
Acquisition of 173,629 shares in 2013; 915,895 shares in 2012; 214,834 shares in 2011 | ' | ' | ' | ' | ' | -3,889 | |
Ending balance at Dec. 31, 2013 | $1,099,305 | $64 | $407,056 | $1,000,312 | $122,214 | ($430,341) | |
[1] | All amounts are net of tax. | ||||||
[2] | The $22,245 pretax amount reclassified from accumulated other comprehensive income is included in net realized investment gains and losses and the $7,786 related tax expense (benefit) is included in income tax expense in the Consolidated Statement of Operations for the year ended December 31, 2013. |
CONSOLIDATED_STATEMENTS_OF_CHA1
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Consolidated Statements of Changes In Shareholders' Equity [Abstract] | ' | ' | ' |
Options exercised, shares | 1,158,537 | 389,089 | 136,290 |
Conversion of common stock units, shares | 11,851 | 15,084 | 15,715 |
Conversion of restricted stock units, shares | 146,930 | 104,152 | 182,309 |
Cash dividends, per share | $0.78 | $0.55 | $0.46 |
Treasury stock, beginning balance, shares | 22,943,925 | 22,028,030 | 21,813,196 |
Treasury stock, acquisition of shares | 173,629 | 915,895 | 214,834 |
Treasury stock, ending balance, shares | 23,117,554 | 22,943,925 | 22,028,030 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows - operating activities | ' | ' | ' |
Premiums collected | $688,355 | $662,729 | $661,094 |
Policyholder benefits paid | -476,103 | -484,144 | -549,888 |
Policy acquisition and other operating expenses paid | -251,293 | -230,072 | -241,138 |
Federal income taxes paid | -33,672 | -14,444 | -4,130 |
Investment income collected | 311,712 | 303,385 | 280,963 |
Interest expense paid | -13,825 | -13,948 | -13,515 |
Contribution to defined benefit pension plan trust fund | -3,103 | -2,534 | -5,926 |
Other | -16,135 | -18,124 | -11,581 |
Net cash provided by operating activities | 205,936 | 202,848 | 115,879 |
Fixed maturities | ' | ' | ' |
Purchases | -1,212,937 | -1,448,219 | -1,356,092 |
Sales | 298,045 | 576,708 | 587,909 |
Maturities, paydowns, calls and redemptions | 504,921 | 585,615 | 362,210 |
Purchase of other invested assets | -35,000 | -50,000 | 0 |
Net cash (used in) provided by short-term and other investments | -153,355 | -18,902 | 102,966 |
Net cash used in investing activities | -598,326 | -354,798 | -303,007 |
Cash flows - financing activities | ' | ' | ' |
Dividends paid to shareholders | -32,550 | -22,541 | -18,990 |
Acquisition of treasury stock | -3,889 | -15,735 | -2,047 |
Exercise of stock options | 19,336 | 5,421 | 2,127 |
Annuity contracts: variable, fixed and FHLB funding agreements | ' | ' | ' |
Deposits | 673,057 | 417,600 | 433,896 |
Benefits, withdrawals and net transfers to Separate Account (variable annuity) assets | -278,350 | -220,803 | -219,415 |
Life policy accounts | ' | ' | ' |
Deposits | 1,636 | 1,881 | 2,078 |
Withdrawals and surrenders | -4,734 | -5,161 | -5,343 |
Cash received related to repurchase agreements | 25,848 | 0 | 0 |
Change in bank overdrafts | -4,956 | -983 | -3,654 |
Net cash provided by financing activities | 395,398 | 159,679 | 188,652 |
Net increase in cash | 3,008 | 7,729 | 1,524 |
Cash at beginning of period | 15,181 | 7,452 | 5,928 |
Cash at end of period | $18,189 | $15,181 | $7,452 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
Summary of Significant Accounting Policies | ' | ||||||||||||||||
NOTE 1 - Summary of Significant Accounting Policies | |||||||||||||||||
Basis of Presentation | |||||||||||||||||
The accompanying consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) and with the rules and regulations of the Securities and Exchange Commission (“SEC”), specifically Regulation S-X and the instructions to Form 10-K. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (1) the reported amounts of assets and liabilities, (2) disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and (3) the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |||||||||||||||||
The consolidated financial statements include the accounts of Horace Mann Educators Corporation and its wholly-owned subsidiaries (“HMEC”; and together with its subsidiaries, the “Company” or “Horace Mann”). HMEC and its subsidiaries have common management, share office facilities and are parties to several intercompany service agreements for management, administrative, data processing, agent commissions, agency services, utilization of personnel and investment advisory services. Under these agreements, costs have been allocated among the companies in conformity with GAAP. In addition, certain of the subsidiaries have entered into intercompany reinsurance agreements. HMEC and its subsidiaries file a consolidated federal income tax return, and there are related tax sharing agreements. All significant intercompany balances and transactions have been eliminated in consolidation. | |||||||||||||||||
The subsidiaries of HMEC market and underwrite personal lines of property and casualty (primarily personal lines automobile and homeowners) insurance, retirement annuities (primarily tax-qualified products) and life insurance, primarily to K-12 teachers, administrators and other employees of public schools and their families. HMEC’s principal operating subsidiaries are Horace Mann Life Insurance Company, Horace Mann Insurance Company, Teachers Insurance Company, Horace Mann Property & Casualty Insurance Company and Horace Mann Lloyds. | |||||||||||||||||
The Company has evaluated subsequent events through the date these consolidated financial statements were issued. | |||||||||||||||||
Investments | |||||||||||||||||
The Company invests primarily in fixed maturity securities (“fixed maturities”). This category includes primarily bonds and notes, but also includes redeemable preferred stocks. These securities are classified as available for sale and carried at fair value. The net adjustment for unrealized gains and losses on all securities available for sale, carried at fair value, is recorded as a separate component of accumulated other comprehensive income within shareholders' equity, net of applicable deferred taxes and the related impact on deferred policy acquisition costs associated with interest-sensitive life and annuity contracts that would have occurred if the securities had been sold at their aggregate fair value and the proceeds reinvested at current yields. | |||||||||||||||||
Equity securities are classified as available for sale and carried at fair value. This category includes nonredeemable preferred stocks and common stocks. | |||||||||||||||||
Short-term and other investments are comprised of short-term fixed income securities, generally carried at cost which approximates fair value; policy loans, carried at unpaid principal balances; mortgage loans, carried at unpaid principal less a valuation allowance for estimated uncollectible amounts; certain alternative investments which are accounted for as equity method investments; and restricted Federal Home Loan Bank membership and activity stocks, carried at redemption value which approximates fair value. | |||||||||||||||||
The Company invests in fixed maturity securities and alternative investment funds that could qualify as variable interest entities, including corporate securities, mortgage-backed securities and asset-backed securities. The Company is not the primary beneficiary of these securities as the Company does not have the power to direct the activities that most significantly impact the entities’ performance. | |||||||||||||||||
Interest income is recognized as earned. Investment income reflects amortization of premiums and accrual of discounts on an effective-yield basis. | |||||||||||||||||
Realized gains and losses arising from the disposal (recorded on a trade date basis) or impairment of securities are determined based upon specific identification of securities. The Company evaluates all investments in its portfolio for other-than-temporary declines in value as described in the following section. | |||||||||||||||||
Other-than-temporary Impairment of Investments | |||||||||||||||||
The Company's methodology of assessing other-than-temporary impairments is based on security-specific facts and circumstances as of the balance sheet date. Based on these facts, if (1) the Company has the intent to sell the fixed maturity security, (2) it is more likely than not the Company will be required to sell the fixed maturity security before the anticipated recovery of the amortized cost basis, or (3) management does not expect to recover the entire cost basis of the fixed maturity security, an other-than-temporary impairment is considered to have occurred. For equity securities, if (1) the Company does not have the ability and intent to hold the security for the recovery of cost or (2) recovery of cost is not expected within a reasonable period of time, an other-than-temporary impairment is considered to have occurred. Additionally, if events become known that call into question whether the security issuer has the ability to honor its contractual commitments, such security holding will be evaluated to determine whether or not such security has suffered an other-than-temporary decline in value. | |||||||||||||||||
The Company reviews the fair value of all investments in its portfolio on a monthly basis to assess whether an other-than-temporary decline in value has occurred. These reviews, in conjunction with the Company's investment managers' monthly credit reports and relevant factors such as (1) the financial condition and near-term prospects of the issuer, (2) the length of time and extent to which the fair value has been less than amortized cost for fixed maturity securities or cost for equity securities, (3) for fixed maturity securities, the Company’s intent to sell a security or whether it is more likely than not the Company will be required to sell the security before the anticipated recovery in the amortized cost basis; and for equity securities, the Company’s ability and intent to hold the security for the recovery of cost or if recovery of cost is not expected within a reasonable period of time, (4) the stock price trend of the issuer, (5) the market leadership position of the issuer, (6) the debt ratings of the issuer, and (7) the cash flows and liquidity of the issuer or the underlying cash flows for asset-backed securities, are all considered in the impairment assessment. A write-down of an investment is recorded when a decline in the fair value of that investment is deemed to be other-than-temporary, with a realized investment loss charged to income for the period for all equity securities and for the credit-related loss portion associated with impaired fixed maturity securities. The amount of the total other-than-temporary impairment related to non-credit factors for fixed maturity securities is recognized in other comprehensive income, net of applicable taxes, unless the Company has the intent to sell the security or if it is more likely than not the Company will be required to sell the security before the anticipated recovery of the amortized cost basis. | |||||||||||||||||
A decline in fair value below amortized cost is not assumed to be other-than-temporary for fixed maturity investments with unrealized losses due to spread widening, market illiquidity or changes in interest rates where there exists a reasonable expectation based on the Company’s consideration of all objective information available that the Company will recover the entire cost basis of the security and the Company does not have the intent to sell the investment before maturity or a market recovery is realized and it is more likely than not the Company will not be required to sell the investment. An other-than-temporary impairment loss will be recognized based upon all relevant facts and circumstances for each investment, as appropriate. | |||||||||||||||||
Additional considerations for certain types of securities include the following: | |||||||||||||||||
Corporate Fixed Maturity Securities | |||||||||||||||||
Judgments regarding whether a corporate fixed maturity security is other-than-temporarily impaired include analyzing the issuer’s financial condition and whether there has been a decline in the issuer’s ability to service the specific security. The analysis of the security issuer is based on asset coverage, cash flow multiples or other industry standards. Several factors assessed include, but are not limited to, credit quality ratings, cash flow sustainability, liquidity, financial strength, industry and market position. Sources of information include, but are not limited to, management projections, independent consultants, external analysts’ research, peer analysis and the Company’s internal analysis. | |||||||||||||||||
If the Company has concerns regarding the viability of the issuer or its ability to service the specific security after this assessment, a cash flow analysis is prepared to determine if the present value of future cash flows has declined below the amortized cost of the fixed maturity security. This analysis to determine an estimate of ultimate recovery value is combined with the estimated timing to recovery and any other applicable cash flows that are expected. If a cash flow analysis estimate is not feasible, then the market’s view of cash flows implied by the period end fair value, market discount rates and effective yield are the primary factors used to estimate a recovery value. | |||||||||||||||||
Mortgage-Backed Securities Not Issued By the U.S. Government or Federally Sponsored Agencies | |||||||||||||||||
The Company uses an estimate of future cash flows expected to be collected to evaluate its mortgage-backed securities for other-than-temporary impairment. The determination of cash flow estimates is inherently subjective and methodologies may vary depending on facts and circumstances specific to the security. All reasonably available information relevant to the collectability of the security, including past events, current conditions, and reasonable and supportable assumptions and forecasts, are considered when developing the estimate of cash flows expected to be collected. Information includes, but is not limited to, debt-servicing, missed refinancing opportunities and geography. Loan level characteristics such as issuer, FICO score, payment terms, level of documentation, property or residency type, and economic outlook are also utilized in financial models, along with historical performance, to estimate or measure the loan’s propensity to default. Additionally, financial models take into account loan age, lease rollovers, rent volatilities, vacancy rates and exposure to refinancing as additional drivers of default. For transactions where loan level data is not available, financial models use a proxy based on the collateral characteristics. Loss severity is a function of multiple factors including, but not limited to, the unpaid balance, interest rate, mortgage insurance ratios, assessed property value at origination, change in property valuation and loan-to-value ratio at origination. Prepayment speeds, both actual and estimated, cost of capital rates and debt service ratios are also considered. The cash flows generated by the collateral securing these securities are then estimated with these default, loss severity and prepayment assumptions. These collateral cash flows are then utilized, along with consideration for the issue’s position in the overall structure, to estimate the cash flows associated with the residential or commercial mortgage-backed security held by the Company. | |||||||||||||||||
Municipal Bonds | |||||||||||||||||
The Company’s municipal bond portfolio consists primarily of special revenue bonds, which present unique considerations in evaluating other-than-temporary impairments, but also includes general obligation bonds. The Company evaluates special revenue bonds for other-than-temporary impairment based on guarantees associated with the repayment from revenues generated by the specified revenue-generating activity associated with the purpose of the bonds. Judgments regarding whether a municipal bond is other-than-temporarily impaired include analyzing the issuer’s financial condition and whether there has been a decline in the overall financial condition of the issuer or its ability to service the specific security. Security credit ratings are reviewed with emphasis on the economy, finances, debt and management of the municipal issuer. Certain securities may be guaranteed by the mono-line credit insurers or other forms of guarantee. While not relied upon in the initial security purchase decision, insurance benefits are considered in the assessments for other-than-temporary impairment, including the credit worthiness of the guarantor. Municipalities possess unique powers, along with a special legal standing and protections, that enable them to act quickly to restore budgetary balance and fiscal integrity. These powers include the sovereign power to tax, access to one-time revenue sources, capacity to issue or restructure debt, and ability to shift spending to other authorities. State governments often provide secondary support to local governments in times of financial stress and the federal government has provided assistance to state governments during recessions. | |||||||||||||||||
If the Company has concerns regarding the viability of the municipal issuer or its ability to service the specific security after this analysis, a cash flow analysis is prepared to determine a present value and whether it has declined below the amortized cost of the security. If a cash flow analysis is not feasible, then the market’s view of the period end fair value, market discount rates and effective yield are the primary factors used to estimate the present value. | |||||||||||||||||
Credit Losses | |||||||||||||||||
The Company estimates the amount of the credit loss component of a fixed maturity security impairment as the difference between amortized cost and the present value of the expected cash flows of the security. The present value is determined using the best estimate cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset-backed or floating rate security. The methodology and assumptions for establishing the best estimate cash flows vary depending on the type of security. Corporate fixed maturity security and municipal bond cash flow estimates are derived from scenario-based outcomes of expected restructurings or the disposition of assets using specific facts and other circumstances, including timing, security interests and loss severity and when not reasonably estimable, such securities are impaired to fair value as management’s best estimate of the present value of future cash flows. The cash flow estimates for mortgage-backed and other structured securities are based on security specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity and prepayment speeds, and structural support, including subordination and guarantees. | |||||||||||||||||
Deferred Policy Acquisition Costs | |||||||||||||||||
As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 and as described in “Adopted Accounting Standards”, the Company has retrospectively applied to prior periods new accounting guidance regarding deferred policy acquisition costs adopted January 1, 2012. | |||||||||||||||||
The Company’s deferred policy acquisition costs asset by segment was as follows: | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Annuity | $ | 170,749 | $ | 125,437 | |||||||||||||
Life | 48,558 | 46,798 | |||||||||||||||
Property and casualty | 26,048 | 24,650 | |||||||||||||||
Total | $ | 245,355 | $ | 196,885 | |||||||||||||
Policy acquisition costs, consisting of commissions, policy issuance and other costs which are incremental and directly related to the successful acquisition of new or renewal business, are capitalized and amortized on a basis consistent with the type of insurance coverage. For all investment (annuity) contracts, acquisition costs are amortized over 20 years in proportion to estimated gross profits. Capitalized acquisition costs for interest-sensitive life contracts also are amortized over 20 years in proportion to estimated gross profits. For other individual life contracts, acquisition costs are amortized in proportion to anticipated premiums over the terms of the insurance policies (10, 15, 20 or 30 years). For property and casualty policies, acquisition costs are amortized over the terms of the insurance policies (6 or 12 months). | |||||||||||||||||
The Company periodically reviews the assumptions and estimates used in capitalizing policy acquisition costs and also periodically reviews its estimations of gross profits. The most significant assumptions that are involved in the estimation of annuity gross profits include interest rate spreads, future financial market performance, business surrender/lapse rates, expenses and the impact of realized investment gains and losses. For the variable deposit portion of the annuity segment, the Company amortizes policy acquisition costs utilizing a future financial market performance assumption of a 10% reversion to the mean approach with a 200 basis point corridor around the mean during the reversion period, representing a cap and a floor on the Company’s long-term assumption. The Company’s practice with regard to returns on Separate Accounts assumes that long-term appreciation in the financial market is not changed by short-term market fluctuations, but is only changed when sustained interim deviations are experienced. The Company monitors these fluctuations and only changes the assumption when its long-term expectation changes. | |||||||||||||||||
In the event actual experience differs significantly from assumptions or assumptions are significantly revised, the Company may be required to record a material charge or credit to current period amortization expense for the period in which the adjustment is made. The Company recorded the following adjustments to amortization expense as a result of evaluating actual experience and prospective assumptions, sometimes referred to as “unlocking”: | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Increase (decrease) to amortization: | |||||||||||||||||
Annuity | $ | -3,700 | $ | -3,836 | $ | 2,466 | |||||||||||
Life | 126 | 751 | 1,159 | ||||||||||||||
Total | $ | -3,574 | $ | -3,085 | $ | 3,625 | |||||||||||
Deferred policy acquisition costs (“DAC”) for interest-sensitive life and investment contracts are adjusted for the impact on estimated future gross profits as if net unrealized investment gains and losses had been realized at the balance sheet date. This adjustment reduced the deferred policy acquisition costs asset by $24,997 and $58,808 at December 31, 2013 and 2012, respectively. The after-tax impact of this adjustment is included in accumulated other comprehensive income (net unrealized gains and losses on fixed maturities and equity securities) within shareholders' equity. | |||||||||||||||||
DAC is reviewed for recoverability from future income, including investment income, and costs which are deemed unrecoverable are expensed in the period in which the determination is made. No such costs were deemed unrecoverable during the years ended December 31, 2013, 2012 and 2011. | |||||||||||||||||
This accounting policy description reflects the adoption, effective January 1, 2012 with retrospective application, of accounting guidance that was issued to address diversity in practice regarding the interpretation of which costs relating to the acquisition of new or renewal insurance contracts qualify for deferral. See also “Note 1 -- Summary of Significant Accounting Policies -- Adopted Accounting Standards -- Costs Associated with Acquiring or Renewing Insurance Contracts”. | |||||||||||||||||
Goodwill and Value of Acquired Insurance In Force | |||||||||||||||||
When the Company was acquired in 1989, intangible assets were recorded in the application of purchase accounting to recognize the value of acquired insurance in force and goodwill. In addition, goodwill was recorded in 1994 related to the purchase of Horace Mann Property & Casualty Insurance Company. The value of acquired insurance in force was fully amortized prior to December 9, 2009. | |||||||||||||||||
Goodwill represents the excess of the amounts paid to acquire a business over the fair value of its net assets at the date of acquisition. Goodwill is not amortized, but is tested for impairment at the reporting unit level at least annually or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. A reporting unit is defined as an operating segment or a business unit one level below an operating segment, if separate financial information is prepared and regularly reviewed by management at that level. The Company’s reporting units, for which goodwill has been allocated, are equivalent to the Company’s operating segments. | |||||||||||||||||
Effective January 1, 2012, the goodwill impairment test, as defined in the accounting guidance, allows an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the entity follows a two-step process. In the first step, the fair value of a reporting unit is compared to its carrying value. If the carrying value of a reporting unit exceeds its fair value, the second step of the impairment test is performed for purposes of confirming and measuring the impairment. In the second step, the fair value of the reporting unit is allocated to all of the assets and liabilities of the reporting unit to determine an implied goodwill value. If the carrying amount of the reporting unit goodwill exceeds the implied goodwill value, an impairment loss would be recognized in an amount equal to that excess. | |||||||||||||||||
The allocation of goodwill by reporting unit is as follows: | |||||||||||||||||
Annuity | $ | 28,025 | |||||||||||||||
Life | 9,911 | ||||||||||||||||
Property and casualty | 9,460 | ||||||||||||||||
Total | $ | 47,396 | |||||||||||||||
In the fourth quarter of 2013, the Company changed the date of its annual impairment test to October 1. The change was made to mitigate resource constraints in connection with year-end financial reporting and more closely coincides the impairment testing date with the internal long-range planning and forecasting process. The Company has determined that this change in accounting principle is preferable under the circumstances and does not result in any delay, acceleration or avoidance of an impairment charge. | |||||||||||||||||
The Company completed its annual goodwill assessment for the individual reporting units as of October 1, 2013 and did not utilize the option to perform an initial assessment of qualitative factors. The first step of the Company’s analysis indicated that fair value exceeded carrying value for all reporting units. The process of evaluating goodwill for impairment required management to make multiple judgments and assumptions to determine the fair value of each reporting unit, including discounted cash flow calculations, the level of the Company’s own share price and assumptions that market participants would make in valuing each reporting unit. Fair value estimates were based primarily on an in-depth analysis of historical experience, projected future cash flows and relevant discount rates, which considered market participant inputs and the relative risk associated with the projected cash flows. Other assumptions included levels of economic capital, future business growth, earnings projections and assets under management for each reporting unit. Estimates of fair value are subject to assumptions that are sensitive to change and represent the Company’s reasonable expectation regarding future developments. The Company also considered other valuation techniques such as peer company price-to-earnings and price-to-book multiples. | |||||||||||||||||
As part of the Company’s October 1, 2013 goodwill analysis, the Company compared the fair value of the aggregated reporting units to the market capitalization of the Company. The difference between the aggregated fair value of the reporting units and the market capitalization of the Company was attributed to several factors, most notably market sentiment, trading volume and transaction premium. The amount of the transaction premium was determined to be reasonable based on insurance industry and Company-specific facts and circumstances. There were no other events or material changes in circumstances during 2013 that indicated that a material change in the fair value of the Company’s reporting units had occurred. | |||||||||||||||||
In the Company’s annual goodwill assessment for the individual reporting units as of December 31, 2012, the first step of the analysis indicated that fair value exceeded carrying value for all reporting units other than the life unit. For the life reporting unit, in the first step of the analysis, the Company determined that the reporting unit’s fair value was less than its carrying value, primarily driven by unrealized investment gains combined with a decrease in anticipated net investment income assuming an extended low interest rate environment. In the second step of the analysis, it was determined that the implied fair value for the life reporting unit’s goodwill was greater than its carrying value; therefore, goodwill was not impaired and no write-down was required. However, the implied fair value exceeded carrying value for the life reporting unit by a limited margin. | |||||||||||||||||
Any amount of goodwill determined to be impaired will be recorded as an expense in the period in which the impairment determination is made. During each year from 2011 through 2013, the Company completed the required annual testing; no impairment charges were necessary as a result of such assessments. The assessment of goodwill recoverability requires significant judgment and is subject to inherent uncertainty. The use of different assumptions, within a reasonable range, could cause the fair value to be below carrying value. Subsequent goodwill assessments could result in impairment, particularly for any reporting unit with at-risk goodwill, due to the impact of a volatile financial market on earnings, discount rate assumptions, liquidity and market capitalization. | |||||||||||||||||
Property and Equipment | |||||||||||||||||
Property and equipment are carried at cost less accumulated depreciation, which is calculated on the straight-line method based on the estimated useful lives of the assets. The estimated life for real estate is identified by specific property and ranges from 20 to 45 years. The estimated useful lives of leasehold improvements and other property and equipment, including capitalized software, generally range from 2 to 10 years. The following amounts are included in Other Assets in the Consolidated Balance Sheets: | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Property and equipment | $ | 108,394 | $ | 108,502 | |||||||||||||
Less: accumulated depreciation | 73,459 | 71,508 | |||||||||||||||
Total | $ | 34,935 | $ | 36,994 | |||||||||||||
Separate Account (Variable Annuity) Assets and Liabilities | |||||||||||||||||
Separate Account assets represent variable annuity contractholder funds invested in various mutual funds. Separate Account assets are recorded at fair value primarily based on market quotations of the underlying securities. Separate Account liabilities are equal to the estimated fair value of Separate Account assets. The investment income, gains and losses of these accounts accrue directly to the contractholders and are not included in the operations of the Company. The activity of the Separate Accounts is not reflected in the Consolidated Statements of Operations except for (1) contract charges earned, (2) the activity related to contract guarantees, which are benefits on existing variable annuity contracts, and (3) the impact of financial market performance on the amortization of deferred policy acquisition costs. The Company’s contract charges earned include fees charged to the Separate Accounts, including mortality charges, risk charges, policy administration fees, investment management fees and surrender charges. | |||||||||||||||||
Future Policy Benefits, Interest-sensitive Life Contract Liabilities and Annuity Contract Liabilities | |||||||||||||||||
Liabilities for future benefits on life and annuity policies are established in amounts adequate to meet the estimated future obligations on policies in force. | |||||||||||||||||
Liabilities for future policy benefits on certain life insurance policies are computed using the net level premium method including assumptions as to investment yields, mortality, persistency, expenses and other assumptions based on the Company’s experience, including a provision for adverse deviation. These assumptions are established at the time the policy is issued and are intended to estimate the experience for the period the policy benefits are payable. If experience is less favorable than the assumptions, additional liabilities may be established, resulting in a charge to income for that period. At December 31, 2013, reserve investment yield assumptions ranged from 4% to 8%. | |||||||||||||||||
Liabilities for future benefits on annuity contracts and certain long-duration life insurance contracts are carried at accumulated policyholder values without reduction for potential surrender or withdrawal charges. The liability also includes provisions for the unearned portion of certain policy charges. | |||||||||||||||||
A guaranteed minimum death benefit (“GMDB”) generally provides an additional benefit if the contractholder dies and the variable annuity contract value is less than a contractually defined amount. The Company has estimated and recorded a GMDB reserve on variable annuity contracts in accordance with accounting guidance. Contractually defined amounts vary from contract to contract based on the date the contract was entered into as well as the GMDB feature elected by the contractholder. The Company regularly monitors the GMDB reserve considering fluctuations in the financial market. The Company has a relatively low exposure to GMDB risk as shown below. | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
GMDB reserve | $ | 209 | $ | 392 | |||||||||||||
Aggregate in-the-money death benefits under the GMDB provision | 30,422 | 41,990 | |||||||||||||||
Variable annuity contract value distribution based on GMDB feature: | |||||||||||||||||
No guarantee | 30 | % | 31 | % | |||||||||||||
Return of premium guarantee | 64 | % | 63 | % | |||||||||||||
Guarantee of premium roll-up at an annual rate of 3% or 5% | 6 | % | 6 | % | |||||||||||||
Total | 100 | % | 100 | % | |||||||||||||
Unpaid Claims and Claim Expenses | |||||||||||||||||
Liabilities for property and casualty unpaid claims and claim expenses include provisions for payments to be made on reported claims, claims incurred but not yet reported and associated settlement expenses. All of the Company's reserves for property and casualty unpaid claims and claim expenses are carried at the full value of estimated liabilities and are not discounted for interest expected to be earned on reserves. Estimated amounts of salvage and subrogation on unpaid property and casualty claims are deducted from the liability for unpaid claims. Due to the nature of the Company's personal lines business, the Company has no exposure to losses related to claims for toxic waste cleanup, other environmental remediation or asbestos-related illnesses other than claims under homeowners insurance policies for environmentally related items such as mold. | |||||||||||||||||
Other Policyholder Funds | |||||||||||||||||
Other Policyholder Funds includes supplementary contracts without life contingencies, dividend accumulations, and amounts payable under Federal Home Loan Bank funding agreements. Amounts received and repaid under the funding agreements are classified in the financing activities section of the Company’s Consolidated Statement of Cash Flows combined with annuity contract deposits and disbursements, respectively. | |||||||||||||||||
Federal Home Loan Bank Funding Agreements | |||||||||||||||||
In 2013, one of the Company's subsidiaries, Horace Mann Life Insurance Company (“HMLIC”), became a member of the Federal Home Loan Bank of Chicago ("FHLB"), which provides HMLIC with access to collateralized borrowings and other FHLB products. As membership requires the ownership of member stock, on June 4, 2013, HMLIC purchased common stock to meet the membership requirement. Any borrowing from the FHLB requires the purchase of FHLB activity-based common stock in an amount equal to 5.0% of the borrowing, or a lower percentage -- such as 2.0% based on the Reduced Capitalization Advance Program. HMEC's Board of Directors has authorized a maximum of $250,000 from the FHLB under advances and funding agreements combined. On December 27, 2013, the Company received $250,000 under funding agreements with $125,000 maturing on December 28, 2015 and $125,000 maturing on December 15, 2023. Interest on the funding agreements accrues at an annual weighted average rate of 0.24% as of December 31, 2013. | |||||||||||||||||
Insurance Premiums and Contract Charges Earned | |||||||||||||||||
Property and casualty insurance premiums are recognized as revenue ratably over the related contract periods in proportion to the risks insured. The unexpired portions of these property and casualty premiums are recorded as unearned premiums, using the monthly pro rata method. | |||||||||||||||||
Premiums and contract charges for interest-sensitive life and investment (annuity) contracts consist of charges for the cost of insurance, policy administration and withdrawals. Premiums for long-term traditional life policies are recognized as revenues when due over the premium-paying period. Annuity and interest-sensitive life contract deposits represent funds deposited by policyholders and are not included in the Company's premiums or contract charges earned. | |||||||||||||||||
Stock Based Compensation | |||||||||||||||||
The Company grants stock options to executive officers, other employees and directors. The exercise price of the option is equal to the fair market value of the Company's common stock on the date of grant. Additional information regarding the Company's stock-based compensation plans is contained in “Note 6 -- Shareholders' Equity and Stock Options”. | |||||||||||||||||
The Company recognizes compensation cost for share-based compensation plans based on the fair value at the grant dates. For the years ended December 31, 2013, 2012 and 2011, the Company recognized $1,419, $2,476 and $1,451, respectively, in expense as a result of the vesting of stock options during the respective periods. | |||||||||||||||||
In 2013, 2012 and 2011, the Company granted stock options as quantified in the table below, which also provides the weighted average grant date fair value for options granted in each year. The fair value of options granted was estimated on the respective dates of grant using the Black-Scholes option pricing model with the weighted-average assumptions shown in the following table. | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Number of options granted | 245,424 | 296,188 | 313,000 | ||||||||||||||
Weighted average grant date fair value of options granted | $ | 8.25 | $ | 6.02 | $ | 6.2 | |||||||||||
Weighted average assumptions: | |||||||||||||||||
Risk-free interest rate | 1 | % | 1 | % | 2.2 | % | |||||||||||
Expected dividend yield | 2.7 | % | 2.2 | % | 2.2 | % | |||||||||||
Expected life, in years | 5.8 | 5.8 | 5.8 | ||||||||||||||
Expected volatility (based on historical volatility) | 54.5 | % | 45.1 | % | 45 | % | |||||||||||
The weighted average fair value of nonvested options outstanding on December 31, 2013 was $6.88. Total unrecognized compensation expense relating to the nonvested options outstanding as of December 31, 2013 was approximately $2,448. This amount will be recognized as expense over the remainder of the vesting period, which is scheduled to be 2014 through 2017. Expense is reflected on a straight-line basis over the vesting period for the entire award. | |||||||||||||||||
Income Taxes | |||||||||||||||||
The Company uses the asset and liability method for calculating deferred federal income taxes. Income tax provisions are generally based on income reported for financial statement purposes. The provisions for federal income taxes for the years ended December 31, 2013, 2012 and 2011 included amounts currently payable and deferred income taxes resulting from the cumulative differences in the Company's assets and liabilities, determined on a tax return versus financial statement basis. | |||||||||||||||||
Deferred tax assets and liabilities include provisions for unrealized investment gains and losses as well as the net funded status of pension and other postretirement benefit obligations with the changes for each period included in the respective components of accumulated other comprehensive income (loss) within shareholders' equity. | |||||||||||||||||
Earnings Per Share | |||||||||||||||||
Basic earnings per share is computed based on the weighted average number of common shares outstanding plus the weighted average number of fully vested restricted stock units and common stock units payable as shares of HMEC common stock. Diluted earnings per share is computed based on the weighted average number of common shares and common stock equivalents outstanding, to the extent dilutive. The Company’s common stock equivalents relate to outstanding common stock options, deferred compensation common stock units and incentive compensation restricted common stock units. | |||||||||||||||||
The computations of net income per share on both basic and diluted bases, including reconciliations of the numerators and denominators, were as follows: | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Basic: | |||||||||||||||||
Net income for the period | $ | 110,893 | $ | 103,866 | $ | 70,506 | |||||||||||
Weighted average number of common shares | |||||||||||||||||
during the period (in thousands) | 40,377 | 39,514 | 39,866 | ||||||||||||||
Net income per share - basic | $ | 2.75 | $ | 2.63 | $ | 1.77 | |||||||||||
Diluted: | |||||||||||||||||
Net income for the period | $ | 110,893 | $ | 103,866 | $ | 70,506 | |||||||||||
Weighted average number of common shares | |||||||||||||||||
during the period (in thousands) | 40,377 | 39,514 | 39,866 | ||||||||||||||
Weighted average number of common equivalent | |||||||||||||||||
shares to reflect the dilutive effect of common | |||||||||||||||||
stock equivalent securities (in thousands): | |||||||||||||||||
Stock options | 211 | 222 | 206 | ||||||||||||||
Common stock units related to deferred | |||||||||||||||||
compensation for Directors | - | 112 | 114 | ||||||||||||||
Common stock units related to deferred | |||||||||||||||||
compensation for Employees | 112 | 116 | 115 | ||||||||||||||
Restricted common stock units related to | |||||||||||||||||
incentive compensation | 933 | 1,424 | 1,136 | ||||||||||||||
Total common and common equivalent shares adjusted | |||||||||||||||||
to calculate diluted earnings per share (in thousands) | 41,633 | 41,388 | 41,437 | ||||||||||||||
Net income per share - diluted | $ | 2.66 | $ | 2.51 | $ | 1.7 | |||||||||||
Options to purchase 243,727 shares of common stock at $20.60 to $30.24 per share were granted in 2013 but were not included in the computation of 2013 diluted earnings per share because of their anti-dilutive effect as a result of the options' exercise price being greater than the average market price of the common shares during 2013 and/or the unrecognized compensation cost having an anti-dilutive effect. The options, which expire in 2020, were still outstanding at December 31, 2013. | |||||||||||||||||
Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||
Comprehensive income (loss) represents the change in shareholders’ equity during a reporting period from transactions and other events and circumstances from non-shareholder sources. For the Company, comprehensive income (loss) is equal to net income plus or minus the after-tax change in net unrealized gains and losses on fixed maturities and equity securities and the after-tax change in net funded status of pension and other postretirement benefit obligations for the period as shown in the Consolidated Statements of Changes in Shareholders' Equity. Accumulated other comprehensive income (loss) represents the accumulated change in shareholders’ equity from these transactions and other events and circumstances from non-shareholder sources as shown in the Consolidated Balance Sheets. | |||||||||||||||||
In the Consolidated Balance Sheets, the Company recognizes the funded status of defined benefit pension plans and other postretirement benefit plans as a component of accumulated other comprehensive income (loss), net of tax. | |||||||||||||||||
Comprehensive Income (Loss) | |||||||||||||||||
The components of comprehensive income (loss) were as follows: | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Net income | $ | 110,893 | $ | 103,866 | $ | 70,506 | |||||||||||
Other comprehensive income (loss): | |||||||||||||||||
Change in net unrealized gains and losses on fixed | |||||||||||||||||
maturities and equity securities | |||||||||||||||||
Net unrealized holding gains and losses on fixed | |||||||||||||||||
maturities and equity securities arising during the period | -375,184 | 204,460 | 281,202 | ||||||||||||||
Less: reclassification adjustment for net gains | |||||||||||||||||
included in income before income tax | 22,245 | 27,298 | 37,663 | ||||||||||||||
Total, before tax | -397,429 | 177,162 | 243,539 | ||||||||||||||
Income tax expense (benefit) | -149,019 | 62,984 | 86,585 | ||||||||||||||
Total, net of tax | -248,410 | 114,178 | 156,954 | ||||||||||||||
Change in net funded status of pension and | |||||||||||||||||
other postretirement benefit obligations | |||||||||||||||||
Before tax | 5,645 | 1,276 | -4,801 | ||||||||||||||
Income tax expense (benefit) | 2,110 | 345 | -1,714 | ||||||||||||||
Total, net of tax | 3,535 | 931 | -3,087 | ||||||||||||||
Total comprehensive income (loss) | $ | -133,982 | $ | 218,975 | $ | 224,373 | |||||||||||
Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||
Reflecting accounting guidance adopted prospectively effective January 1, 2013, the following table reconciles the components of accumulated other comprehensive income (loss) for the period indicated. | |||||||||||||||||
Unrealized | |||||||||||||||||
Gains and | |||||||||||||||||
Losses on | |||||||||||||||||
Fixed Maturities | |||||||||||||||||
and Equity | Defined | ||||||||||||||||
Securities (1)(2) | Benefit Plans (1) | Total (1) | |||||||||||||||
Beginning balance, January 1, 2013 | $ | 382,400 | $ | -15,311 | $ | 367,089 | |||||||||||
Other comprehensive income (loss) before | -233,951 | 3,535 | -230,416 | ||||||||||||||
reclassifications | |||||||||||||||||
Amounts reclassified from accumulated | |||||||||||||||||
other comprehensive income | -14,459 | - | -14,459 | ||||||||||||||
Net current-period other comprehensive income | -248,410 | 3,535 | -244,875 | ||||||||||||||
(loss) | |||||||||||||||||
Ending balance, December 31, 2013 | $ | 133,990 | $ | -11,776 | $ | 122,214 | |||||||||||
-1 | All amounts are net of tax. | ||||||||||||||||
-2 | The $22,245 pretax amount reclassified from accumulated other comprehensive income is included in net realized investment gains and losses and the $7,786 related tax expense (benefit) is included in income tax expense in the Consolidated Statement of Operations for the year ended December 31, 2013. | ||||||||||||||||
Comparative information for elements that are not required to be reclassified in their entirety to net income in the same reporting period is located in “Note 2 -- Investments -- Unrealized Gains and Losses on Fixed Maturities and Equity Securities”. | |||||||||||||||||
Statements of Cash Flows | |||||||||||||||||
For purposes of the Consolidated Statements of Cash Flows, cash constitutes cash on deposit at banks. | |||||||||||||||||
Adopted Accounting Standards | |||||||||||||||||
Comprehensive Income | |||||||||||||||||
Effective January 1, 2013, the Company prospectively adopted accounting guidance to improve the disclosure of reclassifications out of accumulated other comprehensive income. The guidance requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under U.S. GAAP to be reclassified in its entirety to net income. For other amounts that are not required to be reclassified in their entirety to net income in the same reporting period, the reclassifications are required to be cross-referenced to other disclosures that provide additional detail about those amounts. As shown in “Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss)” above, certain disclosures in the Company’s Notes to Consolidated Financial Statements have been expanded to address additional information required by this guidance. The adoption of this accounting guidance did not have an effect on the results of operations or financial position of the Company. | |||||||||||||||||
Balance Sheet Offsetting | |||||||||||||||||
Effective January 1, 2013, the Company adopted accounting guidance to address disclosures about offsetting assets and liabilities. The guidance clarifies which instruments and transactions are subject to the offsetting disclosure requirements. The instruments and transactions include bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions. The adoption of this accounting guidance did not have an effect on the results of operations or financial position of the Company. | |||||||||||||||||
Costs Associated with Acquiring or Renewing Insurance Contracts | |||||||||||||||||
Effective January 1, 2012, the Company adopted accounting guidance which was issued to address diversity in practice regarding the interpretation of which costs relating to the acquisition of new or renewal insurance contracts qualify for deferral. The guidance allows an insurance entity to capitalize only incremental and certain direct costs related to the successful acquisition of new or renewal insurance contracts. Management elected retrospective application of the new guidance resulting in a downward adjustment to the deferred policy acquisition costs asset with a corresponding decrease to beginning shareholders’ equity, net of applicable deferred taxes. The adoption of this accounting guidance reduces expense deferrals and amortization, with a minimal net effect on the Company’s results of operations. | |||||||||||||||||
Investments
Investments | 12 Months Ended | ||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||
Investments [Abstract] | ' | ||||||||||||||||||||||||||||||
Investments | ' | ||||||||||||||||||||||||||||||
NOTE 2 - Investments | |||||||||||||||||||||||||||||||
The Company's investment portfolio included no free-standing derivative financial instruments (futures, forwards, swaps, option contracts or other financial instruments with similar characteristics), and there were no embedded derivative features related to the Company’s insurance products for the three years ended December 31, 2013. | |||||||||||||||||||||||||||||||
Net Investment Income | |||||||||||||||||||||||||||||||
The components of net investment income for the following periods were: | |||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||||||||
Fixed maturities | $ | 304,024 | $ | 297,042 | $ | 285,782 | |||||||||||||||||||||||||
Equity securities | 3,698 | 2,814 | 1,685 | ||||||||||||||||||||||||||||
Short-term and other investments | 8,242 | 8,109 | 7,891 | ||||||||||||||||||||||||||||
Other invested assets (equity method investments) | 5,902 | 5,892 | - | ||||||||||||||||||||||||||||
Total investment income | 321,866 | 313,857 | 295,358 | ||||||||||||||||||||||||||||
Investment expenses | -8,256 | -7,854 | -7,047 | ||||||||||||||||||||||||||||
Net investment income | $ | 313,610 | $ | 306,003 | $ | 288,311 | |||||||||||||||||||||||||
Realized Investment Gains (Losses) | |||||||||||||||||||||||||||||||
Net realized investment gains (losses) for the following periods were: | |||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||||||||
Fixed maturities | $ | 18,480 | $ | 23,218 | $ | 37,466 | |||||||||||||||||||||||||
Equity securities | 3,765 | 4,080 | 197 | ||||||||||||||||||||||||||||
Short-term and other investments | - | - | - | ||||||||||||||||||||||||||||
Net realized investment gains | $ | 22,245 | $ | 27,298 | $ | 37,663 | |||||||||||||||||||||||||
The Company, from time to time, sells invested assets subsequent to the balance sheet date that were considered temporarily impaired at the balance sheet date. Such sales are due to issuer-specific events occurring subsequent to the balance sheet date that result in a change in the Company’s intent or ability to hold an invested asset. The types of events that may result in a sale include significant changes in the economic facts and circumstances related to the invested asset, significant unforeseen changes in liquidity needs, or changes in the Company’s investment strategy. | |||||||||||||||||||||||||||||||
For the year ended December 31, 2013, the Company’s net realized investment gains of $22,245 included $29,511 of gross gains realized on security sales and calls partially offset by $5,734 of realized losses on securities that were disposed of during 2013 and $1,532 of other-than-temporary impairment write-downs on securities in the current period. | |||||||||||||||||||||||||||||||
For the year ended December 31, 2012, the Company’s net realized investment gains of $27,298 included $39,941 of gross gains realized on security sales and calls partially offset by $12,643 of realized losses on securities that were disposed of during 2012. There were no other-than-temporary impairment write-downs on securities during 2012. | |||||||||||||||||||||||||||||||
For the year ended December 31, 2011, the Company’s net realized investment gains of $37,663 included $39,709 of gross gains realized on security sales and calls partially offset by $1,974 of realized losses on securities that were disposed of during 2011 and $72 of other-than-temporary impairment write-downs on securities. In 2011, the other-than-temporary impairment write-downs were related primarily to further impairment on securities the Company had previously impaired. | |||||||||||||||||||||||||||||||
Fixed Maturities and Equity Securities | |||||||||||||||||||||||||||||||
The Company’s investment portfolio is comprised primarily of fixed maturity securities (“fixed maturities”) and equity securities. The amortized cost or cost, unrealized investment gains and losses, fair values and other-than-temporary impairment (“OTTI”) included in accumulated other comprehensive income (loss) (“AOCI”) of all fixed maturities and equity securities in the portfolio were as follows: | |||||||||||||||||||||||||||||||
Amortized | Unrealized | Unrealized | Fair | OTTI in | |||||||||||||||||||||||||||
Cost or Cost | Gains | Losses | Value | AOCI (2) | |||||||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||||
Fixed maturity securities | |||||||||||||||||||||||||||||||
U.S. Government and | |||||||||||||||||||||||||||||||
federally sponsored | |||||||||||||||||||||||||||||||
agency obligations (1): | |||||||||||||||||||||||||||||||
Mortgage-backed | $ | 555,574 | $ | 33,711 | $ | 19,560 | $ | 569,725 | $ | - | |||||||||||||||||||||
securities | |||||||||||||||||||||||||||||||
Other, including | |||||||||||||||||||||||||||||||
U.S. Treasury | 449,060 | 9,865 | 23,351 | 435,574 | - | ||||||||||||||||||||||||||
securities | |||||||||||||||||||||||||||||||
Municipal bonds | 1,425,441 | 80,701 | 34,615 | 1,471,527 | - | ||||||||||||||||||||||||||
Foreign government bonds | 50,641 | 4,700 | 390 | 54,951 | - | ||||||||||||||||||||||||||
Corporate bonds | 2,457,727 | 188,832 | 32,150 | 2,614,409 | - | ||||||||||||||||||||||||||
Other mortgage-backed | 845,762 | 26,477 | 8,852 | 863,387 | 2,812 | ||||||||||||||||||||||||||
securities | |||||||||||||||||||||||||||||||
Totals | $ | 5,784,205 | $ | 344,286 | $ | 118,918 | $ | 6,009,573 | $ | 2,812 | |||||||||||||||||||||
Equity securities | $ | 84,754 | $ | 10,723 | $ | 3,619 | $ | 91,858 | $ | - | |||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||||||||
Fixed maturity securities | |||||||||||||||||||||||||||||||
U.S. Government and | |||||||||||||||||||||||||||||||
federally sponsored | |||||||||||||||||||||||||||||||
agency obligations (1): | |||||||||||||||||||||||||||||||
Mortgage-backed | $ | 547,040 | $ | 72,644 | $ | 125 | $ | 619,559 | $ | - | |||||||||||||||||||||
securities | |||||||||||||||||||||||||||||||
Other, including | |||||||||||||||||||||||||||||||
U.S. Treasury | 371,706 | 37,857 | 135 | 409,428 | - | ||||||||||||||||||||||||||
securities | |||||||||||||||||||||||||||||||
Municipal bonds | 1,402,424 | 186,261 | 2,648 | 1,586,037 | - | ||||||||||||||||||||||||||
Foreign government bonds | 48,476 | 9,393 | - | 57,869 | - | ||||||||||||||||||||||||||
Corporate bonds | 2,258,554 | 313,430 | 4,950 | 2,567,034 | - | ||||||||||||||||||||||||||
Other mortgage-backed | 683,257 | 41,080 | 2,032 | 722,305 | 3,214 | ||||||||||||||||||||||||||
securities | |||||||||||||||||||||||||||||||
Totals | $ | 5,311,457 | $ | 660,665 | $ | 9,890 | $ | 5,962,232 | $ | 3,214 | |||||||||||||||||||||
Equity securities | $ | 52,396 | $ | 2,397 | $ | 1,290 | $ | 53,503 | $ | - | |||||||||||||||||||||
-1 | Fair value includes securities issued by Federal National Mortgage Association (“FNMA”) of $336,193 and $375,111; Federal Home Loan Mortgage Corporation (“FHLMC”) of $427,172 and $418,174; and Government National Mortgage Association (“GNMA”) of $126,245 and $136,998 as of December 31, 2013 and 2012, respectively. | ||||||||||||||||||||||||||||||
-2 | Represents the amount of other-than-temporary impairment losses in AOCI which, beginning April 1, 2009, was not included in earnings under current accounting guidance. Amounts also include unrealized gains/(losses) on impaired securities relating to changes in the fair value of such securities subsequent to the impairment measurement date. | ||||||||||||||||||||||||||||||
Compared to December 31, 2012, the reduction in net unrealized investment gains at December 31, 2013 was due to higher yields on U.S. Treasury securities and slightly narrower credit spreads across most asset classes, the combination of which resulted in a decrease in net unrealized gains for the Company’s holdings of corporate securities, municipal securities, mortgage-backed and asset-backed securities and governmental securities. | |||||||||||||||||||||||||||||||
The following table presents the fair value and gross unrealized losses of fixed maturities and equity securities in an unrealized loss position at December 31, 2013 and 2012, respectively. The Company views the decrease in value of all of the securities with unrealized losses at December 31, 2013 — which was driven largely by changes in interest rates, spread widening, financial market illiquidity and/or market volatility from the date of acquisition — as temporary. For fixed maturity securities, management does not have the intent to sell the securities and it is not more likely than not the Company will be required to sell the securities before the anticipated recovery of the amortized cost bases, and the present value of future cash flows exceeds the amortized cost bases. In addition, management expects to recover the entire cost bases of the fixed maturity securities. For equity securities, the Company has the ability and intent to hold the securities for the recovery of cost and recovery of cost is expected within a reasonable period of time. Therefore, no impairment of these securities was recorded at December 31, 2013. | |||||||||||||||||||||||||||||||
12 months or less | More than 12 months | Total | |||||||||||||||||||||||||||||
Gross | Gross | Gross | |||||||||||||||||||||||||||||
Unrealized | Unrealized | Unrealized | |||||||||||||||||||||||||||||
Fair Value | Losses | Fair Value | Losses | Fair Value | Losses | ||||||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||||
Fixed maturity securities | |||||||||||||||||||||||||||||||
U.S. Government and | |||||||||||||||||||||||||||||||
federally sponsored | |||||||||||||||||||||||||||||||
agency obligations: | |||||||||||||||||||||||||||||||
Mortgage-backed | $ | 150,602 | $ | 19,145 | $ | 1,383 | $ | 415 | $ | 151,985 | $ | 19,560 | |||||||||||||||||||
securities | |||||||||||||||||||||||||||||||
Other | 249,765 | 22,479 | 4,450 | 872 | 254,215 | 23,351 | |||||||||||||||||||||||||
Municipal bonds | 375,523 | 26,529 | 42,899 | 8,086 | 418,422 | 34,615 | |||||||||||||||||||||||||
Foreign government bonds | 6,738 | 390 | - | - | 6,738 | 390 | |||||||||||||||||||||||||
Corporate bonds | 582,849 | 28,634 | 12,948 | 3,516 | 595,797 | 32,150 | |||||||||||||||||||||||||
Other mortgage-backed | 274,983 | 8,300 | 20,008 | 552 | 294,991 | 8,852 | |||||||||||||||||||||||||
securities | |||||||||||||||||||||||||||||||
Total fixed | |||||||||||||||||||||||||||||||
maturity securities | 1,640,460 | 105,477 | 81,688 | 13,441 | 1,722,148 | 118,918 | |||||||||||||||||||||||||
Equity securities (1) | 32,392 | 3,117 | 1,405 | 502 | 33,797 | 3,619 | |||||||||||||||||||||||||
Combined totals | $ | 1,672,852 | $ | 108,594 | $ | 83,093 | $ | 13,943 | $ | 1,755,945 | $ | 122,537 | |||||||||||||||||||
Number of positions with a | |||||||||||||||||||||||||||||||
gross unrealized loss | 534 | 46 | 580 | ||||||||||||||||||||||||||||
Fair value as a percentage of | |||||||||||||||||||||||||||||||
total fixed maturities and | |||||||||||||||||||||||||||||||
equity securities fair value | 27.4 | % | 1.4 | % | 28.8 | % | |||||||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||||||||
Fixed maturity securities | |||||||||||||||||||||||||||||||
U.S. Government and | |||||||||||||||||||||||||||||||
federally sponsored | |||||||||||||||||||||||||||||||
agency obligations: | |||||||||||||||||||||||||||||||
Mortgage-backed | $ | 11,006 | $ | 124 | $ | 50 | $ | 1 | $ | 11,056 | $ | 125 | |||||||||||||||||||
securities | |||||||||||||||||||||||||||||||
Other | 9,944 | 135 | - | - | 9,944 | 135 | |||||||||||||||||||||||||
Municipal bonds | 108,578 | 2,605 | 3,990 | 43 | 112,568 | 2,648 | |||||||||||||||||||||||||
Foreign government bonds | - | - | - | - | - | - | |||||||||||||||||||||||||
Corporate bonds | 56,481 | 875 | 26,725 | 4,075 | 83,206 | 4,950 | |||||||||||||||||||||||||
Other mortgage-backed | 58,218 | 621 | 25,014 | 1,411 | 83,232 | 2,032 | |||||||||||||||||||||||||
securities | |||||||||||||||||||||||||||||||
Total fixed | |||||||||||||||||||||||||||||||
maturity securities | 244,227 | 4,360 | 55,779 | 5,530 | 300,006 | 9,890 | |||||||||||||||||||||||||
Equity securities (1) | 19,344 | 1,288 | 9 | 2 | 19,353 | 1,290 | |||||||||||||||||||||||||
Combined totals | $ | 263,571 | $ | 5,648 | $ | 55,788 | $ | 5,532 | $ | 319,359 | $ | 11,180 | |||||||||||||||||||
Number of positions with a | |||||||||||||||||||||||||||||||
gross unrealized loss | 156 | 43 | 199 | ||||||||||||||||||||||||||||
Fair value as a percentage of | |||||||||||||||||||||||||||||||
total fixed maturities and | |||||||||||||||||||||||||||||||
equity securities fair value | 4.4 | % | 0.9 | % | 5.3 | % | |||||||||||||||||||||||||
-1 | Includes nonredeemable (perpetual) preferred stocks and common stocks. | ||||||||||||||||||||||||||||||
Fixed maturities and equity securities with an investment grade rating represented 95% of the gross unrealized loss as of December 31, 2013. With respect to fixed income securities involving securitized financial assets, the underlying collateral cash flows were stress tested to determine there was no adverse change in the present value of cash flows below the amortized cost basis. | |||||||||||||||||||||||||||||||
Credit Losses | |||||||||||||||||||||||||||||||
The following table summarizes the cumulative amounts related to the Company’s credit loss component of the other-than-temporary impairment losses on fixed maturity securities held as of December 31, 2013 and 2012 that the Company did not intend to sell as of those dates, and it was not more likely than not that the Company would be required to sell the securities before the anticipated recovery of the amortized cost bases, for which the non-credit portions of the other-than-temporary impairment losses were recognized in other comprehensive income: | |||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||
Cumulative credit loss (1) | |||||||||||||||||||||||||||||||
Beginning of period | $ | 2,877 | $ | 3,957 | |||||||||||||||||||||||||||
New credit losses (2) | 1,220 | - | |||||||||||||||||||||||||||||
Losses related to securities sold or paid down during the period | - | -1,080 | |||||||||||||||||||||||||||||
End of period | $ | 4,097 | $ | 2,877 | |||||||||||||||||||||||||||
-1 | The cumulative credit loss amounts exclude other-than-temporary impairment losses on securities held as of the periods indicated that the Company intended to sell or it was more likely than not that the Company would be required to sell the security before the recovery of the amortized cost basis. | ||||||||||||||||||||||||||||||
-2 | For 2013, the other-than-temporary impairment loss was recorded on a Detroit general obligation bond. | ||||||||||||||||||||||||||||||
Maturities/Sales of Fixed Maturities and Equity Securities | |||||||||||||||||||||||||||||||
The following table presents the distribution of the Company’s fixed maturity securities portfolio by estimated expected maturity. Estimated expected maturities differ from contractual maturities, reflecting assumptions regarding borrowers' utilization of the right to call or prepay obligations with or without call or prepayment penalties. For structured securities, including mortgage-backed securities and other asset-backed securities, estimated expected maturities consider broker-dealer survey prepayment assumptions and are verified for consistency with the interest rate and economic environments. | |||||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||
Percent of | |||||||||||||||||||||||||||||||
Amortized | Fair | Total Fair | |||||||||||||||||||||||||||||
Cost | Value | Value | |||||||||||||||||||||||||||||
Estimated expected maturity: | |||||||||||||||||||||||||||||||
Due in 1 year or less | $ | 234,952 | $ | 244,106 | 4.1 | % | |||||||||||||||||||||||||
Due after 1 year through 5 years | 1,206,390 | 1,253,394 | 20.9 | ||||||||||||||||||||||||||||
Due after 5 years through 10 years | 2,227,741 | 2,314,540 | 38.4 | ||||||||||||||||||||||||||||
Due after 10 years through 20 years | 1,202,062 | 1,248,897 | 20.8 | ||||||||||||||||||||||||||||
Due after 20 years | 913,060 | 948,636 | 15.8 | ||||||||||||||||||||||||||||
Total | $ | 5,784,205 | $ | 6,009,573 | 100 | % | |||||||||||||||||||||||||
Average option-adjusted duration, in years | 6.3 | ||||||||||||||||||||||||||||||
Proceeds received from sales of fixed maturities and equity securities, each determined using the specific identification method, and gross gains and gross losses realized as a result of those sales for each year were: | |||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||||||||
Fixed maturity securities | |||||||||||||||||||||||||||||||
Proceeds received | $ | 298,045 | $ | 576,708 | $ | 587,909 | |||||||||||||||||||||||||
Gross gains realized | 17,177 | 32,532 | 39,463 | ||||||||||||||||||||||||||||
Gross losses realized | -4,945 | -11,971 | -2,047 | ||||||||||||||||||||||||||||
Equity securities | |||||||||||||||||||||||||||||||
Proceeds received | $ | 18,643 | $ | 6,057 | $ | 1,078 | |||||||||||||||||||||||||
Gross gains realized | 4,368 | 231 | 247 | ||||||||||||||||||||||||||||
Gross losses realized | -616 | -438 | - | ||||||||||||||||||||||||||||
Unrealized Gains and Losses on Fixed Maturities and Equity Securities | |||||||||||||||||||||||||||||||
Net unrealized gains and losses are computed as the difference between fair value and amortized cost for fixed maturities or cost for equity securities. The following table reconciles the net unrealized investment gains and losses, net of tax, included in accumulated other comprehensive income (loss), before the impact on deferred policy acquisition costs: | |||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||||||||
Net unrealized investment gains (losses) on | |||||||||||||||||||||||||||||||
fixed maturity securities, net of tax | |||||||||||||||||||||||||||||||
Beginning of period | $ | 423,004 | $ | 284,338 | $ | 118,498 | |||||||||||||||||||||||||
Change in unrealized investment gains and losses | -264,503 | 153,758 | 190,193 | ||||||||||||||||||||||||||||
Reclassification of net realized investment (gains) | |||||||||||||||||||||||||||||||
losses to net income | -12,012 | -15,092 | -24,353 | ||||||||||||||||||||||||||||
End of period | $ | 146,489 | $ | 423,004 | $ | 284,338 | |||||||||||||||||||||||||
Net unrealized investment gains (losses) on equity securities, | |||||||||||||||||||||||||||||||
net of tax | |||||||||||||||||||||||||||||||
Beginning of period | $ | 720 | $ | 2,408 | $ | 2,139 | |||||||||||||||||||||||||
Change in unrealized investment gains and losses | 6,345 | 964 | 397 | ||||||||||||||||||||||||||||
Reclassification of net realized investment (gains) | |||||||||||||||||||||||||||||||
losses to net income | -2,447 | -2,652 | -128 | ||||||||||||||||||||||||||||
End of period | $ | 4,618 | $ | 720 | $ | 2,408 | |||||||||||||||||||||||||
Investment in Entities Exceeding 10% of Shareholders' Equity | |||||||||||||||||||||||||||||||
At December 31, 2013 and 2012, there were no investments which exceeded 10% of total shareholders' equity in entities other than obligations of the U.S. Government and federally sponsored government agencies and authorities. | |||||||||||||||||||||||||||||||
Repurchase Agreements | |||||||||||||||||||||||||||||||
Beginning in 2013, the Company enters into repurchase agreements to earn incremental spread income. A repurchase agreement is a transaction in which one party (transferor) agrees to sell securities to another party (transferee) in return for cash (or securities), with a simultaneous agreement to repurchase the same securities at a specified price at a later date. These transactions are generally short-term in nature, and therefore, the carrying amounts of these instruments approximate fair value. | |||||||||||||||||||||||||||||||
As part of repurchase agreements, the Company transfers primarily U.S. government, government agency and corporate securities and receives cash. For the repurchase agreements, the Company receives cash in an amount equal to at least 95% of the fair value of the securities transferred, and the agreements with third parties contain contractual provisions to allow for additional collateral to be obtained when necessary. The cash received from the repurchase program is typically invested in high quality floating rate fixed maturity securities. The Company accounts for the repurchase agreements as collateralized borrowings. The securities transferred under repurchase agreements are included in fixed maturity, available-for-sale securities with the obligation to repurchase those securities recorded in Other Liabilities on the Company's Consolidated Balance Sheets. The fair value of the securities transferred was $24,791 and $0 as of December 31, 2013 and 2012, respectively. The obligation for securities sold under agreement to repurchase was $25,864 and $0, including accrued interest, as of December 31, 2013 and 2012, respectively. | |||||||||||||||||||||||||||||||
Deposits | |||||||||||||||||||||||||||||||
At December 31, 2013 and 2012, securities with a fair value of $17,967 and $18,565, respectively, were on deposit with governmental agencies as required by law in various states in which the insurance subsidiaries of HMEC conduct business. In addition, at December 31, 2013, securities with a fair value of $274,437 were on deposit with the Federal Home Loan Bank as collateral for amounts subject to funding agreements which were equal to $250,000. The deposited securities are included in fixed maturities on the Company’s Consolidated Balance Sheets. | |||||||||||||||||||||||||||||||
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Fair Value of Financial Instruments [Abstract] | ' | |||||||||||||||||||
Fair Value of Financial Instruments | ' | |||||||||||||||||||
NOTE 3 - Fair Value of Financial Instruments | ||||||||||||||||||||
The Company is required under GAAP to disclose estimated fair values for certain financial and non-financial assets and liabilities. Fair values of the Company’s insurance contracts other than annuity contracts are not required to be disclosed. However, the estimated fair values of liabilities under all insurance contracts are taken into consideration in the Company’s overall management of interest rate risk through the matching of investment maturities with amounts due under insurance contracts. | ||||||||||||||||||||
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between knowledgeable, unrelated and willing market participants on the measurement date. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The Company categorizes its financial and non-financial assets and liabilities into a three-level hierarchy based on the priority of the inputs to the valuation technique. The three levels of inputs that may be used to measure fair value are: | ||||||||||||||||||||
Level 1 | Unadjusted quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include fixed maturity and equity securities (both common stock and preferred stock) that are traded in an active exchange market, as well as U.S. Treasury securities. | |||||||||||||||||||
Level 2 | Unadjusted observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for the assets or liabilities. Level 2 assets and liabilities include fixed maturity securities (1) with quoted prices that are traded less frequently than exchange-traded instruments or (2) values based on discounted cash flows with observable inputs. This category generally includes certain U.S. Government and agency mortgage-backed securities, non-agency structured securities, corporate fixed maturity securities and preferred stocks. | |||||||||||||||||||
Level 3 | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, certain discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation and for which the significant inputs are unobservable. This category generally includes certain private debt and equity investments. | |||||||||||||||||||
When the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. As a result, a Level 3 fair value measurement may include inputs that are observable (Level 1 or Level 2) and unobservable (Level 3). Net transfers into or out of Level 3 are reported as having occurred at the end of the reporting period in which the transfers were determined. | ||||||||||||||||||||
The following discussion describes the valuation methodologies used for financial assets and financial liabilities measured at fair value. The techniques utilized in estimating the fair values are affected by the assumptions used, including discount rates and estimates of the amount and timing of future cash flows. The use of different methodologies, assumptions and inputs may have a material effect on the estimated fair values of the Company’s securities holdings. Care should be exercised in deriving conclusions about the Company’s business, its value or financial position based on the fair value information of financial and nonfinancial assets and liabilities presented below. | ||||||||||||||||||||
Fair value estimates are made at a specific point in time, based on available market information and judgments about the financial asset or financial liability, including estimates of timing, amount of expected future cash flows and the credit standing of the issuer. In some cases, the fair value estimates cannot be substantiated by comparison to independent markets. In addition, the disclosed fair value may not be realized in the immediate settlement of the financial asset or financial liability. The disclosed fair values do not reflect any premium or discount that could result from offering for sale at one time an entire holding of a particular financial asset or financial liability. In periods of market disruption, the ability to observe prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified from Level 1 to Level 2 or from Level 2 to Level 3. Potential taxes and other expenses that would be incurred in an actual sale or settlement are not reflected in amounts disclosed. | ||||||||||||||||||||
Investments | ||||||||||||||||||||
For fixed maturity securities, each month the Company obtains fair value prices from its investment managers and custodian bank. Fair values for the Company’s fixed maturity securities are based primarily on prices provided by its investment managers as well as its custodian bank for certain securities. The prices from the custodian bank are compared to prices from the investment managers. Differences in prices between the sources that the Company considers significant are researched and the Company utilizes the price that it considers most representative of an exit price. Both the investment managers and the custodian bank use a variety of independent, nationally recognized pricing sources to determine market valuations. Each designate specific pricing services or indexes for each sector of the market based upon the provider’s expertise. Typical inputs used by these pricing sources include, but are not limited to, reported trades, benchmark yield curves, benchmarking of like securities, ratings designations, sector groupings, issuer spreads, bids, offers, and/or estimated cash flows and prepayment speeds. | ||||||||||||||||||||
When the pricing sources cannot provide fair value determinations, the Company obtains non-binding price quotes from broker-dealers. The broker-dealers’ valuation methodology is sometimes matrix-based, using indicative evaluation measures and adjustments for specific security characteristics and market sentiment. The market inputs utilized in the evaluation measures and adjustments include: benchmark yield curves, reported trades, broker/dealer quotes, ratings and corresponding issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data, and industry and economic events. The extent of the use of each market input depends on the market sector and the market conditions. Depending on the security, the priority of the use of inputs may change or some market inputs may not be relevant. For some securities, additional inputs may be necessary. | ||||||||||||||||||||
The Company analyzes price and market valuations received to verify reasonableness, to understand the key assumptions used and their sources, to conclude the prices obtained are appropriate, and to determine an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs. Based on this evaluation and investment class analysis, each security is classified into Level 1, 2, or 3. The Company has in place certain control processes to determine the reasonableness of the financial asset fair values. These processes are designed to ensure (1) the values received are reasonable and accurately recorded, (2) the data inputs and valuation techniques utilized are appropriate and consistently applied, and (3) the assumptions are reasonable and consistent with the objective of determining fair value. For example, on a continuing basis, the Company assesses the reasonableness of individual security values received from pricing sources that vary from certain thresholds. The Company’s fixed maturity securities portfolio is primarily publicly traded, which allows for a high percentage of the portfolio to be priced through pricing services. Approximately 87% and 88% of the portfolio, based on fair value, was priced through pricing services or index priced as of December 31, 2013 and 2012, respectively. The remainder of the portfolio was priced by broker-dealers or pricing models. When non-binding broker-dealer quotes could be corroborated by comparison to other vendor quotes, pricing models or analysis, the securities were generally classified as Level 2, otherwise they were classified as Level 3. There were no significant changes to the valuation process during 2013. | ||||||||||||||||||||
Fair values of equity securities have been determined by the Company from observable market quotations, when available. When a public quotation is not available, equity securities are valued by using non-binding broker quotes or through the use of pricing models or analysis that is based on market information regarding interest rates, credit spreads and liquidity. The underlying source data for calculating the matrix of credit spreads relative to the U.S. Treasury curve are nationally recognized indices. In addition, credit rating (or credit quality equivalent information) of securities is also factored into a pricing matrix. These inputs are based on assumptions deemed appropriate given the circumstances and are believed to be consistent with what other market participants would use when pricing such securities. There were no significant changes to the valuation process in 2013. | ||||||||||||||||||||
Short-term and other investments are comprised of short-term fixed income securities, policy loans and mortgage loans, restricted FHLB membership and activity stocks, as well as certain alternative investments which are accounted for as equity method investments and therefore excluded from the fair value tabular disclosures. For short-term fixed income securities, because of the nature of these assets, carrying amounts generally approximate fair values, which have been determined from public quotations, when available. The fair value of policy loans is based on estimates using discounted cash flow analysis and current interest rates being offered for new loans. The fair value of mortgage loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and the same remaining maturities. The fair value of FHLB membership and activity stocks is based on redemption value which is equal to par value. | ||||||||||||||||||||
Separate Account (Variable Annuity) Assets and Liabilities | ||||||||||||||||||||
Separate Account assets are carried at fair value and represent variable annuity contractholder funds invested in various mutual funds. Fair values of these assets are based primarily on market quotations of the underlying securities. Investment performance related to these assets is fully offset by corresponding amounts credited to contractholders with the liability reflected within Separate Account liabilities. Separate Account liabilities are equal to the estimated fair value of Separate Account assets. | ||||||||||||||||||||
Fixed Annuity Contract Liabilities and Policyholder Account Balances on Interest-sensitive Life Contracts | ||||||||||||||||||||
The fair values of fixed annuity contract liabilities and policyholder account balances on interest-sensitive life contracts are equal to the discounted estimated future cash flows (using the Company's current interest rates for similar products including consideration of minimum guaranteed interest rates). The Company carries these financial liabilities at cost. | ||||||||||||||||||||
Other Policyholder Funds | ||||||||||||||||||||
Other policyholder funds are liabilities related to supplementary contracts without life contingencies and dividend accumulations, both of which represent deposits that do not have defined maturities, as well as balances outstanding under funding agreements with the FHLB. Other policyholder funds are carried at cost, which management believes is a reasonable estimate of fair value due to the relatively short duration of these deposits, based on the Company’s past experience. | ||||||||||||||||||||
Short-term Debt | ||||||||||||||||||||
Short-term debt is carried at amortized cost, which management believes is a reasonable estimate of fair value due to the liquidity and short duration of these variable rate instruments. | ||||||||||||||||||||
Long-term Debt | ||||||||||||||||||||
The Company carries long-term debt at amortized cost. The fair value of long-term debt is estimated based on unadjusted quoted market prices of the Company’s securities or unadjusted market prices based on similar publicly traded issues when trading activity for the Company’s securities is not sufficient to provide a market price. | ||||||||||||||||||||
Other Liabilities, Repurchase Agreements | ||||||||||||||||||||
The Company carries the obligations for securities sold under agreements to repurchase at cost, which approximates fair value due to the short duration of the obligations. | ||||||||||||||||||||
Financial Instruments Measured and Carried at Fair Value | ||||||||||||||||||||
The following table presents the Company’s fair value hierarchy for those assets and liabilities measured and carried at fair value on a recurring basis. At December 31, 2013, these Level 3 invested assets comprised approximately 2% of the Company’s total investment portfolio fair value. | ||||||||||||||||||||
Fair Value Measurements at | ||||||||||||||||||||
Carrying | Fair | Reporting Date Using | ||||||||||||||||||
Amount | Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||
31-Dec-13 | ||||||||||||||||||||
Financial Assets | ||||||||||||||||||||
Investments | ||||||||||||||||||||
Fixed maturities | ||||||||||||||||||||
U.S. Government and federally | ||||||||||||||||||||
sponsored agency obligations: | ||||||||||||||||||||
Mortgage-backed securities | $ | 569,725 | $ | 569,725 | $ | - | $ | 569,725 | $ | - | ||||||||||
Other, including | ||||||||||||||||||||
U.S. Treasury securities | 435,574 | 435,574 | 17,757 | 417,817 | - | |||||||||||||||
Municipal bonds | 1,471,527 | 1,471,527 | - | 1,468,833 | 2,694 | |||||||||||||||
Foreign government bonds | 54,951 | 54,951 | - | 54,951 | - | |||||||||||||||
Corporate bonds | 2,614,409 | 2,614,409 | 10,181 | 2,543,402 | 60,826 | |||||||||||||||
Other mortgage-backed securities | 863,387 | 863,387 | - | 817,378 | 46,009 | |||||||||||||||
Total fixed maturities | 6,009,573 | 6,009,573 | 27,938 | 5,872,106 | 109,529 | |||||||||||||||
Equity securities | 91,858 | 91,858 | 74,279 | 17,573 | 6 | |||||||||||||||
Short-term investments | 206,758 | 206,758 | 206,354 | 404 | - | |||||||||||||||
Other investments | 5,000 | 5,000 | - | 5,000 | - | |||||||||||||||
Totals | 6,313,189 | 6,313,189 | 308,571 | 5,895,083 | 109,535 | |||||||||||||||
Separate Account | ||||||||||||||||||||
(variable annuity) assets (1) | 1,747,995 | 1,747,995 | 1,747,995 | - | - | |||||||||||||||
Financial Liabilities | - | - | - | - | - | |||||||||||||||
31-Dec-12 | ||||||||||||||||||||
Financial Assets | ||||||||||||||||||||
Investments | ||||||||||||||||||||
Fixed maturities | ||||||||||||||||||||
U.S. Government and federally | ||||||||||||||||||||
sponsored agency obligations: | ||||||||||||||||||||
Mortgage-backed securities | $ | 619,559 | $ | 619,559 | $ | - | $ | 619,559 | $ | - | ||||||||||
Other, including | ||||||||||||||||||||
U.S. Treasury securities | 409,428 | 409,428 | 18,594 | 390,834 | - | |||||||||||||||
Municipal bonds | 1,586,037 | 1,586,037 | - | 1,573,762 | 12,275 | |||||||||||||||
Foreign government bonds | 57,869 | 57,869 | - | 57,869 | - | |||||||||||||||
Corporate bonds | 2,567,034 | 2,567,034 | 11,934 | 2,469,378 | 85,722 | |||||||||||||||
Other mortgage-backed securities | 722,305 | 722,305 | - | 689,133 | 33,172 | |||||||||||||||
Total fixed maturities | 5,962,232 | 5,962,232 | 30,528 | 5,800,535 | 131,169 | |||||||||||||||
Equity securities | 53,503 | 53,503 | 43,704 | 9,459 | 340 | |||||||||||||||
Short-term investments | 87,561 | 87,561 | 87,561 | - | - | |||||||||||||||
Totals | 6,103,296 | 6,103,296 | 161,793 | 5,809,994 | 131,509 | |||||||||||||||
Separate Account | ||||||||||||||||||||
(variable annuity) assets (1) | 1,398,281 | 1,398,281 | 1,398,281 | - | - | |||||||||||||||
Financial Liabilities | - | - | - | - | - | |||||||||||||||
-1 | Separate Account (variable annuity) liabilities are set equal to Separate Account (variable annuity) assets. | |||||||||||||||||||
As of March 31, 2013, the Company transferred the separate account assets and liabilities into Level 1 from Level 2 after reassessing the underlying inputs for the determination of fair value for these assets and liabilities. As disclosed above, fair value is based primarily on market quotations of the underlying securities consistent with the method applied in all prior periods. The Company did not have any other transfers between Levels 1 and 2 during the year ended December 31, 2013. The following tables present reconciliations for the periods indicated for all Level 3 assets measured at fair value on a recurring basis. | ||||||||||||||||||||
Municipal | Corporate | Other | Total | Equity | Total | |||||||||||||||
Bonds | Bonds | Mortgage- | Fixed | Securities | ||||||||||||||||
Backed | Maturities | |||||||||||||||||||
Securities | ||||||||||||||||||||
Financial Assets | ||||||||||||||||||||
Beginning balance, January 1, 2013 | $ | 12,275 | $ | 85,722 | $ | 33,172 | $ | 131,169 | $ | 340 | $ | 131,509 | ||||||||
Transfers into Level 3 (1) | 9,453 | 34,258 | 67,827 | 111,538 | - | 111,538 | ||||||||||||||
Transfers out of Level 3 (1) | -6,347 | -54,530 | -30,847 | -91,724 | - | -91,724 | ||||||||||||||
Total gains or losses | ||||||||||||||||||||
Net realized gains (losses) | ||||||||||||||||||||
included in net income | - | - | - | - | - | - | ||||||||||||||
Net unrealized gains (losses) | ||||||||||||||||||||
included in other | ||||||||||||||||||||
comprehensive income | -481 | -2,007 | -328 | -2,816 | - | -2,816 | ||||||||||||||
Purchases | - | - | - | - | - | - | ||||||||||||||
Issuances | - | - | - | - | - | - | ||||||||||||||
Sales | - | - | - | - | -334 | -334 | ||||||||||||||
Settlements | - | - | - | - | - | - | ||||||||||||||
Paydowns, maturities | ||||||||||||||||||||
and distributions | -12,206 | -2,617 | -23,815 | -38,638 | - | -38,638 | ||||||||||||||
Ending balance, December 31, 2013 | $ | 2,694 | $ | 60,826 | $ | 46,009 | $ | 109,529 | $ | 6 | $ | 109,535 | ||||||||
Beginning balance, January 1, 2012 | $ | - | $ | 88,256 | $ | 4,532 | $ | 92,788 | $ | 385 | $ | 93,173 | ||||||||
Transfers into Level 3 (1) | 12,297 | 47,799 | 29,548 | 89,644 | - | 89,644 | ||||||||||||||
Transfers out of Level 3 (1) | - | -50,707 | - | -50,707 | - | -50,707 | ||||||||||||||
Total gains or losses | ||||||||||||||||||||
Net realized gains (losses) | ||||||||||||||||||||
included in net income | - | - | -2 | -2 | - | -2 | ||||||||||||||
Net unrealized gains (losses) | ||||||||||||||||||||
included in other | ||||||||||||||||||||
comprehensive income | -22 | 1,013 | 200 | 1,191 | -45 | 1,146 | ||||||||||||||
Purchases | - | - | - | - | - | - | ||||||||||||||
Issuances | - | - | - | - | - | - | ||||||||||||||
Sales | - | - | - | - | - | - | ||||||||||||||
Settlements | - | - | - | - | - | - | ||||||||||||||
Paydowns, maturities | ||||||||||||||||||||
and distributions | - | -639 | -1,106 | -1,745 | - | -1,745 | ||||||||||||||
Ending balance, December 31, 2012 | $ | 12,275 | $ | 85,722 | $ | 33,172 | $ | 131,169 | $ | 340 | $ | 131,509 | ||||||||
-1 | Transfers into and out of Level 3 during the years ended December 31, 2013 and 2012 were attributable to changes in the availability of observable market information for individual fixed maturity securities. The Company’s policy is to recognize transfers into and transfers out of the levels as having occurred at the end of the reporting period in which the transfers were determined. | |||||||||||||||||||
At December 31, 2013 and 2012, there were no realized gains or losses included in earnings that were attributable to changes in the fair value of Level 3 assets still held. | ||||||||||||||||||||
The valuation techniques and significant unobservable inputs used in the fair value measurement for financial instruments classified as Level 3 are subject to the control processes as previously described in this note for “Investments”. Generally, valuation for fixed maturity securities include spread pricing, matrix pricing and discounted cash flow methodologies; inputs such as quoted prices for identical or similar securities that are less liquid; and based on lower levels of trading activity than securities classified as Level 2. The valuation techniques and significant unobservable inputs used in the fair value measurement for equity securities classified as Level 3 use similar valuation techniques and significant unobservable inputs as fixed maturities. | ||||||||||||||||||||
The sensitivity of the estimated fair values to changes in the significant unobservable inputs for fixed maturities and equity securities included in Level 3 generally relate to interest rate spreads, illiquidity premiums and default rates. Significant spread widening in isolation will adversely impact the overall valuation, while significant spread tightening will lead to substantial valuation increases. Significant increases (decreases) in illiquidity premiums in isolation will result in substantially lower (higher) valuations. Significant increases (decreases) in expected default rates in isolation will result in substantially lower (higher) valuations. | ||||||||||||||||||||
Financial Instruments Disclosed, But Not Carried, at Fair Value | ||||||||||||||||||||
The Company has various other financial assets and financial liabilities used in the normal course of business that are not carried at fair value, but for which fair value disclosure is required. The following table presents the carrying value, fair value and fair value hierarchy of these financial assets and financial liabilities. | ||||||||||||||||||||
Fair Value Measurements at | ||||||||||||||||||||
Carrying | Fair | Reporting Date Using | ||||||||||||||||||
Amount | Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||
31-Dec-13 | ||||||||||||||||||||
Financial Assets | ||||||||||||||||||||
Investments | ||||||||||||||||||||
Other investments | $ | 140,685 | $ | 144,921 | $ | - | $ | - | $ | 144,921 | ||||||||||
Financial Liabilities | ||||||||||||||||||||
Fixed annuity contract liabilities | 3,515,865 | 3,302,333 | - | - | 3,302,333 | |||||||||||||||
Policyholder account balances on | ||||||||||||||||||||
interest-sensitive life contracts | 78,598 | 79,678 | - | - | 79,678 | |||||||||||||||
Other policyholder funds | 346,292 | 346,292 | - | 250,000 | 96,292 | |||||||||||||||
Short-term debt | 38,000 | 38,000 | - | 38,000 | - | |||||||||||||||
Long-term debt | 199,874 | 218,565 | 218,565 | - | - | |||||||||||||||
Other liabilities, repurchase | ||||||||||||||||||||
agreement obligations | 25,864 | 25,864 | - | 25,864 | - | |||||||||||||||
31-Dec-12 | ||||||||||||||||||||
Financial Assets | ||||||||||||||||||||
Investments | ||||||||||||||||||||
Other investments | $ | 134,985 | $ | 135,121 | $ | - | $ | - | $ | 135,121 | ||||||||||
Financial Liabilities | ||||||||||||||||||||
Fixed annuity contract liabilities | 3,257,758 | 3,070,111 | - | - | 3,070,111 | |||||||||||||||
Policyholder account balances on | ||||||||||||||||||||
interest-sensitive life contracts | 79,017 | 78,519 | - | - | 78,519 | |||||||||||||||
Other policyholder funds | 103,227 | 103,227 | - | - | 103,227 | |||||||||||||||
Short-term debt | 38,000 | 38,000 | - | 38,000 | - | |||||||||||||||
Long-term debt | 199,809 | 219,319 | 219,319 | - | - | |||||||||||||||
Other liabilities, repurchase | ||||||||||||||||||||
agreement obligations | - | - | - | - | - | |||||||||||||||
Property_and_Casualty_Unpaid_C
Property and Casualty Unpaid Claims and Claim Expenses | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Property and Casualty Unpaid Claims and Claim Expenses [Abstract] | ' | ||||||||||
Property and Casualty Unpaid Claims and Claim Expenses | ' | ||||||||||
NOTE 4 - Property and Casualty Unpaid Claims and Claim Expenses | |||||||||||
The following table sets forth an analysis of property and casualty unpaid claims and claim expenses and provides a reconciliation of beginning and ending reserves for the periods indicated. | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Property and casualty segment | |||||||||||
Gross reserves, beginning of year (1) | $ | 274,542 | $ | 281,080 | $ | 301,622 | |||||
Less reinsurance recoverables | 13,705 | 11,463 | 12,225 | ||||||||
Net reserves, beginning of year (2) | 260,837 | 269,617 | 289,397 | ||||||||
Incurred claims and claim expenses: | |||||||||||
Claims occurring in the current year | 403,589 | 406,605 | 452,827 | ||||||||
Decrease in estimated reserves for | |||||||||||
claims occurring in prior years (3) | -17,988 | -17,175 | -10,310 | ||||||||
Total claims and claim expenses incurred (4) | 385,601 | 389,430 | 442,517 | ||||||||
Claims and claim expense payments | |||||||||||
for claims occurring during: | |||||||||||
Current year | 265,831 | 271,286 | 314,759 | ||||||||
Prior years | 118,905 | 126,924 | 147,539 | ||||||||
Total claims and claim expense payments | 384,736 | 398,210 | 462,298 | ||||||||
Net reserves, end of year (2) | 261,702 | 260,837 | 269,617 | ||||||||
Plus reinsurance recoverables | 14,107 | 13,705 | 11,463 | ||||||||
Gross reserves, end of year (1) | $ | 275,809 | $ | 274,542 | $ | 281,080 | |||||
-1 | Unpaid claims and claim expenses as reported in the Consolidated Balance Sheets also include reserves for the life and annuity segments of $15,818, $14,853, $13,729 and $14,073 as of December 31, 2013, 2012, 2011 and 2010, respectively, in addition to property and casualty segment reserves. | ||||||||||
-2 | Reserves net of anticipated reinsurance recoverables. | ||||||||||
-3 | Shows the amounts by which the Company decreased its reserves in each of the periods indicated for claims occurring in previous periods to reflect subsequent information on such claims and changes in their projected final settlement costs. Also refer to the paragraphs below for additional information regarding the reserve development recorded in 2013, 2012 and 2011. | ||||||||||
-4 | Benefits, claims and settlement expenses as reported in the Consolidated Statements of Operations also include amounts for the life and annuity segments of $62,716, $58,820 and $59,917 for the years ended December 31, 2013, 2012 and 2011, respectively, in addition to the property and casualty segment amounts. | ||||||||||
Underwriting results of the property and casualty segment are significantly influenced by estimates of the Company's ultimate liability for insured events. There is a high degree of uncertainty inherent in the estimates of ultimate losses underlying the liability for unpaid claims and claim settlement expenses. This inherent uncertainty is particularly significant for liability-related exposures due to the extended period, often many years, that transpires between a loss event, receipt of related claims data from policyholders and ultimate settlement of the claim. Reserves for property and casualty claims include provisions for payments to be made on reported claims (“case reserves”), claims incurred but not yet reported (“IBNR”) and associated settlement expenses (together, “loss reserves”). The process by which these reserves are established requires reliance upon estimates based on known facts and on interpretations of circumstances, including the Company's experience with similar cases and historical trends involving claim payments and related patterns, pending levels of unpaid claims and product mix, as well as other factors including court decisions, economic conditions, public attitudes and medical costs. | |||||||||||
The Company believes the property and casualty loss reserves are appropriately established based on available facts, laws, and regulations. The Company calculates and records a single best estimate of the reserve (which is equal to the actuarial point estimate) as of each balance sheet date, for each line of business and its components (coverages and perils) for reported losses and for IBNR losses and as a result believes no other estimate is better than the recorded amount. Due to uncertainties involved, the ultimate cost of losses may vary materially from recorded amounts. | |||||||||||
The Company continually updates loss estimates using both quantitative and qualitative information from its reserving actuaries and information derived from other sources. Adjustments may be required as information develops which varies from experience, or, in some cases, augments data which previously were not considered sufficient for use in determining liabilities. The effects of these adjustments may be significant and are charged or credited to income in the period in which the adjustments are made. | |||||||||||
Numerous risk factors will affect more than one product line. One of these factors is changes in claim department practices, including claim closure rates, number of claims closed without payment, the use of third-party claims adjusters and the level of needed case reserve estimated by the adjuster. Other risk factors include changes in claim frequency, changes in claim severity, regulatory and legislative actions, court actions, changes in economic conditions and trends (e.g. medical costs, labor rates and the cost of materials), the occurrence of unusually large or frequent catastrophic loss events, timeliness of claim reporting, the state in which the claim occurred and degree of claimant fraud. The extent of the impact of a risk factor will also vary by coverages within a product line. Individual risk factors are also subject to interactions with other risk factors within product line coverages. | |||||||||||
While all product lines are exposed to these risks, there are some loss types or product lines for which the financial effect will be more significant. For instance, the use of third-party adjusters for large catastrophe losses adds a level of risk to this loss type not present when employee adjusters handle claims. Also, given the relatively large proportion (approximately 70% as of December 31, 2013) of the Company’s reserves that are in the longer-tail automobile liability coverages, regulatory and court actions, changes in economic conditions and trends, and medical costs could be expected to impact this product line more extensively than others. | |||||||||||
Reserves are established for claims as they occur for each line of business based on estimates of the ultimate cost to settle the claims. The actual loss results are compared to prior estimates and differences are recorded as reestimates. The primary actuarial techniques (development of paid loss dollars, development of reported loss dollars, methods based on expected loss ratios and methods utilizing frequency and severity of claims) used to estimate reserves and provide for losses are applied to actual paid losses and reported losses (paid losses plus individual case reserves set by claim adjusters) for an accident year or a calendar year to create an estimate of how losses are likely to develop over time. An accident year refers to classifying claims based on the year in which the claim occurred. A calendar year refers to classifying claims based on the year in which the claims are reported. Both classifications are used to prepare estimates of required reserves for payments to be made in the future. For estimating short-tail coverage reserves (e.g. homeowners and automobile physical damage), which comprise approximately 20% of the Company’s total loss reserves as of December 31, 2013, the primary actuarial technique utilized is the development of paid loss dollars due to the relatively quick claim settlement period. As it relates to estimating long-tail coverage reserves (primarily related to automobile liability), which comprise approximately 80% of the Company’s total loss reserves as of December 31, 2013, the primary actuarial technique utilized is the development of reported loss dollars due to the relatively long claim settlement period. | |||||||||||
In all of the loss estimation techniques referred to above, a ratio (development factor) is calculated which compares current results to results in the prior period for each accident year. Various development factors, based on historical results, are multiplied by the current experience to estimate the development of losses of each accident year from the current time period into the next time period. The development factors for the next time period for each accident year are compounded over the remaining calendar years to calculate an estimate of ultimate losses for each accident year. Occasionally, unusual aberrations in loss patterns are caused by factors such as changes in claim reporting, settlement patterns, unusually large losses, process changes, legal or regulatory environment changes, and other influences. In these instances, analyses of alternate development factor selections are performed to evaluate the effect of these factors, and actuarial judgment is applied to make appropriate development factor assumptions needed to develop a best estimate of ultimate losses. Paid losses are then subtracted from estimated ultimate losses to determine the indicated loss reserves. The difference between indicated reserves and recorded reserves is the amount of reserve reestimate. | |||||||||||
Reserves are reestimated quarterly. When new development factors are calculated from actual losses, and they differ from estimated development factors used in previous reserve estimates, assumptions about losses and required reserves are revised based on the new development factors. Changes to reserves are recorded in the period in which development factor changes result in reserve reestimates. | |||||||||||
Numerous actuarial estimates of the types described above are prepared each quarter to monitor losses for each line of business and its components (coverages and perils) and for reported losses and IBNR. Often, several different estimates are prepared for each detailed component, incorporating alternative analyses of changing claim settlement patterns and other influences on losses, from which the Company selects the best estimate for each component, occasionally incorporating additional analyses and actuarial judgment, as described above. These estimates also incorporate the historical impact of inflation into reserve estimates, the implicit assumption being that a multi-year average development factor represents an adequate provision. Based on the Company’s review of these estimates, as well as the review of the independent reserve studies, the best estimate of required reserves for each line of business and its components (coverages and perils) is determined by management and is recorded for each accident year, and the required reserves for each component are summed to create the reserve balances carried on the Company’s Consolidated Balance Sheets. | |||||||||||
Based on the Company’s products and coverages, historical experience, and modeling of various actuarial methodologies used to develop reserve estimates, the Company estimates that the potential variability of the property and casualty loss reserves within a reasonable probability of other possible outcomes may be approximately plus or minus 6% of reserves, which equates to plus or minus approximately $10,000 of net income as of December 31, 2013. Although this evaluation reflects the most likely outcomes, it is possible the final outcome may fall below or above these estimates. | |||||||||||
Net favorable development of total reserves for property and casualty claims occurring in prior years was $17,988 in 2013, primarily the result of favorable frequency and severity trends in voluntary automobile losses for accident years 2011 and prior. Net favorable development of total reserves for property and casualty claims occurring in prior years was $17,175 in 2012, primarily the result of favorable frequency and severity trends in voluntary automobile loss and claim settlement expense emergence for accident years 2011 and prior. In 2011, net favorable development of total reserves for property and casualty claims occurring in prior years was $10,310, primarily the result of favorable frequency and severity trends in voluntary automobile loss and claim settlement expense emergence for accident years 2009 and prior, as well as favorable development of homeowners loss reserves for accident years 2010 and prior. | |||||||||||
The Company completes a detailed study of property and casualty reserves based on information available at the end of each quarter and year. Trends of reported losses (paid amounts and case reserves on claims reported to the Company) for each accident year are reviewed and ultimate loss costs for those accident years are estimated. The Company engages an independent property and casualty actuarial consulting firm to prepare an independent study of the Company's property and casualty reserves at December 31 of each year, supplemented by other analyses throughout the year. The result of the independent actuarial study at December 31, 2013 was consistent with management’s analyses and selected estimates and did not result in any adjustments to the Company’s recorded property and casualty reserves. | |||||||||||
Based on an assessment of the relative weight given to emerging trends resulting from recent business process changes, pricing, underwriting and claims handling, at both December 31, 2013 and 2012 the Company recorded property and casualty reserves toward the higher end (upper quartile) of a reasonable range of reserve estimates. | |||||||||||
At the time each of the reserve analyses was performed, the Company believed that each estimate was based upon sound methodology and such methodologies were appropriately applied and that there were no trends which indicated the likelihood of future loss reserve development. The financial impact of the net reserve development was therefore accounted for in the period that the development was determined. | |||||||||||
No other adjustments were made in the determination of the liabilities during the periods covered by these consolidated financial statements. Management believes that, based on data currently available, it has reasonably estimated the Company's ultimate losses. | |||||||||||
Debt
Debt | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Debt [Abstract] | ' | |||||||||||
Debt | ' | |||||||||||
NOTE 5 - Debt | ||||||||||||
Indebtedness and scheduled maturities consisted of the following: | ||||||||||||
Effective | ||||||||||||
Interest | Final | December 31, | ||||||||||
Rates | Maturity | 2013 | 2012 | |||||||||
Short-term debt: | ||||||||||||
Bank Credit Facility | Variable | 2015 | $ | 38,000 | $ | 38,000 | ||||||
Long-term debt: | ||||||||||||
6.05% Senior Notes, Face amount of $75,000 less | 6.10% | 2015 | 74,962 | 74,935 | ||||||||
unaccrued discount of $38 and $65 | ||||||||||||
6.85% Senior Notes, Face amount of $125,000 less | 6.90% | 2016 | 124,912 | 124,874 | ||||||||
unaccrued discount of $88 and $126 | ||||||||||||
Total | $ | 237,874 | $ | 237,809 | ||||||||
Credit Agreement with Financial Institutions (“Bank Credit Facility”) | ||||||||||||
On October 7, 2011, HMEC entered into a Bank Credit Agreement (the “Bank Credit Facility”) that replaced a previous bank credit agreement which was scheduled to expire on December 19, 2011. On October 7, 2011, there was no change to HMEC’s short-term debt balance. HMEC borrowed $38,000 under the Bank Credit Facility and used the proceeds to repay the $38,000 balance outstanding under the previous bank credit agreement. | ||||||||||||
The Bank Credit Facility is by and between HMEC, certain financial institutions named therein and JPMorgan Chase Bank, N.A., as administrative agent, provides for unsecured borrowings of up to $150,000 and expires on October 6, 2015. Interest accrues at varying spreads relative to prime or Eurodollar base rates and is payable monthly or quarterly depending on the applicable base rate (Eurodollar base rate plus 1.25%, which totaled 1.49%, as of December 31, 2013). The unused portion of the Bank Credit Facility is subject to a variable commitment fee, which was 0.15% on an annual basis at December 31, 2013. | ||||||||||||
6.05% Senior Notes due 2015 (“Senior Notes due 2015”) | ||||||||||||
On June 9, 2005, the Company issued $75,000 aggregate principal amount of 6.05% senior notes, which will mature on June 15, 2015, issued at a discount of 0.357% resulting in an effective yield of 6.098%. Interest on the Senior Notes due 2015 is payable semi-annually at a rate of 6.05%. The Senior Notes due 2015 are redeemable in whole or in part, at any time, at the Company's option, at a redemption price equal to the greater of (1) 100% of the principal amount of the notes being redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted, on a semi-annual basis, at the Treasury yield (as defined in the indenture) plus 30 basis points, plus, in either of the above cases, accrued interest to the date of redemption. | ||||||||||||
6.85% Senior Notes due 2016 (“Senior Notes due 2016”) | ||||||||||||
On April 21, 2006, the Company issued $125,000 aggregate principal amount of 6.85% senior notes, which will mature on April 15, 2016, issued at a discount of 0.305% resulting in an effective yield of 6.893%. Interest on the Senior Notes due 2016 is payable semi-annually at a rate of 6.85%. The Senior Notes due 2016 are redeemable in whole or in part, at any time, at the Company's option, at a redemption price equal to the greater of (1) 100% of the principal amount of the notes being redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted, on a semi-annual basis, at the Treasury yield (as defined in the indenture) plus 30 basis points, plus, in either of the above cases, accrued interest to the date of redemption. | ||||||||||||
Universal Shelf Registration | ||||||||||||
To provide additional capital management flexibility, the Company filed a “universal shelf” registration on Form S-3 with the SEC on January 5, 2012. The registration statement, which registers the offer and sale by the Company from time to time of up to $300,000 of various securities, which may include debt securities, common stock, preferred stock, depositary shares, warrants and/or delayed delivery contracts, was declared effective on January 18, 2012. Unless fully utilized or withdrawn by the Company earlier, this registration statement will remain effective through January 18, 2015. No securities associated with the registration statement have been issued as of the date of this Annual Report on Form 10-K. The Company’s prior “universal shelf” registration was terminated upon effectiveness of the January 2012 Form S-3; no securities associated with that registration statement were issued. | ||||||||||||
Covenants | ||||||||||||
The Company is in compliance with all of the financial covenants contained in the Senior Notes due 2015 indenture, the Senior Notes due 2016 indenture and the Bank Credit Facility agreement, consisting primarily of relationships of (1) debt to capital, (2) net worth, as defined in the financial covenants, (3) insurance subsidiaries' risk based capital and (4) securities subject to funding agreements and repurchase agreements. | ||||||||||||
Shareholders_Equity_and_Stock_
Shareholders' Equity and Stock Options | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||
Shareholders' Equity and Stock Options [Abstract] | ' | ||||||||||||||||||||||||||||
Shareholders' Equity and Stock Options | ' | ||||||||||||||||||||||||||||
NOTE 6 - Shareholders' Equity and Stock Options | |||||||||||||||||||||||||||||
Share Repurchase Program and Treasury Shares Held (Common Stock) | |||||||||||||||||||||||||||||
On December 7, 2011, HMEC’s Board of Directors (the “Board”) authorized a share repurchase program allowing repurchases of up to $50,000. The share repurchase program authorizes the opportunistic repurchase of HMEC’s common shares in open market or privately negotiated transactions, from time to time, depending on market conditions. The share repurchase program does not have an expiration date and may be limited or terminated at any time without notice. | |||||||||||||||||||||||||||||
From December 7, 2011 through December 31, 2011, the Company repurchased 154,708 shares of its common stock, or 0.4% of the outstanding shares on December 31, 2010, at an aggregate cost of $2,047, or an average price of $13.21 per share, under this share repurchase program. During 2012, the Company repurchased 915,895 shares of its common stock, or 2.3% of the outstanding shares on December 31, 2011, at an aggregate cost of $15,735, or an average price of $17.16 per share, under this share repurchase program. During 2013, the Company repurchased 173,629 shares of its common stock, or 0.4% of the outstanding shares on December 31, 2012, at an aggregate cost of $3,889, or an average price of $22.38 per share, under this share repurchase program. In total and through December 31, 2013, 1,244,232 shares have been repurchased under the $50,000 program at an average price of $17.40 per share. The repurchase of shares was financed through use of cash. As of December 31, 2013, $28,354 remained authorized for future share repurchases. | |||||||||||||||||||||||||||||
In accordance with the terms of the Company’s incentive compensation plans, in 2011 HMEC received 60,126 shares of its common stock in connection with the conversion of restricted stock units. The shares were received in satisfaction of withholding taxes due on the distributions. | |||||||||||||||||||||||||||||
At December 31, 2013, the Company held 23,117,554 shares in treasury. | |||||||||||||||||||||||||||||
Authorization of Preferred Stock | |||||||||||||||||||||||||||||
In 1996, the shareholders of HMEC approved authorization of 1,000,000 shares of $0.001 par value preferred stock. The Board of Directors is authorized to (1) direct the issuance of the preferred stock in one or more series, (2) fix the dividend rate, conversion or exchange rights, redemption price and liquidation preference, of any series of the preferred stock, (3) fix the number of shares for any series and (4) increase or decrease the number of shares of any series. No shares of preferred stock were outstanding at December 31, 2013 and 2012. | |||||||||||||||||||||||||||||
2010 Comprehensive Executive Compensation Plan | |||||||||||||||||||||||||||||
In 2010, the shareholders of HMEC approved the 2010 Comprehensive Executive Compensation Plan (the “Comprehensive Plan”). The purpose of the Comprehensive Plan is to aid the Company in attracting, retaining, motivating and rewarding employees and non-employee Directors; to provide for equitable and competitive compensation opportunities, including deferral opportunities; to encourage long-term service; to recognize individual contributions and reward achievement of Company goals; and to promote the creation of long-term value for the Company’s shareholders by closely aligning the interests of plan participants with those of shareholders. The Comprehensive Plan authorizes share-based and cash-based incentives for plan participants. In 2012, the shareholders of HMEC approved the implementation of a fungible share pool under which grants of full value shares will count against the share limit as two and one half shares for every share subject to a full value award. As of December 31, 2013, approximately 1.8 million shares were available for grant under the Comprehensive Plan. Shares of common stock issued under the Comprehensive Plan may be either authorized and unissued shares of HMEC or shares that have been reacquired by HMEC; however, new shares have been issued historically. | |||||||||||||||||||||||||||||
As further described in the paragraphs below, outstanding stock units and stock options under the Comprehensive Plan were as follows: | |||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||||||
Common stock units related to deferred compensation for Directors | 118,062 | 111,928 | 113,502 | ||||||||||||||||||||||||||
Common stock units related to deferred compensation for employees | 111,981 | 116,174 | 115,087 | ||||||||||||||||||||||||||
Stock options | 956,814 | 1,882,939 | 2,600,583 | ||||||||||||||||||||||||||
Restricted common stock units related to incentive compensation | 1,663,190 | 1,423,611 | 1,135,840 | ||||||||||||||||||||||||||
Total | 2,850,047 | 3,534,652 | 3,965,012 | ||||||||||||||||||||||||||
Director Common Stock Units | |||||||||||||||||||||||||||||
Deferred compensation of directors is in the form of common stock units, which represent an equal number of common shares to be issued in the future. The outstanding units of directors serving on the Board accrue dividends at the same rate as dividends paid to HMEC’s shareholders; outstanding units of retired directors do not accrue dividends. These dividends are reinvested into additional common stock units. | |||||||||||||||||||||||||||||
Employee Common Stock Units | |||||||||||||||||||||||||||||
Deferred compensation of employees is in the form of common stock units, which represent an equal number of common shares to be issued in the future. Distributions of employee deferred compensation are allowed to be either in common shares or cash. Through December 31, 2013, all distributions have been in cash. The outstanding units accrue dividends at the same rate as dividends paid to HMEC’s shareholders. These dividends are reinvested into additional common stock units. | |||||||||||||||||||||||||||||
Stock Options | |||||||||||||||||||||||||||||
Options to purchase shares of HMEC common stock may be granted to executive officers, other employees and directors. The options become exercisable in installments based on service generally beginning in the first year from the date of grant and generally become fully vested 4 years from the date of grant. The options generally expire 7 years from the date of grant. The exercise price of the option is equal to the market price of HMEC’s common stock on the date of grant resulting in a grant date intrinsic value of $0. | |||||||||||||||||||||||||||||
Changes in outstanding options were as follows: | |||||||||||||||||||||||||||||
Weighted Average | Range of | Options | |||||||||||||||||||||||||||
Option Price | Option Prices | Vested and | |||||||||||||||||||||||||||
per Share | per Share | Outstanding | Exercisable | ||||||||||||||||||||||||||
31-Dec-12 | $ | 14.73 | $ 6.91-$20.23 | 1,882,939 | 1,161,703 | ||||||||||||||||||||||||
Granted | $ | 20.97 | $20.60-$30.24 | 245,424 | - | ||||||||||||||||||||||||
Vested | $ | 13.94 | $ 6.91-$20.60 | - | 324,291 | ||||||||||||||||||||||||
Exercised | $ | 13.77 | $ 6.91-$20.23 | -1,158,537 | -1,158,537 | ||||||||||||||||||||||||
Forfeited | $ | 17.02 | $13.83-$20.60 | -3,962 | -3,962 | ||||||||||||||||||||||||
Expired | $ | 18.17 | $18.17 | -9,050 | -9,050 | ||||||||||||||||||||||||
31-Dec-13 | $ | 17.49 | $ 6.91-$30.24 | 956,814 | 314,445 | ||||||||||||||||||||||||
Option information segregated by ranges of exercise prices was as follows: | |||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||
Total Outstanding Options | Vested and Exercisable Options | ||||||||||||||||||||||||||||
Weighted | Weighted | Weighted | Weighted | ||||||||||||||||||||||||||
Range of | Average | Average | Average | Average | |||||||||||||||||||||||||
Option Prices | Option Price | Remaining | Option Price | Remaining | |||||||||||||||||||||||||
per Share | Options | per Share | Term | Options | per Share | Term | |||||||||||||||||||||||
$ 6.91-$13.83 | 178,858 | $ | 13.58 | 3.1 years | 119,543 | $ | 13.45 | 3.1 years | |||||||||||||||||||||
$16.81-$18.20 | 527,437 | $ | 17.17 | 4.6 years | 187,955 | $ | 17.1 | 4.2 years | |||||||||||||||||||||
$20.23-$30.24 | 250,519 | $ | 20.95 | 6.1 years | 6,947 | $ | 20.24 | 0.3 years | |||||||||||||||||||||
Total | $ 6.91-$30.24 | 956,814 | $ | 17.49 | 4.7 years | 314,445 | $ | 15.78 | 3.7 years | ||||||||||||||||||||
The weighted average exercise prices of vested and exercisable options as of December 31, 2012 and 2011 were $14.28 and $15.57, respectively. | |||||||||||||||||||||||||||||
As of December 31, 2013, based on a closing stock price of $31.54 per share, the aggregate intrinsic (in-the-money) values of vested options and all options outstanding were $4,908 and $13,397, respectively. | |||||||||||||||||||||||||||||
Restricted Common Stock Units | |||||||||||||||||||||||||||||
Restricted common stock units may be granted to executive officers, other employees and directors and represent an equal number of common shares to be issued in the future. The restricted common stock units vest in installments based on service or attainment of performance criteria generally beginning in the first year from the date of grant and generally become fully vested 1 to 5 years from the date of grant. On the date of grant, the fair value of restricted common stock units is equal to the market price of HMEC’s common stock on that date. The outstanding units accrue dividends at the same rate as dividends paid to HMEC’s shareholders. These dividends are reinvested into additional restricted common stock units. | |||||||||||||||||||||||||||||
Changes in outstanding restricted common stock units were as follows: | |||||||||||||||||||||||||||||
Total Outstanding Units | Vested Units | ||||||||||||||||||||||||||||
Weighted Average | Weighted Average | ||||||||||||||||||||||||||||
Grant Date Fair | Grant Date Fair | ||||||||||||||||||||||||||||
Units | Value per Unit | Units | Value per Unit | ||||||||||||||||||||||||||
31-Dec-12 | 1,423,611 | $ | 15.93 | 311,407 | $ | 13.15 | |||||||||||||||||||||||
Granted (1) | 484,552 | $ | 25.13 | - | - | ||||||||||||||||||||||||
Vested | - | - | 282,680 | $ | 13.5 | ||||||||||||||||||||||||
Forfeited | -24,507 | $ | 15.62 | - | - | ||||||||||||||||||||||||
Distributed (2) | -220,466 | $ | 9.87 | -220,466 | $ | 9.87 | |||||||||||||||||||||||
31-Dec-13 | 1,663,190 | $ | 19.41 | 373,621 | $ | 15.34 | |||||||||||||||||||||||
-1 | Includes dividends reinvested into additional restricted common stock units. | ||||||||||||||||||||||||||||
-2 | Includes distributed units which were utilized to satisfy withholding taxes due on the distribution. | ||||||||||||||||||||||||||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Income Taxes [Abstract] | ' | ||||||||||
Income Taxes | ' | ||||||||||
NOTE 7 - Income Taxes | |||||||||||
The income tax assets and liabilities included in Other Assets and Other Liabilities, respectively, in the Consolidated Balance Sheets were as follows: | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Income tax (asset) liability | |||||||||||
Current | $ | -1,998 | $ | 4,575 | |||||||
Deferred | 163,213 | 286,726 | |||||||||
Deferred tax assets and liabilities are recognized for all future tax consequences attributable to “temporary differences” between the financial statement carrying value of existing assets and liabilities and their respective tax bases. There are no deferred tax liabilities that have not been recognized. The “temporary differences” that gave rise to the deferred tax balances were as follows: | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Deferred tax assets | |||||||||||
Unearned premium reserve reduction | $ | 15,555 | $ | 14,952 | |||||||
Compensation accruals | 13,188 | 13,592 | |||||||||
Other comprehensive income – net funded status of pension and other | 6,376 | 8,352 | |||||||||
postretirement benefit obligations | |||||||||||
Discounting of unpaid claims and claim expenses tax reserves | 4,747 | 4,825 | |||||||||
Postretirement benefits other than pensions | 2,048 | 2,333 | |||||||||
Impaired securities | 1,800 | 1,268 | |||||||||
Total gross deferred tax assets | 43,714 | 45,322 | |||||||||
Deferred tax liabilities | |||||||||||
Other comprehensive income – net unrealized gains on fixed maturities and equity | 81,497 | 228,159 | |||||||||
securities | |||||||||||
Deferred policy acquisition costs | 80,159 | 62,411 | |||||||||
Life insurance future policy benefit reserve | 21,792 | 18,620 | |||||||||
Investment related adjustments | 18,317 | 15,375 | |||||||||
Intangible assets | 4,262 | 4,262 | |||||||||
Other, net | 900 | 3,221 | |||||||||
Total gross deferred tax liabilities | 206,927 | 332,048 | |||||||||
Net deferred tax liability | $ | 163,213 | $ | 286,726 | |||||||
The Company evaluated sources and character of income, including historical earnings, loss carryback potential, taxable income from future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences, and taxable income from prudent and feasible tax-planning strategies. Although realization of deferred tax assets is not assured, the Company believes it is more likely than not that gross deferred tax assets will be fully realized and that a valuation allowance with respect to the realization of the total gross deferred tax assets was not necessary as of December 31, 2013 and 2012. | |||||||||||
At December 31, 2013, the Company did not have any loss carryforwards or credits. | |||||||||||
The components of income tax expense were as follows: | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Current | $ | 31,610 | $ | 26,331 | $ | 18,211 | |||||
Deferred | 11,563 | 18,976 | 6,201 | ||||||||
Total income tax expense | $ | 43,173 | $ | 45,307 | $ | 24,412 | |||||
Income tax expense for the following periods differed from the expected tax computed by applying the federal corporate tax rate of 35% to income before income taxes as follows: | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Expected federal tax on income | $ | 53,923 | $ | 52,210 | $ | 33,221 | |||||
Add (deduct) tax effects of: | |||||||||||
Tax-exempt interest | -6,829 | -6,836 | -7,072 | ||||||||
Dividend received deduction | -3,382 | -2,132 | -2,010 | ||||||||
Other, net | -539 | 2,065 | 273 | ||||||||
Income tax expense provided on income | $ | 43,173 | $ | 45,307 | $ | 24,412 | |||||
The Company’s federal income tax returns for years prior to 2010 are no longer subject to examination by the Internal Revenue Service (“IRS”). In 2011, the IRS completed an examination of the federal returns through 2009 resulting in additional tax expense of $22. | |||||||||||
The Company recognizes tax benefits from tax return positions only if it is more likely than not the position will be sustainable, upon examination, on its technical merits and any relevant administrative practices or precedents. As a result, the Company applies a more likely than not recognition threshold for all tax uncertainties. | |||||||||||
The Company records liabilities for uncertain tax filing positions where it is more likely than not that the position will not be sustainable upon audit by taxing authorities. These liabilities are reevaluated routinely and are adjusted appropriately based upon changes in facts or law. The Company has no unrecorded liabilities from uncertain tax filing positions. | |||||||||||
HMEC and its subsidiaries file a consolidated federal income tax return. The federal income tax sharing agreements between HMEC and its subsidiaries, as approved by the Board of Directors, provides that tax on income is charged to each subsidiary as if it were filing a separate tax return with the limitation that each subsidiary will receive the benefit of any losses or tax credits to the extent utilized in the consolidated tax return. Intercompany balances are settled quarterly with a final settlement after filing the consolidated federal income tax return with the IRS. | |||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows: | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Balance as of the beginning of the year | $ | - | $ | - | $ | 38 | |||||
Additions based on tax positions related to the current year | 641 | - | - | ||||||||
Settlements in tax positions for prior years | - | - | -38 | ||||||||
Balance as of the end of the year | $ | 641 | $ | - | $ | - | |||||
The Company’s effective tax rate would be affected to the extent there were unrecognized tax benefits that could be recognized. There are no positions for which it is reasonably possible that the total amount of unrecognized tax benefit will significantly increase within the next 12 months. | |||||||||||
The Company classifies all tax related interest and penalties as income tax expense. | |||||||||||
Interest and penalties were as follows: | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Interest and penalties expense (benefit), net of releases of previous | |||||||||||
provisions, recognized in the Consolidated Statements of Operations: | |||||||||||
Gross | $ | - | $ | 468 | $ | -279 | |||||
Net of tax | - | 304 | -181 | ||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Interest and penalties (asset) liability included in Other Assets or Other | $ | 1 | $ | 307 | |||||||
Liabilities in the Consolidated Balance Sheets | |||||||||||
Statutory_Information_and_Rest
Statutory Information and Restrictions | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Reinsurance and Catastrophes and Statutory Surplus and Subsidiary Dividend Restrictions [Abstract] | ' | ||||||||||
Statutory Information and Restrictions | ' | ||||||||||
NOTE 8 - Statutory Information and Restrictions | |||||||||||
The insurance departments of various states in which the insurance subsidiaries of HMEC are domiciled recognize as net income and surplus those amounts determined in conformity with statutory accounting principles prescribed or permitted by the insurance departments, which differ in certain respects from GAAP. | |||||||||||
Reconciliations of statutory capital and surplus and net income, as determined using statutory accounting principles, to the amounts included in the accompanying consolidated financial statements are as follows: | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Statutory capital and surplus of insurance subsidiaries | $ | 809,241 | $ | 754,153 | |||||||
Increase (decrease) due to: | |||||||||||
Deferred policy acquisition costs | 245,355 | 196,885 | |||||||||
Difference in policyholder reserves | 80,459 | 67,582 | |||||||||
Goodwill | 47,396 | 47,396 | |||||||||
Liability for postretirement benefits other than pensions | -1,130 | -2,862 | |||||||||
Investment fair value adjustments on fixed maturities | 227,060 | 651,071 | |||||||||
Difference in investment reserves | 111,983 | 101,276 | |||||||||
Federal income tax liability | -188,426 | -317,875 | |||||||||
Net funded status of pension and other postretirement benefit | -18,217 | -23,862 | |||||||||
obligations | |||||||||||
Non-admitted assets and other, net | 11,349 | 10,660 | |||||||||
Shareholders' equity (deficit) of parent company and | 12,109 | -812 | |||||||||
non-insurance subsidiaries | |||||||||||
Parent company short-term and long-term debt | -237,874 | -237,809 | |||||||||
Shareholders' equity as reported herein | $ | 1,099,305 | $ | 1,245,803 | |||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Statutory net income of insurance subsidiaries | $ | 98,905 | $ | 93,299 | $ | 63,986 | |||||
Net loss of non-insurance companies | -4,583 | -4,726 | -10,164 | ||||||||
Interest expense | -14,236 | -14,249 | -14,007 | ||||||||
Tax benefit of interest expense and other | 6,030 | 9,308 | 4,603 | ||||||||
parent company current tax adjustments | |||||||||||
Combined net income | 86,116 | 83,632 | 44,418 | ||||||||
Increase (decrease) due to: | |||||||||||
Deferred policy acquisition costs | 17,177 | 16,595 | 8,989 | ||||||||
Policyholder benefits | 19,038 | 15,574 | 14,428 | ||||||||
Federal income tax expense | -12,735 | -19,843 | -6,639 | ||||||||
Investment reserves | 6,818 | 14,021 | 9,903 | ||||||||
Other adjustments, net | -5,521 | -6,113 | -593 | ||||||||
Net income as reported herein | $ | 110,893 | $ | 103,866 | $ | 70,506 | |||||
HMEC has principal insurance subsidiaries domiciled in Illinois and Texas. The statutory financial statements of these subsidiaries are prepared in accordance with accounting principles prescribed or permitted by the Illinois Department of Insurance and the Texas Department of Insurance, as applicable. Prescribed statutory accounting principles include a variety of publications of the National Association of Insurance Commissioners (“NAIC”), as well as state laws, regulations and general administrative rules. | |||||||||||
The NAIC has adopted risk-based capital guidelines to evaluate the adequacy of statutory capital and surplus in relation to risks assumed in investments, reserving policies, and volume and types of insurance business written. Based on current guidelines, the risk-based capital statutory requirements are not expected to have a negative regulatory impact on HMEC’s insurance subsidiaries. At December 31, 2013 and 2012, the minimum statutory-basis capital and surplus required to be maintained by HMEC’s insurance subsidiaries was $124,444 and $117,684, respectively. At December 31, 2013 and 2012, statutory capital and surplus of each of the Company’s insurance subsidiaries was above required levels. The restricted net assets of HMEC’s insurance subsidiaries were $17,967 and $18,565 as of December 31, 2013 and 2012, respectively. The minimum statutory-basis capital and surplus amount at each date is the total estimated authorized control level risk-based capital for all of HMEC’s insurance subsidiaries combined. Authorized control level risk-based capital represents the minimum level of statutory-basis capital and surplus necessary before the insurance commissioner in the respective state of domicile is authorized to take whatever regulatory actions considered necessary to protect the best interests of the policyholders and creditors of the insurer. The amount of restricted net assets represents the combined fair value of securities on deposit with governmental agencies for the insurance subsidiaries as required by law in various states in which the insurance subsidiaries of HMEC conduct business. | |||||||||||
HMEC relies largely on dividends from its insurance subsidiaries to meet its obligations for payment of principal and interest on debt, dividends to shareholders and parent company operating expenses, including tax payments pursuant to tax sharing agreements. Payments for share repurchase programs also have this dependency. HMEC’s insurance subsidiaries are subject to various regulatory restrictions which limit the amount of annual dividends or other distributions, including loans or cash advances, available to HMEC without prior approval of the insurance regulatory authorities. As a result, HMEC may not be able to receive dividends from such subsidiaries at times and in amounts necessary to pay desired dividends to shareholders. The aggregate amount of dividends that may be paid in 2014 from all of HMEC’s insurance subsidiaries without prior regulatory approval is approximately $82,000. | |||||||||||
As disclosed in the reconciliation of the statutory capital and surplus of insurance subsidiaries to the consolidated GAAP shareholders’ equity, the insurance subsidiaries have statutory capital and surplus of $809,241 as of December 31, 2013, which is subject to regulatory restrictions. The parent company equity is not restricted. At December 31, 2013, HMEC had $24,387 of liquid assets, comprised of investments and cash, which could be used to fund debt interest, general corporate obligations, as well as dividend payments to shareholders. If necessary, HMEC also has other potential sources of liquidity that could provide for additional funding to meet corporate obligations or pay shareholder dividends, which include a revolving line of credit, as well as issuances of various securities. | |||||||||||
At the time of this Annual Report on Form 10-K and during each of the years in the three year period ended December 31, 2013, the Company had no financial reinsurance agreements in effect. | |||||||||||
Pension_Plans_and_Other_Postre
Pension Plans and Other Postretirement Benefits | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Pension Plans and Other Postretirement Benefits [Abstract] | ' | ||||||||||||||||||||||||
Pension Plans and Other Postretirement Benefits | ' | ||||||||||||||||||||||||
NOTE 9 - Pension Plans and Other Postretirement Benefits | |||||||||||||||||||||||||
The Company has the following retirement plans: a defined contribution plan; a 401(k) plan; a frozen defined benefit plan for employees hired on or before December 31, 1998; and certain employees participate in a supplemental defined contribution plan or a frozen supplemental defined benefit plan or both. | |||||||||||||||||||||||||
After completing the first year of employment, all employees participate in the defined contribution plan. Under this plan, the Company makes contributions to each participant's account based on eligible compensation and years of service. As of the time of this Annual Report on Form 10-K, contribution percentages are as follows: (1) employees hired on or after April 1, 1997, 5% of eligible compensation and (2) employees hired prior to April 1, 1997 with 15 or more years of service, 7% of eligible compensation. Participants are 100% vested in this plan after 3 years of service. | |||||||||||||||||||||||||
All employees of the Company participate in a 401(k) plan. The Company automatically contributes 3% of eligible compensation to each employee's account, which is 100% vested at the time of the contribution. In addition, employees may voluntarily contribute up to 20% of their eligible compensation into their account. And, employees who are age 50 or over at the end of a calendar year may make additional elective deferral contributions (commonly referred to as catch-up contributions) up to the catch-up contribution limit specified by the IRS. | |||||||||||||||||||||||||
Effective April 1, 2002, participants stopped accruing benefits under the defined benefit and supplemental defined benefit plans but continue to retain the benefits they had accrued to date. Amounts earned under the defined benefit and supplemental defined benefit plans were frozen based on years of service and the highest 36 consecutive months of earnings while under the plan (through March 31, 2002). Participants are 100% vested in these defined benefit plans. | |||||||||||||||||||||||||
The Company's policy with respect to funding the defined benefit plan is to contribute to the plan trust amounts which are actuarially determined to provide the plan with sufficient assets to meet future benefit payments consistent with the funding requirements of federal laws and regulations. For the defined contribution, 401(k) and defined benefit plans, investments have been set aside in separate trust funds. The supplemental retirement plans are unfunded, non-qualified plans. | |||||||||||||||||||||||||
Employees whose compensation exceeds the limits covered under the qualified defined contribution plan participate in an unfunded, non-qualified defined contribution plan. The Company accrues an amount for each participant based on their compensation, years of service and account balance. Participants are 100% vested in this plan after 3 years of service. | |||||||||||||||||||||||||
Total expense recorded for the qualified and non-qualified defined contribution, 401(k), defined benefit and supplemental retirement plans was $10,295, $10,415 and $12,353 for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||||||||||||||
Qualified Defined Contribution Plan, 401(k) Plan and Non-qualified Defined Contribution Plan | |||||||||||||||||||||||||
Pension benefits under the qualified defined contribution plan are fully funded. Contributions to employees’ accounts under this plan were expensed in the Company’s Consolidated Statements of Operations. Investments for this plan are set aside in a trust fund and none of the trust fund assets for the plan have been invested in shares of HMEC’s common stock. | |||||||||||||||||||||||||
The 401(k) plan is fully funded. The Company’s contributions to employees’ accounts under this plan were expensed in its Consolidated Statements of Operations. Investments for this plan are set aside through an annuity contract underwritten by the Company's principal life insurance subsidiary. The annuity contract includes a fixed return account option and several variable return account options, with the account options selected by the individual plan participants for both the Company and participant portions contributed. One of the variable return account options invests in shares of HMEC common stock. | |||||||||||||||||||||||||
The non-qualified defined contribution plan is an unfunded plan. Under this plan, distributions are funded at the time payments are made to retirees. | |||||||||||||||||||||||||
Contributions to employees' accounts under the qualified defined contribution plan, the 401(k) plan and the non-qualified defined contribution plan, as well as total assets of the plans, were as follows: | |||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Qualified defined contribution plan: | |||||||||||||||||||||||||
Contributions to employees’ accounts | $ | 4,701 | $ | 4,148 | $ | 4,864 | |||||||||||||||||||
Total assets at the end of the year | 135,097 | 141,286 | 149,675 | ||||||||||||||||||||||
401(k) plan: | |||||||||||||||||||||||||
Contributions to employees’ accounts | 2,781 | 2,753 | 2,856 | ||||||||||||||||||||||
Total assets at the end of the year | 134,891 | 118,073 | 111,370 | ||||||||||||||||||||||
Non-qualified defined contribution plan: | |||||||||||||||||||||||||
Contributions to employees’ accounts | - | - | - | ||||||||||||||||||||||
Total assets at the end of the year | - | - | - | ||||||||||||||||||||||
Defined Benefit Plan and Supplemental Retirement Plans | |||||||||||||||||||||||||
The following tables summarize the funded status of the defined benefit and supplemental retirement pension plans as of December 31, 2013, 2012 and 2011 (the measurement dates) and identify (1) the assumptions used to determine the projected benefit obligation and (2) the components of net pension cost for the defined benefit plan and supplemental retirement plans for the following periods: | |||||||||||||||||||||||||
Supplemental | |||||||||||||||||||||||||
Defined Benefit Plan | Defined Benefit Plans | ||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | ||||||||||||||||||||
Change in benefit obligation: | |||||||||||||||||||||||||
Projected benefit obligation at beginning | $ | 40,994 | $ | 41,736 | $ | 39,553 | $ | 18,192 | $ | 18,012 | $ | 16,801 | |||||||||||||
of year | |||||||||||||||||||||||||
Service cost | - | - | - | - | - | - | |||||||||||||||||||
Interest cost | 1,369 | 1,427 | 1,658 | 616 | 676 | 799 | |||||||||||||||||||
Plan amendments | - | - | - | - | - | - | |||||||||||||||||||
Actuarial loss (gain) | 984 | 2,046 | 4,650 | -783 | 817 | 1,755 | |||||||||||||||||||
Benefits paid | -1,715 | -1,664 | -1,664 | -1,319 | -1,313 | -1,343 | |||||||||||||||||||
Settlements | -2,149 | -2,551 | -2,461 | - | - | - | |||||||||||||||||||
Projected benefit obligation at end of year | $ | 39,483 | $ | 40,994 | $ | 41,736 | $ | 16,706 | $ | 18,192 | $ | 18,012 | |||||||||||||
Change in plan assets: | |||||||||||||||||||||||||
Fair value of plan assets at beginning of | $ | 32,757 | $ | 31,653 | $ | 29,273 | $ | - | $ | - | $ | - | |||||||||||||
year | |||||||||||||||||||||||||
Actual return on plan assets | 4,396 | 3,168 | 911 | - | - | - | |||||||||||||||||||
Employer contributions | 3,103 | 2,534 | 5,926 | 1,319 | 1,313 | 1,343 | |||||||||||||||||||
Benefits paid | -1,715 | -1,664 | -1,664 | -1,319 | -1,313 | -1,343 | |||||||||||||||||||
Expenses paid | -513 | -383 | -332 | - | - | - | |||||||||||||||||||
Settlements | -2,149 | -2,551 | -2,461 | - | - | - | |||||||||||||||||||
Fair value of plan assets at end of year | $ | 35,879 | $ | 32,757 | $ | 31,653 | $ | - | $ | - | $ | - | |||||||||||||
Funded status | $ | -3,604 | $ | -8,237 | $ | -10,083 | $ | -16,706 | $ | -18,192 | $ | -18,012 | |||||||||||||
Prepaid (accrued) benefit expense | $ | 12,331 | $ | 11,188 | $ | 11,594 | $ | -12,479 | $ | -12,855 | $ | -13,197 | |||||||||||||
Total amount recognized in Consolidated | $ | -3,604 | $ | -8,237 | $ | -10,083 | $ | -16,706 | $ | -18,192 | $ | -18,012 | |||||||||||||
Balance Sheets, all in Other Liabilities | |||||||||||||||||||||||||
Amounts recognized in accumulated other | |||||||||||||||||||||||||
comprehensive income (loss) (“AOCI”): | |||||||||||||||||||||||||
Prior service cost | $ | - | $ | - | $ | - | $ | - | $ | 124 | $ | 249 | |||||||||||||
Net actuarial loss | 15,935 | 19,425 | 21,677 | 4,227 | 5,213 | 4,566 | |||||||||||||||||||
Total amount recognized in AOCI | $ | 15,935 | $ | 19,425 | $ | 21,677 | $ | 4,227 | $ | 5,337 | $ | 4,815 | |||||||||||||
Information for pension plans with an | |||||||||||||||||||||||||
accumulated benefit obligation greater | |||||||||||||||||||||||||
than plan assets: | |||||||||||||||||||||||||
Projected benefit obligation | $ | 39,483 | $ | 40,994 | $ | 41,736 | $ | 16,706 | $ | 18,192 | $ | 18,012 | |||||||||||||
Accumulated benefit obligation | 39,483 | 40,994 | 41,736 | 16,706 | 18,192 | 18,012 | |||||||||||||||||||
Fair value of plan assets | 35,879 | 32,757 | 31,653 | - | - | - | |||||||||||||||||||
The change in the Company’s AOCI for the defined benefit plan for the year ended December 31, 2013 was primarily attributable to the performance of the plan assets and an increase in the discount rate, which was partially offset by a change in the mortality assumption. The change in the Company’s AOCI for the defined benefit plan for the year ended December 31, 2012 was primarily attributable to revisions of the discount rate assumption, partially offset by the performance of the plan assets. The change in the Company’s AOCI for the defined benefit plan for the year ended December 31, 2011 was primarily related to revisions of the discount rate assumption. | |||||||||||||||||||||||||
Supplemental | |||||||||||||||||||||||||
Defined Benefit Plan | Defined Benefit Plans | ||||||||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | ||||||||||||||||||||
Components of net periodic pension | |||||||||||||||||||||||||
(income) expense: | |||||||||||||||||||||||||
Service cost: | |||||||||||||||||||||||||
Benefit accrual | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
Other expenses | 360 | 360 | 250 | - | - | - | |||||||||||||||||||
Interest cost | 1,369 | 1,427 | 1,658 | 616 | 676 | 799 | |||||||||||||||||||
Expected return on plan assets | -2,238 | -2,423 | -2,419 | - | - | - | |||||||||||||||||||
Settlement loss | 867 | 1,209 | 1,290 | - | - | - | |||||||||||||||||||
Amortization of: | |||||||||||||||||||||||||
Prior service cost | - | - | - | 124 | 124 | 125 | |||||||||||||||||||
Actuarial loss | 1,602 | 2,367 | 1,824 | 203 | 171 | 698 | |||||||||||||||||||
Net periodic pension expense | $ | 1,960 | $ | 2,940 | $ | 2,603 | $ | 943 | $ | 971 | $ | 1,622 | |||||||||||||
Changes in plan assets and benefit | |||||||||||||||||||||||||
obligations included in other | |||||||||||||||||||||||||
comprehensive income (loss): | |||||||||||||||||||||||||
Prior service cost | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
Net actuarial loss | -1,888 | 115 | 4,951 | -783 | 817 | 1,755 | |||||||||||||||||||
Amortization of: | |||||||||||||||||||||||||
Prior service cost | - | - | - | -124 | -124 | -125 | |||||||||||||||||||
Actuarial loss | -1,602 | -2,367 | -1,824 | -203 | -171 | -698 | |||||||||||||||||||
Total recognized in other | $ | -3,490 | $ | -2,252 | $ | 3,127 | $ | -1,110 | $ | 522 | $ | 932 | |||||||||||||
comprehensive income | |||||||||||||||||||||||||
(loss) | |||||||||||||||||||||||||
Weighted-average assumptions used to | |||||||||||||||||||||||||
determine expense: | |||||||||||||||||||||||||
Discount rate | 3.51 | % | 3.66 | % | 4.58 | % | 3.51 | % | 3.86 | % | 4.92 | % | |||||||||||||
Expected return on plan assets | 7.5 | % | 7.5 | % | 7.5 | % | * | * | * | ||||||||||||||||
Annual rate of salary increase | * | * | * | * | * | * | |||||||||||||||||||
Weighted-average assumptions used to | |||||||||||||||||||||||||
determine benefit obligations as of | |||||||||||||||||||||||||
December 31: | |||||||||||||||||||||||||
Discount rate | 4.46 | % | 3.51 | % | 3.66 | % | 4.46 | % | 3.51 | % | 3.86 | % | |||||||||||||
Expected return on plan assets | 7.5 | % | 7.5 | % | 7.5 | % | * | * | * | ||||||||||||||||
Annual rate of salary increase | * | * | * | * | * | * | |||||||||||||||||||
______________ | |||||||||||||||||||||||||
* | Not applicable. | ||||||||||||||||||||||||
The discount rates at December 31, 2013 were based on the average yield for long-term, high-grade securities available during the benefit payout period. To set its discount rate, the Company looks to leading indicators, including the Mercer Above Mean Yield Curve. | |||||||||||||||||||||||||
The assumption for the long-term rate of return on plan assets was determined by considering actual investment experience during the lifetime of the plan, balanced with reasonable expectations of future growth considering the various classes of assets and percentage allocation for each asset class. | |||||||||||||||||||||||||
The Company has an investment policy for the defined benefit pension plan that aligns the assets within the plan’s trust to an approximate allocation of 50% equity and 50% fixed income funds. Management believes this allocation will produce the targeted long-term rate of return on assets necessary for payment of future benefit obligations, while providing adequate liquidity for payments to current beneficiaries. Assets are reviewed against the defined benefit pension plan’s investment policy and the trustee has been directed to adjust invested assets at least quarterly to maintain the target allocation percentages. | |||||||||||||||||||||||||
Fair values of the equity security funds and fixed income funds have been determined from public quotations. The following table presents the fair value hierarchy for the Company’s defined benefit pension plan assets, excluding cash held. | |||||||||||||||||||||||||
Fair Value Measurements at | |||||||||||||||||||||||||
Reporting Date Using | |||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||
Asset category | |||||||||||||||||||||||||
Equity security funds (1) | |||||||||||||||||||||||||
United States | $ | 14,730 | $ | - | $ | 14,730 | $ | - | |||||||||||||||||
International | 3,579 | - | 3,579 | - | |||||||||||||||||||||
Fixed income funds | 17,413 | - | 17,413 | - | |||||||||||||||||||||
Total | $ | 35,722 | $ | - | $ | 35,722 | $ | - | |||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||
Asset category | |||||||||||||||||||||||||
Equity security funds (1) | |||||||||||||||||||||||||
United States | $ | 13,199 | $ | - | $ | 13,199 | $ | - | |||||||||||||||||
International | 3,290 | - | 3,290 | - | |||||||||||||||||||||
Fixed income funds | 16,125 | - | 16,125 | - | |||||||||||||||||||||
Total | $ | 32,614 | $ | - | $ | 32,614 | $ | - | |||||||||||||||||
_____________________________ | |||||||||||||||||||||||||
-1 | None of the trust fund assets for the defined benefit pension plan have been invested in shares of HMEC’s common stock. | ||||||||||||||||||||||||
There were no Level 3 assets held during the years ended December 31, 2013 and 2012. | |||||||||||||||||||||||||
In 2014, the Company expects amortization of net losses of $1,371 and $158 for the defined benefit plan and the supplemental retirement plans, respectively, and expects no amortization of prior service cost for the supplemental retirement plans to be included in net periodic pension expense. | |||||||||||||||||||||||||
Postretirement Benefits Other than Pensions | |||||||||||||||||||||||||
In addition to providing pension benefits, the Company also provides certain health care and life insurance benefits to a closed group of eligible employees. Postretirement benefits other than pensions of active and retired employees are accrued as expense over the employees' service years. As of December 31, 2006, Health Reimbursement Accounts (“HRAs”) were established for eligible participants and totaled $7,310. | |||||||||||||||||||||||||
In December 2013, the Company announced the elimination of postretirement medical coverage for all remaining eligible participants effective March 31, 2014. As result of this plan change, prior service cost will be amortized over the average working lifetime of active eligible participants. | |||||||||||||||||||||||||
As a result of the changes in the plan for other postretirement benefits, the Company recorded a reduction in its expenses of $144, $431 and $379 for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||||||||||||||
As of December 31, 2013, the balance of the previously established HRAs was $2,746. Funding of HRAs was $181, $168 and $184 for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||||||||||||||
The following table presents the funded status of postretirement benefits other than pensions of active and retired employees (including employees on disability more than 2 years) as of December 31, 2013, 2012 and 2011 (the measurement dates) reconciled with amounts recognized in the Company's Consolidated Balance Sheets: | |||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Change in accumulated postretirement benefit obligations: | |||||||||||||||||||||||||
Accumulated postretirement benefit | |||||||||||||||||||||||||
obligations at beginning of year | $ | 2,862 | $ | 3,326 | $ | 3,489 | |||||||||||||||||||
Changes during fiscal year | |||||||||||||||||||||||||
Service cost | - | - | - | ||||||||||||||||||||||
Interest cost | 92 | 91 | 122 | ||||||||||||||||||||||
Plan amendment | -1,393 | - | - | ||||||||||||||||||||||
Medicare prescription reimbursements | - | - | - | ||||||||||||||||||||||
Employer payments net of participant contributions | -491 | -488 | -526 | ||||||||||||||||||||||
Actuarial (gain) loss | 60 | -67 | 241 | ||||||||||||||||||||||
Accumulated postretirement benefit obligations at end of year | $ | 1,130 | $ | 2,862 | $ | 3,326 | |||||||||||||||||||
Unfunded status | $ | -1,130 | $ | -2,862 | $ | -3,326 | |||||||||||||||||||
Total amount recognized in Consolidated Balance Sheets, | |||||||||||||||||||||||||
all in other liabilities | $ | -1,130 | $ | -2,862 | $ | -3,326 | |||||||||||||||||||
Amounts recognized in accumulated | |||||||||||||||||||||||||
other comprehensive income (loss) (“AOCI”): | |||||||||||||||||||||||||
Prior service credit | $ | -1,341 | $ | - | $ | - | |||||||||||||||||||
Net actuarial gain | -604 | -900 | -1,355 | ||||||||||||||||||||||
Total amount recognized in AOCI | $ | -1,945 | $ | -900 | $ | -1,355 | |||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Components of net periodic benefit: | |||||||||||||||||||||||||
Service cost | $ | - | $ | - | $ | - | |||||||||||||||||||
Interest cost | 92 | 91 | 122 | ||||||||||||||||||||||
Amortization of prior service cost | -52 | - | - | ||||||||||||||||||||||
Amortization of prior gain | -236 | -522 | -501 | ||||||||||||||||||||||
Net periodic income | $ | -196 | $ | -431 | $ | -379 | |||||||||||||||||||
In 2014, the Company expects amortization of net gains of $246 to be included in net periodic pension expense. | |||||||||||||||||||||||||
Sensitivity Analysis and Assumptions for Postretirement Benefits Other than Pensions | |||||||||||||||||||||||||
A one percentage point change in the assumed health care cost trend rate for each year would change the accumulated postretirement benefit obligations as follows: | |||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Accumulated postretirement benefit obligations | |||||||||||||||||||||||||
Effect of a one percentage point increase | $ | - | $ | 45 | $ | 53 | |||||||||||||||||||
Effect of a one percentage point decrease | - | -43 | -50 | ||||||||||||||||||||||
Service and interest cost components of the net | |||||||||||||||||||||||||
periodic postretirement benefit expense | |||||||||||||||||||||||||
Effect of a one percentage point increase | $ | 2 | $ | 1 | $ | 2 | |||||||||||||||||||
Effect of a one percentage point decrease | -2 | -1 | -1 | ||||||||||||||||||||||
Weighted-average assumptions used to determine | |||||||||||||||||||||||||
benefit obligations as of December 31: | |||||||||||||||||||||||||
Discount rate | 4.46 | % | 3.51 | % | 2.95 | % | |||||||||||||||||||
Healthcare cost trend rate | * | 7.5 | % | 8 | % | ||||||||||||||||||||
Rate to which the cost trend rate is assumed to decline | |||||||||||||||||||||||||
(ultimate trend rate) | * | 5 | % | 5 | % | ||||||||||||||||||||
Year the rate is assumed to reach the ultimate trend rate | * | 2022 | 2022 | ||||||||||||||||||||||
Expected return on plan assets | * | * | * | ||||||||||||||||||||||
Weighted-average assumptions used to determine net periodic | |||||||||||||||||||||||||
benefit cost for the years ended December 31: | |||||||||||||||||||||||||
Discount rate | 3.51 | % | 2.95 | % | 3.68 | % | |||||||||||||||||||
Healthcare cost trend rate | 7.5 | % | 8 | % | 8 | % | |||||||||||||||||||
Rate to which the cost trend rate is assumed to decline | |||||||||||||||||||||||||
(ultimate trend rate) | 5 | % | 5 | % | 5 | % | |||||||||||||||||||
Year the rate is assumed to reach the ultimate trend rate | 2022 | 2022 | 2021 | ||||||||||||||||||||||
Expected return on plan assets | * | * | * | ||||||||||||||||||||||
___________________________ | |||||||||||||||||||||||||
* Not applicable. | |||||||||||||||||||||||||
The discount rates at December 31, 2013 were based on the average yield for long-term, high-grade securities available during the benefit payout period. To set its discount rate, the Company looks to leading indicators, including the Mercer Above Mean Yield Curve. | |||||||||||||||||||||||||
2014 Contributions | |||||||||||||||||||||||||
In 2014, there is no minimum funding requirement for the Company’s defined benefit plan. The following table discloses that minimum funding requirement and the expected full year contributions for the Company’s plans. | |||||||||||||||||||||||||
Defined Benefit Pension Plans | |||||||||||||||||||||||||
Defined | Supplemental | Other | |||||||||||||||||||||||
Benefit | Defined Benefit | Postretirement | |||||||||||||||||||||||
Plan | Plans | Benefits | |||||||||||||||||||||||
Minimum funding requirement for 2014 | - | N/A | N/A | ||||||||||||||||||||||
Expected contributions (approximations) | |||||||||||||||||||||||||
for the year ended December 31, 2014 | |||||||||||||||||||||||||
as of the time of this Form 10-K (1) | $ | 2,000 | $ | 1,320 | $ | 217 | |||||||||||||||||||
_________________________ | |||||||||||||||||||||||||
N/A - Not applicable. | |||||||||||||||||||||||||
-1 | HMEC’s Annual Report on Form 10-K for the year ended December 31, 2013. | ||||||||||||||||||||||||
Estimated Future Benefit Payments | |||||||||||||||||||||||||
The Company’s defined benefit plan may be subject to settlement accounting. Assumptions for both the number of individuals retiring in a calendar year and their elections regarding lump sum distributions are significant factors impacting the payout patterns for each of the plans below. Therefore, actual results could vary from the estimates shown. Estimated future benefit payments as of December 31, 2013 were as follows: | |||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | 2019-2023 | ||||||||||||||||||||
Pension plans: | |||||||||||||||||||||||||
Defined benefit plan | $ | 3,696 | $ | 3,415 | $ | 3,270 | $ | 2,827 | $ | 2,670 | $ | 13,393 | |||||||||||||
Supplemental retirement plans | 1,320 | 1,310 | 1,300 | 1,287 | 1,272 | 6,050 | |||||||||||||||||||
Other postretirement benefits | 216 | 122 | 120 | 117 | 112 | 450 | |||||||||||||||||||
Reinsurance_and_Catastrophes
Reinsurance and Catastrophes | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Reinsurance and Catastrophes and Statutory Surplus and Subsidiary Dividend Restrictions [Abstract] | ' | |||||||||||||
Reinsurance and Catastrophes | ' | |||||||||||||
NOTE 10 - Reinsurance and Catastrophes | ||||||||||||||
In the normal course of business, the Company’s insurance subsidiaries assume and cede reinsurance with other insurers. Reinsurance is ceded primarily to limit losses from large exposures and to permit recovery of a portion of direct losses; however, such a transfer does not relieve the originating insurance company of primary liability. | ||||||||||||||
The Company is a national underwriter and therefore has exposure to catastrophic losses in certain coastal states and other regions throughout the U.S. Catastrophes can be caused by various events including hurricanes, windstorms, earthquakes, hail, severe winter weather and wildfires, and the frequency and severity of catastrophes are inherently unpredictable. The financial impact from catastrophic losses results from both the total amount of insured exposure in the area affected by the catastrophe as well as the severity of the event. The Company seeks to reduce its exposure to catastrophe losses through the geographic diversification of its insurance coverage, deductibles, maximum coverage limits and the purchase of catastrophe reinsurance. | ||||||||||||||
The Company’s net catastrophe losses incurred of approximately $40,225 for the year ended December 31, 2013 reflected significant losses from wind/hail/tornado events in the spring and summer months. The Company’s net catastrophe losses incurred of approximately $43,319 for the year ended December 31, 2012 reflected losses primarily from wind/hail/tornado events in the spring and summer months, as well as from Hurricane Isaac. The Company’s net catastrophe losses incurred of approximately $86,000 for the year ended December 31, 2011 reflected losses primarily from wind/hail/tornado events in the spring and summer months, as well as from Hurricane Irene. | ||||||||||||||
The total amounts of reinsurance recoverable on unpaid insurance reserves classified as assets and reported in Other Assets in the Consolidated Balance Sheets were as follows: | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
Reinsurance recoverables on reserves and unpaid claims | ||||||||||||||
Property and casualty | ||||||||||||||
Reinsurance companies | $ | 10,152 | $ | 10,419 | ||||||||||
State insurance facilities | 3,955 | 3,286 | ||||||||||||
Life and health | 10,395 | 10,344 | ||||||||||||
Total | $ | 24,502 | $ | 24,049 | ||||||||||
The Company recognizes the cost of reinsurance premiums over the contract periods for such premiums in proportion to the insurance protection provided. Amounts recoverable from reinsurers for unpaid claims and claim settlement expenses, including estimated amounts for unsettled claims, claims incurred but not yet reported and policy benefits, are estimated in a manner consistent with the insurance liability associated with the policy. The effects of reinsurance on premiums written and contract deposits; premiums and contract charges earned; and benefits, claims and settlement expenses were as follows: | ||||||||||||||
Ceded to | Assumed | |||||||||||||
Gross | Other | from Other | Net | |||||||||||
Amount | Companies | Companies | Amount | |||||||||||
Year ended December 31, 2013 | ||||||||||||||
Premiums written and contract deposits | $ | 1,120,852 | $ | 30,115 | $ | 3,456 | $ | 1,094,193 | ||||||
Premiums and contract charges earned | 717,494 | 29,990 | 3,434 | 690,938 | ||||||||||
Benefits, claims and settlement expenses | 455,298 | 10,018 | 3,037 | 448,317 | ||||||||||
Year ended December 31, 2012 | ||||||||||||||
Premiums written and contract deposits | 1,093,937 | 29,691 | 3,481 | 1,067,727 | ||||||||||
Premiums and contract charges earned | 696,721 | 29,634 | 3,440 | 670,527 | ||||||||||
Benefits, claims and settlement expenses | 457,332 | 12,177 | 3,095 | 448,250 | ||||||||||
Year ended December 31, 2011 | ||||||||||||||
Premiums written and contract deposits | 1,106,012 | 31,271 | 3,708 | 1,078,449 | ||||||||||
Premiums and contract charges earned | 695,264 | 31,940 | 3,796 | 667,120 | ||||||||||
Benefits, claims and settlement expenses | 519,935 | 20,767 | 3,266 | 502,434 | ||||||||||
There were no losses from uncollectible reinsurance recoverables in the three years ended December 31, 2013. Past due reinsurance recoverables as of December 31, 2013 were not material. | ||||||||||||||
The Company maintains catastrophe excess of loss reinsurance coverage. For 2013, the Company’s catastrophe excess of loss coverage consisted of one contract in addition to the Florida Hurricane Catastrophe Fund (“FHCF”). The catastrophe excess of loss contract provided 95% coverage for catastrophe losses above a retention of $25,000 per occurrence up to $175,000 per occurrence. This contract consisted of three layers, each of which provided for one mandatory reinstatement. The layers were $25,000 excess of $25,000, $40,000 excess of $50,000 and $85,000 excess of $90,000. In addition, the Company’s predominant insurance subsidiary for property and casualty business written in Florida reinsured 90% of hurricane losses in that state above an estimated retention of $5,600 up to $20,300, based on the FHCF’s financial resources. The FHCF contract is a one-year contract, effective June 1, 2013. | ||||||||||||||
For liability coverages, in 2013, the Company reinsured each loss above a retention of $800 with coverage up to $2,500 per occurrence and $20,000 in a clash event. (A clash cover is a reinsurance casualty excess contract requiring two or more casualty coverages or policies issued by the Company to be involved in the same loss occurrence for coverage to apply.) For property coverages, in 2013 the Company reinsured each loss above a retention of $800 up to $2,500 on a per risk basis, including catastrophe losses that in the aggregate were less than the retention levels above. Also, the Company could submit to the reinsurers three per risk losses from the same occurrence for a total of $5,100 of property recovery in any one event. | ||||||||||||||
The maximum individual life insurance risk retained by the Company is $200 on any individual life, while either $100 or $125 is retained on each group life policy depending on the type of coverage. Excess amounts are reinsured. The Company also maintains a life catastrophe reinsurance program. For 2013, the Company reinsured 100% of the catastrophe risk in excess of $1,000 up to $35,000 per occurrence, with one reinstatement. The Company’s life catastrophe risk reinsurance program covers acts of terrorism and includes nuclear, biological and chemical explosions but excludes other acts of war. | ||||||||||||||
Contingencies_and_Commitments
Contingencies and Commitments | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||
Contingencies and Commitments [Abstract] | ' | |||||||||||||||||||||
Contingencies and Commitments | ' | |||||||||||||||||||||
NOTE 11 - Contingencies and Commitments | ||||||||||||||||||||||
Lawsuits and Legal Proceedings | ||||||||||||||||||||||
Companies in the insurance industry have been subject to substantial litigation resulting from claims, disputes and other matters. Most recently, they have faced expensive claims, including class action lawsuits, alleging, among other things, improper sales practices and improper claims settlement procedures. Negotiated settlements of certain such actions have had a material adverse effect on many insurance companies. | ||||||||||||||||||||||
At the time of this Annual Report on Form 10-K, the Company does not have pending litigation from which there is a reasonable possibility of material loss. | ||||||||||||||||||||||
Assessments for Insolvencies of Unaffiliated Insurance Companies | ||||||||||||||||||||||
The Company is contingently liable for possible assessments under regulatory requirements pertaining to potential insolvencies of unaffiliated insurance companies. Liabilities, which are established based upon regulatory guidance, have generally been insignificant. | ||||||||||||||||||||||
Leases | ||||||||||||||||||||||
The Company has entered into various operating lease agreements, primarily for real estate (claims and marketing offices in a few states, as well as portions of the home office complex) and also for computer equipment and copy machines. Rental expenses were $2,838, $2,882 and $2,883 for the years ended December 31, 2013, 2012 and 2011, respectively. Future minimum lease payments under leases expiring subsequent to December 31, 2013 are as follows: | ||||||||||||||||||||||
As of December 31, 2013 | ||||||||||||||||||||||
2019- | 2024 and | |||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | 2023 | beyond | ||||||||||||||||
Minimum operating lease payments | $ | 2,473 | $ | 2,413 | $ | 2,219 | $ | 2,195 | $ | 2,242 | $ | 6,575 | - | |||||||||
Supplementary_Data_on_Cash_Flo
Supplementary Data on Cash Flows | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Supplementary Data on Cash Flows [Abstract] | ' | ||||||||||
Supplementary Data on Cash Flows | ' | ||||||||||
NOTE 12 - Supplementary Data on Cash Flows | |||||||||||
A reconciliation of net income to net cash provided by operating activities as presented in the Consolidated Statements of Cash Flows is as follows: | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Cash flows from operating activities | |||||||||||
Net income | $ | 110,893 | $ | 103,866 | $ | 70,506 | |||||
Adjustments to reconcile net income to net | |||||||||||
cash provided by operating activities: | |||||||||||
Realized investment gains | -22,245 | -27,298 | -37,663 | ||||||||
Increase in accrued investment income | -1,898 | -2,618 | -7,348 | ||||||||
Increase (decrease) in accrued expenses | 1,157 | 13,589 | -9,203 | ||||||||
Depreciation and amortization | 7,680 | 7,892 | 8,577 | ||||||||
Increase in insurance liabilities | 143,542 | 127,992 | 105,576 | ||||||||
Increase in premium receivables | -4,018 | -5,638 | -1,263 | ||||||||
Increase in deferred policy acquisition costs | -14,659 | -13,989 | -6,258 | ||||||||
(Increase) decrease in reinsurance recoverable | -1,289 | 872 | -2,877 | ||||||||
Increase in income tax liabilities | 7,099 | 29,752 | 17,953 | ||||||||
Other | -20,326 | -31,572 | -22,121 | ||||||||
Total adjustments | 95,043 | 98,982 | 45,373 | ||||||||
Net cash provided by operating activities | $ | 205,936 | $ | 202,848 | $ | 115,879 | |||||
Segment_Information
Segment Information | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Segment Information [Abstract] | ' | ||||||||||
Segment Information | ' | ||||||||||
NOTE 13 - Segment Information | |||||||||||
The Company conducts and manages its business through four segments. The three operating segments, representing the major lines of insurance business, are: property and casualty insurance, primarily personal lines automobile and homeowners products; retirement annuity products, primarily tax-qualified fixed and variable deposits; and life insurance. The Company does not allocate the impact of corporate-level transactions to the insurance segments, consistent with the basis for management’s evaluation of the results of those segments, but classifies those items in the fourth segment, corporate and other. In addition to ongoing transactions such as corporate debt service, realized investment gains and losses and certain public company expenses, such items also have included corporate debt retirement costs/gains, when applicable. | |||||||||||
The accounting policies of the segments are the same as those described in “Note 1 -- Summary of Significant Accounting Policies”. The Company accounts for intersegment transactions, primarily the allocation of agent and overhead costs from the corporate and other segment to the property and casualty, annuity and life segments, on a direct cost basis. | |||||||||||
Summarized financial information for these segments is as follows: | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Insurance premiums and contract charges earned | |||||||||||
Property and casualty | $ | 561,954 | $ | 546,339 | $ | 547,540 | |||||
Annuity | 22,575 | 21,794 | 18,883 | ||||||||
Life | 106,409 | 102,394 | 100,697 | ||||||||
Total | $ | 690,938 | $ | 670,527 | $ | 667,120 | |||||
Net investment income | |||||||||||
Property and casualty | $ | 36,208 | $ | 36,792 | $ | 36,886 | |||||
Annuity | 208,419 | 200,785 | 182,806 | ||||||||
Life | 69,932 | 69,409 | 69,633 | ||||||||
Corporate and other | 7 | 2 | -3 | ||||||||
Intersegment eliminations | -956 | -985 | -1,011 | ||||||||
Total | $ | 313,610 | $ | 306,003 | $ | 288,311 | |||||
Net income | |||||||||||
Property and casualty | $ | 44,433 | $ | 37,043 | $ | 5,844 | |||||
Annuity | 44,719 | 40,527 | 30,906 | ||||||||
Life | 20,339 | 21,912 | 19,435 | ||||||||
Corporate and other | 1,402 | 4,384 | 14,321 | ||||||||
Total | $ | 110,893 | $ | 103,866 | $ | 70,506 | |||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Assets | |||||||||||
Property and casualty | $ | 1,001,561 | $ | 1,016,368 | $ | 957,266 | |||||
Annuity | 5,963,348 | 5,380,780 | 4,926,204 | ||||||||
Life | 1,743,084 | 1,663,696 | 1,459,919 | ||||||||
Corporate and other | 154,557 | 131,449 | 115,367 | ||||||||
Intersegment eliminations | -35,878 | -24,567 | -23,587 | ||||||||
Total | $ | 8,826,672 | $ | 8,167,726 | $ | 7,435,169 | |||||
Additional significant financial information for these segments is as follows: | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Policy acquisition expenses amortized | |||||||||||
Property and casualty | $ | 68,516 | $ | 63,768 | $ | 61,374 | |||||
Annuity | 7,957 | 6,868 | 12,334 | ||||||||
Life | 8,170 | 8,883 | 9,690 | ||||||||
Total | $ | 84,643 | $ | 79,519 | $ | 83,398 | |||||
Income tax expense (benefit) | |||||||||||
Property and casualty | $ | 12,740 | $ | 10,849 | $ | -5,183 | |||||
Annuity | 18,531 | 19,046 | 13,499 | ||||||||
Life | 10,919 | 12,305 | 11,366 | ||||||||
Corporate and other | 983 | 3,107 | 4,730 | ||||||||
Total | $ | 43,173 | $ | 45,307 | $ | 24,412 | |||||
Unaudited_Selected_Quarterly_F
Unaudited Selected Quarterly Financial Data | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||
Unaudited Selected Quarterly Financial Data [Abstract] | ' | |||||||||||||||||||||
Unaudited Selected Quarterly Financial Data | ' | |||||||||||||||||||||
NOTE 14 – Unaudited Selected Quarterly Financial Data | ||||||||||||||||||||||
Selected quarterly financial data is presented below. | ||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | |||||||||||||||||||
2013 | ||||||||||||||||||||||
Insurance premiums written and contract deposits | $ | 275,379 | $ | 306,033 | $ | 267,703 | $ | 245,078 | ||||||||||||||
Total revenues | 259,215 | 251,884 | 265,637 | 254,531 | ||||||||||||||||||
Net income | 34,287 | 23,599 | 25,995 | 27,012 | ||||||||||||||||||
Per share information | ||||||||||||||||||||||
Basic | ||||||||||||||||||||||
Net income | $ | 0.84 | $ | 0.59 | $ | 0.65 | $ | 0.68 | ||||||||||||||
Shares of common stock – weighted average (1) | 40,818 | 40,001 | 39,768 | 39,527 | ||||||||||||||||||
Diluted | ||||||||||||||||||||||
Net income | $ | 0.81 | $ | 0.57 | $ | 0.63 | $ | 0.66 | ||||||||||||||
Shares of common stock and equivalent shares - | 42,205 | 41,732 | 41,395 | 41,088 | ||||||||||||||||||
weighted average (1) | ||||||||||||||||||||||
2012 | ||||||||||||||||||||||
Insurance premiums written and contract deposits | $ | 279,479 | $ | 285,206 | $ | 260,289 | $ | 242,753 | ||||||||||||||
Total revenues | 255,417 | 256,548 | 254,226 | 244,623 | ||||||||||||||||||
Net income | 31,826 | 32,266 | 13,103 | 26,671 | ||||||||||||||||||
Per share information | ||||||||||||||||||||||
Basic | ||||||||||||||||||||||
Net income | $ | 0.81 | $ | 0.82 | $ | 0.33 | $ | 0.67 | ||||||||||||||
Shares of common stock – weighted average (1) | 39,339 | 39,381 | 39,544 | 39,794 | ||||||||||||||||||
Diluted | ||||||||||||||||||||||
Net income | $ | 0.77 | $ | 0.78 | $ | 0.32 | $ | 0.64 | ||||||||||||||
Shares of common stock and equivalent shares - | 41,272 | 41,138 | 41,304 | 41,546 | ||||||||||||||||||
weighted average (1) | ||||||||||||||||||||||
2011 | ||||||||||||||||||||||
Insurance premiums written and contract deposits | $ | 276,113 | $ | 298,910 | $ | 259,324 | $ | 244,102 | ||||||||||||||
Total revenues | 247,645 | 260,833 | 245,351 | 244,473 | ||||||||||||||||||
Net income (loss) | 32,913 | 23,637 | -11,851 | 25,807 | ||||||||||||||||||
Per share information | ||||||||||||||||||||||
Basic | ||||||||||||||||||||||
Net income (loss) | $ | 0.82 | $ | 0.59 | $ | -0.3 | $ | 0.65 | ||||||||||||||
Shares of common stock – weighted average (1) | 39,900 | 39,919 | 39,893 | 39,749 | ||||||||||||||||||
Diluted | ||||||||||||||||||||||
Net income (loss) | $ | 0.79 | $ | 0.57 | $ | -0.3 | $ | 0.62 | ||||||||||||||
Shares of common stock and equivalent shares - | 41,414 | 41,451 | 39,893 | 41,699 | ||||||||||||||||||
weighted average (1) | ||||||||||||||||||||||
__________ | ||||||||||||||||||||||
-1 | Rounded to thousands. | |||||||||||||||||||||
Summary_of_Investments_Other_T
Summary of Investments Other Than Investments in Related Parties | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Summary of Investments-Other Than Investments in Related Parties [Abstract] | ' | ||||||||||
Summary of Investments-Other Than Investments in Related Parties | ' | ||||||||||
SCHEDULE I | |||||||||||
HORACE MANN EDUCATORS CORPORATION | |||||||||||
SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | |||||||||||
31-Dec-13 | |||||||||||
(Dollars in thousands) | |||||||||||
Amount | |||||||||||
shown in | |||||||||||
Fair | Balance | ||||||||||
Type of Investments | Cost(1) | Value | Sheet | ||||||||
Fixed maturities: | |||||||||||
U.S. Government and federally sponsored agency obligations | $ | 1,004,634 | $ | 1,005,299 | $ | 1,005,299 | |||||
States, municipalities and political subdivisions | 1,425,441 | 1,471,527 | 1,471,527 | ||||||||
Foreign government bonds | 50,641 | 54,951 | 54,951 | ||||||||
Public utilities | 206,445 | 234,540 | 234,540 | ||||||||
Other bonds | 3,097,044 | 3,243,256 | 3,243,256 | ||||||||
Total fixed maturity securities | 5,784,205 | 6,009,573 | 6,009,573 | ||||||||
Equity securities: | |||||||||||
Non-redeemable preferred stocks | 22,172 | 20,968 | 20,968 | ||||||||
Common stocks | 42,578 | 52,961 | 52,961 | ||||||||
Closed-end fund | 20,004 | 17,929 | 17,929 | ||||||||
Total equity securities | 84,754 | 91,858 | 91,858 | ||||||||
Mortgage loans | 79 | XXX | 79 | ||||||||
Short-term investments | 206,753 | XXX | 206,758 | ||||||||
Policy loans | 140,607 | XXX | 140,607 | ||||||||
Other | 90,598 | XXX | 90,598 | ||||||||
Total investments | $ | 6,306,996 | XXX | $ | 6,539,473 | ||||||
-1 | Bonds at original cost reduced by repayments and adjusted for amortization of premiums or accrual of discounts and impairment in value of specifically identified investments. | ||||||||||
See accompanying Report of Independent Registered Public Accounting Firm. | |||||||||||
Condensed_Financial_Informatio
Condensed Financial Information of Registrant | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Condensed Financial Information of Registrant [Abstract] | ' | ||||||||||
Condensed Financial Information of Registrant | ' | ||||||||||
SCHEDULE II | |||||||||||
HORACE MANN EDUCATORS CORPORATION | |||||||||||
(Parent Company Only) | |||||||||||
CONDENSED FINANCIAL INFORMATION OF REGISTRANT | |||||||||||
BALANCE SHEETS | |||||||||||
As of December 31, 2013 and 2012 | |||||||||||
(Dollars in thousands, except per share data) | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
ASSETS | |||||||||||
Investments and cash | $ | 24,387 | $ | 29,554 | |||||||
Investment in subsidiaries | 1,282,614 | 1,406,641 | |||||||||
Other assets | 60,164 | 52,223 | |||||||||
Total assets | $ | 1,367,165 | $ | 1,488,418 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Short-term debt | $ | 38,000 | $ | 38,000 | |||||||
Long-term debt | 199,874 | 199,809 | |||||||||
Other liabilities | 29,986 | 4,806 | |||||||||
Total liabilities | 267,860 | 242,615 | |||||||||
Preferred stock, $0.001 par value, authorized 1,000,000 shares; none issued | - | - | |||||||||
Common stock, $0.001 par value, authorized 75,000,000 shares; issued, 2013, | 64 | 62 | |||||||||
63,629,105; 2012, 62,311,787 | |||||||||||
Additional paid-in capital | 407,056 | 383,135 | |||||||||
Retained earnings | 1,000,312 | 921,969 | |||||||||
Accumulated other comprehensive income (loss), net of taxes: | |||||||||||
Net unrealized gains on fixed maturities and equity securities | 133,990 | 382,400 | |||||||||
Net funded status of pension and other postretirement benefit obligations | -11,776 | -15,311 | |||||||||
Treasury stock, at cost, 2013, 23,117,554 shares; 2012, 22,943,925 shares | -430,341 | -426,452 | |||||||||
Total shareholders' equity | 1,099,305 | 1,245,803 | |||||||||
Total liabilities and shareholders' equity | $ | 1,367,165 | $ | 1,488,418 | |||||||
See accompanying note to condensed financial statements. | |||||||||||
See accompanying Report of Independent Registered Public Accounting Firm. | |||||||||||
SCHEDULE II | |||||||||||
HORACE MANN EDUCATORS CORPORATION | |||||||||||
(Parent Company Only) | |||||||||||
CONDENSED FINANCIAL INFORMATION OF REGISTRANT | |||||||||||
STATEMENTS OF OPERATIONS | |||||||||||
(Dollars in thousands) | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Revenues | |||||||||||
Net investment income | $ | 6 | $ | 2 | $ | -3 | |||||
Realized investment gains | 208 | - | - | ||||||||
Total revenues | 214 | 2 | -3 | ||||||||
Expenses | |||||||||||
Interest | 14,236 | 14,249 | 14,007 | ||||||||
Other | 4,832 | 4,576 | 3,590 | ||||||||
Total expenses | 19,068 | 18,825 | 17,597 | ||||||||
Loss before income tax benefit and equity in net earnings of subsidiaries | -18,854 | -18,823 | -17,600 | ||||||||
Income tax benefit | -6,599 | -6,196 | -8,197 | ||||||||
Loss before equity in net earnings of subsidiaries | -12,255 | -12,627 | -9,403 | ||||||||
Equity in net earnings of subsidiaries | 123,148 | 116,493 | 79,909 | ||||||||
Net income | $ | 110,893 | $ | 103,866 | $ | 70,506 | |||||
See accompanying note to condensed financial statements. | |||||||||||
See accompanying Report of Independent Registered Public Accounting Firm. | |||||||||||
SCHEDULE II | |||||||||||
HORACE MANN EDUCATORS CORPORATION | |||||||||||
(Parent Company Only) | |||||||||||
CONDENSED FINANCIAL INFORMATION OF REGISTRANT | |||||||||||
STATEMENTS OF CASH FLOWS | |||||||||||
(Dollars in thousands) | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Cash flows - operating activities | |||||||||||
Interest expense paid | $ | -13,825 | $ | -13,948 | $ | -13,515 | |||||
Federal income taxes (paid) recovered | 5,996 | -118 | 12,058 | ||||||||
Cash dividends received from subsidiaries | 41,000 | 50,000 | 26,000 | ||||||||
Other, net, including settlement of payables to subsidiaries | -21,235 | 7,703 | -10,012 | ||||||||
Net cash provided by operating activities | 11,936 | 43,637 | 14,531 | ||||||||
Cash flows - investing activities | |||||||||||
Net (increase) decrease in investments | 5,488 | -10,762 | 4,240 | ||||||||
Net cash provided by (used in) investing activities | 5,488 | -10,762 | 4,240 | ||||||||
Cash flows - financing activities | |||||||||||
Dividends paid to shareholders | -32,550 | -22,541 | -18,990 | ||||||||
Acquisition of treasury stock | -3,889 | -15,735 | -2,047 | ||||||||
Exercise of stock options | 19,336 | 5,421 | 2,127 | ||||||||
Net cash used in financing activities | -17,103 | -32,855 | -18,910 | ||||||||
Net increase (decrease) in cash | 321 | 20 | -139 | ||||||||
Cash at beginning of period | 149 | 129 | 268 | ||||||||
Cash at end of period | $ | 470 | $ | 149 | $ | 129 | |||||
See accompanying note to condensed financial statements. | |||||||||||
See accompanying Report of Independent Registered Public Accounting Firm. | |||||||||||
SCHEDULE II | |||||||||||
HORACE MANN EDUCATORS CORPORATION | |||||||||||
(Parent Company Only) | |||||||||||
CONDENSED FINANCIAL INFORMATION OF REGISTRANT | |||||||||||
NOTE TO CONDENSED FINANCIAL STATEMENTS | |||||||||||
The accompanying condensed financial statements should be read in conjunction with the Consolidated Financial Statements and the accompanying notes thereto. | |||||||||||
Schedule_III_and_VI_Supplement
Schedule III and VI Supplementary Insurance Information Supplemental Information Concerning Property and Casualty Insurance Operations | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule III and VI Supplementary Insurance Information Supplemental Information Concerning Property and Casualty Insurance Operations [Abstract] | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule III and VI Supplementary Insurance Information Supplemental Information Concerning Property and Casualty Insurance Operations | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE III & VI (COMBINED) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
HORACE MANN EDUCATORS CORPORATION | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE III: SUPPLEMENTARY INSURANCE INFORMATION | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE VI: SUPPLEMENTAL INFORMATION CONCERNING PROPERTY AND CASUALTY INSURANCE OPERATIONS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Column identification for | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule III: | A | B | C | D | E | F | G | H | I | J | K | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule VI: | A | B | C | D | E | F | G | H | I | J | K | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discount, | Other | Benefits, | Claims and claims | Amortization | Paid | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred | Future policy | if any, | policy | Premium | claims | adjustment expense | of deferred | claims | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
policy | benefits, | deducted in | claims and | revenue/ | Net | and | incurred related to | policy | Other | and claims | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
acquisition | claims and | previous | Unearned | benefits | premium | investment | settlement | Current | Prior | acquisition | operating | adjustment | Premiums | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment | costs | claims expenses | column | premiums | payable | earned | income | expenses | year | years | costs | expenses | expense | written | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and | $ | 26,048 | $ | 275,809 | $ | 0 | $ | 217,841 | $ | - | $ | 561,954 | $ | 36,208 | $ | 385,601 | $ | 403,589 | $ | -17,988 | $ | 68,516 | $ | 87,064 | $ | 384,736 | $ | 570,363 | ||||||||||||||||||||||||||||||||||||||||||||
casualty | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annuity | 170,749 | 3,523,901 | xxx | 562 | 342,795 | 22,575 | 208,419 | 128,768 | xxx | xxx | 7,957 | 34,004 | xxx | xxx | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Life | 48,558 | 1,008,369 | xxx | 2,711 | 3,497 | 106,409 | 69,932 | 103,841 | xxx | xxx | 8,170 | 34,394 | xxx | xxx | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other, including | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
consolidating eliminations | N/A | N/A | xxx | N/A | N/A | N/A | -949 | N/A | xxx | xxx | N/A | 18,886 | xxx | xxx | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 245,355 | $ | 4,808,079 | xxx | $ | 221,114 | $ | 346,292 | $ | 690,938 | $ | 313,610 | $ | 618,210 | xxx | xxx | $ | 84,643 | $ | 174,348 | xxx | xxx | |||||||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and | $ | 24,650 | $ | 274,542 | $ | 0 | $ | 209,431 | $ | - | $ | 546,339 | $ | 36,792 | $ | 389,430 | $ | 406,605 | $ | -17,175 | $ | 63,768 | $ | 83,579 | $ | 398,210 | $ | 550,774 | ||||||||||||||||||||||||||||||||||||||||||||
casualty | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annuity | 125,437 | 3,264,128 | xxx | 526 | 99,603 | 21,794 | 200,785 | 124,693 | xxx | xxx | 6,868 | 34,148 | xxx | xxx | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Life | 46,798 | 984,716 | xxx | 3,311 | 3,624 | 102,394 | 69,409 | 97,692 | xxx | xxx | 8,883 | 33,589 | xxx | xxx | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other, including | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
consolidating eliminations | N/A | N/A | xxx | N/A | N/A | N/A | -983 | N/A | xxx | xxx | N/A | 18,991 | xxx | xxx | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 196,885 | $ | 4,523,386 | xxx | $ | 213,268 | $ | 103,227 | $ | 670,527 | $ | 306,003 | $ | 611,815 | xxx | xxx | $ | 79,519 | $ | 170,307 | xxx | xxx | |||||||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and | $ | 22,906 | $ | 281,080 | $ | 0 | $ | 204,996 | $ | - | $ | 547,540 | $ | 36,886 | $ | 442,517 | $ | 452,827 | $ | -10,310 | $ | 61,374 | $ | 80,133 | $ | 462,298 | $ | 545,950 | ||||||||||||||||||||||||||||||||||||||||||||
casualty | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annuity | 139,316 | 2,951,004 | xxx | 34 | 110,734 | 18,883 | 182,806 | 115,468 | xxx | xxx | 12,334 | 31,802 | xxx | xxx | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Life | 54,234 | 959,931 | xxx | 3,933 | 3,796 | 100,697 | 69,633 | 99,359 | xxx | xxx | 9,690 | 33,135 | xxx | xxx | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other, including | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
consolidating eliminations | N/A | N/A | xxx | N/A | N/A | N/A | -1,014 | N/A | xxx | xxx | N/A | 17,572 | xxx | xxx | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 216,456 | $ | 4,192,015 | xxx | $ | 208,963 | $ | 114,530 | $ | 667,120 | $ | 288,311 | $ | 657,344 | xxx | xxx | $ | 83,398 | $ | 162,642 | xxx | xxx | |||||||||||||||||||||||||||||||||||||||||||||||||
N/A - Not applicable. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
See accompanying Report of Independent Registered Public Accounting Firm. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reinsurance
Reinsurance | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Reinsurance [Abstract] | ' | ||||||||||||||||||||||||
Reinsurance | ' | ||||||||||||||||||||||||
SCHEDULE IV | |||||||||||||||||||||||||
HORACE MANN EDUCATORS CORPORATION | |||||||||||||||||||||||||
REINSURANCE | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
Column A | Column B | Column C | Column D | Column E | Column F | ||||||||||||||||||||
Ceded to | Assumed | Percentage | |||||||||||||||||||||||
Gross | Other | from Other | Net | of Amount | |||||||||||||||||||||
Amount | Companies | Companies | Amount | Assumed to Net | |||||||||||||||||||||
Year ended December 31, 2013 | |||||||||||||||||||||||||
Life insurance in force | $ | 15,102,466 | $ | 3,231,421 | $ | - | $ | 11,871,045 | - | ||||||||||||||||
Premiums | |||||||||||||||||||||||||
Property and casualty | $ | 582,780 | $ | 24,260 | $ | 3,434 | $ | 561,954 | 0.6 | % | |||||||||||||||
Annuity | 22,575 | - | - | 22,575 | - | ||||||||||||||||||||
Life | 112,139 | 5,730 | - | 106,409 | - | ||||||||||||||||||||
Total premiums | $ | 717,494 | $ | 29,990 | $ | 3,434 | $ | 690,938 | 0.5 | % | |||||||||||||||
Year ended December 31, 2012 | |||||||||||||||||||||||||
Life insurance in force | $ | 14,632,272 | $ | 3,070,951 | $ | - | $ | 11,561,321 | - | ||||||||||||||||
Premiums | |||||||||||||||||||||||||
Property and casualty | $ | 566,853 | $ | 23,954 | $ | 3,440 | $ | 546,339 | 0.6 | % | |||||||||||||||
Annuity | 21,794 | - | - | 21,794 | - | ||||||||||||||||||||
Life | 108,074 | 5,680 | - | 102,394 | - | ||||||||||||||||||||
Total premiums | $ | 696,721 | $ | 29,634 | $ | 3,440 | $ | 670,527 | 0.5 | % | |||||||||||||||
Year ended December 31, 2011 | |||||||||||||||||||||||||
Life insurance in force | $ | 14,161,408 | $ | 2,836,731 | $ | - | $ | 11,324,677 | - | ||||||||||||||||
Premiums | |||||||||||||||||||||||||
Property and casualty | $ | 570,264 | $ | 26,520 | $ | 3,796 | $ | 547,540 | 0.7 | % | |||||||||||||||
Annuity | 18,883 | - | - | 18,883 | - | ||||||||||||||||||||
Life | 106,117 | 5,420 | - | 100,697 | - | ||||||||||||||||||||
Total premiums | $ | 695,264 | $ | 31,940 | $ | 3,796 | $ | 667,120 | 0.6 | % | |||||||||||||||
Note: Premiums above include insurance premiums earned and contract charges earned. | |||||||||||||||||||||||||
See accompanying Report of Independent Registered Public Accounting Firm. | |||||||||||||||||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
Basis of Presentation | ' | ||||||||||||||||
Basis of Presentation | |||||||||||||||||
The accompanying consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) and with the rules and regulations of the Securities and Exchange Commission (“SEC”), specifically Regulation S-X and the instructions to Form 10-K. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (1) the reported amounts of assets and liabilities, (2) disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and (3) the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |||||||||||||||||
The consolidated financial statements include the accounts of Horace Mann Educators Corporation and its wholly-owned subsidiaries (“HMEC”; and together with its subsidiaries, the “Company” or “Horace Mann”). HMEC and its subsidiaries have common management, share office facilities and are parties to several intercompany service agreements for management, administrative, data processing, agent commissions, agency services, utilization of personnel and investment advisory services. Under these agreements, costs have been allocated among the companies in conformity with GAAP. In addition, certain of the subsidiaries have entered into intercompany reinsurance agreements. HMEC and its subsidiaries file a consolidated federal income tax return, and there are related tax sharing agreements. All significant intercompany balances and transactions have been eliminated in consolidation. | |||||||||||||||||
The subsidiaries of HMEC market and underwrite personal lines of property and casualty (primarily personal lines automobile and homeowners) insurance, retirement annuities (primarily tax-qualified products) and life insurance, primarily to K-12 teachers, administrators and other employees of public schools and their families. HMEC’s principal operating subsidiaries are Horace Mann Life Insurance Company, Horace Mann Insurance Company, Teachers Insurance Company, Horace Mann Property & Casualty Insurance Company and Horace Mann Lloyds. | |||||||||||||||||
The Company has evaluated subsequent events through the date these consolidated financial statements were issued. | |||||||||||||||||
Investments | ' | ||||||||||||||||
Investments | |||||||||||||||||
The Company invests primarily in fixed maturity securities (“fixed maturities”). This category includes primarily bonds and notes, but also includes redeemable preferred stocks. These securities are classified as available for sale and carried at fair value. The net adjustment for unrealized gains and losses on all securities available for sale, carried at fair value, is recorded as a separate component of accumulated other comprehensive income within shareholders' equity, net of applicable deferred taxes and the related impact on deferred policy acquisition costs associated with interest-sensitive life and annuity contracts that would have occurred if the securities had been sold at their aggregate fair value and the proceeds reinvested at current yields. | |||||||||||||||||
Equity securities are classified as available for sale and carried at fair value. This category includes nonredeemable preferred stocks and common stocks. | |||||||||||||||||
Short-term and other investments are comprised of short-term fixed income securities, generally carried at cost which approximates fair value; policy loans, carried at unpaid principal balances; mortgage loans, carried at unpaid principal less a valuation allowance for estimated uncollectible amounts; certain alternative investments which are accounted for as equity method investments; and restricted Federal Home Loan Bank membership and activity stocks, carried at redemption value which approximates fair value. | |||||||||||||||||
The Company invests in fixed maturity securities and alternative investment funds that could qualify as variable interest entities, including corporate securities, mortgage-backed securities and asset-backed securities. The Company is not the primary beneficiary of these securities as the Company does not have the power to direct the activities that most significantly impact the entities’ performance. | |||||||||||||||||
Interest income is recognized as earned. Investment income reflects amortization of premiums and accrual of discounts on an effective-yield basis. | |||||||||||||||||
Realized gains and losses arising from the disposal (recorded on a trade date basis) or impairment of securities are determined based upon specific identification of securities. The Company evaluates all investments in its portfolio for other-than-temporary declines in value as described in the following section. | |||||||||||||||||
Other-than-temporary Impairment of Investments | ' | ||||||||||||||||
Other-than-temporary Impairment of Investments | |||||||||||||||||
The Company's methodology of assessing other-than-temporary impairments is based on security-specific facts and circumstances as of the balance sheet date. Based on these facts, if (1) the Company has the intent to sell the fixed maturity security, (2) it is more likely than not the Company will be required to sell the fixed maturity security before the anticipated recovery of the amortized cost basis, or (3) management does not expect to recover the entire cost basis of the fixed maturity security, an other-than-temporary impairment is considered to have occurred. For equity securities, if (1) the Company does not have the ability and intent to hold the security for the recovery of cost or (2) recovery of cost is not expected within a reasonable period of time, an other-than-temporary impairment is considered to have occurred. Additionally, if events become known that call into question whether the security issuer has the ability to honor its contractual commitments, such security holding will be evaluated to determine whether or not such security has suffered an other-than-temporary decline in value. | |||||||||||||||||
The Company reviews the fair value of all investments in its portfolio on a monthly basis to assess whether an other-than-temporary decline in value has occurred. These reviews, in conjunction with the Company's investment managers' monthly credit reports and relevant factors such as (1) the financial condition and near-term prospects of the issuer, (2) the length of time and extent to which the fair value has been less than amortized cost for fixed maturity securities or cost for equity securities, (3) for fixed maturity securities, the Company’s intent to sell a security or whether it is more likely than not the Company will be required to sell the security before the anticipated recovery in the amortized cost basis; and for equity securities, the Company’s ability and intent to hold the security for the recovery of cost or if recovery of cost is not expected within a reasonable period of time, (4) the stock price trend of the issuer, (5) the market leadership position of the issuer, (6) the debt ratings of the issuer, and (7) the cash flows and liquidity of the issuer or the underlying cash flows for asset-backed securities, are all considered in the impairment assessment. A write-down of an investment is recorded when a decline in the fair value of that investment is deemed to be other-than-temporary, with a realized investment loss charged to income for the period for all equity securities and for the credit-related loss portion associated with impaired fixed maturity securities. The amount of the total other-than-temporary impairment related to non-credit factors for fixed maturity securities is recognized in other comprehensive income, net of applicable taxes, unless the Company has the intent to sell the security or if it is more likely than not the Company will be required to sell the security before the anticipated recovery of the amortized cost basis. | |||||||||||||||||
A decline in fair value below amortized cost is not assumed to be other-than-temporary for fixed maturity investments with unrealized losses due to spread widening, market illiquidity or changes in interest rates where there exists a reasonable expectation based on the Company’s consideration of all objective information available that the Company will recover the entire cost basis of the security and the Company does not have the intent to sell the investment before maturity or a market recovery is realized and it is more likely than not the Company will not be required to sell the investment. An other-than-temporary impairment loss will be recognized based upon all relevant facts and circumstances for each investment, as appropriate. | |||||||||||||||||
Additional considerations for certain types of securities include the following: | |||||||||||||||||
Corporate Fixed Maturity Securities | |||||||||||||||||
Judgments regarding whether a corporate fixed maturity security is other-than-temporarily impaired include analyzing the issuer’s financial condition and whether there has been a decline in the issuer’s ability to service the specific security. The analysis of the security issuer is based on asset coverage, cash flow multiples or other industry standards. Several factors assessed include, but are not limited to, credit quality ratings, cash flow sustainability, liquidity, financial strength, industry and market position. Sources of information include, but are not limited to, management projections, independent consultants, external analysts’ research, peer analysis and the Company’s internal analysis. | |||||||||||||||||
If the Company has concerns regarding the viability of the issuer or its ability to service the specific security after this assessment, a cash flow analysis is prepared to determine if the present value of future cash flows has declined below the amortized cost of the fixed maturity security. This analysis to determine an estimate of ultimate recovery value is combined with the estimated timing to recovery and any other applicable cash flows that are expected. If a cash flow analysis estimate is not feasible, then the market’s view of cash flows implied by the period end fair value, market discount rates and effective yield are the primary factors used to estimate a recovery value. | |||||||||||||||||
Mortgage-Backed Securities Not Issued By the U.S. Government or Federally Sponsored Agencies | |||||||||||||||||
The Company uses an estimate of future cash flows expected to be collected to evaluate its mortgage-backed securities for other-than-temporary impairment. The determination of cash flow estimates is inherently subjective and methodologies may vary depending on facts and circumstances specific to the security. All reasonably available information relevant to the collectability of the security, including past events, current conditions, and reasonable and supportable assumptions and forecasts, are considered when developing the estimate of cash flows expected to be collected. Information includes, but is not limited to, debt-servicing, missed refinancing opportunities and geography. Loan level characteristics such as issuer, FICO score, payment terms, level of documentation, property or residency type, and economic outlook are also utilized in financial models, along with historical performance, to estimate or measure the loan’s propensity to default. Additionally, financial models take into account loan age, lease rollovers, rent volatilities, vacancy rates and exposure to refinancing as additional drivers of default. For transactions where loan level data is not available, financial models use a proxy based on the collateral characteristics. Loss severity is a function of multiple factors including, but not limited to, the unpaid balance, interest rate, mortgage insurance ratios, assessed property value at origination, change in property valuation and loan-to-value ratio at origination. Prepayment speeds, both actual and estimated, cost of capital rates and debt service ratios are also considered. The cash flows generated by the collateral securing these securities are then estimated with these default, loss severity and prepayment assumptions. These collateral cash flows are then utilized, along with consideration for the issue’s position in the overall structure, to estimate the cash flows associated with the residential or commercial mortgage-backed security held by the Company. | |||||||||||||||||
Municipal Bonds | |||||||||||||||||
The Company’s municipal bond portfolio consists primarily of special revenue bonds, which present unique considerations in evaluating other-than-temporary impairments, but also includes general obligation bonds. The Company evaluates special revenue bonds for other-than-temporary impairment based on guarantees associated with the repayment from revenues generated by the specified revenue-generating activity associated with the purpose of the bonds. Judgments regarding whether a municipal bond is other-than-temporarily impaired include analyzing the issuer’s financial condition and whether there has been a decline in the overall financial condition of the issuer or its ability to service the specific security. Security credit ratings are reviewed with emphasis on the economy, finances, debt and management of the municipal issuer. Certain securities may be guaranteed by the mono-line credit insurers or other forms of guarantee. While not relied upon in the initial security purchase decision, insurance benefits are considered in the assessments for other-than-temporary impairment, including the credit worthiness of the guarantor. Municipalities possess unique powers, along with a special legal standing and protections, that enable them to act quickly to restore budgetary balance and fiscal integrity. These powers include the sovereign power to tax, access to one-time revenue sources, capacity to issue or restructure debt, and ability to shift spending to other authorities. State governments often provide secondary support to local governments in times of financial stress and the federal government has provided assistance to state governments during recessions. | |||||||||||||||||
If the Company has concerns regarding the viability of the municipal issuer or its ability to service the specific security after this analysis, a cash flow analysis is prepared to determine a present value and whether it has declined below the amortized cost of the security. If a cash flow analysis is not feasible, then the market’s view of the period end fair value, market discount rates and effective yield are the primary factors used to estimate the present value. | |||||||||||||||||
Credit Losses | |||||||||||||||||
The Company estimates the amount of the credit loss component of a fixed maturity security impairment as the difference between amortized cost and the present value of the expected cash flows of the security. The present value is determined using the best estimate cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset-backed or floating rate security. The methodology and assumptions for establishing the best estimate cash flows vary depending on the type of security. Corporate fixed maturity security and municipal bond cash flow estimates are derived from scenario-based outcomes of expected restructurings or the disposition of assets using specific facts and other circumstances, including timing, security interests and loss severity and when not reasonably estimable, such securities are impaired to fair value as management’s best estimate of the present value of future cash flows. The cash flow estimates for mortgage-backed and other structured securities are based on security specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity and prepayment speeds, and structural support, including subordination and guarantees. | |||||||||||||||||
Deferred Policy Acquisition Costs | ' | ||||||||||||||||
Deferred Policy Acquisition Costs | |||||||||||||||||
As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 and as described in “Adopted Accounting Standards”, the Company has retrospectively applied to prior periods new accounting guidance regarding deferred policy acquisition costs adopted January 1, 2012. | |||||||||||||||||
The Company’s deferred policy acquisition costs asset by segment was as follows: | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Annuity | $ | 170,749 | $ | 125,437 | |||||||||||||
Life | 48,558 | 46,798 | |||||||||||||||
Property and casualty | 26,048 | 24,650 | |||||||||||||||
Total | $ | 245,355 | $ | 196,885 | |||||||||||||
Policy acquisition costs, consisting of commissions, policy issuance and other costs which are incremental and directly related to the successful acquisition of new or renewal business, are capitalized and amortized on a basis consistent with the type of insurance coverage. For all investment (annuity) contracts, acquisition costs are amortized over 20 years in proportion to estimated gross profits. Capitalized acquisition costs for interest-sensitive life contracts also are amortized over 20 years in proportion to estimated gross profits. For other individual life contracts, acquisition costs are amortized in proportion to anticipated premiums over the terms of the insurance policies (10, 15, 20 or 30 years). For property and casualty policies, acquisition costs are amortized over the terms of the insurance policies (6 or 12 months). | |||||||||||||||||
The Company periodically reviews the assumptions and estimates used in capitalizing policy acquisition costs and also periodically reviews its estimations of gross profits. The most significant assumptions that are involved in the estimation of annuity gross profits include interest rate spreads, future financial market performance, business surrender/lapse rates, expenses and the impact of realized investment gains and losses. For the variable deposit portion of the annuity segment, the Company amortizes policy acquisition costs utilizing a future financial market performance assumption of a 10% reversion to the mean approach with a 200 basis point corridor around the mean during the reversion period, representing a cap and a floor on the Company’s long-term assumption. The Company’s practice with regard to returns on Separate Accounts assumes that long-term appreciation in the financial market is not changed by short-term market fluctuations, but is only changed when sustained interim deviations are experienced. The Company monitors these fluctuations and only changes the assumption when its long-term expectation changes. | |||||||||||||||||
In the event actual experience differs significantly from assumptions or assumptions are significantly revised, the Company may be required to record a material charge or credit to current period amortization expense for the period in which the adjustment is made. The Company recorded the following adjustments to amortization expense as a result of evaluating actual experience and prospective assumptions, sometimes referred to as “unlocking”: | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Increase (decrease) to amortization: | |||||||||||||||||
Annuity | $ | -3,700 | $ | -3,836 | $ | 2,466 | |||||||||||
Life | 126 | 751 | 1,159 | ||||||||||||||
Total | $ | -3,574 | $ | -3,085 | $ | 3,625 | |||||||||||
Deferred policy acquisition costs (“DAC”) for interest-sensitive life and investment contracts are adjusted for the impact on estimated future gross profits as if net unrealized investment gains and losses had been realized at the balance sheet date. This adjustment reduced the deferred policy acquisition costs asset by $24,997 and $58,808 at December 31, 2013 and 2012, respectively. The after-tax impact of this adjustment is included in accumulated other comprehensive income (net unrealized gains and losses on fixed maturities and equity securities) within shareholders' equity. | |||||||||||||||||
DAC is reviewed for recoverability from future income, including investment income, and costs which are deemed unrecoverable are expensed in the period in which the determination is made. No such costs were deemed unrecoverable during the years ended December 31, 2013, 2012 and 2011. | |||||||||||||||||
This accounting policy description reflects the adoption, effective January 1, 2012 with retrospective application, of accounting guidance that was issued to address diversity in practice regarding the interpretation of which costs relating to the acquisition of new or renewal insurance contracts qualify for deferral. See also “Note 1 -- Summary of Significant Accounting Policies -- Adopted Accounting Standards -- Costs Associated with Acquiring or Renewing Insurance Contracts”. | |||||||||||||||||
Goodwill and Value of Acquired Insurance In Force | ' | ||||||||||||||||
Goodwill and Value of Acquired Insurance In Force | |||||||||||||||||
When the Company was acquired in 1989, intangible assets were recorded in the application of purchase accounting to recognize the value of acquired insurance in force and goodwill. In addition, goodwill was recorded in 1994 related to the purchase of Horace Mann Property & Casualty Insurance Company. The value of acquired insurance in force was fully amortized prior to December 9, 2009. | |||||||||||||||||
Goodwill represents the excess of the amounts paid to acquire a business over the fair value of its net assets at the date of acquisition. Goodwill is not amortized, but is tested for impairment at the reporting unit level at least annually or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. A reporting unit is defined as an operating segment or a business unit one level below an operating segment, if separate financial information is prepared and regularly reviewed by management at that level. The Company’s reporting units, for which goodwill has been allocated, are equivalent to the Company’s operating segments. | |||||||||||||||||
Effective January 1, 2012, the goodwill impairment test, as defined in the accounting guidance, allows an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the entity follows a two-step process. In the first step, the fair value of a reporting unit is compared to its carrying value. If the carrying value of a reporting unit exceeds its fair value, the second step of the impairment test is performed for purposes of confirming and measuring the impairment. In the second step, the fair value of the reporting unit is allocated to all of the assets and liabilities of the reporting unit to determine an implied goodwill value. If the carrying amount of the reporting unit goodwill exceeds the implied goodwill value, an impairment loss would be recognized in an amount equal to that excess. | |||||||||||||||||
The allocation of goodwill by reporting unit is as follows: | |||||||||||||||||
Annuity | $ | 28,025 | |||||||||||||||
Life | 9,911 | ||||||||||||||||
Property and casualty | 9,460 | ||||||||||||||||
Total | $ | 47,396 | |||||||||||||||
In the fourth quarter of 2013, the Company changed the date of its annual impairment test to October 1. The change was made to mitigate resource constraints in connection with year-end financial reporting and more closely coincides the impairment testing date with the internal long-range planning and forecasting process. The Company has determined that this change in accounting principle is preferable under the circumstances and does not result in any delay, acceleration or avoidance of an impairment charge. | |||||||||||||||||
The Company completed its annual goodwill assessment for the individual reporting units as of October 1, 2013 and did not utilize the option to perform an initial assessment of qualitative factors. The first step of the Company’s analysis indicated that fair value exceeded carrying value for all reporting units. The process of evaluating goodwill for impairment required management to make multiple judgments and assumptions to determine the fair value of each reporting unit, including discounted cash flow calculations, the level of the Company’s own share price and assumptions that market participants would make in valuing each reporting unit. Fair value estimates were based primarily on an in-depth analysis of historical experience, projected future cash flows and relevant discount rates, which considered market participant inputs and the relative risk associated with the projected cash flows. Other assumptions included levels of economic capital, future business growth, earnings projections and assets under management for each reporting unit. Estimates of fair value are subject to assumptions that are sensitive to change and represent the Company’s reasonable expectation regarding future developments. The Company also considered other valuation techniques such as peer company price-to-earnings and price-to-book multiples. | |||||||||||||||||
As part of the Company’s October 1, 2013 goodwill analysis, the Company compared the fair value of the aggregated reporting units to the market capitalization of the Company. The difference between the aggregated fair value of the reporting units and the market capitalization of the Company was attributed to several factors, most notably market sentiment, trading volume and transaction premium. The amount of the transaction premium was determined to be reasonable based on insurance industry and Company-specific facts and circumstances. There were no other events or material changes in circumstances during 2013 that indicated that a material change in the fair value of the Company’s reporting units had occurred. | |||||||||||||||||
In the Company’s annual goodwill assessment for the individual reporting units as of December 31, 2012, the first step of the analysis indicated that fair value exceeded carrying value for all reporting units other than the life unit. For the life reporting unit, in the first step of the analysis, the Company determined that the reporting unit’s fair value was less than its carrying value, primarily driven by unrealized investment gains combined with a decrease in anticipated net investment income assuming an extended low interest rate environment. In the second step of the analysis, it was determined that the implied fair value for the life reporting unit’s goodwill was greater than its carrying value; therefore, goodwill was not impaired and no write-down was required. However, the implied fair value exceeded carrying value for the life reporting unit by a limited margin. | |||||||||||||||||
Any amount of goodwill determined to be impaired will be recorded as an expense in the period in which the impairment determination is made. During each year from 2011 through 2013, the Company completed the required annual testing; no impairment charges were necessary as a result of such assessments. The assessment of goodwill recoverability requires significant judgment and is subject to inherent uncertainty. The use of different assumptions, within a reasonable range, could cause the fair value to be below carrying value. Subsequent goodwill assessments could result in impairment, particularly for any reporting unit with at-risk goodwill, due to the impact of a volatile financial market on earnings, discount rate assumptions, liquidity and market capitalization. | |||||||||||||||||
Property and Equipment | ' | ||||||||||||||||
Property and Equipment | |||||||||||||||||
Property and equipment are carried at cost less accumulated depreciation, which is calculated on the straight-line method based on the estimated useful lives of the assets. The estimated life for real estate is identified by specific property and ranges from 20 to 45 years. The estimated useful lives of leasehold improvements and other property and equipment, including capitalized software, generally range from 2 to 10 years. The following amounts are included in Other Assets in the Consolidated Balance Sheets: | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Property and equipment | $ | 108,394 | $ | 108,502 | |||||||||||||
Less: accumulated depreciation | 73,459 | 71,508 | |||||||||||||||
Total | $ | 34,935 | $ | 36,994 | |||||||||||||
Separate Account (Variable Annuity) Assets and Liabilities | ' | ||||||||||||||||
Separate Account (Variable Annuity) Assets and Liabilities | |||||||||||||||||
Separate Account assets represent variable annuity contractholder funds invested in various mutual funds. Separate Account assets are recorded at fair value primarily based on market quotations of the underlying securities. Separate Account liabilities are equal to the estimated fair value of Separate Account assets. The investment income, gains and losses of these accounts accrue directly to the contractholders and are not included in the operations of the Company. The activity of the Separate Accounts is not reflected in the Consolidated Statements of Operations except for (1) contract charges earned, (2) the activity related to contract guarantees, which are benefits on existing variable annuity contracts, and (3) the impact of financial market performance on the amortization of deferred policy acquisition costs. The Company’s contract charges earned include fees charged to the Separate Accounts, including mortality charges, risk charges, policy administration fees, investment management fees and surrender charges. | |||||||||||||||||
Future Policy Benefits, Interest-sensitive Life Contract Liabilities and Annuity Contract Liabilities | ' | ||||||||||||||||
Future Policy Benefits, Interest-sensitive Life Contract Liabilities and Annuity Contract Liabilities | |||||||||||||||||
Liabilities for future benefits on life and annuity policies are established in amounts adequate to meet the estimated future obligations on policies in force. | |||||||||||||||||
Liabilities for future policy benefits on certain life insurance policies are computed using the net level premium method including assumptions as to investment yields, mortality, persistency, expenses and other assumptions based on the Company’s experience, including a provision for adverse deviation. These assumptions are established at the time the policy is issued and are intended to estimate the experience for the period the policy benefits are payable. If experience is less favorable than the assumptions, additional liabilities may be established, resulting in a charge to income for that period. At December 31, 2013, reserve investment yield assumptions ranged from 4% to 8%. | |||||||||||||||||
Liabilities for future benefits on annuity contracts and certain long-duration life insurance contracts are carried at accumulated policyholder values without reduction for potential surrender or withdrawal charges. The liability also includes provisions for the unearned portion of certain policy charges. | |||||||||||||||||
A guaranteed minimum death benefit (“GMDB”) generally provides an additional benefit if the contractholder dies and the variable annuity contract value is less than a contractually defined amount. The Company has estimated and recorded a GMDB reserve on variable annuity contracts in accordance with accounting guidance. Contractually defined amounts vary from contract to contract based on the date the contract was entered into as well as the GMDB feature elected by the contractholder. The Company regularly monitors the GMDB reserve considering fluctuations in the financial market. The Company has a relatively low exposure to GMDB risk as shown below. | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
GMDB reserve | $ | 209 | $ | 392 | |||||||||||||
Aggregate in-the-money death benefits under the GMDB provision | 30,422 | 41,990 | |||||||||||||||
Variable annuity contract value distribution based on GMDB feature: | |||||||||||||||||
No guarantee | 30 | % | 31 | % | |||||||||||||
Return of premium guarantee | 64 | % | 63 | % | |||||||||||||
Guarantee of premium roll-up at an annual rate of 3% or 5% | 6 | % | 6 | % | |||||||||||||
Total | 100 | % | 100 | % | |||||||||||||
Unpaid Claims and Claim Expenses | ' | ||||||||||||||||
Unpaid Claims and Claim Expenses | |||||||||||||||||
Liabilities for property and casualty unpaid claims and claim expenses include provisions for payments to be made on reported claims, claims incurred but not yet reported and associated settlement expenses. All of the Company's reserves for property and casualty unpaid claims and claim expenses are carried at the full value of estimated liabilities and are not discounted for interest expected to be earned on reserves. Estimated amounts of salvage and subrogation on unpaid property and casualty claims are deducted from the liability for unpaid claims. Due to the nature of the Company's personal lines business, the Company has no exposure to losses related to claims for toxic waste cleanup, other environmental remediation or asbestos-related illnesses other than claims under homeowners insurance policies for environmentally related items such as mold. | |||||||||||||||||
Other Policyholder Funds | ' | ||||||||||||||||
Other Policyholder Funds | |||||||||||||||||
Other Policyholder Funds includes supplementary contracts without life contingencies, dividend accumulations, and amounts payable under Federal Home Loan Bank funding agreements. Amounts received and repaid under the funding agreements are classified in the financing activities section of the Company’s Consolidated Statement of Cash Flows combined with annuity contract deposits and disbursements, respectively. | |||||||||||||||||
Federal Home Loan Bank Funding Agreements | |||||||||||||||||
In 2013, one of the Company's subsidiaries, Horace Mann Life Insurance Company (“HMLIC”), became a member of the Federal Home Loan Bank of Chicago ("FHLB"), which provides HMLIC with access to collateralized borrowings and other FHLB products. As membership requires the ownership of member stock, on June 4, 2013, HMLIC purchased common stock to meet the membership requirement. Any borrowing from the FHLB requires the purchase of FHLB activity-based common stock in an amount equal to 5.0% of the borrowing, or a lower percentage -- such as 2.0% based on the Reduced Capitalization Advance Program. HMEC's Board of Directors has authorized a maximum of $250,000 from the FHLB under advances and funding agreements combined. On December 27, 2013, the Company received $250,000 under funding agreements with $125,000 maturing on December 28, 2015 and $125,000 maturing on December 15, 2023. Interest on the funding agreements accrues at an annual weighted average rate of 0.24% as of December 31, 2013. | |||||||||||||||||
Insurance Premiums and Contract Charges Earned | ' | ||||||||||||||||
Insurance Premiums and Contract Charges Earned | |||||||||||||||||
Property and casualty insurance premiums are recognized as revenue ratably over the related contract periods in proportion to the risks insured. The unexpired portions of these property and casualty premiums are recorded as unearned premiums, using the monthly pro rata method. | |||||||||||||||||
Premiums and contract charges for interest-sensitive life and investment (annuity) contracts consist of charges for the cost of insurance, policy administration and withdrawals. Premiums for long-term traditional life policies are recognized as revenues when due over the premium-paying period. Annuity and interest-sensitive life contract deposits represent funds deposited by policyholders and are not included in the Company's premiums or contract charges earned. | |||||||||||||||||
Stock Based Compensation | ' | ||||||||||||||||
Stock Based Compensation | |||||||||||||||||
The Company grants stock options to executive officers, other employees and directors. The exercise price of the option is equal to the fair market value of the Company's common stock on the date of grant. Additional information regarding the Company's stock-based compensation plans is contained in “Note 6 -- Shareholders' Equity and Stock Options”. | |||||||||||||||||
The Company recognizes compensation cost for share-based compensation plans based on the fair value at the grant dates. For the years ended December 31, 2013, 2012 and 2011, the Company recognized $1,419, $2,476 and $1,451, respectively, in expense as a result of the vesting of stock options during the respective periods. | |||||||||||||||||
In 2013, 2012 and 2011, the Company granted stock options as quantified in the table below, which also provides the weighted average grant date fair value for options granted in each year. The fair value of options granted was estimated on the respective dates of grant using the Black-Scholes option pricing model with the weighted-average assumptions shown in the following table. | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Number of options granted | 245,424 | 296,188 | 313,000 | ||||||||||||||
Weighted average grant date fair value of options granted | $ | 8.25 | $ | 6.02 | $ | 6.2 | |||||||||||
Weighted average assumptions: | |||||||||||||||||
Risk-free interest rate | 1 | % | 1 | % | 2.2 | % | |||||||||||
Expected dividend yield | 2.7 | % | 2.2 | % | 2.2 | % | |||||||||||
Expected life, in years | 5.8 | 5.8 | 5.8 | ||||||||||||||
Expected volatility (based on historical volatility) | 54.5 | % | 45.1 | % | 45 | % | |||||||||||
The weighted average fair value of nonvested options outstanding on December 31, 2013 was $6.88. Total unrecognized compensation expense relating to the nonvested options outstanding as of December 31, 2013 was approximately $2,448. This amount will be recognized as expense over the remainder of the vesting period, which is scheduled to be 2014 through 2017. Expense is reflected on a straight-line basis over the vesting period for the entire award. | |||||||||||||||||
Income Taxes | ' | ||||||||||||||||
Income Taxes | |||||||||||||||||
The Company uses the asset and liability method for calculating deferred federal income taxes. Income tax provisions are generally based on income reported for financial statement purposes. The provisions for federal income taxes for the years ended December 31, 2013, 2012 and 2011 included amounts currently payable and deferred income taxes resulting from the cumulative differences in the Company's assets and liabilities, determined on a tax return versus financial statement basis. | |||||||||||||||||
Deferred tax assets and liabilities include provisions for unrealized investment gains and losses as well as the net funded status of pension and other postretirement benefit obligations with the changes for each period included in the respective components of accumulated other comprehensive income (loss) within shareholders' equity. | |||||||||||||||||
Earnings Per Share | ' | ||||||||||||||||
Earnings Per Share | |||||||||||||||||
Basic earnings per share is computed based on the weighted average number of common shares outstanding plus the weighted average number of fully vested restricted stock units and common stock units payable as shares of HMEC common stock. Diluted earnings per share is computed based on the weighted average number of common shares and common stock equivalents outstanding, to the extent dilutive. The Company’s common stock equivalents relate to outstanding common stock options, deferred compensation common stock units and incentive compensation restricted common stock units. | |||||||||||||||||
The computations of net income per share on both basic and diluted bases, including reconciliations of the numerators and denominators, were as follows: | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Basic: | |||||||||||||||||
Net income for the period | $ | 110,893 | $ | 103,866 | $ | 70,506 | |||||||||||
Weighted average number of common shares | |||||||||||||||||
during the period (in thousands) | 40,377 | 39,514 | 39,866 | ||||||||||||||
Net income per share - basic | $ | 2.75 | $ | 2.63 | $ | 1.77 | |||||||||||
Diluted: | |||||||||||||||||
Net income for the period | $ | 110,893 | $ | 103,866 | $ | 70,506 | |||||||||||
Weighted average number of common shares | |||||||||||||||||
during the period (in thousands) | 40,377 | 39,514 | 39,866 | ||||||||||||||
Weighted average number of common equivalent | |||||||||||||||||
shares to reflect the dilutive effect of common | |||||||||||||||||
stock equivalent securities (in thousands): | |||||||||||||||||
Stock options | 211 | 222 | 206 | ||||||||||||||
Common stock units related to deferred | |||||||||||||||||
compensation for Directors | - | 112 | 114 | ||||||||||||||
Common stock units related to deferred | |||||||||||||||||
compensation for Employees | 112 | 116 | 115 | ||||||||||||||
Restricted common stock units related to | |||||||||||||||||
incentive compensation | 933 | 1,424 | 1,136 | ||||||||||||||
Total common and common equivalent shares adjusted | |||||||||||||||||
to calculate diluted earnings per share (in thousands) | 41,633 | 41,388 | 41,437 | ||||||||||||||
Net income per share - diluted | $ | 2.66 | $ | 2.51 | $ | 1.7 | |||||||||||
Options to purchase 243,727 shares of common stock at $20.60 to $30.24 per share were granted in 2013 but were not included in the computation of 2013 diluted earnings per share because of their anti-dilutive effect as a result of the options' exercise price being greater than the average market price of the common shares during 2013 and/or the unrecognized compensation cost having an anti-dilutive effect. The options, which expire in 2020, were still outstanding at December 31, 2013. | |||||||||||||||||
Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) | ' | ||||||||||||||||
Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||
Comprehensive income (loss) represents the change in shareholders’ equity during a reporting period from transactions and other events and circumstances from non-shareholder sources. For the Company, comprehensive income (loss) is equal to net income plus or minus the after-tax change in net unrealized gains and losses on fixed maturities and equity securities and the after-tax change in net funded status of pension and other postretirement benefit obligations for the period as shown in the Consolidated Statements of Changes in Shareholders' Equity. Accumulated other comprehensive income (loss) represents the accumulated change in shareholders’ equity from these transactions and other events and circumstances from non-shareholder sources as shown in the Consolidated Balance Sheets. | |||||||||||||||||
In the Consolidated Balance Sheets, the Company recognizes the funded status of defined benefit pension plans and other postretirement benefit plans as a component of accumulated other comprehensive income (loss), net of tax. | |||||||||||||||||
Comprehensive Income (Loss) | |||||||||||||||||
The components of comprehensive income (loss) were as follows: | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Net income | $ | 110,893 | $ | 103,866 | $ | 70,506 | |||||||||||
Other comprehensive income (loss): | |||||||||||||||||
Change in net unrealized gains and losses on fixed | |||||||||||||||||
maturities and equity securities | |||||||||||||||||
Net unrealized holding gains and losses on fixed | |||||||||||||||||
maturities and equity securities arising during the period | -375,184 | 204,460 | 281,202 | ||||||||||||||
Less: reclassification adjustment for net gains | |||||||||||||||||
included in income before income tax | 22,245 | 27,298 | 37,663 | ||||||||||||||
Total, before tax | -397,429 | 177,162 | 243,539 | ||||||||||||||
Income tax expense (benefit) | -149,019 | 62,984 | 86,585 | ||||||||||||||
Total, net of tax | -248,410 | 114,178 | 156,954 | ||||||||||||||
Change in net funded status of pension and | |||||||||||||||||
other postretirement benefit obligations | |||||||||||||||||
Before tax | 5,645 | 1,276 | -4,801 | ||||||||||||||
Income tax expense (benefit) | 2,110 | 345 | -1,714 | ||||||||||||||
Total, net of tax | 3,535 | 931 | -3,087 | ||||||||||||||
Total comprehensive income (loss) | $ | -133,982 | $ | 218,975 | $ | 224,373 | |||||||||||
Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||
Reflecting accounting guidance adopted prospectively effective January 1, 2013, the following table reconciles the components of accumulated other comprehensive income (loss) for the period indicated. | |||||||||||||||||
Unrealized | |||||||||||||||||
Gains and | |||||||||||||||||
Losses on | |||||||||||||||||
Fixed Maturities | |||||||||||||||||
and Equity | Defined | ||||||||||||||||
Securities (1)(2) | Benefit Plans (1) | Total (1) | |||||||||||||||
Beginning balance, January 1, 2013 | $ | 382,400 | $ | -15,311 | $ | 367,089 | |||||||||||
Other comprehensive income (loss) before | -233,951 | 3,535 | -230,416 | ||||||||||||||
reclassifications | |||||||||||||||||
Amounts reclassified from accumulated | |||||||||||||||||
other comprehensive income | -14,459 | - | -14,459 | ||||||||||||||
Net current-period other comprehensive income | -248,410 | 3,535 | -244,875 | ||||||||||||||
(loss) | |||||||||||||||||
Ending balance, December 31, 2013 | $ | 133,990 | $ | -11,776 | $ | 122,214 | |||||||||||
-1 | All amounts are net of tax. | ||||||||||||||||
-2 | The $22,245 pretax amount reclassified from accumulated other comprehensive income is included in net realized investment gains and losses and the $7,786 related tax expense (benefit) is included in income tax expense in the Consolidated Statement of Operations for the year ended December 31, 2013. | ||||||||||||||||
Comparative information for elements that are not required to be reclassified in their entirety to net income in the same reporting period is located in “Note 2 -- Investments -- Unrealized Gains and Losses on Fixed Maturities and Equity Securities”. | |||||||||||||||||
Statements of Cash Flows | ' | ||||||||||||||||
Statements of Cash Flows | |||||||||||||||||
For purposes of the Consolidated Statements of Cash Flows, cash constitutes cash on deposit at banks. | |||||||||||||||||
Adopted Accounting Standards | ' | ||||||||||||||||
Adopted Accounting Standards | |||||||||||||||||
Comprehensive Income | |||||||||||||||||
Effective January 1, 2013, the Company prospectively adopted accounting guidance to improve the disclosure of reclassifications out of accumulated other comprehensive income. The guidance requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under U.S. GAAP to be reclassified in its entirety to net income. For other amounts that are not required to be reclassified in their entirety to net income in the same reporting period, the reclassifications are required to be cross-referenced to other disclosures that provide additional detail about those amounts. As shown in “Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss)” above, certain disclosures in the Company’s Notes to Consolidated Financial Statements have been expanded to address additional information required by this guidance. The adoption of this accounting guidance did not have an effect on the results of operations or financial position of the Company. | |||||||||||||||||
Balance Sheet Offsetting | |||||||||||||||||
Effective January 1, 2013, the Company adopted accounting guidance to address disclosures about offsetting assets and liabilities. The guidance clarifies which instruments and transactions are subject to the offsetting disclosure requirements. The instruments and transactions include bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions. The adoption of this accounting guidance did not have an effect on the results of operations or financial position of the Company. | |||||||||||||||||
Costs Associated with Acquiring or Renewing Insurance Contracts | |||||||||||||||||
Effective January 1, 2012, the Company adopted accounting guidance which was issued to address diversity in practice regarding the interpretation of which costs relating to the acquisition of new or renewal insurance contracts qualify for deferral. The guidance allows an insurance entity to capitalize only incremental and certain direct costs related to the successful acquisition of new or renewal insurance contracts. Management elected retrospective application of the new guidance resulting in a downward adjustment to the deferred policy acquisition costs asset with a corresponding decrease to beginning shareholders’ equity, net of applicable deferred taxes. The adoption of this accounting guidance reduces expense deferrals and amortization, with a minimal net effect on the Company’s results of operations. | |||||||||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
Deferred policy acquisition costs asset by segment | ' | ||||||||||||||||
The Company’s deferred policy acquisition costs asset by segment was as follows: | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Annuity | $ | 170,749 | $ | 125,437 | |||||||||||||
Life | 48,558 | 46,798 | |||||||||||||||
Property and casualty | 26,048 | 24,650 | |||||||||||||||
Total | $ | 245,355 | $ | 196,885 | |||||||||||||
Adjustment to amortization expenses | ' | ||||||||||||||||
The Company recorded the following adjustments to amortization expense as a result of evaluating actual experience and prospective assumptions, sometimes referred to as “unlocking”: | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Increase (decrease) to amortization: | |||||||||||||||||
Annuity | $ | -3,700 | $ | -3,836 | $ | 2,466 | |||||||||||
Life | 126 | 751 | 1,159 | ||||||||||||||
Total | $ | -3,574 | $ | -3,085 | $ | 3,625 | |||||||||||
Allocation of goodwill by reporting unit | ' | ||||||||||||||||
The allocation of goodwill by reporting unit is as follows: | |||||||||||||||||
Annuity | $ | 28,025 | |||||||||||||||
Life | 9,911 | ||||||||||||||||
Property and casualty | 9,460 | ||||||||||||||||
Total | $ | 47,396 | |||||||||||||||
Property and Equipment | ' | ||||||||||||||||
The following amounts are included in Other Assets in the Consolidated Balance Sheets: | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Property and equipment | $ | 108,394 | $ | 108,502 | |||||||||||||
Less: accumulated depreciation | 73,459 | 71,508 | |||||||||||||||
Total | $ | 34,935 | $ | 36,994 | |||||||||||||
Summary of guaranteed minimum death benefit | ' | ||||||||||||||||
The Company has a relatively low exposure to GMDB risk as shown below. | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
GMDB reserve | $ | 209 | $ | 392 | |||||||||||||
Aggregate in-the-money death benefits under the GMDB provision | 30,422 | 41,990 | |||||||||||||||
Variable annuity contract value distribution based on GMDB feature: | |||||||||||||||||
No guarantee | 30 | % | 31 | % | |||||||||||||
Return of premium guarantee | 64 | % | 63 | % | |||||||||||||
Guarantee of premium roll-up at an annual rate of 3% or 5% | 6 | % | 6 | % | |||||||||||||
Total | 100 | % | 100 | % | |||||||||||||
Stock options fair value pricing model weighted-average assumptions | ' | ||||||||||||||||
The fair value of options granted was estimated on the respective dates of grant using the Black-Scholes option pricing model with the weighted-average assumptions shown in the following table. | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Number of options granted | 245,424 | 296,188 | 313,000 | ||||||||||||||
Weighted average grant date fair value of options granted | $ | 8.25 | $ | 6.02 | $ | 6.2 | |||||||||||
Weighted average assumptions: | |||||||||||||||||
Risk-free interest rate | 1 | % | 1 | % | 2.2 | % | |||||||||||
Expected dividend yield | 2.7 | % | 2.2 | % | 2.2 | % | |||||||||||
Expected life, in years | 5.8 | 5.8 | 5.8 | ||||||||||||||
Expected volatility (based on historical volatility) | 54.5 | % | 45.1 | % | 45 | % | |||||||||||
Computations of net income per share on both basic and diluted bases, including reconciliations of the numerators and denominators | ' | ||||||||||||||||
The computations of net income per share on both basic and diluted bases, including reconciliations of the numerators and denominators, were as follows: | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Basic: | |||||||||||||||||
Net income for the period | $ | 110,893 | $ | 103,866 | $ | 70,506 | |||||||||||
Weighted average number of common shares | |||||||||||||||||
during the period (in thousands) | 40,377 | 39,514 | 39,866 | ||||||||||||||
Net income per share - basic | $ | 2.75 | $ | 2.63 | $ | 1.77 | |||||||||||
Diluted: | |||||||||||||||||
Net income for the period | $ | 110,893 | $ | 103,866 | $ | 70,506 | |||||||||||
Weighted average number of common shares | |||||||||||||||||
during the period (in thousands) | 40,377 | 39,514 | 39,866 | ||||||||||||||
Weighted average number of common equivalent | |||||||||||||||||
shares to reflect the dilutive effect of common | |||||||||||||||||
stock equivalent securities (in thousands): | |||||||||||||||||
Stock options | 211 | 222 | 206 | ||||||||||||||
Common stock units related to deferred | |||||||||||||||||
compensation for Directors | - | 112 | 114 | ||||||||||||||
Common stock units related to deferred | |||||||||||||||||
compensation for Employees | 112 | 116 | 115 | ||||||||||||||
Restricted common stock units related to | |||||||||||||||||
incentive compensation | 933 | 1,424 | 1,136 | ||||||||||||||
Total common and common equivalent shares adjusted | |||||||||||||||||
to calculate diluted earnings per share (in thousands) | 41,633 | 41,388 | 41,437 | ||||||||||||||
Net income per share - diluted | $ | 2.66 | $ | 2.51 | $ | 1.7 | |||||||||||
Components of comprehensive income | ' | ||||||||||||||||
The components of comprehensive income (loss) were as follows: | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Net income | $ | 110,893 | $ | 103,866 | $ | 70,506 | |||||||||||
Other comprehensive income (loss): | |||||||||||||||||
Change in net unrealized gains and losses on fixed | |||||||||||||||||
maturities and equity securities | |||||||||||||||||
Net unrealized holding gains and losses on fixed | |||||||||||||||||
maturities and equity securities arising during the period | -375,184 | 204,460 | 281,202 | ||||||||||||||
Less: reclassification adjustment for net gains | |||||||||||||||||
included in income before income tax | 22,245 | 27,298 | 37,663 | ||||||||||||||
Total, before tax | -397,429 | 177,162 | 243,539 | ||||||||||||||
Income tax expense (benefit) | -149,019 | 62,984 | 86,585 | ||||||||||||||
Total, net of tax | -248,410 | 114,178 | 156,954 | ||||||||||||||
Change in net funded status of pension and | |||||||||||||||||
other postretirement benefit obligations | |||||||||||||||||
Before tax | 5,645 | 1,276 | -4,801 | ||||||||||||||
Income tax expense (benefit) | 2,110 | 345 | -1,714 | ||||||||||||||
Total, net of tax | 3,535 | 931 | -3,087 | ||||||||||||||
Total comprehensive income (loss) | $ | -133,982 | $ | 218,975 | $ | 224,373 | |||||||||||
Accumulated Other Comprehensive Income (Loss) | ' | ||||||||||||||||
Reflecting accounting guidance adopted prospectively effective January 1, 2013, the following table reconciles the components of accumulated other comprehensive income (loss) for the period indicated. | |||||||||||||||||
Unrealized | |||||||||||||||||
Gains and | |||||||||||||||||
Losses on | |||||||||||||||||
Fixed Maturities | |||||||||||||||||
and Equity | Defined | ||||||||||||||||
Securities (1)(2) | Benefit Plans (1) | Total (1) | |||||||||||||||
Beginning balance, January 1, 2013 | $ | 382,400 | $ | -15,311 | $ | 367,089 | |||||||||||
Other comprehensive income (loss) before | -233,951 | 3,535 | -230,416 | ||||||||||||||
reclassifications | |||||||||||||||||
Amounts reclassified from accumulated | |||||||||||||||||
other comprehensive income | -14,459 | - | -14,459 | ||||||||||||||
Net current-period other comprehensive income | -248,410 | 3,535 | -244,875 | ||||||||||||||
(loss) | |||||||||||||||||
Ending balance, December 31, 2013 | $ | 133,990 | $ | -11,776 | $ | 122,214 | |||||||||||
-1 | All amounts are net of tax. | ||||||||||||||||
-2 | The $22,245 pretax amount reclassified from accumulated other comprehensive income is included in net realized investment gains and losses and the $7,786 related tax expense (benefit) is included in income tax expense in the Consolidated Statement of Operations for the year ended December 31, 2013. | ||||||||||||||||
Investments_Tables
Investments (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||
Investments [Abstract] | ' | ||||||||||||||||||||||||||||||
Components of net investment income | ' | ||||||||||||||||||||||||||||||
The components of net investment income for the following periods were: | |||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||||||||
Fixed maturities | $ | 304,024 | $ | 297,042 | $ | 285,782 | |||||||||||||||||||||||||
Equity securities | 3,698 | 2,814 | 1,685 | ||||||||||||||||||||||||||||
Short-term and other investments | 8,242 | 8,109 | 7,891 | ||||||||||||||||||||||||||||
Other invested assets (equity method investments) | 5,902 | 5,892 | - | ||||||||||||||||||||||||||||
Total investment income | 321,866 | 313,857 | 295,358 | ||||||||||||||||||||||||||||
Investment expenses | -8,256 | -7,854 | -7,047 | ||||||||||||||||||||||||||||
Net investment income | $ | 313,610 | $ | 306,003 | $ | 288,311 | |||||||||||||||||||||||||
Summary of realized investment gains (losses) | ' | ||||||||||||||||||||||||||||||
Net realized investment gains (losses) for the following periods were: | |||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||||||||
Fixed maturities | $ | 18,480 | $ | 23,218 | $ | 37,466 | |||||||||||||||||||||||||
Equity securities | 3,765 | 4,080 | 197 | ||||||||||||||||||||||||||||
Short-term and other investments | - | - | - | ||||||||||||||||||||||||||||
Net realized investment gains | $ | 22,245 | $ | 27,298 | $ | 37,663 | |||||||||||||||||||||||||
Unrealized gains and losses on fixed maturities and equity securities | ' | ||||||||||||||||||||||||||||||
The amortized cost or cost, unrealized investment gains and losses, fair values and other-than-temporary impairment (“OTTI”) included in accumulated other comprehensive income (loss) (“AOCI”) of all fixed maturities and equity securities in the portfolio were as follows: | |||||||||||||||||||||||||||||||
Amortized | Unrealized | Unrealized | Fair | OTTI in | |||||||||||||||||||||||||||
Cost or Cost | Gains | Losses | Value | AOCI (2) | |||||||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||||
Fixed maturity securities | |||||||||||||||||||||||||||||||
U.S. Government and | |||||||||||||||||||||||||||||||
federally sponsored | |||||||||||||||||||||||||||||||
agency obligations (1): | |||||||||||||||||||||||||||||||
Mortgage-backed | $ | 555,574 | $ | 33,711 | $ | 19,560 | $ | 569,725 | $ | - | |||||||||||||||||||||
securities | |||||||||||||||||||||||||||||||
Other, including | |||||||||||||||||||||||||||||||
U.S. Treasury | 449,060 | 9,865 | 23,351 | 435,574 | - | ||||||||||||||||||||||||||
securities | |||||||||||||||||||||||||||||||
Municipal bonds | 1,425,441 | 80,701 | 34,615 | 1,471,527 | - | ||||||||||||||||||||||||||
Foreign government bonds | 50,641 | 4,700 | 390 | 54,951 | - | ||||||||||||||||||||||||||
Corporate bonds | 2,457,727 | 188,832 | 32,150 | 2,614,409 | - | ||||||||||||||||||||||||||
Other mortgage-backed | 845,762 | 26,477 | 8,852 | 863,387 | 2,812 | ||||||||||||||||||||||||||
securities | |||||||||||||||||||||||||||||||
Totals | $ | 5,784,205 | $ | 344,286 | $ | 118,918 | $ | 6,009,573 | $ | 2,812 | |||||||||||||||||||||
Equity securities | $ | 84,754 | $ | 10,723 | $ | 3,619 | $ | 91,858 | $ | - | |||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||||||||
Fixed maturity securities | |||||||||||||||||||||||||||||||
U.S. Government and | |||||||||||||||||||||||||||||||
federally sponsored | |||||||||||||||||||||||||||||||
agency obligations (1): | |||||||||||||||||||||||||||||||
Mortgage-backed | $ | 547,040 | $ | 72,644 | $ | 125 | $ | 619,559 | $ | - | |||||||||||||||||||||
securities | |||||||||||||||||||||||||||||||
Other, including | |||||||||||||||||||||||||||||||
U.S. Treasury | 371,706 | 37,857 | 135 | 409,428 | - | ||||||||||||||||||||||||||
securities | |||||||||||||||||||||||||||||||
Municipal bonds | 1,402,424 | 186,261 | 2,648 | 1,586,037 | - | ||||||||||||||||||||||||||
Foreign government bonds | 48,476 | 9,393 | - | 57,869 | - | ||||||||||||||||||||||||||
Corporate bonds | 2,258,554 | 313,430 | 4,950 | 2,567,034 | - | ||||||||||||||||||||||||||
Other mortgage-backed | 683,257 | 41,080 | 2,032 | 722,305 | 3,214 | ||||||||||||||||||||||||||
securities | |||||||||||||||||||||||||||||||
Totals | $ | 5,311,457 | $ | 660,665 | $ | 9,890 | $ | 5,962,232 | $ | 3,214 | |||||||||||||||||||||
Equity securities | $ | 52,396 | $ | 2,397 | $ | 1,290 | $ | 53,503 | $ | - | |||||||||||||||||||||
-1 | Fair value includes securities issued by Federal National Mortgage Association (“FNMA”) of $336,193 and $375,111; Federal Home Loan Mortgage Corporation (“FHLMC”) of $427,172 and $418,174; and Government National Mortgage Association (“GNMA”) of $126,245 and $136,998 as of December 31, 2013 and 2012, respectively. | ||||||||||||||||||||||||||||||
-2 | Represents the amount of other-than-temporary impairment losses in AOCI which, beginning April 1, 2009, was not included in earnings under current accounting guidance. Amounts also include unrealized gains/(losses) on impaired securities relating to changes in the fair value of such securities subsequent to the impairment measurement date. | ||||||||||||||||||||||||||||||
Summary of fair value and gross unrealized losses of fixed maturity securities and equity securities in an unrealized loss position | ' | ||||||||||||||||||||||||||||||
Therefore, no impairment of these securities was recorded at December 31, 2013. | |||||||||||||||||||||||||||||||
12 months or less | More than 12 months | Total | |||||||||||||||||||||||||||||
Gross | Gross | Gross | |||||||||||||||||||||||||||||
Unrealized | Unrealized | Unrealized | |||||||||||||||||||||||||||||
Fair Value | Losses | Fair Value | Losses | Fair Value | Losses | ||||||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||||
Fixed maturity securities | |||||||||||||||||||||||||||||||
U.S. Government and | |||||||||||||||||||||||||||||||
federally sponsored | |||||||||||||||||||||||||||||||
agency obligations: | |||||||||||||||||||||||||||||||
Mortgage-backed | $ | 150,602 | $ | 19,145 | $ | 1,383 | $ | 415 | $ | 151,985 | $ | 19,560 | |||||||||||||||||||
securities | |||||||||||||||||||||||||||||||
Other | 249,765 | 22,479 | 4,450 | 872 | 254,215 | 23,351 | |||||||||||||||||||||||||
Municipal bonds | 375,523 | 26,529 | 42,899 | 8,086 | 418,422 | 34,615 | |||||||||||||||||||||||||
Foreign government bonds | 6,738 | 390 | - | - | 6,738 | 390 | |||||||||||||||||||||||||
Corporate bonds | 582,849 | 28,634 | 12,948 | 3,516 | 595,797 | 32,150 | |||||||||||||||||||||||||
Other mortgage-backed | 274,983 | 8,300 | 20,008 | 552 | 294,991 | 8,852 | |||||||||||||||||||||||||
securities | |||||||||||||||||||||||||||||||
Total fixed | |||||||||||||||||||||||||||||||
maturity securities | 1,640,460 | 105,477 | 81,688 | 13,441 | 1,722,148 | 118,918 | |||||||||||||||||||||||||
Equity securities (1) | 32,392 | 3,117 | 1,405 | 502 | 33,797 | 3,619 | |||||||||||||||||||||||||
Combined totals | $ | 1,672,852 | $ | 108,594 | $ | 83,093 | $ | 13,943 | $ | 1,755,945 | $ | 122,537 | |||||||||||||||||||
Number of positions with a | |||||||||||||||||||||||||||||||
gross unrealized loss | 534 | 46 | 580 | ||||||||||||||||||||||||||||
Fair value as a percentage of | |||||||||||||||||||||||||||||||
total fixed maturities and | |||||||||||||||||||||||||||||||
equity securities fair value | 27.4 | % | 1.4 | % | 28.8 | % | |||||||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||||||||
Fixed maturity securities | |||||||||||||||||||||||||||||||
U.S. Government and | |||||||||||||||||||||||||||||||
federally sponsored | |||||||||||||||||||||||||||||||
agency obligations: | |||||||||||||||||||||||||||||||
Mortgage-backed | $ | 11,006 | $ | 124 | $ | 50 | $ | 1 | $ | 11,056 | $ | 125 | |||||||||||||||||||
securities | |||||||||||||||||||||||||||||||
Other | 9,944 | 135 | - | - | 9,944 | 135 | |||||||||||||||||||||||||
Municipal bonds | 108,578 | 2,605 | 3,990 | 43 | 112,568 | 2,648 | |||||||||||||||||||||||||
Foreign government bonds | - | - | - | - | - | - | |||||||||||||||||||||||||
Corporate bonds | 56,481 | 875 | 26,725 | 4,075 | 83,206 | 4,950 | |||||||||||||||||||||||||
Other mortgage-backed | 58,218 | 621 | 25,014 | 1,411 | 83,232 | 2,032 | |||||||||||||||||||||||||
securities | |||||||||||||||||||||||||||||||
Total fixed | |||||||||||||||||||||||||||||||
maturity securities | 244,227 | 4,360 | 55,779 | 5,530 | 300,006 | 9,890 | |||||||||||||||||||||||||
Equity securities (1) | 19,344 | 1,288 | 9 | 2 | 19,353 | 1,290 | |||||||||||||||||||||||||
Combined totals | $ | 263,571 | $ | 5,648 | $ | 55,788 | $ | 5,532 | $ | 319,359 | $ | 11,180 | |||||||||||||||||||
Number of positions with a | |||||||||||||||||||||||||||||||
gross unrealized loss | 156 | 43 | 199 | ||||||||||||||||||||||||||||
Fair value as a percentage of | |||||||||||||||||||||||||||||||
total fixed maturities and | |||||||||||||||||||||||||||||||
equity securities fair value | 4.4 | % | 0.9 | % | 5.3 | % | |||||||||||||||||||||||||
-1 | Includes nonredeemable (perpetual) preferred stocks and common stocks. | ||||||||||||||||||||||||||||||
Summary of cumulative credit losses | ' | ||||||||||||||||||||||||||||||
The following table summarizes the cumulative amounts related to the Company’s credit loss component of the other-than-temporary impairment losses on fixed maturity securities held as of December 31, 2013 and 2012 that the Company did not intend to sell as of those dates, and it was not more likely than not that the Company would be required to sell the securities before the anticipated recovery of the amortized cost bases, for which the non-credit portions of the other-than-temporary impairment losses were recognized in other comprehensive income: | |||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||
Cumulative credit loss (1) | |||||||||||||||||||||||||||||||
Beginning of period | $ | 2,877 | $ | 3,957 | |||||||||||||||||||||||||||
New credit losses (2) | 1,220 | - | |||||||||||||||||||||||||||||
Losses related to securities sold or paid down during the period | - | -1,080 | |||||||||||||||||||||||||||||
End of period | $ | 4,097 | $ | 2,877 | |||||||||||||||||||||||||||
-1 | The cumulative credit loss amounts exclude other-than-temporary impairment losses on securities held as of the periods indicated that the Company intended to sell or it was more likely than not that the Company would be required to sell the security before the recovery of the amortized cost basis. | ||||||||||||||||||||||||||||||
-2 | For 2013, the other-than-temporary impairment loss was recorded on a Detroit general obligation bond. | ||||||||||||||||||||||||||||||
Distribution of the Company's fixed maturity portfolio by estimated expected maturity | ' | ||||||||||||||||||||||||||||||
For structured securities, including mortgage-backed securities and other asset-backed securities, estimated expected maturities consider broker-dealer survey prepayment assumptions and are verified for consistency with the interest rate and economic environments. | |||||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||
Percent of | |||||||||||||||||||||||||||||||
Amortized | Fair | Total Fair | |||||||||||||||||||||||||||||
Cost | Value | Value | |||||||||||||||||||||||||||||
Estimated expected maturity: | |||||||||||||||||||||||||||||||
Due in 1 year or less | $ | 234,952 | $ | 244,106 | 4.1 | % | |||||||||||||||||||||||||
Due after 1 year through 5 years | 1,206,390 | 1,253,394 | 20.9 | ||||||||||||||||||||||||||||
Due after 5 years through 10 years | 2,227,741 | 2,314,540 | 38.4 | ||||||||||||||||||||||||||||
Due after 10 years through 20 years | 1,202,062 | 1,248,897 | 20.8 | ||||||||||||||||||||||||||||
Due after 20 years | 913,060 | 948,636 | 15.8 | ||||||||||||||||||||||||||||
Total | $ | 5,784,205 | $ | 6,009,573 | 100 | % | |||||||||||||||||||||||||
Average option-adjusted duration, in years | 6.3 | ||||||||||||||||||||||||||||||
Proceeds received from sales of fixed maturities and equity securities | ' | ||||||||||||||||||||||||||||||
Proceeds received from sales of fixed maturities and equity securities, each determined using the specific identification method, and gross gains and gross losses realized as a result of those sales for each year were: | |||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||||||||
Fixed maturity securities | |||||||||||||||||||||||||||||||
Proceeds received | $ | 298,045 | $ | 576,708 | $ | 587,909 | |||||||||||||||||||||||||
Gross gains realized | 17,177 | 32,532 | 39,463 | ||||||||||||||||||||||||||||
Gross losses realized | -4,945 | -11,971 | -2,047 | ||||||||||||||||||||||||||||
Equity securities | |||||||||||||||||||||||||||||||
Proceeds received | $ | 18,643 | $ | 6,057 | $ | 1,078 | |||||||||||||||||||||||||
Gross gains realized | 4,368 | 231 | 247 | ||||||||||||||||||||||||||||
Gross losses realized | -616 | -438 | - | ||||||||||||||||||||||||||||
Reconciliation of net unrealized investment gains (losses) on fixed maturity securities and equity securities | ' | ||||||||||||||||||||||||||||||
The following table reconciles the net unrealized investment gains and losses, net of tax, included in accumulated other comprehensive income (loss), before the impact on deferred policy acquisition costs: | |||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||||||||
Net unrealized investment gains (losses) on | |||||||||||||||||||||||||||||||
fixed maturity securities, net of tax | |||||||||||||||||||||||||||||||
Beginning of period | $ | 423,004 | $ | 284,338 | $ | 118,498 | |||||||||||||||||||||||||
Change in unrealized investment gains and losses | -264,503 | 153,758 | 190,193 | ||||||||||||||||||||||||||||
Reclassification of net realized investment (gains) | |||||||||||||||||||||||||||||||
losses to net income | -12,012 | -15,092 | -24,353 | ||||||||||||||||||||||||||||
End of period | $ | 146,489 | $ | 423,004 | $ | 284,338 | |||||||||||||||||||||||||
Net unrealized investment gains (losses) on equity securities, | |||||||||||||||||||||||||||||||
net of tax | |||||||||||||||||||||||||||||||
Beginning of period | $ | 720 | $ | 2,408 | $ | 2,139 | |||||||||||||||||||||||||
Change in unrealized investment gains and losses | 6,345 | 964 | 397 | ||||||||||||||||||||||||||||
Reclassification of net realized investment (gains) | |||||||||||||||||||||||||||||||
losses to net income | -2,447 | -2,652 | -128 | ||||||||||||||||||||||||||||
End of period | $ | 4,618 | $ | 720 | $ | 2,408 | |||||||||||||||||||||||||
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Fair Value of Financial Instruments [Abstract] | ' | |||||||||||||||||||
Summary of Company's fair value hierarchy measured at recurring basis | ' | |||||||||||||||||||
At December 31, 2013, these Level 3 invested assets comprised approximately 2% of the Company’s total investment portfolio fair value. | ||||||||||||||||||||
Fair Value Measurements at | ||||||||||||||||||||
Carrying | Fair | Reporting Date Using | ||||||||||||||||||
Amount | Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||
31-Dec-13 | ||||||||||||||||||||
Financial Assets | ||||||||||||||||||||
Investments | ||||||||||||||||||||
Fixed maturities | ||||||||||||||||||||
U.S. Government and federally | ||||||||||||||||||||
sponsored agency obligations: | ||||||||||||||||||||
Mortgage-backed securities | $ | 569,725 | $ | 569,725 | $ | - | $ | 569,725 | $ | - | ||||||||||
Other, including | ||||||||||||||||||||
U.S. Treasury securities | 435,574 | 435,574 | 17,757 | 417,817 | - | |||||||||||||||
Municipal bonds | 1,471,527 | 1,471,527 | - | 1,468,833 | 2,694 | |||||||||||||||
Foreign government bonds | 54,951 | 54,951 | - | 54,951 | - | |||||||||||||||
Corporate bonds | 2,614,409 | 2,614,409 | 10,181 | 2,543,402 | 60,826 | |||||||||||||||
Other mortgage-backed securities | 863,387 | 863,387 | - | 817,378 | 46,009 | |||||||||||||||
Total fixed maturities | 6,009,573 | 6,009,573 | 27,938 | 5,872,106 | 109,529 | |||||||||||||||
Equity securities | 91,858 | 91,858 | 74,279 | 17,573 | 6 | |||||||||||||||
Short-term investments | 206,758 | 206,758 | 206,354 | 404 | - | |||||||||||||||
Other investments | 5,000 | 5,000 | - | 5,000 | - | |||||||||||||||
Totals | 6,313,189 | 6,313,189 | 308,571 | 5,895,083 | 109,535 | |||||||||||||||
Separate Account | ||||||||||||||||||||
(variable annuity) assets (1) | 1,747,995 | 1,747,995 | 1,747,995 | - | - | |||||||||||||||
Financial Liabilities | - | - | - | - | - | |||||||||||||||
31-Dec-12 | ||||||||||||||||||||
Financial Assets | ||||||||||||||||||||
Investments | ||||||||||||||||||||
Fixed maturities | ||||||||||||||||||||
U.S. Government and federally | ||||||||||||||||||||
sponsored agency obligations: | ||||||||||||||||||||
Mortgage-backed securities | $ | 619,559 | $ | 619,559 | $ | - | $ | 619,559 | $ | - | ||||||||||
Other, including | ||||||||||||||||||||
U.S. Treasury securities | 409,428 | 409,428 | 18,594 | 390,834 | - | |||||||||||||||
Municipal bonds | 1,586,037 | 1,586,037 | - | 1,573,762 | 12,275 | |||||||||||||||
Foreign government bonds | 57,869 | 57,869 | - | 57,869 | - | |||||||||||||||
Corporate bonds | 2,567,034 | 2,567,034 | 11,934 | 2,469,378 | 85,722 | |||||||||||||||
Other mortgage-backed securities | 722,305 | 722,305 | - | 689,133 | 33,172 | |||||||||||||||
Total fixed maturities | 5,962,232 | 5,962,232 | 30,528 | 5,800,535 | 131,169 | |||||||||||||||
Equity securities | 53,503 | 53,503 | 43,704 | 9,459 | 340 | |||||||||||||||
Short-term investments | 87,561 | 87,561 | 87,561 | - | - | |||||||||||||||
Totals | 6,103,296 | 6,103,296 | 161,793 | 5,809,994 | 131,509 | |||||||||||||||
Separate Account | ||||||||||||||||||||
(variable annuity) assets (1) | 1,398,281 | 1,398,281 | 1,398,281 | - | - | |||||||||||||||
Financial Liabilities | - | - | - | - | - | |||||||||||||||
-1 | Separate Account (variable annuity) liabilities are set equal to Separate Account (variable annuity) assets. | |||||||||||||||||||
Table for reconciliations for all Level 3 assets measured at fair value on a recurring basis | ' | |||||||||||||||||||
The following tables present reconciliations for the periods indicated for all Level 3 assets measured at fair value on a recurring basis. | ||||||||||||||||||||
Municipal | Corporate | Other | Total | Equity | Total | |||||||||||||||
Bonds | Bonds | Mortgage- | Fixed | Securities | ||||||||||||||||
Backed | Maturities | |||||||||||||||||||
Securities | ||||||||||||||||||||
Financial Assets | ||||||||||||||||||||
Beginning balance, January 1, 2013 | $ | 12,275 | $ | 85,722 | $ | 33,172 | $ | 131,169 | $ | 340 | $ | 131,509 | ||||||||
Transfers into Level 3 (1) | 9,453 | 34,258 | 67,827 | 111,538 | - | 111,538 | ||||||||||||||
Transfers out of Level 3 (1) | -6,347 | -54,530 | -30,847 | -91,724 | - | -91,724 | ||||||||||||||
Total gains or losses | ||||||||||||||||||||
Net realized gains (losses) | ||||||||||||||||||||
included in net income | - | - | - | - | - | - | ||||||||||||||
Net unrealized gains (losses) | ||||||||||||||||||||
included in other | ||||||||||||||||||||
comprehensive income | -481 | -2,007 | -328 | -2,816 | - | -2,816 | ||||||||||||||
Purchases | - | - | - | - | - | - | ||||||||||||||
Issuances | - | - | - | - | - | - | ||||||||||||||
Sales | - | - | - | - | -334 | -334 | ||||||||||||||
Settlements | - | - | - | - | - | - | ||||||||||||||
Paydowns, maturities | ||||||||||||||||||||
and distributions | -12,206 | -2,617 | -23,815 | -38,638 | - | -38,638 | ||||||||||||||
Ending balance, December 31, 2013 | $ | 2,694 | $ | 60,826 | $ | 46,009 | $ | 109,529 | $ | 6 | $ | 109,535 | ||||||||
Beginning balance, January 1, 2012 | $ | - | $ | 88,256 | $ | 4,532 | $ | 92,788 | $ | 385 | $ | 93,173 | ||||||||
Transfers into Level 3 (1) | 12,297 | 47,799 | 29,548 | 89,644 | - | 89,644 | ||||||||||||||
Transfers out of Level 3 (1) | - | -50,707 | - | -50,707 | - | -50,707 | ||||||||||||||
Total gains or losses | ||||||||||||||||||||
Net realized gains (losses) | ||||||||||||||||||||
included in net income | - | - | -2 | -2 | - | -2 | ||||||||||||||
Net unrealized gains (losses) | ||||||||||||||||||||
included in other | ||||||||||||||||||||
comprehensive income | -22 | 1,013 | 200 | 1,191 | -45 | 1,146 | ||||||||||||||
Purchases | - | - | - | - | - | - | ||||||||||||||
Issuances | - | - | - | - | - | - | ||||||||||||||
Sales | - | - | - | - | - | - | ||||||||||||||
Settlements | - | - | - | - | - | - | ||||||||||||||
Paydowns, maturities | ||||||||||||||||||||
and distributions | - | -639 | -1,106 | -1,745 | - | -1,745 | ||||||||||||||
Ending balance, December 31, 2012 | $ | 12,275 | $ | 85,722 | $ | 33,172 | $ | 131,169 | $ | 340 | $ | 131,509 | ||||||||
-1 | Transfers into and out of Level 3 during the years ended December 31, 2013 and 2012 were attributable to changes in the availability of observable market information for individual fixed maturity securities. The Company’s policy is to recognize transfers into and transfers out of the levels as having occurred at the end of the reporting period in which the transfers were determined. | |||||||||||||||||||
Carrying value, fair value and fair value hierarchy of financial assets and financial liabilities | ' | |||||||||||||||||||
The following table presents the carrying value, fair value and fair value hierarchy of these financial assets and financial liabilities. | ||||||||||||||||||||
Fair Value Measurements at | ||||||||||||||||||||
Carrying | Fair | Reporting Date Using | ||||||||||||||||||
Amount | Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||
31-Dec-13 | ||||||||||||||||||||
Financial Assets | ||||||||||||||||||||
Investments | ||||||||||||||||||||
Other investments | $ | 140,685 | $ | 144,921 | $ | - | $ | - | $ | 144,921 | ||||||||||
Financial Liabilities | ||||||||||||||||||||
Fixed annuity contract liabilities | 3,515,865 | 3,302,333 | - | - | 3,302,333 | |||||||||||||||
Policyholder account balances on | ||||||||||||||||||||
interest-sensitive life contracts | 78,598 | 79,678 | - | - | 79,678 | |||||||||||||||
Other policyholder funds | 346,292 | 346,292 | - | 250,000 | 96,292 | |||||||||||||||
Short-term debt | 38,000 | 38,000 | - | 38,000 | - | |||||||||||||||
Long-term debt | 199,874 | 218,565 | 218,565 | - | - | |||||||||||||||
Other liabilities, repurchase | ||||||||||||||||||||
agreement obligations | 25,864 | 25,864 | - | 25,864 | - | |||||||||||||||
31-Dec-12 | ||||||||||||||||||||
Financial Assets | ||||||||||||||||||||
Investments | ||||||||||||||||||||
Other investments | $ | 134,985 | $ | 135,121 | $ | - | $ | - | $ | 135,121 | ||||||||||
Financial Liabilities | ||||||||||||||||||||
Fixed annuity contract liabilities | 3,257,758 | 3,070,111 | - | - | 3,070,111 | |||||||||||||||
Policyholder account balances on | ||||||||||||||||||||
interest-sensitive life contracts | 79,017 | 78,519 | - | - | 78,519 | |||||||||||||||
Other policyholder funds | 103,227 | 103,227 | - | - | 103,227 | |||||||||||||||
Short-term debt | 38,000 | 38,000 | - | 38,000 | - | |||||||||||||||
Long-term debt | 199,809 | 219,319 | 219,319 | - | - | |||||||||||||||
Other liabilities, repurchase | ||||||||||||||||||||
agreement obligations | - | - | - | - | - | |||||||||||||||
Property_and_Casualty_Unpaid_C1
Property and Casualty Unpaid Claims and Claim Expenses (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Property and Casualty Unpaid Claims and Claim Expenses [Abstract] | ' | ||||||||||
Reconciliation of property and casualty unpaid claims and claim expenses | ' | ||||||||||
The following table sets forth an analysis of property and casualty unpaid claims and claim expenses and provides a reconciliation of beginning and ending reserves for the periods indicated. | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Property and casualty segment | |||||||||||
Gross reserves, beginning of year (1) | $ | 274,542 | $ | 281,080 | $ | 301,622 | |||||
Less reinsurance recoverables | 13,705 | 11,463 | 12,225 | ||||||||
Net reserves, beginning of year (2) | 260,837 | 269,617 | 289,397 | ||||||||
Incurred claims and claim expenses: | |||||||||||
Claims occurring in the current year | 403,589 | 406,605 | 452,827 | ||||||||
Decrease in estimated reserves for | |||||||||||
claims occurring in prior years (3) | -17,988 | -17,175 | -10,310 | ||||||||
Total claims and claim expenses incurred (4) | 385,601 | 389,430 | 442,517 | ||||||||
Claims and claim expense payments | |||||||||||
for claims occurring during: | |||||||||||
Current year | 265,831 | 271,286 | 314,759 | ||||||||
Prior years | 118,905 | 126,924 | 147,539 | ||||||||
Total claims and claim expense payments | 384,736 | 398,210 | 462,298 | ||||||||
Net reserves, end of year (2) | 261,702 | 260,837 | 269,617 | ||||||||
Plus reinsurance recoverables | 14,107 | 13,705 | 11,463 | ||||||||
Gross reserves, end of year (1) | $ | 275,809 | $ | 274,542 | $ | 281,080 | |||||
-1 | Unpaid claims and claim expenses as reported in the Consolidated Balance Sheets also include reserves for the life and annuity segments of $15,818, $14,853, $13,729 and $14,073 as of December 31, 2013, 2012, 2011 and 2010, respectively, in addition to property and casualty segment reserves. | ||||||||||
-2 | Reserves net of anticipated reinsurance recoverables. | ||||||||||
-3 | Shows the amounts by which the Company decreased its reserves in each of the periods indicated for claims occurring in previous periods to reflect subsequent information on such claims and changes in their projected final settlement costs. Also refer to the paragraphs below for additional information regarding the reserve development recorded in 2013, 2012 and 2011. | ||||||||||
-4 | Benefits, claims and settlement expenses as reported in the Consolidated Statements of Operations also include amounts for the life and annuity segments of $62,716, $58,820 and $59,917 for the years ended December 31, 2013, 2012 and 2011, respectively, in addition to the property and casualty segment amounts. | ||||||||||
Debt_Tables
Debt (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Debt [Abstract] | ' | |||||||||||
Summary of Indebtedness outstanding | ' | |||||||||||
Indebtedness and scheduled maturities consisted of the following: | ||||||||||||
Effective | ||||||||||||
Interest | Final | December 31, | ||||||||||
Rates | Maturity | 2013 | 2012 | |||||||||
Short-term debt: | ||||||||||||
Bank Credit Facility | Variable | 2015 | $ | 38,000 | $ | 38,000 | ||||||
Long-term debt: | ||||||||||||
6.05% Senior Notes, Face amount of $75,000 less | 6.10% | 2015 | 74,962 | 74,935 | ||||||||
unaccrued discount of $38 and $65 | ||||||||||||
6.85% Senior Notes, Face amount of $125,000 less | 6.90% | 2016 | 124,912 | 124,874 | ||||||||
unaccrued discount of $88 and $126 | ||||||||||||
Total | $ | 237,874 | $ | 237,809 | ||||||||
Shareholders_Equity_and_Stock_1
Shareholders' Equity and Stock Options (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||
Shareholders' Equity and Stock Options [Abstract] | ' | ||||||||||||||||||||||||||||
Summary of stock units and stock options outstanding under the Comprehensive Plan | ' | ||||||||||||||||||||||||||||
As further described in the paragraphs below, outstanding stock units and stock options under the Comprehensive Plan were as follows: | |||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||||||
Common stock units related to deferred compensation for Directors | 118,062 | 111,928 | 113,502 | ||||||||||||||||||||||||||
Common stock units related to deferred compensation for employees | 111,981 | 116,174 | 115,087 | ||||||||||||||||||||||||||
Stock options | 956,814 | 1,882,939 | 2,600,583 | ||||||||||||||||||||||||||
Restricted common stock units related to incentive compensation | 1,663,190 | 1,423,611 | 1,135,840 | ||||||||||||||||||||||||||
Total | 2,850,047 | 3,534,652 | 3,965,012 | ||||||||||||||||||||||||||
Summary of changes in outstanding options | ' | ||||||||||||||||||||||||||||
Changes in outstanding options were as follows: | |||||||||||||||||||||||||||||
Weighted Average | Range of | Options | |||||||||||||||||||||||||||
Option Price | Option Prices | Vested and | |||||||||||||||||||||||||||
per Share | per Share | Outstanding | Exercisable | ||||||||||||||||||||||||||
31-Dec-12 | $ | 14.73 | $ 6.91-$20.23 | 1,882,939 | 1,161,703 | ||||||||||||||||||||||||
Granted | $ | 20.97 | $20.60-$30.24 | 245,424 | - | ||||||||||||||||||||||||
Vested | $ | 13.94 | $ 6.91-$20.60 | - | 324,291 | ||||||||||||||||||||||||
Exercised | $ | 13.77 | $ 6.91-$20.23 | -1,158,537 | -1,158,537 | ||||||||||||||||||||||||
Forfeited | $ | 17.02 | $13.83-$20.60 | -3,962 | -3,962 | ||||||||||||||||||||||||
Expired | $ | 18.17 | $18.17 | -9,050 | -9,050 | ||||||||||||||||||||||||
31-Dec-13 | $ | 17.49 | $ 6.91-$30.24 | 956,814 | 314,445 | ||||||||||||||||||||||||
Summary of options outstanding segregated by ranges of exercise prices | ' | ||||||||||||||||||||||||||||
Option information segregated by ranges of exercise prices was as follows: | |||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||
Total Outstanding Options | Vested and Exercisable Options | ||||||||||||||||||||||||||||
Weighted | Weighted | Weighted | Weighted | ||||||||||||||||||||||||||
Range of | Average | Average | Average | Average | |||||||||||||||||||||||||
Option Prices | Option Price | Remaining | Option Price | Remaining | |||||||||||||||||||||||||
per Share | Options | per Share | Term | Options | per Share | Term | |||||||||||||||||||||||
$ 6.91-$13.83 | 178,858 | $ | 13.58 | 3.1 years | 119,543 | $ | 13.45 | 3.1 years | |||||||||||||||||||||
$16.81-$18.20 | 527,437 | $ | 17.17 | 4.6 years | 187,955 | $ | 17.1 | 4.2 years | |||||||||||||||||||||
$20.23-$30.24 | 250,519 | $ | 20.95 | 6.1 years | 6,947 | $ | 20.24 | 0.3 years | |||||||||||||||||||||
Total | $ 6.91-$30.24 | 956,814 | $ | 17.49 | 4.7 years | 314,445 | $ | 15.78 | 3.7 years | ||||||||||||||||||||
Summary of changes in outstanding restricted common stock units | ' | ||||||||||||||||||||||||||||
Changes in outstanding restricted common stock units were as follows: | |||||||||||||||||||||||||||||
Total Outstanding Units | Vested Units | ||||||||||||||||||||||||||||
Weighted Average | Weighted Average | ||||||||||||||||||||||||||||
Grant Date Fair | Grant Date Fair | ||||||||||||||||||||||||||||
Units | Value per Unit | Units | Value per Unit | ||||||||||||||||||||||||||
31-Dec-12 | 1,423,611 | $ | 15.93 | 311,407 | $ | 13.15 | |||||||||||||||||||||||
Granted (1) | 484,552 | $ | 25.13 | - | - | ||||||||||||||||||||||||
Vested | - | - | 282,680 | $ | 13.5 | ||||||||||||||||||||||||
Forfeited | -24,507 | $ | 15.62 | - | - | ||||||||||||||||||||||||
Distributed (2) | -220,466 | $ | 9.87 | -220,466 | $ | 9.87 | |||||||||||||||||||||||
31-Dec-13 | 1,663,190 | $ | 19.41 | 373,621 | $ | 15.34 | |||||||||||||||||||||||
-1 | Includes dividends reinvested into additional restricted common stock units. | ||||||||||||||||||||||||||||
-2 | Includes distributed units which were utilized to satisfy withholding taxes due on the distribution. | ||||||||||||||||||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Income Taxes [Abstract] | ' | ||||||||||
Summary of income tax assets and liabilities | ' | ||||||||||
The income tax assets and liabilities included in Other Assets and Other Liabilities, respectively, in the Consolidated Balance Sheets were as follows: | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Income tax (asset) liability | |||||||||||
Current | $ | -1,998 | $ | 4,575 | |||||||
Deferred | 163,213 | 286,726 | |||||||||
Summary of deferred tax assets and liabilities | ' | ||||||||||
The “temporary differences” that gave rise to the deferred tax balances were as follows: | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Deferred tax assets | |||||||||||
Unearned premium reserve reduction | $ | 15,555 | $ | 14,952 | |||||||
Compensation accruals | 13,188 | 13,592 | |||||||||
Other comprehensive income – net funded status of pension and other | 6,376 | 8,352 | |||||||||
postretirement benefit obligations | |||||||||||
Discounting of unpaid claims and claim expenses tax reserves | 4,747 | 4,825 | |||||||||
Postretirement benefits other than pensions | 2,048 | 2,333 | |||||||||
Impaired securities | 1,800 | 1,268 | |||||||||
Total gross deferred tax assets | 43,714 | 45,322 | |||||||||
Deferred tax liabilities | |||||||||||
Other comprehensive income – net unrealized gains on fixed maturities and equity | 81,497 | 228,159 | |||||||||
securities | |||||||||||
Deferred policy acquisition costs | 80,159 | 62,411 | |||||||||
Life insurance future policy benefit reserve | 21,792 | 18,620 | |||||||||
Investment related adjustments | 18,317 | 15,375 | |||||||||
Intangible assets | 4,262 | 4,262 | |||||||||
Other, net | 900 | 3,221 | |||||||||
Total gross deferred tax liabilities | 206,927 | 332,048 | |||||||||
Net deferred tax liability | $ | 163,213 | $ | 286,726 | |||||||
Income Taxes Expenses | ' | ||||||||||
The components of income tax expense were as follows: | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Current | $ | 31,610 | $ | 26,331 | $ | 18,211 | |||||
Deferred | 11,563 | 18,976 | 6,201 | ||||||||
Total income tax expense | $ | 43,173 | $ | 45,307 | $ | 24,412 | |||||
Income Taxes Expenses Reconciliation | ' | ||||||||||
Income tax expense for the following periods differed from the expected tax computed by applying the federal corporate tax rate of 35% to income before income taxes as follows: | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Expected federal tax on income | $ | 53,923 | $ | 52,210 | $ | 33,221 | |||||
Add (deduct) tax effects of: | |||||||||||
Tax-exempt interest | -6,829 | -6,836 | -7,072 | ||||||||
Dividend received deduction | -3,382 | -2,132 | -2,010 | ||||||||
Other, net | -539 | 2,065 | 273 | ||||||||
Income tax expense provided on income | $ | 43,173 | $ | 45,307 | $ | 24,412 | |||||
Unrecognized tax benefits, excluding interest and penalties | ' | ||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows: | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Balance as of the beginning of the year | $ | - | $ | - | $ | 38 | |||||
Additions based on tax positions related to the current year | 641 | - | - | ||||||||
Settlements in tax positions for prior years | - | - | -38 | ||||||||
Balance as of the end of the year | $ | 641 | $ | - | $ | - | |||||
Summary of Interest and penalties | ' | ||||||||||
Interest and penalties were as follows: | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Interest and penalties expense (benefit), net of releases of previous | |||||||||||
provisions, recognized in the Consolidated Statements of Operations: | |||||||||||
Gross | $ | - | $ | 468 | $ | -279 | |||||
Net of tax | - | 304 | -181 | ||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Interest and penalties (asset) liability included in Other Assets or Other | $ | 1 | $ | 307 | |||||||
Liabilities in the Consolidated Balance Sheets | |||||||||||
Statutory_Information_and_Rest1
Statutory Information and Restrictions (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Reinsurance and Catastrophes and Statutory Surplus and Subsidiary Dividend Restrictions [Abstract] | ' | ||||||||||
Statutory surplus and subsidiary dividend restrictions | ' | ||||||||||
Reconciliations of statutory capital and surplus and net income, as determined using statutory accounting principles, to the amounts included in the accompanying consolidated financial statements are as follows: | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Statutory capital and surplus of insurance subsidiaries | $ | 809,241 | $ | 754,153 | |||||||
Increase (decrease) due to: | |||||||||||
Deferred policy acquisition costs | 245,355 | 196,885 | |||||||||
Difference in policyholder reserves | 80,459 | 67,582 | |||||||||
Goodwill | 47,396 | 47,396 | |||||||||
Liability for postretirement benefits other than pensions | -1,130 | -2,862 | |||||||||
Investment fair value adjustments on fixed maturities | 227,060 | 651,071 | |||||||||
Difference in investment reserves | 111,983 | 101,276 | |||||||||
Federal income tax liability | -188,426 | -317,875 | |||||||||
Net funded status of pension and other postretirement benefit | -18,217 | -23,862 | |||||||||
obligations | |||||||||||
Non-admitted assets and other, net | 11,349 | 10,660 | |||||||||
Shareholders' equity (deficit) of parent company and | 12,109 | -812 | |||||||||
non-insurance subsidiaries | |||||||||||
Parent company short-term and long-term debt | -237,874 | -237,809 | |||||||||
Shareholders' equity as reported herein | $ | 1,099,305 | $ | 1,245,803 | |||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Statutory net income of insurance subsidiaries | $ | 98,905 | $ | 93,299 | $ | 63,986 | |||||
Net loss of non-insurance companies | -4,583 | -4,726 | -10,164 | ||||||||
Interest expense | -14,236 | -14,249 | -14,007 | ||||||||
Tax benefit of interest expense and other | 6,030 | 9,308 | 4,603 | ||||||||
parent company current tax adjustments | |||||||||||
Combined net income | 86,116 | 83,632 | 44,418 | ||||||||
Increase (decrease) due to: | |||||||||||
Deferred policy acquisition costs | 17,177 | 16,595 | 8,989 | ||||||||
Policyholder benefits | 19,038 | 15,574 | 14,428 | ||||||||
Federal income tax expense | -12,735 | -19,843 | -6,639 | ||||||||
Investment reserves | 6,818 | 14,021 | 9,903 | ||||||||
Other adjustments, net | -5,521 | -6,113 | -593 | ||||||||
Net income as reported herein | $ | 110,893 | $ | 103,866 | $ | 70,506 | |||||
Pension_Plans_and_Other_Postre1
Pension Plans and Other Postretirement Benefits (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ' | ||||||||||||||||||||||||
Summary of contributions to qualified defined contribution plan, 401(k), non-qualified defined contribution plan and total assets of the plans | ' | ||||||||||||||||||||||||
Contributions to employees' accounts under the qualified defined contribution plan, the 401(k) plan and the non-qualified defined contribution plan, as well as total assets of the plans, were as follows: | |||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Qualified defined contribution plan: | |||||||||||||||||||||||||
Contributions to employees’ accounts | $ | 4,701 | $ | 4,148 | $ | 4,864 | |||||||||||||||||||
Total assets at the end of the year | 135,097 | 141,286 | 149,675 | ||||||||||||||||||||||
401(k) plan: | |||||||||||||||||||||||||
Contributions to employees’ accounts | 2,781 | 2,753 | 2,856 | ||||||||||||||||||||||
Total assets at the end of the year | 134,891 | 118,073 | 111,370 | ||||||||||||||||||||||
Non-qualified defined contribution plan: | |||||||||||||||||||||||||
Contributions to employees’ accounts | - | - | - | ||||||||||||||||||||||
Total assets at the end of the year | - | - | - | ||||||||||||||||||||||
Defined benefit plan and the supplemental defined benefit plans | ' | ||||||||||||||||||||||||
The change in the Company’s AOCI for the defined benefit plan for the year ended December 31, 2011 was primarily related to revisions of the discount rate assumption. | |||||||||||||||||||||||||
Supplemental | |||||||||||||||||||||||||
Defined Benefit Plan | Defined Benefit Plans | ||||||||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | ||||||||||||||||||||
Components of net periodic pension | |||||||||||||||||||||||||
(income) expense: | |||||||||||||||||||||||||
Service cost: | |||||||||||||||||||||||||
Benefit accrual | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
Other expenses | 360 | 360 | 250 | - | - | - | |||||||||||||||||||
Interest cost | 1,369 | 1,427 | 1,658 | 616 | 676 | 799 | |||||||||||||||||||
Expected return on plan assets | -2,238 | -2,423 | -2,419 | - | - | - | |||||||||||||||||||
Settlement loss | 867 | 1,209 | 1,290 | - | - | - | |||||||||||||||||||
Amortization of: | |||||||||||||||||||||||||
Prior service cost | - | - | - | 124 | 124 | 125 | |||||||||||||||||||
Actuarial loss | 1,602 | 2,367 | 1,824 | 203 | 171 | 698 | |||||||||||||||||||
Net periodic pension expense | $ | 1,960 | $ | 2,940 | $ | 2,603 | $ | 943 | $ | 971 | $ | 1,622 | |||||||||||||
Changes in plan assets and benefit | |||||||||||||||||||||||||
obligations included in other | |||||||||||||||||||||||||
comprehensive income (loss): | |||||||||||||||||||||||||
Prior service cost | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
Net actuarial loss | -1,888 | 115 | 4,951 | -783 | 817 | 1,755 | |||||||||||||||||||
Amortization of: | |||||||||||||||||||||||||
Prior service cost | - | - | - | -124 | -124 | -125 | |||||||||||||||||||
Actuarial loss | -1,602 | -2,367 | -1,824 | -203 | -171 | -698 | |||||||||||||||||||
Total recognized in other | $ | -3,490 | $ | -2,252 | $ | 3,127 | $ | -1,110 | $ | 522 | $ | 932 | |||||||||||||
comprehensive income | |||||||||||||||||||||||||
(loss) | |||||||||||||||||||||||||
Weighted-average assumptions used to | |||||||||||||||||||||||||
determine expense: | |||||||||||||||||||||||||
Discount rate | 3.51 | % | 3.66 | % | 4.58 | % | 3.51 | % | 3.86 | % | 4.92 | % | |||||||||||||
Expected return on plan assets | 7.5 | % | 7.5 | % | 7.5 | % | * | * | * | ||||||||||||||||
Annual rate of salary increase | * | * | * | * | * | * | |||||||||||||||||||
Weighted-average assumptions used to | |||||||||||||||||||||||||
determine benefit obligations as of | |||||||||||||||||||||||||
December 31: | |||||||||||||||||||||||||
Discount rate | 4.46 | % | 3.51 | % | 3.66 | % | 4.46 | % | 3.51 | % | 3.86 | % | |||||||||||||
Expected return on plan assets | 7.5 | % | 7.5 | % | 7.5 | % | * | * | * | ||||||||||||||||
Annual rate of salary increase | * | * | * | * | * | * | |||||||||||||||||||
______________ | |||||||||||||||||||||||||
* | Not applicable. | ||||||||||||||||||||||||
Fair value hierarchy for the Company's defined benefit pension plan assets | ' | ||||||||||||||||||||||||
The following table presents the fair value hierarchy for the Company’s defined benefit pension plan assets, excluding cash held. | |||||||||||||||||||||||||
Fair Value Measurements at | |||||||||||||||||||||||||
Reporting Date Using | |||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||
Asset category | |||||||||||||||||||||||||
Equity security funds (1) | |||||||||||||||||||||||||
United States | $ | 14,730 | $ | - | $ | 14,730 | $ | - | |||||||||||||||||
International | 3,579 | - | 3,579 | - | |||||||||||||||||||||
Fixed income funds | 17,413 | - | 17,413 | - | |||||||||||||||||||||
Total | $ | 35,722 | $ | - | $ | 35,722 | $ | - | |||||||||||||||||
31-Dec-12 | |||||||||||||||||||||||||
Asset category | |||||||||||||||||||||||||
Equity security funds (1) | |||||||||||||||||||||||||
United States | $ | 13,199 | $ | - | $ | 13,199 | $ | - | |||||||||||||||||
International | 3,290 | - | 3,290 | - | |||||||||||||||||||||
Fixed income funds | 16,125 | - | 16,125 | - | |||||||||||||||||||||
Total | $ | 32,614 | $ | - | $ | 32,614 | $ | - | |||||||||||||||||
_____________________________ | |||||||||||||||||||||||||
-1 | None of the trust fund assets for the defined benefit pension plan have been invested in shares of HMEC’s common stock. | ||||||||||||||||||||||||
Summary of change in accumulated postretirement benefit obligations | ' | ||||||||||||||||||||||||
A one percentage point change in the assumed health care cost trend rate for each year would change the accumulated postretirement benefit obligations as follows: | |||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Accumulated postretirement benefit obligations | |||||||||||||||||||||||||
Effect of a one percentage point increase | $ | - | $ | 45 | $ | 53 | |||||||||||||||||||
Effect of a one percentage point decrease | - | -43 | -50 | ||||||||||||||||||||||
Service and interest cost components of the net | |||||||||||||||||||||||||
periodic postretirement benefit expense | |||||||||||||||||||||||||
Effect of a one percentage point increase | $ | 2 | $ | 1 | $ | 2 | |||||||||||||||||||
Effect of a one percentage point decrease | -2 | -1 | -1 | ||||||||||||||||||||||
Weighted-average assumptions used to determine | |||||||||||||||||||||||||
benefit obligations as of December 31: | |||||||||||||||||||||||||
Discount rate | 4.46 | % | 3.51 | % | 2.95 | % | |||||||||||||||||||
Healthcare cost trend rate | * | 7.5 | % | 8 | % | ||||||||||||||||||||
Rate to which the cost trend rate is assumed to decline | |||||||||||||||||||||||||
(ultimate trend rate) | * | 5 | % | 5 | % | ||||||||||||||||||||
Year the rate is assumed to reach the ultimate trend rate | * | 2022 | 2022 | ||||||||||||||||||||||
Expected return on plan assets | * | * | * | ||||||||||||||||||||||
Weighted-average assumptions used to determine net periodic | |||||||||||||||||||||||||
benefit cost for the years ended December 31: | |||||||||||||||||||||||||
Discount rate | 3.51 | % | 2.95 | % | 3.68 | % | |||||||||||||||||||
Healthcare cost trend rate | 7.5 | % | 8 | % | 8 | % | |||||||||||||||||||
Rate to which the cost trend rate is assumed to decline | |||||||||||||||||||||||||
(ultimate trend rate) | 5 | % | 5 | % | 5 | % | |||||||||||||||||||
Year the rate is assumed to reach the ultimate trend rate | 2022 | 2022 | 2021 | ||||||||||||||||||||||
Expected return on plan assets | * | * | * | ||||||||||||||||||||||
___________________________ | |||||||||||||||||||||||||
* Not applicable. | |||||||||||||||||||||||||
Summary of minimum funding requirement and the expected full year contributions for the Company's plans | ' | ||||||||||||||||||||||||
The following table discloses that minimum funding requirement and the expected full year contributions for the Company’s plans. | |||||||||||||||||||||||||
Defined Benefit Pension Plans | |||||||||||||||||||||||||
Defined | Supplemental | Other | |||||||||||||||||||||||
Benefit | Defined Benefit | Postretirement | |||||||||||||||||||||||
Plan | Plans | Benefits | |||||||||||||||||||||||
Minimum funding requirement for 2014 | - | N/A | N/A | ||||||||||||||||||||||
Expected contributions (approximations) | |||||||||||||||||||||||||
for the year ended December 31, 2014 | |||||||||||||||||||||||||
as of the time of this Form 10-K (1) | $ | 2,000 | $ | 1,320 | $ | 217 | |||||||||||||||||||
_________________________ | |||||||||||||||||||||||||
N/A - Not applicable. | |||||||||||||||||||||||||
-1 | HMEC’s Annual Report on Form 10-K for the year ended December 31, 2013. | ||||||||||||||||||||||||
Estimated future benefit payments | ' | ||||||||||||||||||||||||
Estimated future benefit payments as of December 31, 2013 were as follows: | |||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | 2019-2023 | ||||||||||||||||||||
Pension plans: | |||||||||||||||||||||||||
Defined benefit plan | $ | 3,696 | $ | 3,415 | $ | 3,270 | $ | 2,827 | $ | 2,670 | $ | 13,393 | |||||||||||||
Supplemental retirement plans | 1,320 | 1,310 | 1,300 | 1,287 | 1,272 | 6,050 | |||||||||||||||||||
Other postretirement benefits | 216 | 122 | 120 | 117 | 112 | 450 | |||||||||||||||||||
Postretirement Benefit Costs [Member] | ' | ||||||||||||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ' | ||||||||||||||||||||||||
Funded status of the defined benefit, supplemental retirement pension plans and postretirement benefits other than pensions | ' | ||||||||||||||||||||||||
The following table presents the funded status of postretirement benefits other than pensions of active and retired employees (including employees on disability more than 2 years) as of December 31, 2013, 2012 and 2011 (the measurement dates) reconciled with amounts recognized in the Company's Consolidated Balance Sheets: | |||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Change in accumulated postretirement benefit obligations: | |||||||||||||||||||||||||
Accumulated postretirement benefit | |||||||||||||||||||||||||
obligations at beginning of year | $ | 2,862 | $ | 3,326 | $ | 3,489 | |||||||||||||||||||
Changes during fiscal year | |||||||||||||||||||||||||
Service cost | - | - | - | ||||||||||||||||||||||
Interest cost | 92 | 91 | 122 | ||||||||||||||||||||||
Plan amendment | -1,393 | - | - | ||||||||||||||||||||||
Medicare prescription reimbursements | - | - | - | ||||||||||||||||||||||
Employer payments net of participant contributions | -491 | -488 | -526 | ||||||||||||||||||||||
Actuarial (gain) loss | 60 | -67 | 241 | ||||||||||||||||||||||
Accumulated postretirement benefit obligations at end of year | $ | 1,130 | $ | 2,862 | $ | 3,326 | |||||||||||||||||||
Unfunded status | $ | -1,130 | $ | -2,862 | $ | -3,326 | |||||||||||||||||||
Total amount recognized in Consolidated Balance Sheets, | |||||||||||||||||||||||||
all in other liabilities | $ | -1,130 | $ | -2,862 | $ | -3,326 | |||||||||||||||||||
Amounts recognized in accumulated | |||||||||||||||||||||||||
other comprehensive income (loss) (“AOCI”): | |||||||||||||||||||||||||
Prior service credit | $ | -1,341 | $ | - | $ | - | |||||||||||||||||||
Net actuarial gain | -604 | -900 | -1,355 | ||||||||||||||||||||||
Total amount recognized in AOCI | $ | -1,945 | $ | -900 | $ | -1,355 | |||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Components of net periodic benefit: | |||||||||||||||||||||||||
Service cost | $ | - | $ | - | $ | - | |||||||||||||||||||
Interest cost | 92 | 91 | 122 | ||||||||||||||||||||||
Amortization of prior service cost | -52 | - | - | ||||||||||||||||||||||
Amortization of prior gain | -236 | -522 | -501 | ||||||||||||||||||||||
Net periodic income | $ | -196 | $ | -431 | $ | -379 | |||||||||||||||||||
Defined Benefit Plan [Member] | ' | ||||||||||||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ' | ||||||||||||||||||||||||
Funded status of the defined benefit, supplemental retirement pension plans and postretirement benefits other than pensions | ' | ||||||||||||||||||||||||
The following tables summarize the funded status of the defined benefit and supplemental retirement pension plans as of December 31, 2013, 2012 and 2011 (the measurement dates) and identify (1) the assumptions used to determine the projected benefit obligation and (2) the components of net pension cost for the defined benefit plan and supplemental retirement plans for the following periods: | |||||||||||||||||||||||||
Supplemental | |||||||||||||||||||||||||
Defined Benefit Plan | Defined Benefit Plans | ||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | ||||||||||||||||||||
Change in benefit obligation: | |||||||||||||||||||||||||
Projected benefit obligation at beginning | $ | 40,994 | $ | 41,736 | $ | 39,553 | $ | 18,192 | $ | 18,012 | $ | 16,801 | |||||||||||||
of year | |||||||||||||||||||||||||
Service cost | - | - | - | - | - | - | |||||||||||||||||||
Interest cost | 1,369 | 1,427 | 1,658 | 616 | 676 | 799 | |||||||||||||||||||
Plan amendments | - | - | - | - | - | - | |||||||||||||||||||
Actuarial loss (gain) | 984 | 2,046 | 4,650 | -783 | 817 | 1,755 | |||||||||||||||||||
Benefits paid | -1,715 | -1,664 | -1,664 | -1,319 | -1,313 | -1,343 | |||||||||||||||||||
Settlements | -2,149 | -2,551 | -2,461 | - | - | - | |||||||||||||||||||
Projected benefit obligation at end of year | $ | 39,483 | $ | 40,994 | $ | 41,736 | $ | 16,706 | $ | 18,192 | $ | 18,012 | |||||||||||||
Change in plan assets: | |||||||||||||||||||||||||
Fair value of plan assets at beginning of | $ | 32,757 | $ | 31,653 | $ | 29,273 | $ | - | $ | - | $ | - | |||||||||||||
year | |||||||||||||||||||||||||
Actual return on plan assets | 4,396 | 3,168 | 911 | - | - | - | |||||||||||||||||||
Employer contributions | 3,103 | 2,534 | 5,926 | 1,319 | 1,313 | 1,343 | |||||||||||||||||||
Benefits paid | -1,715 | -1,664 | -1,664 | -1,319 | -1,313 | -1,343 | |||||||||||||||||||
Expenses paid | -513 | -383 | -332 | - | - | - | |||||||||||||||||||
Settlements | -2,149 | -2,551 | -2,461 | - | - | - | |||||||||||||||||||
Fair value of plan assets at end of year | $ | 35,879 | $ | 32,757 | $ | 31,653 | $ | - | $ | - | $ | - | |||||||||||||
Funded status | $ | -3,604 | $ | -8,237 | $ | -10,083 | $ | -16,706 | $ | -18,192 | $ | -18,012 | |||||||||||||
Prepaid (accrued) benefit expense | $ | 12,331 | $ | 11,188 | $ | 11,594 | $ | -12,479 | $ | -12,855 | $ | -13,197 | |||||||||||||
Total amount recognized in Consolidated | $ | -3,604 | $ | -8,237 | $ | -10,083 | $ | -16,706 | $ | -18,192 | $ | -18,012 | |||||||||||||
Balance Sheets, all in Other Liabilities | |||||||||||||||||||||||||
Amounts recognized in accumulated other | |||||||||||||||||||||||||
comprehensive income (loss) (“AOCI”): | |||||||||||||||||||||||||
Prior service cost | $ | - | $ | - | $ | - | $ | - | $ | 124 | $ | 249 | |||||||||||||
Net actuarial loss | 15,935 | 19,425 | 21,677 | 4,227 | 5,213 | 4,566 | |||||||||||||||||||
Total amount recognized in AOCI | $ | 15,935 | $ | 19,425 | $ | 21,677 | $ | 4,227 | $ | 5,337 | $ | 4,815 | |||||||||||||
Information for pension plans with an | |||||||||||||||||||||||||
accumulated benefit obligation greater | |||||||||||||||||||||||||
than plan assets: | |||||||||||||||||||||||||
Projected benefit obligation | $ | 39,483 | $ | 40,994 | $ | 41,736 | $ | 16,706 | $ | 18,192 | $ | 18,012 | |||||||||||||
Accumulated benefit obligation | 39,483 | 40,994 | 41,736 | 16,706 | 18,192 | 18,012 | |||||||||||||||||||
Fair value of plan assets | 35,879 | 32,757 | 31,653 | - | - | - | |||||||||||||||||||
Reinsurance_and_Catastrophes_T
Reinsurance and Catastrophes (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Reinsurance and Catastrophes and Statutory Surplus and Subsidiary Dividend Restrictions [Abstract] | ' | |||||||||||||
Summary of reinsurance recoverable on unpaid insurance reserves | ' | |||||||||||||
The total amounts of reinsurance recoverable on unpaid insurance reserves classified as assets and reported in Other Assets in the Consolidated Balance Sheets were as follows: | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
Reinsurance recoverables on reserves and unpaid claims | ||||||||||||||
Property and casualty | ||||||||||||||
Reinsurance companies | $ | 10,152 | $ | 10,419 | ||||||||||
State insurance facilities | 3,955 | 3,286 | ||||||||||||
Life and health | 10,395 | 10,344 | ||||||||||||
Total | $ | 24,502 | $ | 24,049 | ||||||||||
Effects of reinsurance on premiums and benefits | ' | |||||||||||||
The effects of reinsurance on premiums written and contract deposits; premiums and contract charges earned; and benefits, claims and settlement expenses were as follows: | ||||||||||||||
Ceded to | Assumed | |||||||||||||
Gross | Other | from Other | Net | |||||||||||
Amount | Companies | Companies | Amount | |||||||||||
Year ended December 31, 2013 | ||||||||||||||
Premiums written and contract deposits | $ | 1,120,852 | $ | 30,115 | $ | 3,456 | $ | 1,094,193 | ||||||
Premiums and contract charges earned | 717,494 | 29,990 | 3,434 | 690,938 | ||||||||||
Benefits, claims and settlement expenses | 455,298 | 10,018 | 3,037 | 448,317 | ||||||||||
Year ended December 31, 2012 | ||||||||||||||
Premiums written and contract deposits | 1,093,937 | 29,691 | 3,481 | 1,067,727 | ||||||||||
Premiums and contract charges earned | 696,721 | 29,634 | 3,440 | 670,527 | ||||||||||
Benefits, claims and settlement expenses | 457,332 | 12,177 | 3,095 | 448,250 | ||||||||||
Year ended December 31, 2011 | ||||||||||||||
Premiums written and contract deposits | 1,106,012 | 31,271 | 3,708 | 1,078,449 | ||||||||||
Premiums and contract charges earned | 695,264 | 31,940 | 3,796 | 667,120 | ||||||||||
Benefits, claims and settlement expenses | 519,935 | 20,767 | 3,266 | 502,434 | ||||||||||
Contingencies_and_Commitments_
Contingencies and Commitments (Tables) | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||
Contingencies and Commitments [Abstract] | ' | |||||||||||||||||||||
Summary of future minimum lease payments | ' | |||||||||||||||||||||
Future minimum lease payments under leases expiring subsequent to December 31, 2013 are as follows: | ||||||||||||||||||||||
As of December 31, 2013 | ||||||||||||||||||||||
2019- | 2024 and | |||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | 2023 | beyond | ||||||||||||||||
Minimum operating lease payments | $ | 2,473 | $ | 2,413 | $ | 2,219 | $ | 2,195 | $ | 2,242 | $ | 6,575 | - | |||||||||
Supplementary_Data_on_Cash_Flo1
Supplementary Data on Cash Flows (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Supplementary Data on Cash Flows [Abstract] | ' | ||||||||||
Reconciliation of net income to net cash provided by operating activities | ' | ||||||||||
A reconciliation of net income to net cash provided by operating activities as presented in the Consolidated Statements of Cash Flows is as follows: | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Cash flows from operating activities | |||||||||||
Net income | $ | 110,893 | $ | 103,866 | $ | 70,506 | |||||
Adjustments to reconcile net income to net | |||||||||||
cash provided by operating activities: | |||||||||||
Realized investment gains | -22,245 | -27,298 | -37,663 | ||||||||
Increase in accrued investment income | -1,898 | -2,618 | -7,348 | ||||||||
Increase (decrease) in accrued expenses | 1,157 | 13,589 | -9,203 | ||||||||
Depreciation and amortization | 7,680 | 7,892 | 8,577 | ||||||||
Increase in insurance liabilities | 143,542 | 127,992 | 105,576 | ||||||||
Increase in premium receivables | -4,018 | -5,638 | -1,263 | ||||||||
Increase in deferred policy acquisition costs | -14,659 | -13,989 | -6,258 | ||||||||
(Increase) decrease in reinsurance recoverable | -1,289 | 872 | -2,877 | ||||||||
Increase in income tax liabilities | 7,099 | 29,752 | 17,953 | ||||||||
Other | -20,326 | -31,572 | -22,121 | ||||||||
Total adjustments | 95,043 | 98,982 | 45,373 | ||||||||
Net cash provided by operating activities | $ | 205,936 | $ | 202,848 | $ | 115,879 | |||||
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Segment Information [Abstract] | ' | ||||||||||
Summarized financial information for these segments | ' | ||||||||||
Summarized financial information for these segments is as follows: | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Insurance premiums and contract charges earned | |||||||||||
Property and casualty | $ | 561,954 | $ | 546,339 | $ | 547,540 | |||||
Annuity | 22,575 | 21,794 | 18,883 | ||||||||
Life | 106,409 | 102,394 | 100,697 | ||||||||
Total | $ | 690,938 | $ | 670,527 | $ | 667,120 | |||||
Net investment income | |||||||||||
Property and casualty | $ | 36,208 | $ | 36,792 | $ | 36,886 | |||||
Annuity | 208,419 | 200,785 | 182,806 | ||||||||
Life | 69,932 | 69,409 | 69,633 | ||||||||
Corporate and other | 7 | 2 | -3 | ||||||||
Intersegment eliminations | -956 | -985 | -1,011 | ||||||||
Total | $ | 313,610 | $ | 306,003 | $ | 288,311 | |||||
Net income | |||||||||||
Property and casualty | $ | 44,433 | $ | 37,043 | $ | 5,844 | |||||
Annuity | 44,719 | 40,527 | 30,906 | ||||||||
Life | 20,339 | 21,912 | 19,435 | ||||||||
Corporate and other | 1,402 | 4,384 | 14,321 | ||||||||
Total | $ | 110,893 | $ | 103,866 | $ | 70,506 | |||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Assets | |||||||||||
Property and casualty | $ | 1,001,561 | $ | 1,016,368 | $ | 957,266 | |||||
Annuity | 5,963,348 | 5,380,780 | 4,926,204 | ||||||||
Life | 1,743,084 | 1,663,696 | 1,459,919 | ||||||||
Corporate and other | 154,557 | 131,449 | 115,367 | ||||||||
Intersegment eliminations | -35,878 | -24,567 | -23,587 | ||||||||
Total | $ | 8,826,672 | $ | 8,167,726 | $ | 7,435,169 | |||||
Additional significant financial information for these segments | ' | ||||||||||
Additional significant financial information for these segments is as follows: | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Policy acquisition expenses amortized | |||||||||||
Property and casualty | $ | 68,516 | $ | 63,768 | $ | 61,374 | |||||
Annuity | 7,957 | 6,868 | 12,334 | ||||||||
Life | 8,170 | 8,883 | 9,690 | ||||||||
Total | $ | 84,643 | $ | 79,519 | $ | 83,398 | |||||
Income tax expense (benefit) | |||||||||||
Property and casualty | $ | 12,740 | $ | 10,849 | $ | -5,183 | |||||
Annuity | 18,531 | 19,046 | 13,499 | ||||||||
Life | 10,919 | 12,305 | 11,366 | ||||||||
Corporate and other | 983 | 3,107 | 4,730 | ||||||||
Total | $ | 43,173 | $ | 45,307 | $ | 24,412 | |||||
Unaudited_Selected_Quarterly_F1
Unaudited Selected Quarterly Financial Data (Tables) | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||
Unaudited Selected Quarterly Financial Data [Abstract] | ' | |||||||||||||||||||||
Selected quarterly financial data | ' | |||||||||||||||||||||
Selected quarterly financial data is presented below. | ||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | |||||||||||||||||||
2013 | ||||||||||||||||||||||
Insurance premiums written and contract deposits | $ | 275,379 | $ | 306,033 | $ | 267,703 | $ | 245,078 | ||||||||||||||
Total revenues | 259,215 | 251,884 | 265,637 | 254,531 | ||||||||||||||||||
Net income | 34,287 | 23,599 | 25,995 | 27,012 | ||||||||||||||||||
Per share information | ||||||||||||||||||||||
Basic | ||||||||||||||||||||||
Net income | $ | 0.84 | $ | 0.59 | $ | 0.65 | $ | 0.68 | ||||||||||||||
Shares of common stock – weighted average (1) | 40,818 | 40,001 | 39,768 | 39,527 | ||||||||||||||||||
Diluted | ||||||||||||||||||||||
Net income | $ | 0.81 | $ | 0.57 | $ | 0.63 | $ | 0.66 | ||||||||||||||
Shares of common stock and equivalent shares - | 42,205 | 41,732 | 41,395 | 41,088 | ||||||||||||||||||
weighted average (1) | ||||||||||||||||||||||
2012 | ||||||||||||||||||||||
Insurance premiums written and contract deposits | $ | 279,479 | $ | 285,206 | $ | 260,289 | $ | 242,753 | ||||||||||||||
Total revenues | 255,417 | 256,548 | 254,226 | 244,623 | ||||||||||||||||||
Net income | 31,826 | 32,266 | 13,103 | 26,671 | ||||||||||||||||||
Per share information | ||||||||||||||||||||||
Basic | ||||||||||||||||||||||
Net income | $ | 0.81 | $ | 0.82 | $ | 0.33 | $ | 0.67 | ||||||||||||||
Shares of common stock – weighted average (1) | 39,339 | 39,381 | 39,544 | 39,794 | ||||||||||||||||||
Diluted | ||||||||||||||||||||||
Net income | $ | 0.77 | $ | 0.78 | $ | 0.32 | $ | 0.64 | ||||||||||||||
Shares of common stock and equivalent shares - | 41,272 | 41,138 | 41,304 | 41,546 | ||||||||||||||||||
weighted average (1) | ||||||||||||||||||||||
2011 | ||||||||||||||||||||||
Insurance premiums written and contract deposits | $ | 276,113 | $ | 298,910 | $ | 259,324 | $ | 244,102 | ||||||||||||||
Total revenues | 247,645 | 260,833 | 245,351 | 244,473 | ||||||||||||||||||
Net income (loss) | 32,913 | 23,637 | -11,851 | 25,807 | ||||||||||||||||||
Per share information | ||||||||||||||||||||||
Basic | ||||||||||||||||||||||
Net income (loss) | $ | 0.82 | $ | 0.59 | $ | -0.3 | $ | 0.65 | ||||||||||||||
Shares of common stock – weighted average (1) | 39,900 | 39,919 | 39,893 | 39,749 | ||||||||||||||||||
Diluted | ||||||||||||||||||||||
Net income (loss) | $ | 0.79 | $ | 0.57 | $ | -0.3 | $ | 0.62 | ||||||||||||||
Shares of common stock and equivalent shares - | 41,414 | 41,451 | 39,893 | 41,699 | ||||||||||||||||||
weighted average (1) | ||||||||||||||||||||||
__________ | ||||||||||||||||||||||
-1 | Rounded to thousands. | |||||||||||||||||||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred policy acquisition costs asset by segment | ' | ' |
Total | $245,355 | $196,885 |
Annuity [Member] | ' | ' |
Deferred policy acquisition costs asset by segment | ' | ' |
Total | 170,749 | 125,437 |
Life [Member] | ' | ' |
Deferred policy acquisition costs asset by segment | ' | ' |
Total | 48,558 | 46,798 |
Property and casualty [Member] | ' | ' |
Deferred policy acquisition costs asset by segment | ' | ' |
Total | $26,048 | $24,650 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 1) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Adjustment to deferred policy acquisition costs amortization expenses | ' | ' | ' |
Total | ($3,574) | ($3,085) | $3,625 |
Annuity [Member] | ' | ' | ' |
Adjustment to deferred policy acquisition costs amortization expenses | ' | ' | ' |
Total | -3,700 | -3,836 | 2,466 |
Life [Member] | ' | ' | ' |
Adjustment to deferred policy acquisition costs amortization expenses | ' | ' | ' |
Total | $126 | $751 | $1,159 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Allocation of goodwill by reporting unit | ' | ' |
Goodwill | $47,396 | $47,396 |
Annuity [Member] | ' | ' |
Allocation of goodwill by reporting unit | ' | ' |
Goodwill | 28,025 | ' |
Life [Member] | ' | ' |
Allocation of goodwill by reporting unit | ' | ' |
Goodwill | 9,911 | ' |
Property and casualty [Member] | ' | ' |
Allocation of goodwill by reporting unit | ' | ' |
Goodwill | $9,460 | ' |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies (Details 3) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Property and Equipment | ' | ' |
Property and equipment | $108,394 | $108,502 |
Less: accumulated depreciation | 73,459 | 71,508 |
Total | $34,935 | $36,994 |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies (Details 4) (Guaranteed Minimum Death Benefit [Member], USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Guaranteed Minimum Death Benefit [Member] | ' | ' |
Summary of guaranteed minimum death benefit | ' | ' |
GMDB reserve | $209 | $392 |
Aggregate in-the-money death benefits under the GMDB provision | $30,422 | $41,990 |
Variable annuity contract value distribution based on GMDB feature: | ' | ' |
No guarantee | 30.00% | 31.00% |
Return of premium guarantee | 64.00% | 63.00% |
Guarantee of premium roll-up at an annual rate of 3% or 5% | 6.00% | 6.00% |
Total | 100.00% | 100.00% |
Summary_of_Significant_Account8
Summary of Significant Accounting Policies (Details 5) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Fair value of options granted was estimated on the dates of grant using weighted-average assumptions | ' | ' | ' |
Number of options granted | 245,424 | 296,188 | 313,000 |
Weighted average grant date fair value of options granted | $8.25 | $6.02 | $6.20 |
Weighted average assumptions: | ' | ' | ' |
Risk-free interest rate | 1.00% | 1.00% | 2.20% |
Expected dividend yield | 2.70% | 2.20% | 2.20% |
Expected life, in years | '5 years 9 months 18 days | '5 years 9 months 18 days | '5 years 9 months 18 days |
Expected volatility (based on historical volatility) | 54.50% | 45.10% | 45.00% |
Summary_of_Significant_Account9
Summary of Significant Accounting Policies (Details 6) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2011 | Jun. 30, 2011 | Mar. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||||||||||
Basic: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Net income per share - basic | $0.84 | $0.59 | $0.65 | $0.68 | $0.81 | $0.82 | $0.33 | $0.67 | $0.82 | $0.59 | ($0.30) | $0.65 | $2.75 | $2.63 | $1.77 | ||||||||||||
Net income for the period | $34,287 | $23,599 | $25,995 | $27,012 | $31,826 | $32,266 | $13,103 | $26,671 | $32,913 | $23,637 | ($11,851) | $25,807 | $110,893 | $103,866 | $70,506 | ||||||||||||
Weighted average number of common shares during the period (in thousands) | 40,818 | [1] | 40,001 | [1] | 39,768 | [1] | 39,527 | [1] | 39,339 | [1] | 39,381 | [1] | 39,544 | [1] | 39,794 | [1] | 39,900 | [1] | 39,919 | [1] | 39,893 | [1] | 39,749 | [1] | 40,376,562 | 39,513,540 | 39,865,815 |
Diluted: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Net income | $34,287 | $23,599 | $25,995 | $27,012 | $31,826 | $32,266 | $13,103 | $26,671 | $32,913 | $23,637 | ($11,851) | $25,807 | $110,893 | $103,866 | $70,506 | ||||||||||||
Weighted average number of common shares during the period (in thousands) | 42,205 | [1] | 41,732 | [1] | 41,395 | [1] | 41,088 | [1] | 41,272 | [1] | 41,138 | [1] | 41,304 | [1] | 41,546 | [1] | 41,414 | [1] | 41,451 | [1] | 39,893 | [1] | 41,699 | [1] | 41,633,240 | 41,388,368 | 41,436,512 |
Weighted average number of common equivalent shares to reflect the dilutive effect of common stock equivalent securities (in thousands): | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Stock options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 211,000 | 222,000 | 206,000 | ||||||||||||
Common stock units related to deferred compensation for Directors | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 112,000 | 114,000 | ||||||||||||
Common stock units related to deferred compensation for Employees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 112,000 | 116,000 | 115,000 | ||||||||||||
Restricted common stock units related to incentive compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 933,000 | 1,424,000 | 1,136,000 | ||||||||||||
Total common and common equivalent shares adjusted to calculate diluted earnings per share (in thousands) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 41,633,000 | 41,388,000 | 41,437,000 | ||||||||||||
Net income per share - diluted | $0.81 | $0.57 | $0.63 | $0.66 | $0.77 | $0.78 | $0.32 | $0.64 | $0.79 | $0.57 | ($0.30) | $0.62 | $2.66 | $2.51 | $1.70 | ||||||||||||
[1] | Rounded to thousands. |
Recovered_Sheet1
Summary of Significant Accounting Policies (Details 7) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2011 | Jun. 30, 2011 | Mar. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Components of comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Net income | $34,287 | $23,599 | $25,995 | $27,012 | $31,826 | $32,266 | $13,103 | $26,671 | $32,913 | $23,637 | ($11,851) | $25,807 | $110,893 | $103,866 | $70,506 | |
Change in net unrealized gains and losses on fixed maturities and equity securities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Net unrealized holding gains and losses on fixed maturities and equity securities arising during the period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -375,184 | 204,460 | 281,202 | |
Less: reclassification adjustment for net gains included in income before income tax | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 22,245 | 27,298 | 37,663 | |
Total, before tax | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -397,429 | 177,162 | 243,539 | |
Income tax expense (benefit) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -149,019 | 62,984 | 86,585 | |
Total, net of tax | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -248,410 | [1],[2] | 114,178 | 156,954 |
Change in net funded status of pension and other postretirement benefit obligations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Before tax | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,645 | 1,276 | -4,801 | |
Income tax expense (benefit) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,110 | 345 | -1,714 | |
Total, net of tax | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,535 | 931 | -3,087 | |
Total | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ($133,982) | $218,975 | $224,373 | |
[1] | All amounts are net of tax. | |||||||||||||||
[2] | The $22,245 pretax amount reclassified from accumulated other comprehensive income is included in net realized investment gains and losses and the $7,786 related tax expense (benefit) is included in income tax expense in the Consolidated Statement of Operations for the year ended December 31, 2013. |
Recovered_Sheet2
Summary of Significant Accounting Policies (Details 8) (USD $) | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||
Beginning balance, January 1, 2013 | $367,089 | [1] | ' | ' | |
Other comprehensive income (loss) before reclassifications | -230,416 | [1] | ' | ' | |
Amounts reclassified from accumulated other comprehensive income | -14,459 | [1] | ' | ' | |
Net current-period other comprehensive income (loss) | -244,875 | [1] | 115,109 | 153,867 | |
Ending balance, December 31, 2013 | 122,214 | [1] | 367,089 | [1] | ' |
Unrealized Gains and Losses on Fixed Maturities and Equity Securities | ' | ' | ' | ||
Beginning balance, January 1, 2013 | 382,400 | [1],[2] | ' | ' | |
Other comprehensive income (loss) before reclassifications | -233,951 | [1],[2] | ' | ' | |
Amounts reclassified from accumulated other comprehensive income | -14,459 | [1],[2] | ' | ' | |
Net current-period other comprehensive income (loss) | -248,410 | [1],[2] | 114,178 | 156,954 | |
Ending balance, December 31, 2013 | 133,990 | [1],[2] | 382,400 | [1],[2] | ' |
Defined BenefitPlans | ' | ' | ' | ||
Beginning balance, January 1, 2013 | -15,311 | [1] | ' | ' | |
Other comprehensive income (loss) before reclassifications | 3,535 | [1] | ' | ' | |
Amounts reclassified from accumulated other comprehensive income | 0 | [1] | ' | ' | |
Net current-period other comprehensive income (loss) | 3,535 | [1] | ' | ' | |
Ending balance, December 31, 2013 | ($11,776) | [1] | ($15,311) | [1] | ' |
[1] | All amounts are net of tax. | ||||
[2] | The $22,245 pretax amount reclassified from accumulated other comprehensive income is included in net realized investment gains and losses and the $7,786 related tax expense (benefit) is included in income tax expense in the Consolidated Statement of Operations for the year ended December 31, 2013. |
Recovered_Sheet3
Summary of Significant Accounting Policies (Details Textual) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Summary of Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Shares of common stock | $20.97 | ' | ' |
Summary of Significant Accounting Policies (Additional Textual) [Abstract] | ' | ' | ' |
Acquisition costs amortization in years for individual life contracts term one | '10 years | ' | ' |
Acquisition costs amortization in years for individual life contracts term two | '15 years | ' | ' |
Acquisition costs amortization in years for individual life contracts term three | '20 years | ' | ' |
Acquisition costs amortization in years for individual life contracts term four | '30 years | ' | ' |
Property and Casualty policy, acquisition cost amortized term one | '6 months | ' | ' |
Property and Casualty policy, acquisition cost amortized term two | '12 months | ' | ' |
Financial market performance assumption | 10.00% | ' | ' |
Deferred policy acquisition costs deemed unrecoverable | $0 | $0 | $0 |
Goodwill impairment charges | 0 | ' | ' |
Compensation cost for share-based compensation plans based on the fair value | 1,419 | 2,476 | 1,451 |
Number of options not included in diluted earnings per share computation | 243,727 | ' | ' |
Weighted average fair value of nonvested options outstanding | $19.41 | $15.93 | ' |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Gain (Loss), before Tax | 22,245 | ' | ' |
Federal Home Loan Bank Advances Branch Of FHLB Bank Borrowings Description | 'Any borrowing from the FHLB requires the purchase of FHLB activity-based common stock in an amount equal to 5.0% of the borrowing, or a lower percentage -- such as 2.0% based on the Reduced Capitalization Advance Program. | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Amount of Advances | 250,000 | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Interest Rate | 0.24% | ' | ' |
Financial market performance corridor assumption with basis point | 200 | ' | ' |
Deferred Policy Acquisition Costs | 245,355 | 196,885 | ' |
Other Tax Expense (Benefit) | 7,786 | ' | ' |
Maturing On December 28, 2015 [Member] | ' | ' | ' |
Summary of Significant Accounting Policies (Additional Textual) [Abstract] | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Amount of Advances | 125,000 | ' | ' |
Maturing On December 15, 2023 [Member] | ' | ' | ' |
Summary of Significant Accounting Policies (Additional Textual) [Abstract] | ' | ' | ' |
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Amount of Advances | 125,000 | ' | ' |
Nonvested [Member] | ' | ' | ' |
Summary of Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Nonvested options outstanding | 2,448 | ' | ' |
Summary of Significant Accounting Policies (Additional Textual) [Abstract] | ' | ' | ' |
Weighted average fair value of nonvested options outstanding | $6.88 | ' | ' |
Interest Sensitive Life Contracts [Member] | ' | ' | ' |
Summary of Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Capitalized acquisition costs amortization period for interest-sensitive life contracts | '20 years | ' | ' |
Summary of Significant Accounting Policies (Additional Textual) [Abstract] | ' | ' | ' |
Deferred Policy Acquisition Costs | $24,997 | $58,808 | ' |
Investment Contracts [Member] | ' | ' | ' |
Summary of Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Acquisition costs, amortization period | '20 years | ' | ' |
Maximum [Member] | ' | ' | ' |
Summary of Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Reserve investment yield assumptions on certain life insurance policies | 8.00% | ' | ' |
Shares of common stock | $30.24 | ' | ' |
Option expiration date | '2017 | ' | ' |
Summary of Significant Accounting Policies (Additional Textual) [Abstract] | ' | ' | ' |
Guarantee Of Premium Annual Rate Percentage | 5.00% | ' | ' |
Minimum [Member] | ' | ' | ' |
Summary of Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Reserve investment yield assumptions on certain life insurance policies | 4.00% | ' | ' |
Shares of common stock | $20.60 | ' | ' |
Option expiration date | '2014 | ' | ' |
Summary of Significant Accounting Policies (Additional Textual) [Abstract] | ' | ' | ' |
Guarantee Of Premium Annual Rate Percentage | 3.00% | ' | ' |
Leasehold improvements and other property and equipment [Member] | Maximum [Member] | ' | ' | ' |
Summary of Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Estimated useful lives of property and equipment | '10 years | ' | ' |
Leasehold improvements and other property and equipment [Member] | Minimum [Member] | ' | ' | ' |
Summary of Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Estimated useful lives of property and equipment | '2 years | ' | ' |
Real Estate Property [Member] | Maximum [Member] | ' | ' | ' |
Summary of Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Estimated useful lives of property and equipment | '45 years | ' | ' |
Real Estate Property [Member] | Minimum [Member] | ' | ' | ' |
Summary of Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Estimated useful lives of property and equipment | '20 years | ' | ' |
Investments_Details
Investments (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Components of net investment income | ' | ' | ' |
Total investment income | $321,866 | $313,857 | $295,358 |
Investment expenses | -8,256 | -7,854 | -7,047 |
Net investment income | 313,610 | 306,003 | 288,311 |
Fixed maturities [Member] | ' | ' | ' |
Components of net investment income | ' | ' | ' |
Total investment income | 304,024 | 297,042 | 285,782 |
Equity securities [Member] | ' | ' | ' |
Components of net investment income | ' | ' | ' |
Total investment income | 3,698 | 2,814 | 1,685 |
Short-term and other investments [Member] | ' | ' | ' |
Components of net investment income | ' | ' | ' |
Total investment income | 8,242 | 8,109 | 7,891 |
Other invested asset [Member] | ' | ' | ' |
Components of net investment income | ' | ' | ' |
Total investment income | $5,902 | $5,892 | $0 |
Investments_Details_1
Investments (Details 1) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Summary of realized investment gains (losses) | ' | ' | ' |
Net realized investment gains | $22,245 | $27,298 | $37,663 |
Fixed maturities [Member] | ' | ' | ' |
Summary of realized investment gains (losses) | ' | ' | ' |
Net realized investment gains | 18,480 | 23,218 | 37,466 |
Equity Securities [Member] | ' | ' | ' |
Summary of realized investment gains (losses) | ' | ' | ' |
Net realized investment gains | 3,765 | 4,080 | 197 |
Short-term and other investments [Member] | ' | ' | ' |
Summary of realized investment gains (losses) | ' | ' | ' |
Net realized investment gains | $0 | $0 | $0 |
Investments_Details_2
Investments (Details 2) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Unrealized gains and losses on fixed maturities and equity securities | ' | ' | ||
Amortized Cost or Cost | $5,784,205 | $5,311,457 | ||
Unrealized Gains | 344,286 | 660,665 | ||
Unrealized Losses | 118,918 | 9,890 | ||
Fair value of issued securities | 6,009,573 | 5,962,232 | ||
OTTI in AOCI | 2,812 | [1] | 3,214 | [1] |
Equity securities, Amortized Cost or Cost | 84,754 | 52,396 | ||
Mortgage-backed securities [Member] | ' | ' | ||
Unrealized gains and losses on fixed maturities and equity securities | ' | ' | ||
Amortized Cost or Cost | 555,574 | [2] | 547,040 | [2] |
Unrealized Gains | 33,711 | [2] | 72,644 | [2] |
Unrealized Losses | 19,560 | [2] | 125 | [2] |
Fair value of issued securities | 569,725 | [2] | 619,559 | [2] |
OTTI in AOCI | 0 | [1],[2] | 0 | [1],[2] |
Other including U.S. Treasury Securities [Member] | ' | ' | ||
Unrealized gains and losses on fixed maturities and equity securities | ' | ' | ||
Amortized Cost or Cost | 449,060 | [2] | 371,706 | [2] |
Unrealized Gains | 9,865 | [2] | 37,857 | [2] |
Unrealized Losses | 23,351 | [2] | 135 | [2] |
Fair value of issued securities | 435,574 | [2] | 409,428 | [2] |
OTTI in AOCI | 0 | [1],[2] | 0 | [1],[2] |
Municipal Bonds [Member] | ' | ' | ||
Unrealized gains and losses on fixed maturities and equity securities | ' | ' | ||
Amortized Cost or Cost | 1,425,441 | 1,402,424 | ||
Unrealized Gains | 80,701 | 186,261 | ||
Unrealized Losses | 34,615 | 2,648 | ||
Fair value of issued securities | 1,471,527 | 1,586,037 | ||
OTTI in AOCI | 0 | [1] | 0 | [1] |
Foreign government bonds [Member] | ' | ' | ||
Unrealized gains and losses on fixed maturities and equity securities | ' | ' | ||
Amortized Cost or Cost | 50,641 | 48,476 | ||
Unrealized Gains | 4,700 | 9,393 | ||
Unrealized Losses | 390 | 0 | ||
Fair value of issued securities | 54,951 | 57,869 | ||
OTTI in AOCI | 0 | [1] | 0 | [1] |
Corporate Bonds [Member] | ' | ' | ||
Unrealized gains and losses on fixed maturities and equity securities | ' | ' | ||
Amortized Cost or Cost | 2,457,727 | 2,258,554 | ||
Unrealized Gains | 188,832 | 313,430 | ||
Unrealized Losses | 32,150 | 4,950 | ||
Fair value of issued securities | 2,614,409 | 2,567,034 | ||
OTTI in AOCI | 0 | [1] | 0 | [1] |
Other Mortgage-backed Securities [Member] | ' | ' | ||
Unrealized gains and losses on fixed maturities and equity securities | ' | ' | ||
Amortized Cost or Cost | 845,762 | 683,257 | ||
Unrealized Gains | 26,477 | 41,080 | ||
Unrealized Losses | 8,852 | 2,032 | ||
Fair value of issued securities | 863,387 | 722,305 | ||
OTTI in AOCI | 2,812 | [1] | 3,214 | [1] |
Equity Securities [Member] | ' | ' | ||
Unrealized gains and losses on fixed maturities and equity securities | ' | ' | ||
Unrealized Gains | 10,723 | 2,397 | ||
Unrealized Losses | 3,619 | 1,290 | ||
Fair value of issued securities | 91,858 | 53,503 | ||
OTTI in AOCI | 0 | [1] | 0 | [1] |
Equity securities, Amortized Cost or Cost | $84,754 | $52,396 | ||
[1] | Represents the amount of other-than-temporary impairment losses in AOCI which, beginning April 1, 2009, was not included in earnings under current accounting guidance. Amounts also include unrealized gains/(losses) on impaired securities relating to changes in the fair value of such securities subsequent to the impairment measurement date. | |||
[2] | Fair value includes securities issued by Federal National Mortgage Association (bFNMAb) of $336,193 and $375,111; Federal Home Loan Mortgage Corporation (bFHLMCb) of $427,172 and $418,174; and Government National Mortgage Association (bGNMAb) of $126,245 and $136,998 as of December 31, 2013 and 2012, respectively. |
Investments_Details_3
Investments (Details 3) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Number | Number | |||
Fixed maturity securities Fair Value | ' | ' | ||
Fixed maturity securities, Fair Value 12 Months or Less | $1,672,852 | $263,571 | ||
Fixed maturity securities, Fair Value More than 12 Months | 83,093 | 55,788 | ||
Fixed maturity securities, Fair Value, Total | 1,755,945 | 319,359 | ||
Fixed maturity securities Gross Unrealized Losses | ' | ' | ||
Fixed maturity securities, Gross Unrealized Losses 12 Months or Less | 108,594 | 5,648 | ||
Fixed maturity securities, Gross Unrealized Losses More than 12 Months | 13,943 | 5,532 | ||
Fixed maturity securities, Gross Unrealized Losses, Total | 122,537 | 11,180 | ||
Number of positions with a gross unrealized loss 12 months or less | 534 | 156 | ||
Number of position with gross unrealized loss position more than 12 months | 46 | 43 | ||
Number of position with gross unrealized loss position Total | 580 | 199 | ||
Fair value as percentage of fixed maturities and equity securities fair value less than 12 months | 27.40% | 4.40% | ||
Fair value as percentage of fixed maturities and equity securities fair value more than 12 months | 1.40% | 0.90% | ||
Fair value as percentage of fixed maturities and equity securities fair value, Total | 28.80% | 5.30% | ||
Mortgage-backed securities [Member] | ' | ' | ||
Fixed maturity securities Fair Value | ' | ' | ||
Fixed maturity securities, Fair Value 12 Months or Less | 150,602 | 11,006 | ||
Fixed maturity securities, Fair Value More than 12 Months | 1,383 | 50 | ||
Fixed maturity securities, Fair Value, Total | 151,985 | 11,056 | ||
Fixed maturity securities Gross Unrealized Losses | ' | ' | ||
Fixed maturity securities, Gross Unrealized Losses 12 Months or Less | 19,145 | 124 | ||
Fixed maturity securities, Gross Unrealized Losses More than 12 Months | 415 | 1 | ||
Fixed maturity securities, Gross Unrealized Losses, Total | 19,560 | 125 | ||
Other [Member] | ' | ' | ||
Fixed maturity securities Fair Value | ' | ' | ||
Fixed maturity securities, Fair Value 12 Months or Less | 249,765 | 9,944 | ||
Fixed maturity securities, Fair Value More than 12 Months | 4,450 | 0 | ||
Fixed maturity securities, Fair Value, Total | 254,215 | 9,944 | ||
Fixed maturity securities Gross Unrealized Losses | ' | ' | ||
Fixed maturity securities, Gross Unrealized Losses 12 Months or Less | 22,479 | 135 | ||
Fixed maturity securities, Gross Unrealized Losses More than 12 Months | 872 | 0 | ||
Fixed maturity securities, Gross Unrealized Losses, Total | 23,351 | 135 | ||
Municipal Bonds [Member] | ' | ' | ||
Fixed maturity securities Fair Value | ' | ' | ||
Fixed maturity securities, Fair Value 12 Months or Less | 375,523 | 108,578 | ||
Fixed maturity securities, Fair Value More than 12 Months | 42,899 | 3,990 | ||
Fixed maturity securities, Fair Value, Total | 418,422 | 112,568 | ||
Fixed maturity securities Gross Unrealized Losses | ' | ' | ||
Fixed maturity securities, Gross Unrealized Losses 12 Months or Less | 26,529 | 2,605 | ||
Fixed maturity securities, Gross Unrealized Losses More than 12 Months | 8,086 | 43 | ||
Fixed maturity securities, Gross Unrealized Losses, Total | 34,615 | 2,648 | ||
Foreign government bonds [Member] | ' | ' | ||
Fixed maturity securities Fair Value | ' | ' | ||
Fixed maturity securities, Fair Value 12 Months or Less | 6,738 | 0 | ||
Fixed maturity securities, Fair Value More than 12 Months | 0 | 0 | ||
Fixed maturity securities, Fair Value, Total | 6,738 | 0 | ||
Fixed maturity securities Gross Unrealized Losses | ' | ' | ||
Fixed maturity securities, Gross Unrealized Losses 12 Months or Less | 390 | 0 | ||
Fixed maturity securities, Gross Unrealized Losses More than 12 Months | 0 | 0 | ||
Fixed maturity securities, Gross Unrealized Losses, Total | 390 | 0 | ||
Corporate Bonds [Member] | ' | ' | ||
Fixed maturity securities Fair Value | ' | ' | ||
Fixed maturity securities, Fair Value 12 Months or Less | 582,849 | 56,481 | ||
Fixed maturity securities, Fair Value More than 12 Months | 12,948 | 26,725 | ||
Fixed maturity securities, Fair Value, Total | 595,797 | 83,206 | ||
Fixed maturity securities Gross Unrealized Losses | ' | ' | ||
Fixed maturity securities, Gross Unrealized Losses 12 Months or Less | 28,634 | 875 | ||
Fixed maturity securities, Gross Unrealized Losses More than 12 Months | 3,516 | 4,075 | ||
Fixed maturity securities, Gross Unrealized Losses, Total | 32,150 | 4,950 | ||
Other Mortgage-backed Securities [Member] | ' | ' | ||
Fixed maturity securities Fair Value | ' | ' | ||
Fixed maturity securities, Fair Value 12 Months or Less | 274,983 | 58,218 | ||
Fixed maturity securities, Fair Value More than 12 Months | 20,008 | 25,014 | ||
Fixed maturity securities, Fair Value, Total | 294,991 | 83,232 | ||
Fixed maturity securities Gross Unrealized Losses | ' | ' | ||
Fixed maturity securities, Gross Unrealized Losses 12 Months or Less | 8,300 | 621 | ||
Fixed maturity securities, Gross Unrealized Losses More than 12 Months | 552 | 1,411 | ||
Fixed maturity securities, Gross Unrealized Losses, Total | 8,852 | 2,032 | ||
Total Fixed Maturities Securities [Member] | ' | ' | ||
Fixed maturity securities Fair Value | ' | ' | ||
Fixed maturity securities, Fair Value 12 Months or Less | 1,640,460 | 244,227 | ||
Fixed maturity securities, Fair Value More than 12 Months | 81,688 | 55,779 | ||
Fixed maturity securities, Fair Value, Total | 1,722,148 | 300,006 | ||
Fixed maturity securities Gross Unrealized Losses | ' | ' | ||
Fixed maturity securities, Gross Unrealized Losses 12 Months or Less | 105,477 | 4,360 | ||
Fixed maturity securities, Gross Unrealized Losses More than 12 Months | 13,441 | 5,530 | ||
Fixed maturity securities, Gross Unrealized Losses, Total | 118,918 | 9,890 | ||
Equity Securities [Member] | ' | ' | ||
Fixed maturity securities Fair Value | ' | ' | ||
Fixed maturity securities, Fair Value 12 Months or Less | 32,392 | [1] | 19,344 | [1] |
Fixed maturity securities, Fair Value More than 12 Months | 1,405 | [1] | 9 | [1] |
Fixed maturity securities, Fair Value, Total | 33,797 | [1] | 19,353 | [1] |
Fixed maturity securities Gross Unrealized Losses | ' | ' | ||
Fixed maturity securities, Gross Unrealized Losses 12 Months or Less | 3,117 | [1] | 1,288 | [1] |
Fixed maturity securities, Gross Unrealized Losses More than 12 Months | 502 | [1] | 2 | [1] |
Fixed maturity securities, Gross Unrealized Losses, Total | $3,619 | [1] | $1,290 | [1] |
[1] | Includes nonredeemable (perpetual) preferred stocks and common stocks. |
Investments_Details_4
Investments (Details 4) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Cumulative credit loss (1) | ' | ' | ||
Beginning of period | $2,877 | [1] | $3,957 | [1] |
New credit losses (2) | 1,220 | [1],[2] | 0 | [1],[2] |
Losses related to securities sold or paid down during the period | 0 | [1] | -1,080 | [1] |
End of period | $4,097 | [1] | $2,877 | [1] |
[1] | The cumulative credit loss amounts exclude other-than-temporary impairment losses on securities held as of the periods indicated that the Company intended to sell or it was more likely than not that the Company would be required to sell the security before the recovery of the amortized cost basis. | |||
[2] | For 2013, the other-than-temporary impairment loss was recorded on a Detroit general obligation bond. |
Investments_Details_5
Investments (Details 5) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Estimated expected maturity: | ' | ' |
Due in 1 year or less, Amortized Cost | $234,952 | ' |
Due in 1 year or less, Fair Value | 244,106 | ' |
Due in 1 year or less, Percent of Total Fair Value | 4.10% | ' |
Due after 1 year through 5 years, Amortized Cost | 1,206,390 | ' |
Due after 1 year through 5 years, Fair Value | 1,253,394 | ' |
Due after 1 year through 5 years, Percent of Total Fair Value | 20.90% | ' |
Due after 5 years through 10 years, Amortized Cost | 2,227,741 | ' |
Due after 5 years through 10 years, Fair Value | 2,314,540 | ' |
Due after 5 years through 10 years, Percent of Total Fair Value | 38.40% | ' |
Due after 10 years through 20 years, Amortized Cost | 1,202,062 | ' |
Due after 10 years through 20 years, Fair Value | 1,248,897 | ' |
Due after 10 years through 20 years, Percent of Total Fair Value | 20.80% | ' |
Due after 20 years, Amortized Cost | 913,060 | ' |
Due after 20 years, Fair Value | 948,636 | ' |
Due after 20 years, Percent of Total Fair Value | 15.80% | ' |
Total, Amortized Cost | 5,784,205 | 5,311,457 |
Total, Fair Value | $6,009,573 | $5,962,232 |
Total, Percent of Total Fair Value | 100.00% | ' |
Average option-adjusted duration, in years | '6 years 3 months 18 days | ' |
Investments_Details_6
Investments (Details 6) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Proceeds received from sales of fixed maturities and equity securities | ' | ' | ' |
Proceeds received, Fixed maturity securities | $298,045 | $576,708 | $587,909 |
Proceeds received, Equity securities | 18,643 | 6,057 | 1,078 |
Gross gains realized | 29,511 | 39,941 | 39,709 |
Gross losses realized | -5,734 | -12,643 | -1,974 |
Fixed Maturity Securities [Member] | ' | ' | ' |
Proceeds received from sales of fixed maturities and equity securities | ' | ' | ' |
Gross gains realized | 17,177 | 32,532 | 39,463 |
Gross losses realized | -4,945 | -11,971 | -2,047 |
Equity Securities [Member] | ' | ' | ' |
Proceeds received from sales of fixed maturities and equity securities | ' | ' | ' |
Gross gains realized | 4,368 | 231 | 247 |
Gross losses realized | ($616) | ($438) | $0 |
Investments_Details_7
Investments (Details 7) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Reconciliation of net unrealized investment gains (losses) on fixed maturity securities and equity securities | ' | ' | ' | |
Reclassification of net realized investment (gains) losses to net income | ($14,459) | [1],[2] | ' | ' |
Fixed Maturity Securities [Member] | ' | ' | ' | |
Reconciliation of net unrealized investment gains (losses) on fixed maturity securities and equity securities | ' | ' | ' | |
Beginning of period | 423,004 | 284,338 | 118,498 | |
Change in unrealized investment gains and losses | -264,503 | 153,758 | 190,193 | |
Reclassification of net realized investment (gains) losses to net income | -12,012 | -15,092 | -24,353 | |
End of period | 146,489 | 423,004 | 284,338 | |
Equity Securities [Member] | ' | ' | ' | |
Reconciliation of net unrealized investment gains (losses) on fixed maturity securities and equity securities | ' | ' | ' | |
Beginning of period | 720 | 2,408 | 2,139 | |
Change in unrealized investment gains and losses | 6,345 | 964 | 397 | |
Reclassification of net realized investment (gains) losses to net income | -2,447 | -2,652 | -128 | |
End of period | $4,618 | $720 | $2,408 | |
[1] | All amounts are net of tax. | |||
[2] | The $22,245 pretax amount reclassified from accumulated other comprehensive income is included in net realized investment gains and losses and the $7,786 related tax expense (benefit) is included in income tax expense in the Consolidated Statement of Operations for the year ended December 31, 2013. |
Investments_Details_Textual
Investments (Details Textual) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Investments (Textual) [Abstract] | ' | ' | ' |
Fair value of issued securities | $6,009,573 | $5,962,232 | ' |
Investments (Additional Textual) [Abstract] | ' | ' | ' |
Net realized investment gains | 22,245 | 27,298 | 37,663 |
Gross gains realized on security sales | 29,511 | 39,941 | 39,709 |
Realized losses on securities | 5,734 | 12,643 | 1,974 |
Fixed maturities and equity securities with investment grade rating, percent of gross unrealized loss | 95.00% | ' | ' |
Fair value of securities on deposit | 17,967 | 18,565 | ' |
Impairment of securities | 1,532 | ' | 72 |
Fair value of securities transferred | 24,791 | 0 | ' |
Obligation for securities sold under agreement to repurchase, including accrued interest | 25,864 | 0 | ' |
Cash received in an amount equal to fair value of securities transferred | 95.00% | ' | ' |
Secured Debt | 250,000 | ' | ' |
Federal National Mortgage Association Certificates and Obligations (FNMA) [Member] | ' | ' | ' |
Investments (Textual) [Abstract] | ' | ' | ' |
Fair value of issued securities | 336,193 | 375,111 | ' |
Federal Home Loan Mortgage Corporation Certificates and Obligations (FHLMC) [Member] | ' | ' | ' |
Investments (Textual) [Abstract] | ' | ' | ' |
Fair value of issued securities | 427,172 | 418,174 | ' |
Government National Mortgage Association Certificates and Obligations (GNMA) [Member] | ' | ' | ' |
Investments (Textual) [Abstract] | ' | ' | ' |
Fair value of issued securities | 126,245 | 136,998 | ' |
Federal Home Loan Bank [Member] | ' | ' | ' |
Investments (Additional Textual) [Abstract] | ' | ' | ' |
Fair Value of Securities on deposit with Federal Home Loan Bank | $274,437 | ' | ' |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Investments, Carrying Value | $6,539,473 | $6,292,097 | ||
Separate Account (variable annuity) assets, Carrying Value | 1,747,995 | 1,398,281 | ||
Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 6,009,573 | 5,962,232 | ||
Fair Value | 6,009,573 | 5,962,232 | ||
Investments, Carrying Value | 6,313,189 | 6,103,296 | ||
Investments, Fair Value | 6,313,189 | 6,103,296 | ||
Separate Account (variable annuity) assets, Carrying Value | 1,747,995 | [1] | 1,398,281 | [1] |
Separate Account (variable annuity) assets, Fair Value | 1,747,995 | [1] | 1,398,281 | [1] |
Financial Liabilities | 0 | 0 | ||
Recurring [Member] | Other Investments [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Investments, Carrying Value | 5,000 | ' | ||
Investments, Fair Value | 5,000 | ' | ||
Short-term investments [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Investments, Carrying Value | 206,758 | 87,561 | ||
Investments, Fair Value | 206,758 | 87,561 | ||
Mortgage-backed securities [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 569,725 | 619,559 | ||
Fair Value | 569,725 | 619,559 | ||
Other including U.S. Treasury Securities [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 435,574 | 409,428 | ||
Fair Value | 435,574 | 409,428 | ||
Municipal Bonds [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 1,471,527 | 1,586,037 | ||
Fair Value | 1,471,527 | 1,586,037 | ||
Foreign government bonds [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 54,951 | 57,869 | ||
Fair Value | 54,951 | 57,869 | ||
Corporate Bonds [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 2,614,409 | 2,567,034 | ||
Fair Value | 2,614,409 | 2,567,034 | ||
Other Mortgage-backed Securities [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 863,387 | 722,305 | ||
Fair Value | 863,387 | 722,305 | ||
Equity Securities [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 91,858 | 53,503 | ||
Fair Value | 91,858 | 53,503 | ||
Level 1 [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 27,938 | 30,528 | ||
Investments, Carrying Value | 308,571 | 161,793 | ||
Separate Account (variable annuity) assets, Carrying Value | 1,747,995 | [1] | 1,398,281 | [1] |
Financial Liabilities | 0 | 0 | ||
Level 1 [Member] | Recurring [Member] | Other Investments [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Investments, Carrying Value | 0 | ' | ||
Level 1 [Member] | Short-term investments [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Investments, Carrying Value | 206,354 | 87,561 | ||
Level 1 [Member] | Mortgage-backed securities [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 0 | 0 | ||
Level 1 [Member] | Other including U.S. Treasury Securities [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 17,757 | 18,594 | ||
Level 1 [Member] | Municipal Bonds [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 0 | 0 | ||
Level 1 [Member] | Foreign government bonds [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 0 | 0 | ||
Level 1 [Member] | Corporate Bonds [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 10,181 | 11,934 | ||
Level 1 [Member] | Other Mortgage-backed Securities [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 0 | 0 | ||
Level 1 [Member] | Equity Securities [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 74,279 | 43,704 | ||
Level 2 [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 5,872,106 | 5,800,535 | ||
Investments, Carrying Value | 5,895,083 | 5,809,994 | ||
Separate Account (variable annuity) assets, Carrying Value | 0 | [1] | 0 | [1] |
Financial Liabilities | 0 | 0 | ||
Level 2 [Member] | Recurring [Member] | Other Investments [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Investments, Carrying Value | 5,000 | ' | ||
Level 2 [Member] | Short-term investments [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Investments, Carrying Value | 404 | 0 | ||
Level 2 [Member] | Mortgage-backed securities [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 569,725 | 619,559 | ||
Level 2 [Member] | Other including U.S. Treasury Securities [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 417,817 | 390,834 | ||
Level 2 [Member] | Municipal Bonds [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 1,468,833 | 1,573,762 | ||
Level 2 [Member] | Foreign government bonds [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 54,951 | 57,869 | ||
Level 2 [Member] | Corporate Bonds [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 2,543,402 | 2,469,378 | ||
Level 2 [Member] | Other Mortgage-backed Securities [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 817,378 | 689,133 | ||
Level 2 [Member] | Equity Securities [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 17,573 | 9,459 | ||
Level 3 [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 109,529 | 131,169 | ||
Investments, Carrying Value | 109,535 | 131,509 | ||
Separate Account (variable annuity) assets, Carrying Value | 0 | [1] | 0 | [1] |
Financial Liabilities | 0 | 0 | ||
Level 3 [Member] | Recurring [Member] | Other Investments [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Investments, Carrying Value | 0 | ' | ||
Level 3 [Member] | Short-term investments [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Investments, Carrying Value | 0 | 0 | ||
Level 3 [Member] | Mortgage-backed securities [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 0 | 0 | ||
Level 3 [Member] | Other including U.S. Treasury Securities [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 0 | 0 | ||
Level 3 [Member] | Municipal Bonds [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 2,694 | 12,275 | ||
Level 3 [Member] | Foreign government bonds [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 0 | 0 | ||
Level 3 [Member] | Corporate Bonds [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 60,826 | 85,722 | ||
Level 3 [Member] | Other Mortgage-backed Securities [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | 46,009 | 33,172 | ||
Level 3 [Member] | Equity Securities [Member] | Recurring [Member] | ' | ' | ||
U.S. government and federally sponsored agency obligations | ' | ' | ||
Carrying Amount | $6 | $340 | ||
[1] | Separate Account (variable annuity) liabilities are set equal to Separate Account (variable annuity) assets. |
Fair_Value_of_Financial_Instru3
Fair Value of Financial Instruments (Details 1) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Financial Assets | ' | ' | ||
Beginning balance | $131,509 | $93,173 | ||
Transfers into Level 3 | 111,538 | [1] | 89,644 | [1] |
Transfers out of Level 3 | -91,724 | [1] | -50,707 | [1] |
Total gains or losses | ' | ' | ||
Net realized gains (losses) included in net income | 0 | -2 | ||
Net unrealized gains (losses) included in other comprehensive income | -2,816 | 1,146 | ||
Purchases | 0 | 0 | ||
Issuances | 0 | 0 | ||
Sales | -334 | 0 | ||
Settlements | 0 | 0 | ||
Paydowns, maturities and distributions | -38,638 | -1,745 | ||
Ending balance | 109,535 | 131,509 | ||
Municipal Bonds [Member] | ' | ' | ||
Financial Assets | ' | ' | ||
Beginning balance | 12,275 | 0 | ||
Transfers into Level 3 | 9,453 | [1] | 12,297 | [1] |
Transfers out of Level 3 | -6,347 | [1] | 0 | [1] |
Total gains or losses | ' | ' | ||
Net realized gains (losses) included in net income | 0 | 0 | ||
Net unrealized gains (losses) included in other comprehensive income | -481 | -22 | ||
Purchases | 0 | 0 | ||
Issuances | 0 | 0 | ||
Sales | 0 | 0 | ||
Settlements | 0 | 0 | ||
Paydowns, maturities and distributions | -12,206 | 0 | ||
Ending balance | 2,694 | 12,275 | ||
Corporate Bonds [Member] | ' | ' | ||
Financial Assets | ' | ' | ||
Beginning balance | 85,722 | 88,256 | ||
Transfers into Level 3 | 34,258 | [1] | 47,799 | [1] |
Transfers out of Level 3 | -54,530 | [1] | -50,707 | [1] |
Total gains or losses | ' | ' | ||
Net realized gains (losses) included in net income | 0 | 0 | ||
Net unrealized gains (losses) included in other comprehensive income | -2,007 | 1,013 | ||
Purchases | 0 | 0 | ||
Issuances | 0 | 0 | ||
Sales | 0 | 0 | ||
Settlements | 0 | 0 | ||
Paydowns, maturities and distributions | -2,617 | -639 | ||
Ending balance | 60,826 | 85,722 | ||
Other Mortgage-backed Securities [Member] | ' | ' | ||
Financial Assets | ' | ' | ||
Beginning balance | 33,172 | 4,532 | ||
Transfers into Level 3 | 67,827 | [1] | 29,548 | [1] |
Transfers out of Level 3 | -30,847 | [1] | 0 | [1] |
Total gains or losses | ' | ' | ||
Net realized gains (losses) included in net income | 0 | -2 | ||
Net unrealized gains (losses) included in other comprehensive income | -328 | 200 | ||
Purchases | 0 | 0 | ||
Issuances | 0 | 0 | ||
Sales | 0 | 0 | ||
Settlements | 0 | 0 | ||
Paydowns, maturities and distributions | -23,815 | -1,106 | ||
Ending balance | 46,009 | 33,172 | ||
Total Fixed Maturities [Member] | ' | ' | ||
Financial Assets | ' | ' | ||
Beginning balance | 131,169 | 92,788 | ||
Transfers into Level 3 | 111,538 | [1] | 89,644 | [1] |
Transfers out of Level 3 | -91,724 | [1] | -50,707 | [1] |
Total gains or losses | ' | ' | ||
Net realized gains (losses) included in net income | 0 | -2 | ||
Net unrealized gains (losses) included in other comprehensive income | -2,816 | 1,191 | ||
Purchases | 0 | 0 | ||
Issuances | 0 | 0 | ||
Sales | 0 | 0 | ||
Settlements | 0 | 0 | ||
Paydowns, maturities and distributions | -38,638 | -1,745 | ||
Ending balance | 109,529 | 131,169 | ||
Equity Securities [Member] | ' | ' | ||
Financial Assets | ' | ' | ||
Beginning balance | 340 | 385 | ||
Transfers into Level 3 | 0 | [1] | 0 | [1] |
Transfers out of Level 3 | 0 | [1] | 0 | [1] |
Total gains or losses | ' | ' | ||
Net realized gains (losses) included in net income | 0 | 0 | ||
Net unrealized gains (losses) included in other comprehensive income | 0 | -45 | ||
Purchases | 0 | 0 | ||
Issuances | 0 | 0 | ||
Sales | -334 | 0 | ||
Settlements | 0 | 0 | ||
Paydowns, maturities and distributions | 0 | 0 | ||
Ending balance | $6 | $340 | ||
[1] | Transfers into and out of Level 3 during the years ended December 31, 2013 and 2012 were attributable to changes in the availability of observable market information for individual fixed maturity securities. The Companybs policy is to recognize transfers into and transfers out of the levels as having occurred at the end of the reporting period in which the transfers were determined. |
Fair_Value_of_Financial_Instru4
Fair Value of Financial Instruments (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Investments | ' | ' |
Other investments, Carrying Value | $6,539,473 | $6,292,097 |
Financial Liabilities | ' | ' |
Fixed annuity contract liabilities, Carrying Value | 3,515,865 | 3,257,758 |
Fixed annuity contract liabilities, Fair value | 3,302,333 | 3,070,111 |
Policyholder account balances on interest-sensitive life contracts, Carrying Value | 78,598 | 79,017 |
Policyholder account balances on interest-sensitive life contracts, Fair value | 79,678 | 78,519 |
Other policyholder funds, Carrying Value | 346,292 | 103,227 |
Other policyholder funds, Fair Value | 346,292 | 103,227 |
Short-term debt, Carrying Value | 38,000 | 38,000 |
Short-term debt, Fair Value | 38,000 | 38,000 |
Long-term debt, Carrying Value | 199,874 | 199,809 |
Long-term debt, Fair Value | 218,565 | 219,319 |
Other liabilities, repurchase agreement obligations, Carrying Value | 25,864 | 0 |
Other liabilities, repurchase agreement obligations, Fair Value | 25,864 | 0 |
Other investments [Member] | ' | ' |
Investments | ' | ' |
Other investments, Carrying Value | 140,685 | 134,985 |
Other investments, Fair Value | 144,921 | 135,121 |
Level 1 [Member] | ' | ' |
Financial Liabilities | ' | ' |
Fixed annuity contract liabilities, Carrying Value | 0 | 0 |
Policyholder account balances on interest-sensitive life contracts, Carrying Value | 0 | 0 |
Other policyholder funds, Carrying Value | 0 | 0 |
Short-term debt, Carrying Value | 0 | 0 |
Long-term debt, Carrying Value | 218,565 | 219,319 |
Other liabilities, repurchase agreement obligations, Fair Value | 0 | 0 |
Level 1 [Member] | Other investments [Member] | ' | ' |
Investments | ' | ' |
Other investments, Carrying Value | 0 | 0 |
Level 2 [Member] | ' | ' |
Financial Liabilities | ' | ' |
Fixed annuity contract liabilities, Carrying Value | 0 | 0 |
Policyholder account balances on interest-sensitive life contracts, Carrying Value | 0 | 0 |
Other policyholder funds, Carrying Value | 250,000 | 0 |
Short-term debt, Carrying Value | 38,000 | 38,000 |
Long-term debt, Carrying Value | 0 | 0 |
Other liabilities, repurchase agreement obligations, Fair Value | 25,864 | 0 |
Level 2 [Member] | Other investments [Member] | ' | ' |
Investments | ' | ' |
Other investments, Carrying Value | 0 | 0 |
Level 3 [Member] | ' | ' |
Financial Liabilities | ' | ' |
Fixed annuity contract liabilities, Carrying Value | 3,302,333 | 3,070,111 |
Policyholder account balances on interest-sensitive life contracts, Carrying Value | 79,678 | 78,519 |
Other policyholder funds, Carrying Value | 96,292 | 103,227 |
Short-term debt, Carrying Value | 0 | 0 |
Long-term debt, Carrying Value | 0 | 0 |
Other liabilities, repurchase agreement obligations, Fair Value | 0 | 0 |
Level 3 [Member] | Other investments [Member] | ' | ' |
Investments | ' | ' |
Other investments, Carrying Value | $144,921 | $135,121 |
Fair_Value_of_Financial_Instru5
Fair Value of Financial Instruments (Details Textual) | Dec. 31, 2013 | Dec. 31, 2012 |
Fair Value of Financial Instruments (Textual) [Abstract] | ' | ' |
Percentage of Investment portfolio fair value pricing services or index price | 87.00% | 88.00% |
Percentage of Invested assets in total investment portfolio level 3 | 2.00% | ' |
Property_and_Casualty_Unpaid_C2
Property and Casualty Unpaid Claims and Claim Expenses (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Claims and claim expense payments for claims occurring during: | ' | ' | ' | |||
Plus reinsurance recoverables | $24,502 | $24,049 | ' | |||
Property and casualty segment [Member] | ' | ' | ' | |||
Reconciliation of property and casualty unpaid claims and claim expenses | ' | ' | ' | |||
Gross reserves, beginning of year | 274,542 | [1] | 281,080 | [1] | 301,622 | [1] |
Less reinsurance recoverables | 13,705 | 11,463 | 12,225 | |||
Net reserves, beginning of year | 260,837 | [2] | 269,617 | [2] | 289,397 | [2] |
Incurred claims and claim expenses: | ' | ' | ' | |||
Claims occurring in the current year | 403,589 | 406,605 | 452,827 | |||
Decrease in estimated reserves for claims occurring in prior years | -17,988 | [3] | -17,175 | [3] | -10,310 | [3] |
Total claims and claim expenses incurred | 385,601 | [4] | 389,430 | [4] | 442,517 | [4] |
Claims and claim expense payments for claims occurring during: | ' | ' | ' | |||
Current year | 265,831 | 271,286 | 314,759 | |||
Prior years | 118,905 | 126,924 | 147,539 | |||
Total claims and claim expense payments | 384,736 | 398,210 | 462,298 | |||
Net reserves, end of year | 261,702 | [2] | 260,837 | [2] | 269,617 | [2] |
Plus reinsurance recoverables | 14,107 | 13,705 | 11,463 | |||
Gross reserves, end of year | $275,809 | [1] | $274,542 | [1] | $281,080 | [1] |
[1] | Unpaid claims and claim expenses as reported in the Consolidated Balance Sheets also include reserves for the life and annuity segments of $15,818, $14,853, $13,729 and $14,073 as of December 31, 2013, 2012, 2011 and 2010, respectively, in addition to property and casualty segment reserves. | |||||
[2] | Reserves net of anticipated reinsurance recoverables. | |||||
[3] | Shows the amounts by which the Company decreased its reserves in each of the periods indicated for claims occurring in previous periods to reflect subsequent information on such claims and changes in their projected final settlement costs. Also refer to the paragraphs below for additional information regarding the reserve development recorded in 2013, 2012 and 2011. | |||||
[4] | Benefits, claims and settlement expenses as reported in the Consolidated Statements of Operations also include amounts for the life and annuity segments of $62,716, $58,820 and $59,917 for the years ended December 31, 2013, 2012 and 2011, respectively, in addition to the property and casualty segment amounts. |
Property_and_Casualty_Unpaid_C3
Property and Casualty Unpaid Claims and Claim Expenses (Details Textual) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Property and Casualty Unpaid Claims and Claim Expenses (Textual) [Abstract] | ' | ' | ' | ' |
Benefits, claims and settlement expenses | $448,317 | $448,250 | $502,434 | ' |
Property and Casualty Unpaid Claims and Claim Expenses (Additional Textual) [Abstract] | ' | ' | ' | ' |
Favorable development of total reserves for property and casualty claims occurring in prior years | 17,988 | 17,175 | 10,310 | ' |
Automobile liability coverage reserves as percentage of total reserves | 70.00% | ' | ' | ' |
Short tail coverage reserves as percentage of total reserves | 20.00% | ' | ' | ' |
Long tail coverage reserves as percentage of total reserves | 80.00% | ' | ' | ' |
Potential variability of property and casualty loss reserves | 6.00% | ' | ' | ' |
Potential variability of property and casualty loss reserves plus minus of net income | 10,000 | ' | ' | ' |
Life and Annuity [Member] | ' | ' | ' | ' |
Property and Casualty Unpaid Claims and Claim Expenses (Textual) [Abstract] | ' | ' | ' | ' |
Unpaid claims and claim expenses | 15,818 | 14,853 | 13,729 | 14,073 |
Benefits, claims and settlement expenses | $62,716 | $58,820 | $59,917 | ' |
Debt_Details
Debt (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Short-term debt: | ' | ' |
Bank Credit Facility | $38,000 | $38,000 |
Long-term debt: | ' | ' |
Final Maturity | '2015 | ' |
Long-term debt | 199,874 | 199,809 |
Total | 237,874 | 237,809 |
Senior Notes 2015 [Member] | ' | ' |
Long-term debt: | ' | ' |
Effective Interest Rates | 6.10% | ' |
Final Maturity | '2015 | ' |
Long-term debt | 74,962 | 74,935 |
Senior Notes 2016 [Member] | ' | ' |
Long-term debt: | ' | ' |
Effective Interest Rates | 6.90% | ' |
Final Maturity | '2016 | ' |
Long-term debt | $124,912 | $124,874 |
Debt_Details_Textual
Debt (Details Textual) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Debt (Textual) [Abstract] | ' | ' |
Offer and sale of various securities | $300,000 | ' |
Debt Instrument, Basis Spread on Variable Rate | 1.25% | ' |
Previous Unsecured Bank Credit Facility [Member] | ' | ' |
Debt (Textual) [Abstract] | ' | ' |
Expiry date for agreement | 19-Dec-11 | ' |
Repayment of balance outstanding | 38,000 | ' |
Current Unsecured Bank Credit Facility [Member] | ' | ' |
Debt (Textual) [Abstract] | ' | ' |
Unsecured borrowings | 150,000 | ' |
Expiry date for agreement | 6-Oct-15 | ' |
Effective interest rate | 1.49% | ' |
Current borrowing under the Current Bank Credit Facility | 38,000 | ' |
Variable commitment fee unused portion | 0.15% | ' |
Senior Notes 2015 [Member] | ' | ' |
Debt (Textual) [Abstract] | ' | ' |
Unaccrued discount | 38 | 65 |
Senior Notes | 6.05% | ' |
Aggregate principal amount | 75,000 | ' |
Maturity date of Senior note | 15-Jun-15 | ' |
Discount on issue | 0.36% | ' |
Effective yield | 6.10% | ' |
Percentage of principal amount of senior notes for redemption | 100.00% | ' |
Treasury yield basis point | '30 basis points | ' |
Senior Notes 2016 [Member] | ' | ' |
Debt (Textual) [Abstract] | ' | ' |
Unaccrued discount | 88 | 126 |
Senior Notes | 6.85% | ' |
Aggregate principal amount | $125,000 | ' |
Maturity date of Senior note | 15-Apr-16 | ' |
Discount on issue | 0.31% | ' |
Effective yield | 6.89% | ' |
Percentage of principal amount of senior notes for redemption | 100.00% | ' |
Treasury yield basis point | '30 basis points | ' |
Shareholders_Equity_and_Stock_2
Shareholders' Equity and Stock Options (Details) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Summary of stock units and stock options outstanding under the Comprehensive Plan | ' | ' | ' |
Stock options | 956,814 | 1,882,939 | 2,600,583 |
Restricted common stock units related to incentive compensation | 1,663,190 | 1,423,611 | 1,135,840 |
Total | 2,850,047 | 3,534,652 | 3,965,012 |
Employee Stock Option [Member] | ' | ' | ' |
Summary of stock units and stock options outstanding under the Comprehensive Plan | ' | ' | ' |
Common stock units related to deferred compensation | 111,981 | 116,174 | 115,087 |
Restricted Stock Units (RSUs) [Member] | ' | ' | ' |
Summary of stock units and stock options outstanding under the Comprehensive Plan | ' | ' | ' |
Common stock units related to deferred compensation | 118,062 | 111,928 | 113,502 |
Shareholders_Equity_and_Stock_3
Shareholders' Equity and Stock Options (Details 1) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Summary of changes in outstanding options | ' | ' | ' |
Weighted Average Option Price per Share, Beginning Balance | $14.73 | ' | ' |
Weighted Average Option Price per Share, Options Granted | $20.97 | ' | ' |
Weighted Average Option Price per Share, Options Vested | $13.94 | ' | ' |
Weighted Average Option Price per Share, Options Exercised | $13.77 | ' | ' |
Weighted Average Option Price per Share, Options Forfeited | $17.02 | ' | ' |
Weighted Average Option Price per Share, Options Expired | $18.17 | ' | ' |
Range of Option Prices per Share, Beginning Balance | $17.49 | ' | ' |
Range of Option Prices per Share, Expired | $18.17 | ' | ' |
Range of Option Prices per Share, Ending Balance | ' | $17.49 | ' |
Options outstanding, Beginning Balance | 1,882,939 | 2,600,583 | ' |
Outstanding Options, Granted | 245,424 | 296,188 | 313,000 |
Outstanding Options, Vested | 0 | ' | ' |
Outstanding Options, Exercised | -1,158,537 | -389,089 | -136,290 |
Outstanding Options, Forfeited | -3,962 | ' | ' |
Outstanding Options, Expired | -9,050 | ' | ' |
Options outstanding, Ending Balance | 956,814 | 1,882,939 | 2,600,583 |
Vested and Exercisable, Beginning Balance | 1,161,703 | ' | ' |
Vested and Exercisable, Granted | 0 | ' | ' |
Vested and Exercisable, Vested | 324,291 | ' | ' |
Vested and Exercisable, Exercisable | -1,158,537 | ' | ' |
Vested and Exercisable, Forfeited | -3,962 | ' | ' |
Vested and Exercisable, Expired | -9,050 | ' | ' |
Vested and Exercisable, Ending Balance | 314,445 | 1,161,703 | ' |
Maximum [Member] | ' | ' | ' |
Summary of changes in outstanding options | ' | ' | ' |
Weighted Average Option Price per Share, Options Granted | $30.24 | ' | ' |
Range of Option Prices per Share, Beginning Balance | $20.23 | ' | ' |
Range of Option Prices per Share, Granted | $30.24 | ' | ' |
Range of Option Prices per Share, Vested | $20.60 | ' | ' |
Range of Option Prices per Share, Exercised | $20.23 | ' | ' |
Range of Option Prices per Share, Forfeited | $20.60 | ' | ' |
Range of Option Prices per Share, Ending Balance | $30.24 | ' | ' |
Minimum [Member] | ' | ' | ' |
Summary of changes in outstanding options | ' | ' | ' |
Weighted Average Option Price per Share, Options Granted | $20.60 | ' | ' |
Range of Option Prices per Share, Beginning Balance | $6.91 | ' | ' |
Range of Option Prices per Share, Granted | $20.60 | ' | ' |
Range of Option Prices per Share, Vested | $6.91 | ' | ' |
Range of Option Prices per Share, Exercised | $6.91 | ' | ' |
Range of Option Prices per Share, Forfeited | $13.83 | ' | ' |
Range of Option Prices per Share, Ending Balance | $6.91 | ' | ' |
Shareholders_Equity_and_Stock_4
Shareholders' Equity and Stock Options (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
$6.91-$13.83 [Member] | $16.81-$18.20 [Member] | $20.23-$30.24 [Member] | $ 6.91-$30.24 [Member] | ||||
Summary of options outstanding segregated by ranges of exercise prices | ' | ' | ' | ' | ' | ' | ' |
Total Outstanding Options, Options | 956,814 | 1,882,939 | 2,600,583 | 178,858 | 527,437 | 250,519 | 956,814 |
Total Outstanding Options, Weighted Average Option Price per Share | ' | $14.73 | ' | $13.58 | $17.17 | $20.95 | $17.49 |
Total Outstanding Options, Weighted Average Remaining Term | ' | ' | ' | '3 years 1 month 6 days | '4 years 7 months 6 days | '6 years 1 month 6 days | '4 years 8 months 12 days |
Vested and Exercisable Options | 314,445 | 1,161,703 | ' | 119,543 | 187,955 | 6,947 | 314,445 |
Vested and Exercisable Options, Weighted Average Option Price per Share | ' | $14.28 | $15.57 | $13.45 | $17.10 | $20.24 | $15.78 |
Vested and Exercisable Options, Weighted Average Remaining Term | ' | ' | ' | '3 years 1 month 6 days | '4 years 2 months 12 days | '3 months 18 days | '3 years 8 months 12 days |
Shareholders_Equity_and_Stock_5
Shareholders' Equity and Stock Options (Details 3) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2011 | ||
Summary of changes in outstanding restricted common stock units | ' | ' | |
Beginning balance, Total Outstanding, Units | 1,423,611 | 1,135,840 | |
Granted, Total Outstanding Units | 484,552 | [1] | ' |
Vested, Total Outstanding Units | 0 | ' | |
Forfeited, Total Outstanding Units | -24,507 | ' | |
Distributed, Total Outstanding Units | -220,466 | [2] | ' |
Ending balance, Total Outstanding, Units | 1,663,190 | 1,135,840 | |
Beginning balance, Total Outstanding, Weighted Average Grant Date Fair Value per Unit | $15.93 | ' | |
Grant, Total Outstanding, Weighted Average Grant Date Fair Value per Unit | $25.13 | [1] | ' |
Vested, Total Outstanding, Weighted Average Grant Date Fair Value per Unit | $0 | ' | |
Forfeited, Total Outstanding, Weighted Average Grant Date Fair Value per Unit | $15.62 | ' | |
Distributed, Total Outstanding, Weighted Average Grant Date Fair Value per Unit | $9.87 | [2] | ' |
Ending balance, Total Outstanding, Weighted Average Grant Date Fair Value per Unit | $19.41 | ' | |
Beginning balance, Vested, Units | 311,407 | ' | |
Vested Units | 282,680 | ' | |
Granted, Vested, Units | 0 | [1] | ' |
Distributed, Vested, Units | -220,466 | [2] | ' |
Forfeited, Vested, Units | 0 | ' | |
Ending balance, Vested, Units | 373,621 | ' | |
Beginning balance, Vested, Weighted Average Grant Date Fair Value per Unit | $13.15 | ' | |
Granted, Weighted Average Grant Date Fair Value per Unit | $0 | [1] | ' |
Vested, Weighted Average Grant Date Fair Value per Unit | $13.50 | ' | |
Forfeited, Weighted Average Grant Date Fair Value per Unit | $0 | ' | |
Distributed, Vested, Weighted Average Grant Date Fair Value per Unit | $9.87 | [2] | ' |
Ending balance, Vested, Weighted Average Grant Date Fair Value per Unit | $15.34 | ' | |
[1] | Includes dividends reinvested into additional restricted common stock units. | ||
[2] | Includes distributed units which were utilized to satisfy withholding taxes due on the distribution. |
Shareholders_Equity_and_Stock_6
Shareholders' Equity and Stock Options (Details Textual) (USD $) | 12 Months Ended | 12 Months Ended | ||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
Maximum [Member] | Minimum [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Employee Stock Option [Member] | Common Stock [Member] | Common Stock [Member] | ||||
Maximum [Member] | Minimum [Member] | Minimum [Member] | ||||||||
Shareholders Equity and Stock Options (Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of share repurchase authorized | ' | ' | ' | $50,000 | ' | ' | ' | ' | $50,000 | ' |
Shares repurchased from December 7, 2011 through December 31, 2011 | ' | ' | ' | ' | ' | ' | ' | ' | 154,708 | ' |
Shares repurchased under the Dec. 7, 2011 repurchase program, total | ' | ' | ' | ' | ' | ' | ' | ' | 1,244,232 | ' |
Vested period of grant date | ' | ' | ' | ' | ' | '5 years | '1 year | '4 years | ' | ' |
Expiration period of options from the date of grant | ' | ' | ' | ' | '7 years | ' | ' | ' | ' | ' |
Shares repurchased during 2013 | ' | ' | ' | ' | ' | ' | ' | ' | 173,629 | ' |
Aggregate cost of shares repurchased during 2013 | 3,889 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shareholders Equity and Stock Options (Additional Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average prices of vested and exercisable options | ' | $14.28 | $15.57 | ' | ' | ' | ' | ' | ' | ' |
Aggregate intrinsic (in-the-money) values of vested options | 4,908 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate intrinsic options outstanding | 13,397 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of December 31, 2010 outstanding shares repurchased from December 7, 2011 through December 31, 2011 | ' | ' | ' | ' | ' | ' | ' | ' | 0.40% | ' |
Percentage of December 31, 2011 outstanding shares repurchased during 2012 | 2.30% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate cost of shares repurchased from December 7, 2011 through December 31, 2011 | 2,047 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate cost of shares repurchased during 2012 | 15,735 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Average price per share of shares repurchased from December 7, 2011 through December 31, 2011 | $13.21 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Average price per share of shares repurchased during 2012 | $17.16 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Average price per share of shares repurchased under the Dec. 7, 2011 repurchase program, total | $17.40 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Remaining Common stock authorized for future repurchases | $28,354 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares of common stock in connection with the conversion of restricted stock units | ' | ' | 60,126 | ' | ' | ' | ' | ' | ' | ' |
Shares held in treasury | 23,117,554 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock, par value | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' |
Grant date intrinsic value | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Closing stock price per share | $31.54 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Average price per share of shares repurchased during 2013 | $22.38 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares repurchased during 2012 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 915,895 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Income tax (asset) liability | ' | ' |
Current | ($1,998) | $4,575 |
Deferred | $163,213 | $286,726 |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred tax assets | ' | ' |
Unearned premium reserve reduction | $15,555 | $14,952 |
Compensation accruals | 13,188 | 13,592 |
Other comprehensive income net funded status of pension and other postretirement benefit obligations | 6,376 | 8,352 |
Discounting of unpaid claims and claim expenses tax reserves | 4,747 | 4,825 |
Postretirement benefits other than pensions | 2,048 | 2,333 |
Impaired securities | 1,800 | 1,268 |
Total gross deferred tax assets | 43,714 | 45,322 |
Deferred tax liabilities | ' | ' |
Other comprehensive income - net unrealized gains on fixed maturities and equity securities | 81,497 | 228,159 |
Deferred policy acquisition costs | 80,159 | 62,411 |
Life insurance future policy benefit reserve | 21,792 | 18,620 |
Investment related adjustments | 18,317 | 15,375 |
Intangible assets | 4,262 | 4,262 |
Other, net | 900 | 3,221 |
Total gross deferred tax liabilities | 206,927 | 332,048 |
Net deferred tax liability | $163,213 | $286,726 |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income taxes expenses | ' | ' | ' |
Current | $31,610 | $26,331 | $18,211 |
Deferred | 11,563 | 18,976 | 6,201 |
Total income tax expense | $43,173 | $45,307 | $24,412 |
Income_Taxes_Details_3
Income Taxes (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income taxes expenses reconciliation | ' | ' | ' |
Expected federal tax on income | $53,923 | $52,210 | $33,221 |
Add (deduct) tax effects of: | ' | ' | ' |
Tax-exempt interest | -6,829 | -6,836 | -7,072 |
Dividend received deduction | -3,382 | -2,132 | -2,010 |
Other, net | -539 | 2,065 | 273 |
Total income tax expense | $43,173 | $45,307 | $24,412 |
Income_Taxes_Details_4
Income Taxes (Details 4) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Unrecognized tax benefits, excluding interest and penalties | ' | ' | ' |
Balance as of the beginning of the year | $0 | $0 | $38 |
Additions based on tax positions related to the current year | 641 | 0 | 0 |
Settlements in tax positions for prior years | 0 | 0 | -38 |
Balance as of the end of the year | $641 | $0 | $0 |
Income_Taxes_Details_5
Income Taxes (Details 5) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Interest and penalties expense (benefit), net of releases of previous provisions, recognized in the Consolidated Statements of Operations: | ' | ' | ' |
Gross | $0 | $468 | ($279) |
Net of tax | 0 | 304 | -181 |
Interest and penalties (asset) liability included in Other Assets or Other Liabilities in the Consolidated Balance Sheets | $1 | $307 | ' |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Income Taxes (Textual) [Abstract] | ' |
Corporate tax rate | 35.00% |
Examination of tax additional tax expense | $22 |
Statutory_Information_and_Rest2
Statutory Information and Restrictions (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2011 | Jun. 30, 2011 | Mar. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Reconciliations of statutory capital and surplus | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Statutory capital and surplus of insurance subsidiaries | $809,241 | ' | ' | ' | $754,153 | ' | ' | ' | ' | ' | ' | ' | $809,241 | $754,153 | ' |
Increase (decrease) due to: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred policy acquisition costs | 245,355 | ' | ' | ' | 196,885 | ' | ' | ' | ' | ' | ' | ' | 245,355 | 196,885 | ' |
Difference in policyholder reserves | 80,459 | ' | ' | ' | 67,582 | ' | ' | ' | ' | ' | ' | ' | 80,459 | 67,582 | ' |
Goodwill | 47,396 | ' | ' | ' | 47,396 | ' | ' | ' | ' | ' | ' | ' | 47,396 | 47,396 | ' |
Liability for postretirement benefits other than pensions | -1,130 | ' | ' | ' | -2,862 | ' | ' | ' | ' | ' | ' | ' | -1,130 | -2,862 | ' |
Investment fair value adjustments on fixed maturities | 227,060 | ' | ' | ' | 651,071 | ' | ' | ' | ' | ' | ' | ' | 227,060 | 651,071 | ' |
Difference in investment reserves | 111,983 | ' | ' | ' | 101,276 | ' | ' | ' | ' | ' | ' | ' | 111,983 | 101,276 | ' |
Federal income tax liability | -188,426 | ' | ' | ' | -317,875 | ' | ' | ' | ' | ' | ' | ' | -188,426 | -317,875 | ' |
Net funded status of pension and other postretirement benefit obligations | -18,217 | ' | ' | ' | -23,862 | ' | ' | ' | ' | ' | ' | ' | -18,217 | -23,862 | ' |
Non-admitted assets and other, net | 11,349 | ' | ' | ' | 10,660 | ' | ' | ' | ' | ' | ' | ' | 11,349 | 10,660 | ' |
Shareholders' equity (deficit) of parent company and non-insurance subsidiaries | 12,109 | ' | ' | ' | -812 | ' | ' | ' | ' | ' | ' | ' | 12,109 | -812 | ' |
Parent company short-term and long-term debt | -237,874 | ' | ' | ' | -237,809 | ' | ' | ' | ' | ' | ' | ' | -237,874 | -237,809 | ' |
Total shareholders' equity | 1,099,305 | ' | ' | ' | 1,245,803 | ' | ' | ' | 1,055,353 | ' | ' | ' | 1,099,305 | 1,245,803 | 1,055,353 |
Reconciliations of statutory net income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Statutory net income of insurance subsidiaries | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 98,905 | 93,299 | 63,986 |
Net loss of non-insurance companies | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -4,583 | -4,726 | -10,164 |
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -14,236 | -14,249 | -14,007 |
Tax benefit of interest expense and other parent company current tax adjustments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,030 | 9,308 | 4,603 |
Combined net income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 86,116 | 83,632 | 44,418 |
Increase (decrease) due to: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred policy acquisition costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17,177 | 16,595 | 8,989 |
Policyholder benefits | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19,038 | 15,574 | 14,428 |
Federal income tax expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -12,735 | -19,843 | -6,639 |
Investment reserves | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,818 | 14,021 | 9,903 |
Other adjustments, net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -5,521 | -6,113 | -593 |
Net income | $34,287 | $23,599 | $25,995 | $27,012 | $31,826 | $32,266 | $13,103 | $26,671 | $32,913 | $23,637 | ($11,851) | $25,807 | $110,893 | $103,866 | $70,506 |
Statutory_Information_and_Rest3
Statutory Information and Restrictions (Details Textual) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Statutory Surplus and Subsidiary Dividend Restrictions (Textual) [Abstract] | ' | ' |
Minimum statutory-basis capital and surplus | $124,444 | $117,684 |
Restricted net assets of HMEC's insurance subsidiaries | 17,967 | 18,565 |
Aggregate amount of dividends | 82,000 | ' |
Statutory capital and surplus of insurance subsidiaries | 809,241 | 754,153 |
Liquid assets | $24,387 | ' |
Number of financial reinsurance agreements | 0 | ' |
Pension_Plans_and_Other_Postre2
Pension Plans and Other Postretirement Benefits (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Qualified Defined Contribution Plan [Member] | ' | ' | ' |
Summary of contributions to qualified defined contribution plan, 401(k), non-qualified defined contribution plan and total assets of the plans | ' | ' | ' |
Contributions to employeesb accounts | $4,701 | $4,148 | $4,864 |
Total assets at the end of the year | 135,097 | 141,286 | 149,675 |
401 K Plan [Member] | ' | ' | ' |
Summary of contributions to qualified defined contribution plan, 401(k), non-qualified defined contribution plan and total assets of the plans | ' | ' | ' |
Contributions to employeesb accounts | 2,781 | 2,753 | 2,856 |
Total assets at the end of the year | 134,891 | 118,073 | 111,370 |
Non Qualified Defined Contribution Plan [Member] | ' | ' | ' |
Summary of contributions to qualified defined contribution plan, 401(k), non-qualified defined contribution plan and total assets of the plans | ' | ' | ' |
Contributions to employeesb accounts | 0 | 0 | 0 |
Total assets at the end of the year | $0 | $0 | $0 |
Pension_Plans_and_Other_Postre3
Pension Plans and Other Postretirement Benefits (Details 1) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Defined Benefit Plan [Member] | ' | ' | ' |
Change in benefit obligation: | ' | ' | ' |
Projected benefit obligation at beginning of year | $40,994 | $41,736 | $39,553 |
Service cost | 0 | 0 | 0 |
Interest cost | 1,369 | 1,427 | 1,658 |
Plan amendments | 0 | 0 | 0 |
Actuarial loss (gain) | 984 | 2,046 | 4,650 |
Benefits paid | -1,715 | -1,664 | -1,664 |
Settlements | -2,149 | -2,551 | -2,461 |
Projected benefit obligation at end of year | 39,483 | 40,994 | 41,736 |
Change in plan assets: | ' | ' | ' |
Fair value of plan assets at beginning of year | 32,757 | 31,653 | 29,273 |
Actual return on plan assets | 4,396 | 3,168 | 911 |
Employer contributions | 3,103 | 2,534 | 5,926 |
Benefits paid | -1,715 | -1,664 | -1,664 |
Expenses paid | -513 | -383 | -332 |
Settlements | -2,149 | -2,551 | -2,461 |
Fair value of plan assets at end of year | 35,879 | 32,757 | 31,653 |
Funded status | -3,604 | -8,237 | -10,083 |
Prepaid (accrued) benefit expense | 12,331 | 11,188 | 11,594 |
Total amount recognized in Consolidated Balance Sheets, all in other liabilities | -3,604 | -8,237 | -10,083 |
Amounts recognized in accumulated other comprehensive income (loss) ("AOCI"): | ' | ' | ' |
Prior service cost | 0 | 0 | 0 |
Net actuarial loss | 15,935 | 19,425 | 21,677 |
Total amount recognized in AOCI | 15,935 | 19,425 | 21,677 |
Information for pension plans with an accumulated benefit obligation greater than plan assets: | ' | ' | ' |
Projected benefit obligation | 39,483 | 40,994 | 41,736 |
Accumulated benefit obligation | 39,483 | 40,994 | 41,736 |
Fair value of plan assets | 35,879 | 32,757 | 31,653 |
Supplemental Defined Benefit Plans [Member] | ' | ' | ' |
Change in benefit obligation: | ' | ' | ' |
Projected benefit obligation at beginning of year | 18,192 | 18,012 | 16,801 |
Service cost | 0 | 0 | 0 |
Interest cost | 616 | 676 | 799 |
Plan amendments | 0 | 0 | 0 |
Actuarial loss (gain) | -783 | 817 | 1,755 |
Benefits paid | -1,319 | -1,313 | -1,343 |
Settlements | 0 | 0 | 0 |
Projected benefit obligation at end of year | 16,706 | 18,192 | 18,012 |
Change in plan assets: | ' | ' | ' |
Fair value of plan assets at beginning of year | 0 | 0 | 0 |
Actual return on plan assets | 0 | 0 | 0 |
Employer contributions | 1,319 | 1,313 | 1,343 |
Benefits paid | -1,319 | -1,313 | -1,343 |
Expenses paid | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 |
Fair value of plan assets at end of year | 0 | 0 | 0 |
Funded status | -16,706 | -18,192 | -18,012 |
Prepaid (accrued) benefit expense | -12,479 | -12,855 | -13,197 |
Total amount recognized in Consolidated Balance Sheets, all in other liabilities | -16,706 | -18,192 | -18,012 |
Amounts recognized in accumulated other comprehensive income (loss) ("AOCI"): | ' | ' | ' |
Prior service cost | 0 | 124 | 249 |
Net actuarial loss | 4,227 | 5,213 | 4,566 |
Total amount recognized in AOCI | 4,227 | 5,337 | 4,815 |
Information for pension plans with an accumulated benefit obligation greater than plan assets: | ' | ' | ' |
Projected benefit obligation | 16,706 | 18,192 | 18,012 |
Accumulated benefit obligation | 16,706 | 18,192 | 18,012 |
Fair value of plan assets | $0 | $0 | $0 |
Pension_Plans_and_Other_Postre4
Pension Plans and Other Postretirement Benefits (Details 2) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Amortization of: | ' | ' | ' | |||
Actuarial loss | $22,245 | ' | ' | |||
Total recognized in other comprehensive income (loss) | -5,645 | -1,276 | 4,801 | |||
Weighted-average assumptions used to determine expense: | ' | ' | ' | |||
Discount rate | 3.51% | 2.95% | 3.68% | |||
Expected return on plan assets | ' | [1] | ' | [1] | ' | [1] |
Weighted-average assumptions used to determine benefit obligations as of December 31: | ' | ' | ' | |||
Discount rate | 4.46% | 3.51% | 2.95% | |||
Expected return on plan assets | ' | [1] | ' | [1] | ' | [1] |
Defined Benefit Plan [Member] | ' | ' | ' | |||
Service Cost | ' | ' | ' | |||
Benefit accrual | 0 | 0 | 0 | |||
Other expenses | 360 | 360 | 250 | |||
Interest cost | 1,369 | 1,427 | 1,658 | |||
Expected return on plan assets | -2,238 | -2,423 | -2,419 | |||
Settlement loss | 867 | 1,209 | 1,290 | |||
Amortization of: | ' | ' | ' | |||
Prior service cost | 0 | 0 | 0 | |||
Actuarial loss (gain) | 1,602 | 2,367 | 1,824 | |||
Net periodic pension (benefit) expense | 1,960 | 2,940 | 2,603 | |||
Changes in plan assets and benefit obligations included in other comprehensive income (loss): | ' | ' | ' | |||
Prior service cost | 0 | 0 | 0 | |||
Net actuarial loss | -1,888 | 115 | 4,951 | |||
Amortization of: | ' | ' | ' | |||
Prior service cost | 0 | 0 | 0 | |||
Actuarial loss | -1,602 | -2,367 | -1,824 | |||
Total recognized in other comprehensive income (loss) | -3,490 | -2,252 | 3,127 | |||
Weighted-average assumptions used to determine expense: | ' | ' | ' | |||
Discount rate | 3.51% | 3.66% | 4.58% | |||
Expected return on plan assets | 7.50% | 7.50% | 7.50% | |||
Annual rate of salary increase | ' | [1] | ' | [1] | ' | [1] |
Weighted-average assumptions used to determine benefit obligations as of December 31: | ' | ' | ' | |||
Discount rate | 4.46% | 3.51% | 3.66% | |||
Expected return on plan assets | 7.50% | 7.50% | 7.50% | |||
Annual rate of salary increase | ' | [1] | ' | [1] | ' | [1] |
Supplemental Defined Benefit Plans [Member] | ' | ' | ' | |||
Service Cost | ' | ' | ' | |||
Benefit accrual | 0 | 0 | 0 | |||
Other expenses | 0 | 0 | 0 | |||
Interest cost | 616 | 676 | 799 | |||
Expected return on plan assets | 0 | 0 | 0 | |||
Settlement loss | 0 | 0 | 0 | |||
Amortization of: | ' | ' | ' | |||
Prior service cost | 124 | 124 | 125 | |||
Actuarial loss (gain) | 203 | 171 | 698 | |||
Net periodic pension (benefit) expense | 943 | 971 | 1,622 | |||
Changes in plan assets and benefit obligations included in other comprehensive income (loss): | ' | ' | ' | |||
Prior service cost | 0 | 0 | 0 | |||
Net actuarial loss | -783 | 817 | 1,755 | |||
Amortization of: | ' | ' | ' | |||
Prior service cost | -124 | -124 | -125 | |||
Actuarial loss | -203 | -171 | -698 | |||
Total recognized in other comprehensive income (loss) | ($1,110) | $522 | $932 | |||
Weighted-average assumptions used to determine expense: | ' | ' | ' | |||
Discount rate | 3.51% | 3.86% | 4.92% | |||
Expected return on plan assets | ' | [1] | ' | [1] | ' | [1] |
Annual rate of salary increase | ' | [1] | ' | [1] | ' | [1] |
Weighted-average assumptions used to determine benefit obligations as of December 31: | ' | ' | ' | |||
Discount rate | 4.46% | 3.51% | 3.86% | |||
Expected return on plan assets | ' | [1] | ' | [1] | ' | [1] |
Annual rate of salary increase | ' | [1] | ' | [1] | ' | [1] |
[1] | Not applicable. |
Pension_Plans_and_Other_Postre5
Pension Plans and Other Postretirement Benefits (Details 3) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Fair value hierarchy for the Company's defined benefit pension plan assets | ' | ' | ||
Total | $35,722 | $32,614 | ||
United States [Member] | ' | ' | ||
Fair value hierarchy for the Company's defined benefit pension plan assets | ' | ' | ||
Total | 14,730 | [1] | 13,199 | [1] |
International [Member] | ' | ' | ||
Fair value hierarchy for the Company's defined benefit pension plan assets | ' | ' | ||
Total | 3,579 | [1] | 3,290 | [1] |
Fixed Income Funds [Member] | ' | ' | ||
Fair value hierarchy for the Company's defined benefit pension plan assets | ' | ' | ||
Total | 17,413 | 16,125 | ||
Level 1 [Member] | ' | ' | ||
Fair value hierarchy for the Company's defined benefit pension plan assets | ' | ' | ||
Total | 0 | 0 | ||
Level 1 [Member] | United States [Member] | ' | ' | ||
Fair value hierarchy for the Company's defined benefit pension plan assets | ' | ' | ||
Total | 0 | [1] | 0 | [1] |
Level 1 [Member] | International [Member] | ' | ' | ||
Fair value hierarchy for the Company's defined benefit pension plan assets | ' | ' | ||
Total | 0 | [1] | 0 | [1] |
Level 1 [Member] | Fixed Income Funds [Member] | ' | ' | ||
Fair value hierarchy for the Company's defined benefit pension plan assets | ' | ' | ||
Total | 0 | 0 | ||
Level 2 [Member] | ' | ' | ||
Fair value hierarchy for the Company's defined benefit pension plan assets | ' | ' | ||
Total | 35,722 | 32,614 | ||
Level 2 [Member] | United States [Member] | ' | ' | ||
Fair value hierarchy for the Company's defined benefit pension plan assets | ' | ' | ||
Total | 14,730 | [1] | 13,199 | [1] |
Level 2 [Member] | International [Member] | ' | ' | ||
Fair value hierarchy for the Company's defined benefit pension plan assets | ' | ' | ||
Total | 3,579 | [1] | 3,290 | [1] |
Level 2 [Member] | Fixed Income Funds [Member] | ' | ' | ||
Fair value hierarchy for the Company's defined benefit pension plan assets | ' | ' | ||
Total | 17,413 | 16,125 | ||
Level 3 [Member] | ' | ' | ||
Fair value hierarchy for the Company's defined benefit pension plan assets | ' | ' | ||
Total | 0 | 0 | ||
Level 3 [Member] | United States [Member] | ' | ' | ||
Fair value hierarchy for the Company's defined benefit pension plan assets | ' | ' | ||
Total | 0 | [1] | 0 | [1] |
Level 3 [Member] | International [Member] | ' | ' | ||
Fair value hierarchy for the Company's defined benefit pension plan assets | ' | ' | ||
Total | 0 | [1] | 0 | [1] |
Level 3 [Member] | Fixed Income Funds [Member] | ' | ' | ||
Fair value hierarchy for the Company's defined benefit pension plan assets | ' | ' | ||
Total | $0 | $0 | ||
[1] | None of the trust fund assets for the defined benefit pension plan have been invested in shares of HMECbs common stock. |
Pension_Plans_and_Other_Postre6
Pension Plans and Other Postretirement Benefits (Details 4) (Postretirement Benefit Costs [Member], USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Postretirement Benefit Costs [Member] | ' | ' | ' |
Change in accumulated postretirement benefit obligations: | ' | ' | ' |
Projected benefit obligation at beginning of year | $2,862 | $3,326 | $3,489 |
Changes during fiscal year | ' | ' | ' |
Service cost | 0 | 0 | 0 |
Interest cost | 92 | 91 | 122 |
Plan amendment | -1,393 | 0 | 0 |
Medicare prescription reimbursements | 0 | 0 | 0 |
Employer payments net of participant contributions | -491 | -488 | -526 |
Actuarial (gain) loss | 60 | -67 | 241 |
Projected benefit obligation at end of year | 1,130 | 2,862 | 3,326 |
Funded status | -1,130 | -2,862 | -3,326 |
Total amount recognized in Consolidated Balance Sheets, all in other liabilities | -1,130 | -2,862 | -3,326 |
Amounts recognized in accumulated other comprehensive income (loss) ("AOCI"): | ' | ' | ' |
Prior service cost | -1,341 | 0 | 0 |
Net actuarial loss | -604 | -900 | -1,355 |
Total amount recognized in AOCI | ($1,945) | ($900) | ($1,355) |
Pension_Plans_and_Other_Postre7
Pension Plans and Other Postretirement Benefits (Details 5) (Postretirement Benefit Costs [Member], USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Postretirement Benefit Costs [Member] | ' | ' | ' |
Components of net periodic benefit: | ' | ' | ' |
Service cost | $0 | $0 | $0 |
Interest cost | 92 | 91 | 122 |
Amortization of prior service cost | -52 | 0 | 0 |
Amortization of prior gains | -236 | -522 | -501 |
Net periodic pension (benefit) expense | ($196) | ($431) | ($379) |
Pension_Plans_and_Other_Postre8
Pension Plans and Other Postretirement Benefits (Details 6) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Accumulated postretirement benefit obligations and Service and interest cost components of the net periodic postretirement benefit expense | ' | ' | ' | |||
Accumulated postretirement benefit obligations effect of a one percentage point increase effect of a one percentage point increase | $0 | $45 | $53 | |||
Accumulated postretirement benefit obligations effect of a one percentage point increase effect of a one percentage point decrease | 0 | -43 | -50 | |||
Service and interest cost components of the net periodic postretirement benefit expense effect of a one percentage point increase | 2 | 1 | 2 | |||
Service and interest cost components of the net periodic postretirement benefit expense effect of a one percentage point decrease | ($2) | ($1) | ($1) | |||
Weighted-average assumptions used to determine benefit obligations as of December 31: | ' | ' | ' | |||
Discount rate | 4.46% | 3.51% | 2.95% | |||
Healthcare cost trend rate | ' | [1] | 7.50% | 8.00% | ||
Rate to which the cost trend rate is assumed to decline (ultimate trend rate) | ' | [1] | 5.00% | 5.00% | ||
Year the rate is assumed to reach the ultimate trend rate | ' | '2022 | '2022 | |||
Expected return on plan assets | ' | [1] | ' | [1] | ' | [1] |
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31: | ' | ' | ' | |||
Discount rate | 3.51% | 2.95% | 3.68% | |||
Healthcare cost trend rate | 7.50% | 8.00% | 8.00% | |||
Rate to which the cost trend rate is assumed to decline (ultimate trend rate) | 5.00% | 5.00% | 5.00% | |||
Year the rate is assumed to reach the ultimate trend rate | '2022 | '2022 | '2021 | |||
Expected return on plan assets | ' | [1] | ' | [1] | ' | [1] |
[1] | Not applicable. |
Pension_Plans_and_Other_Postre9
Pension Plans and Other Postretirement Benefits (Details 7) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | |
Defined Benefit Plan [Member] | ' | |
Summary of minimum funding requirement and the expected full year contributions for the Company's plans | ' | |
Minimum funding requirement for 2014 | $0 | |
Expected contributions (approximations) for the year ended December 31, 2014 as of the time of this Form 10-K (1) | 2,000 | [1] |
Supplemental Retirement Plans [Member] | ' | |
Summary of minimum funding requirement and the expected full year contributions for the Company's plans | ' | |
Expected contributions (approximations) for the year ended December 31, 2014 as of the time of this Form 10-K (1) | 1,320 | [1] |
Other Postretirement Benefit [Member] | ' | |
Summary of minimum funding requirement and the expected full year contributions for the Company's plans | ' | |
Expected contributions (approximations) for the year ended December 31, 2014 as of the time of this Form 10-K (1) | $217 | [1] |
[1] | HMECbs Annual Report on Form 10-K for the year ended December 31, 2013. |
Recovered_Sheet4
Pension Plans and Other Postretirement Benefits (Details 8) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Defined Benefit Plan [Member] | ' |
Future benefit payments | ' |
2014 | $3,696 |
2015 | 3,415 |
2016 | 3,270 |
2017 | 2,827 |
2018 | 2,670 |
2019-2023 | 13,393 |
Supplemental Retirement Plans [Member] | ' |
Future benefit payments | ' |
2014 | 1,320 |
2015 | 1,310 |
2016 | 1,300 |
2017 | 1,287 |
2018 | 1,272 |
2019-2023 | 6,050 |
Other Postretirement Benefit [Member] | ' |
Future benefit payments | ' |
2014 | 216 |
2015 | 122 |
2016 | 120 |
2017 | 117 |
2018 | 112 |
2019-2023 | $450 |
Recovered_Sheet5
Pension Plans and Other Postretirement Benefits (Details Textual) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2006 |
Pension Plans and Other Postretirement Benefits (Textual) [Abstract] | ' | ' | ' | ' |
Reduction in expense due to changes in the plan for other postretirement benefits | $144 | $431 | $379 | ' |
Pension Plans and Other Postretirement Benefits (Additional Textual) [Abstract] | ' | ' | ' | ' |
Employer contribution as percentage of eligible compensation for hired on or after April 1, 1997 | 5.00% | ' | ' | ' |
Minimum period of service, for employees hired prior to April 1, 1997, to have defined benefit plan contribution percentage calculated at 7% of eligible compensation | '15 years | ' | ' | ' |
Employer contribution as percentage of eligible compensation for employees hired prior to April 1, 1997 having more than 15 years of service | 7.00% | ' | ' | ' |
Highest number of consecutive months of earnings used to calculate amounts earned when defined benefit and supplemental defined benefit plans were frozen | '36 months | ' | ' | ' |
Total expense recorded for plans | 10,295 | 10,415 | 12,353 | ' |
Health reimbursement account balance | 2,746 | ' | ' | 7,310 |
Health reimbursement accounts funding | 181 | 168 | 184 | ' |
Total Fixed Maturities [Member] | ' | ' | ' | ' |
Pension Plans and Other Postretirement Benefits (Textual) [Abstract] | ' | ' | ' | ' |
Defined Benefit Plan, Target Allocation Percentage | '50% fixed income funds | ' | ' | ' |
Equity Securities [Member] | ' | ' | ' | ' |
Pension Plans and Other Postretirement Benefits (Textual) [Abstract] | ' | ' | ' | ' |
Defined Benefit Plan, Target Allocation Percentage | '50% equity | ' | ' | ' |
Defined Benefit Plan [Member] | ' | ' | ' | ' |
Pension Plans and Other Postretirement Benefits (Textual) [Abstract] | ' | ' | ' | ' |
Employee Vesting Percentage | 100.00% | ' | ' | ' |
Defined benefit plan vesting percentage of participants | 100.00% | ' | ' | ' |
Expected amortization of net loss expected in the next fiscal year | 1,371 | ' | ' | ' |
Supplemental Retirement Plans [Member] | ' | ' | ' | ' |
Pension Plans and Other Postretirement Benefits (Textual) [Abstract] | ' | ' | ' | ' |
Expected amortization of net loss expected in the next fiscal year | 158 | ' | ' | ' |
401 K [Member] | ' | ' | ' | ' |
Pension Plans and Other Postretirement Benefits (Textual) [Abstract] | ' | ' | ' | ' |
Employee Vesting Percentage | 100.00% | ' | ' | ' |
401(k) Plan Employer Contribution Percent | 3.00% | ' | ' | ' |
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent | 20.00% | ' | ' | ' |
Non-qualified Defined Contribution Plan [Member] | ' | ' | ' | ' |
Pension Plans and Other Postretirement Benefits (Textual) [Abstract] | ' | ' | ' | ' |
Participants are 100% vested in the Defined Contribution plan after | '3 years | ' | ' | ' |
Employee Vesting Percentage | 100.00% | ' | ' | ' |
Pension Costs [Member] | ' | ' | ' | ' |
Pension Plans and Other Postretirement Benefits (Textual) [Abstract] | ' | ' | ' | ' |
Expected amortization of net loss expected in the next fiscal year | $246 | ' | ' | ' |
Reinsurance_and_Catastrophes_D
Reinsurance and Catastrophes (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Summary of reinsurance recoverable on unpaid insurance reserves | ' | ' |
Reinsurance Recoverables | $24,502 | $24,049 |
Reinsurance companies [Member] | ' | ' |
Summary of reinsurance recoverable on unpaid insurance reserves | ' | ' |
Reinsurance Recoverables | 10,152 | 10,419 |
State insurance facilities [Member] | ' | ' |
Summary of reinsurance recoverable on unpaid insurance reserves | ' | ' |
Reinsurance Recoverables | 3,955 | 3,286 |
Life and health [Member] | ' | ' |
Summary of reinsurance recoverable on unpaid insurance reserves | ' | ' |
Reinsurance Recoverables | $10,395 | $10,344 |
Reinsurance_and_Catastrophes_D1
Reinsurance and Catastrophes (Details 1) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2011 | Jun. 30, 2011 | Mar. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Effects of reinsurance on premiums and benefits | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Premiums written and contract deposits, Gross Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,120,852 | $1,093,937 | $1,106,012 |
Premiums written and contract deposits, Ceded to Other Companies | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30,115 | 29,691 | 31,271 |
Premiums written and contract deposits, Assumed from Other Companies | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,456 | 3,481 | 3,708 |
Premiums written and contract deposits, Net Amount | 275,379 | 306,033 | 267,703 | 245,078 | 279,479 | 285,206 | 260,289 | 242,753 | 276,113 | 298,910 | 259,324 | 244,102 | 1,094,193 | 1,067,727 | 1,078,449 |
Premiums and contract charges earned, Gross Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 717,494 | 696,721 | 695,264 |
Premiums and contract charges earned, Ceded to Other Companies | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 29,990 | 29,634 | 31,940 |
Premiums and contract charges earned, Assumed from Other Companies | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,434 | 3,440 | 3,796 |
Premiums and contract charges earned, Net Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 690,938 | 670,527 | 667,120 |
Benefits, claims and settlement expenses, Gross Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 455,298 | 457,332 | 519,935 |
Benefits, claims and settlement expenses, Ceded to Other Companies | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,018 | 12,177 | 20,767 |
Benefits, claims and settlement expenses, Assumed from Other Companies | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,037 | 3,095 | 3,266 |
Benefits, claims and settlement expenses, Net Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $448,317 | $448,250 | $502,434 |
Reinsurance_and_Catastrophes_D2
Reinsurance and Catastrophes (Details Textual) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Reinsurance And Catastrophes (Textual) [Abstract] | ' | ' | ' |
Liability coverages, Company reinsured each loss above a retention in a clash event | $20,000 | ' | ' |
Reinsurance and Catastrophes (Additional Textual) [Abstract] | ' | ' | ' |
Losses incurred from Natural Catastrophes | 40,225 | 43,319 | 86,000 |
Percentage of coverage for catastrophe losses above retention amount | 95.00% | ' | ' |
Coverage provided above retention per occurrence under layer one of catastrophe excess of loss reinsurance coverage | 25,000 | ' | ' |
Coverage provided above retention per occurrence under layer two of catastrophe excess of loss reinsurance coverage | 40,000 | ' | ' |
Coverage provided above retention per occurrence under layer three of catastrophe excess of loss reinsurance coverage | 85,000 | ' | ' |
Retention base amount per occurrence under layer one of catastrophe excess of loss reinsurance coverage | 25,000 | ' | ' |
Retention base amount per occurrence under layer two of catastrophe excess of loss reinsurance coverage | 50,000 | ' | ' |
Retention base amount per occurrence under layer three of catastrophe excess of loss reinsurance coverage | 90,000 | ' | ' |
Amount of property recovery per risk losses from the same occurrence in any one event | 5,100 | ' | ' |
Maximum individual life insurance risk retained on any individual life | 200 | ' | ' |
Percent of hurricane losses reinsured by the Company's predominant insurance subsidiary for Property and casualty business written in Florida | 90.00% | ' | ' |
Percent of life catastrophe risk reinsured | 100.00% | ' | ' |
Maximum [Member] | ' | ' | ' |
Reinsurance And Catastrophes (Textual) [Abstract] | ' | ' | ' |
Retention per occurrence | 175,000 | ' | ' |
Liability coverages, Company reinsured each loss above a retention per occurrence | 2,500 | ' | ' |
Retained on each group life policy depending on the type of coverage | 100 | ' | ' |
Maximum reinsured 100% above retention per occurrence for life catastrophe risk | 35,000 | ' | ' |
Estimated retention by the Company's predominant insurance subsidiary for property and casualty business written in Florida based on FHCF's financial resources | 20,300 | ' | ' |
Minimum [Member] | ' | ' | ' |
Reinsurance And Catastrophes (Textual) [Abstract] | ' | ' | ' |
Retention per occurrence | 25,000 | ' | ' |
Liability coverages, Company reinsured each loss above a retention per occurrence | 800 | ' | ' |
Retained on each group life policy depending on the type of coverage | 125 | ' | ' |
Life catastrophe risk retention per occurrence | 1,000 | ' | ' |
Estimated retention by the Company's predominant insurance subsidiary for property and casualty business written in Florida based on FHCF's financial resources | 5,600 | ' | ' |
Property and casualty segment [Member] | Maximum [Member] | ' | ' | ' |
Reinsurance And Catastrophes (Textual) [Abstract] | ' | ' | ' |
Property coverages, amount reinsured above a retention per occurrence | 2,500 | ' | ' |
Property and casualty segment [Member] | Minimum [Member] | ' | ' | ' |
Reinsurance And Catastrophes (Textual) [Abstract] | ' | ' | ' |
Property coverages, Company reinsured each loss above a retention per occurrence | $800 | ' | ' |
Contingencies_and_Commitments_1
Contingencies and Commitments (Details) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Summary of future minimum lease payments | ' |
2014 | $2,473 |
2015 | 2,413 |
2016 | 2,219 |
2017 | 2,195 |
2018 | 2,242 |
2019-2023 | 6,575 |
2024 and beyond | $0 |
Contingencies_and_Commitments_2
Contingencies and Commitments (Details Textual) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Contingencies and Commitments (Textual) [Abstract] | ' | ' | ' |
Rental expenses | $2,838 | $2,882 | $2,883 |
Supplementary_Data_on_Cash_Flo2
Supplementary Data on Cash Flows (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2011 | Jun. 30, 2011 | Mar. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | $34,287 | $23,599 | $25,995 | $27,012 | $31,826 | $32,266 | $13,103 | $26,671 | $32,913 | $23,637 | ($11,851) | $25,807 | $110,893 | $103,866 | $70,506 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Realized investment gains | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -22,245 | -27,298 | -37,663 |
Increase in accrued investment income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -1,898 | -2,618 | -7,348 |
Increase (decrease) in accrued expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,157 | 13,589 | -9,203 |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,680 | 7,892 | 8,577 |
Increase in insurance liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 143,542 | 127,992 | 105,576 |
Increase in premium receivables | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -4,018 | -5,638 | -1,263 |
Increase in deferred policy acquisition costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -14,659 | -13,989 | -6,258 |
(Increase) decrease in reinsurance recoverable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -1,289 | 872 | -2,877 |
Increase in income tax liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,099 | 29,752 | 17,953 |
Other | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -20,326 | -31,572 | -22,121 |
Total adjustments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 95,043 | 98,982 | 45,373 |
Net cash provided by operating activities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $205,936 | $202,848 | $115,879 |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2011 | Jun. 30, 2011 | Mar. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Summarized financial information for these segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Insurance premiums and contract charges earned | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $690,938 | $670,527 | $667,120 |
Net investment income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 313,610 | 306,003 | 288,311 |
Net income | 34,287 | 23,599 | 25,995 | 27,012 | 31,826 | 32,266 | 13,103 | 26,671 | 32,913 | 23,637 | -11,851 | 25,807 | 110,893 | 103,866 | 70,506 |
Assets | 8,826,672 | ' | ' | ' | 8,167,726 | ' | ' | ' | 7,435,169 | ' | ' | ' | 8,826,672 | 8,167,726 | 7,435,169 |
Property and casualty [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summarized financial information for these segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Insurance premiums and contract charges earned | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 561,954 | 546,339 | 547,540 |
Net investment income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 36,208 | 36,792 | 36,886 |
Net income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 44,433 | 37,043 | 5,844 |
Assets | 1,001,561 | ' | ' | ' | 1,016,368 | ' | ' | ' | 957,266 | ' | ' | ' | 1,001,561 | 1,016,368 | 957,266 |
Annuity [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summarized financial information for these segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Insurance premiums and contract charges earned | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 22,575 | 21,794 | 18,883 |
Net investment income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 208,419 | 200,785 | 182,806 |
Net income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 44,719 | 40,527 | 30,906 |
Assets | 5,963,348 | ' | ' | ' | 5,380,780 | ' | ' | ' | 4,926,204 | ' | ' | ' | 5,963,348 | 5,380,780 | 4,926,204 |
Life [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summarized financial information for these segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Insurance premiums and contract charges earned | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 106,409 | 102,394 | 100,697 |
Net investment income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 69,932 | 69,409 | 69,633 |
Net income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,339 | 21,912 | 19,435 |
Assets | 1,743,084 | ' | ' | ' | 1,663,696 | ' | ' | ' | 1,459,919 | ' | ' | ' | 1,743,084 | 1,663,696 | 1,459,919 |
Corporate and other [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summarized financial information for these segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net investment income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7 | 2 | -3 |
Net income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,402 | 4,384 | 14,321 |
Assets | 154,557 | ' | ' | ' | 131,449 | ' | ' | ' | 115,367 | ' | ' | ' | 154,557 | 131,449 | 115,367 |
Intersegment eliminations [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summarized financial information for these segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net investment income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -956 | -985 | -1,011 |
Assets | ($35,878) | ' | ' | ' | ($24,567) | ' | ' | ' | ($23,587) | ' | ' | ' | ($35,878) | ($24,567) | ($23,587) |
Segment_Information_Details_1
Segment Information (Details 1) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Additional significant financial information for these segments | ' | ' | ' |
Policy acquisition expenses | $84,643 | $79,519 | $83,398 |
Income tax expense (benefit) | 43,173 | 45,307 | 24,412 |
Property and casualty [Member] | ' | ' | ' |
Additional significant financial information for these segments | ' | ' | ' |
Policy acquisition expenses | 68,516 | 63,768 | 61,374 |
Income tax expense (benefit) | 12,740 | 10,849 | -5,183 |
Annuity [Member] | ' | ' | ' |
Additional significant financial information for these segments | ' | ' | ' |
Policy acquisition expenses | 7,957 | 6,868 | 12,334 |
Income tax expense (benefit) | 18,531 | 19,046 | 13,499 |
Life [Member] | ' | ' | ' |
Additional significant financial information for these segments | ' | ' | ' |
Policy acquisition expenses | 8,170 | 8,883 | 9,690 |
Income tax expense (benefit) | 10,919 | 12,305 | 11,366 |
Corporate and other [Member] | ' | ' | ' |
Additional significant financial information for these segments | ' | ' | ' |
Income tax expense (benefit) | $983 | $3,107 | $4,730 |
Segment_Information_Details_Te
Segment Information (Details Textual) | 12 Months Ended |
Dec. 31, 2013 | |
Segment Information (Textual) [Abstract] | ' |
Business segments | 4 |
Unaudited_Selected_Quarterly_F2
Unaudited Selected Quarterly Financial Data (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2011 | Jun. 30, 2011 | Mar. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||||||||||
Selected quarterly financial data | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Insurance premiums written and contract deposits | $275,379 | $306,033 | $267,703 | $245,078 | $279,479 | $285,206 | $260,289 | $242,753 | $276,113 | $298,910 | $259,324 | $244,102 | $1,094,193 | $1,067,727 | $1,078,449 | ||||||||||||
Total revenues | 259,215 | 251,884 | 265,637 | 254,531 | 255,417 | 256,548 | 254,226 | 244,623 | 247,645 | 260,833 | 245,351 | 244,473 | 1,031,267 | 1,010,814 | 998,302 | ||||||||||||
Net income | $34,287 | $23,599 | $25,995 | $27,012 | $31,826 | $32,266 | $13,103 | $26,671 | $32,913 | $23,637 | ($11,851) | $25,807 | $110,893 | $103,866 | $70,506 | ||||||||||||
Basic | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Net income per share - basic | $0.84 | $0.59 | $0.65 | $0.68 | $0.81 | $0.82 | $0.33 | $0.67 | $0.82 | $0.59 | ($0.30) | $0.65 | $2.75 | $2.63 | $1.77 | ||||||||||||
Basic | 40,818 | [1] | 40,001 | [1] | 39,768 | [1] | 39,527 | [1] | 39,339 | [1] | 39,381 | [1] | 39,544 | [1] | 39,794 | [1] | 39,900 | [1] | 39,919 | [1] | 39,893 | [1] | 39,749 | [1] | 40,376,562 | 39,513,540 | 39,865,815 |
Diluted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Net income per share - diluted | $0.81 | $0.57 | $0.63 | $0.66 | $0.77 | $0.78 | $0.32 | $0.64 | $0.79 | $0.57 | ($0.30) | $0.62 | $2.66 | $2.51 | $1.70 | ||||||||||||
Shares of common stock and equivalent shares - weighted average (1) | 42,205 | [1] | 41,732 | [1] | 41,395 | [1] | 41,088 | [1] | 41,272 | [1] | 41,138 | [1] | 41,304 | [1] | 41,546 | [1] | 41,414 | [1] | 41,451 | [1] | 39,893 | [1] | 41,699 | [1] | 41,633,240 | 41,388,368 | 41,436,512 |
[1] | Rounded to thousands. |
Schedule_I_Summary_of_Investme
Schedule I Summary of Investments Other Than Investments in Related Parties (Details) (USD $) | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | ||
Summary of Investments | ' | |
Total investments, Cost | $6,306,996 | [1] |
Total investments, Fair Value | 0 | |
Total investments, Amount shown in Balance Sheet | 6,539,473 | |
Mortgage loans [Member] | ' | |
Summary of Investments | ' | |
Total investments, Cost | 79 | [1] |
Total investments, Fair Value | 0 | |
Total investments, Amount shown in Balance Sheet | 79 | |
Short-term investments [Member] | ' | |
Summary of Investments | ' | |
Total investments, Cost | 206,753 | [1] |
Total investments, Fair Value | 0 | |
Total investments, Amount shown in Balance Sheet | 206,758 | |
Policy loans [Member] | ' | |
Summary of Investments | ' | |
Total investments, Cost | 140,607 | [1] |
Total investments, Fair Value | 0 | |
Total investments, Amount shown in Balance Sheet | 140,607 | |
Other [Member] | ' | |
Summary of Investments | ' | |
Total investments, Cost | 90,598 | [1] |
Total investments, Fair Value | 0 | |
Total investments, Amount shown in Balance Sheet | 90,598 | |
Fixed maturities [Member] | ' | |
Summary of Investments | ' | |
Total investments, Cost | 5,784,205 | [1] |
Total investments, Fair Value | 6,009,573 | |
Total investments, Amount shown in Balance Sheet | 6,009,573 | |
Fixed maturities [Member] | U.S. Government and federally sponsored agency obligations [Member] | ' | |
Summary of Investments | ' | |
Total investments, Cost | 1,004,634 | [1] |
Total investments, Fair Value | 1,005,299 | |
Total investments, Amount shown in Balance Sheet | 1,005,299 | |
Fixed maturities [Member] | States, municipalities and political subdivisions [Member] | ' | |
Summary of Investments | ' | |
Total investments, Cost | 1,425,441 | [1] |
Total investments, Fair Value | 1,471,527 | |
Total investments, Amount shown in Balance Sheet | 1,471,527 | |
Fixed maturities [Member] | Foreign government bonds [Member] | ' | |
Summary of Investments | ' | |
Total investments, Cost | 50,641 | [1] |
Total investments, Fair Value | 54,951 | |
Total investments, Amount shown in Balance Sheet | 54,951 | |
Fixed maturities [Member] | Public utilities [Member] | ' | |
Summary of Investments | ' | |
Total investments, Cost | 206,445 | [1] |
Total investments, Fair Value | 234,540 | |
Total investments, Amount shown in Balance Sheet | 234,540 | |
Fixed maturities [Member] | Other bonds [Member] | ' | |
Summary of Investments | ' | |
Total investments, Cost | 3,097,044 | [1] |
Total investments, Fair Value | 3,243,256 | |
Total investments, Amount shown in Balance Sheet | 3,243,256 | |
Equity securities [Member] | ' | |
Summary of Investments | ' | |
Total investments, Cost | 84,754 | [1] |
Total investments, Fair Value | 91,858 | |
Total investments, Amount shown in Balance Sheet | 91,858 | |
Equity securities [Member] | Non-redeemable preferred stocks [Member] | ' | |
Summary of Investments | ' | |
Total investments, Cost | 22,172 | [1] |
Total investments, Fair Value | 20,968 | |
Total investments, Amount shown in Balance Sheet | 20,968 | |
Equity securities [Member] | Common stocks [Member] | ' | |
Summary of Investments | ' | |
Total investments, Cost | 42,578 | [1] |
Total investments, Fair Value | 52,961 | |
Total investments, Amount shown in Balance Sheet | 52,961 | |
Equity securities [Member] | Closed End Fund [Member] | ' | |
Summary of Investments | ' | |
Total investments, Cost | 20,004 | [1] |
Total investments, Fair Value | 17,929 | |
Total investments, Amount shown in Balance Sheet | $17,929 | |
[1] | Bonds at original cost reduced by repayments and adjusted for amortization of premiums or accrual of discounts and impairment in value of specifically identified investments. |
Schedule_II_Condensed_Financia
Schedule II Condensed Financial Information of Registrant (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||
In Thousands, unless otherwise specified | |||||
ASSETS | ' | ' | ' | ||
Other assets | $228,264 | $217,886 | ' | ||
Total assets | 8,826,672 | 8,167,726 | 7,435,169 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ' | ' | ' | ||
Long-term debt | 199,874 | 199,809 | ' | ||
Other liabilities | 366,013 | 445,952 | ' | ||
Total liabilities | 7,727,367 | 6,921,923 | ' | ||
Preferred stock, $0.001 par value, authorized 1,000,000 shares; none issued | 0 | 0 | ' | ||
Common stock, $0.001 par value, authorized 75,000,000 shares; issued, 2013, 63,629,105; 2012, 62,311,787 | 64 | 62 | ' | ||
Additional paid-in capital | 407,056 | 383,135 | ' | ||
Retained earnings | 1,000,312 | 921,969 | ' | ||
Accumulated other comprehensive income (loss), net of taxes: | ' | ' | ' | ||
Net unrealized gains on fixed maturities and equity securities | 133,990 | [1],[2] | 382,400 | [1],[2] | ' |
Net funded status of pension and other postretirement benefit obligations | -11,776 | [1] | -15,311 | [1] | ' |
Treasury stock, at cost, 2013, 23,117,554 shares; 2012, 22,943,925 shares | -430,341 | -426,452 | ' | ||
Total shareholders equity | 1,099,305 | 1,245,803 | 1,055,353 | ||
Total liabilities and shareholders equity | 8,826,672 | 8,167,726 | ' | ||
Parent Company [Member] | ' | ' | ' | ||
ASSETS | ' | ' | ' | ||
Investments and cash | 24,387 | 29,554 | ' | ||
Investment in subsidiaries | 1,282,614 | 1,406,641 | ' | ||
Other assets | 60,164 | 52,223 | ' | ||
Total assets | 1,367,165 | 1,488,418 | ' | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ' | ' | ' | ||
Short-term debt | 38,000 | 38,000 | ' | ||
Long-term debt | 199,874 | 199,809 | ' | ||
Other liabilities | 29,986 | 4,806 | ' | ||
Total liabilities | 267,860 | 242,615 | ' | ||
Preferred stock, $0.001 par value, authorized 1,000,000 shares; none issued | 0 | 0 | ' | ||
Common stock, $0.001 par value, authorized 75,000,000 shares; issued, 2013, 63,629,105; 2012, 62,311,787 | 64 | 62 | ' | ||
Additional paid-in capital | 407,056 | 383,135 | ' | ||
Retained earnings | 1,000,312 | 921,969 | ' | ||
Accumulated other comprehensive income (loss), net of taxes: | ' | ' | ' | ||
Net unrealized gains on fixed maturities and equity securities | 133,990 | 382,400 | ' | ||
Net funded status of pension and other postretirement benefit obligations | -11,776 | -15,311 | ' | ||
Treasury stock, at cost, 2013, 23,117,554 shares; 2012, 22,943,925 shares | -430,341 | -426,452 | ' | ||
Total shareholders equity | 1,099,305 | 1,245,803 | ' | ||
Total liabilities and shareholders equity | $1,367,165 | $1,488,418 | ' | ||
[1] | All amounts are net of tax. | ||||
[2] | The $22,245 pretax amount reclassified from accumulated other comprehensive income is included in net realized investment gains and losses and the $7,786 related tax expense (benefit) is included in income tax expense in the Consolidated Statement of Operations for the year ended December 31, 2013. |
Schedule_II_Condensed_Financia1
Schedule II Condensed Financial Information of Registrant (Parenthetical) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Condensed Financial Statements, Captions [Line Items] | ' | ' | ' | ' |
Preferred stock, par value | $0.00 | $0.00 | ' | ' |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | ' | ' |
Preferred stock, shares issued | 0 | 0 | ' | ' |
Common stock, par value | $0.00 | $0.00 | ' | ' |
Common stock, shares authorized | 75,000,000 | 75,000,000 | ' | ' |
Common stock, shares issued | 63,629,105 | 62,311,787 | ' | ' |
Treasury stock, shares | 23,117,554 | 22,943,925 | 22,028,030 | 21,813,196 |
Parent Company [Member] | ' | ' | ' | ' |
Condensed Financial Statements, Captions [Line Items] | ' | ' | ' | ' |
Preferred stock, par value | $0.00 | $0.00 | ' | ' |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | ' | ' |
Preferred stock, shares issued | 0 | 0 | ' | ' |
Common stock, par value | $0.00 | $0.00 | ' | ' |
Common stock, shares authorized | 75,000,000 | 75,000,000 | ' | ' |
Common stock, shares issued | 63,629,105 | 62,311,787 | ' | ' |
Treasury stock, shares | 23,117,554 | 22,943,925 | ' | ' |
Schedule_II_Condensed_Financia2
Schedule II Condensed Financial Information of Registrant (Details 1) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2011 | Jun. 30, 2011 | Mar. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net investment income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $313,610 | $306,003 | $288,311 |
Realized investment gains | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 22,245 | 27,298 | 37,663 |
Total revenues | 259,215 | 251,884 | 265,637 | 254,531 | 255,417 | 256,548 | 254,226 | 244,623 | 247,645 | 260,833 | 245,351 | 244,473 | 1,031,267 | 1,010,814 | 998,302 |
Expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14,236 | 14,249 | 14,007 |
Total expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 877,201 | 861,641 | 903,384 |
Income tax benefit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 43,173 | 45,307 | 24,412 |
Net income | 34,287 | 23,599 | 25,995 | 27,012 | 31,826 | 32,266 | 13,103 | 26,671 | 32,913 | 23,637 | -11,851 | 25,807 | 110,893 | 103,866 | 70,506 |
Parent Company [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net investment income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6 | 2 | -3 |
Realized investment gains | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 208 | 0 | 0 |
Total revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 214 | 2 | -3 |
Expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14,236 | 14,249 | 14,007 |
Other | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,832 | 4,576 | 3,590 |
Total expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19,068 | 18,825 | 17,597 |
Loss before income tax benefit and equity in net earnings of subsidiaries | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -18,854 | -18,823 | -17,600 |
Income tax benefit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -6,599 | -6,196 | -8,197 |
Loss before equity in net earnings of subsidiaries | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -12,255 | -12,627 | -9,403 |
Equity in net earnings of subsidiaries | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 123,148 | 116,493 | 79,909 |
Net income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $110,893 | $103,866 | $70,506 |
Schedule_II_Condensed_Financia3
Schedule II Condensed Financial Information of Registrant (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows - operating activities | ' | ' | ' |
Interest expense paid | ($13,825) | ($13,948) | ($13,515) |
Federal income taxes (paid) recovered | -33,672 | -14,444 | -4,130 |
Net cash provided by operating activities | 205,936 | 202,848 | 115,879 |
Cash flows - investing activities | ' | ' | ' |
Net cash provided by (used in) investing activities | -598,326 | -354,798 | -303,007 |
Cash flows - financing activities | ' | ' | ' |
Dividends paid to shareholders | -32,550 | -22,541 | -18,990 |
Exercise of stock options | 19,336 | 5,421 | 2,127 |
Net cash used in financing activities | 395,398 | 159,679 | 188,652 |
Net increase (decrease) in cash | 3,008 | 7,729 | 1,524 |
Cash at beginning of period | 15,181 | 7,452 | 5,928 |
Cash at end of period | 18,189 | 15,181 | 7,452 |
Parent Company [Member] | ' | ' | ' |
Cash flows - operating activities | ' | ' | ' |
Interest expense paid | -13,825 | -13,948 | -13,515 |
Federal income taxes (paid) recovered | 5,996 | -118 | 12,058 |
Cash dividends received from subsidiaries | 41,000 | 50,000 | 26,000 |
Other, net, including settlement of payables to subsidiaries | -21,235 | 7,703 | -10,012 |
Net cash provided by operating activities | 11,936 | 43,637 | 14,531 |
Cash flows - investing activities | ' | ' | ' |
Net (increase) decrease in investments | 5,488 | -10,762 | 4,240 |
Net cash provided by (used in) investing activities | 5,488 | -10,762 | 4,240 |
Cash flows - financing activities | ' | ' | ' |
Dividends paid to shareholders | -32,550 | -22,541 | -18,990 |
Acquisition of treasury stock | -3,889 | -15,735 | -2,047 |
Exercise of stock options | 19,336 | 5,421 | 2,127 |
Net cash used in financing activities | -17,103 | -32,855 | -18,910 |
Net increase (decrease) in cash | 321 | 20 | -139 |
Cash at beginning of period | 149 | 129 | 268 |
Cash at end of period | $470 | $149 | $129 |
Schedule_III_and_VI_Supplement1
Schedule III and VI Supplementary Insurance Information Supplemental Information Concerning Property and Casualty Insurance Operations (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Supplementary Insurance Information by Segment | ' | ' | ' |
Deferred policy acquisition costs | $245,355 | $196,885 | $216,456 |
Future policy benefits, claims and claims expenses | 4,808,079 | 4,523,386 | 4,192,015 |
Unearned premiums | 221,114 | 213,268 | 208,963 |
Other policy claims and benefits payable | 346,292 | 103,227 | 114,530 |
Premium revenue/ premium earned | 690,938 | 670,527 | 667,120 |
Net investment income | 313,610 | 306,003 | 288,311 |
Benefits, claims and settlement expenses | 618,210 | 611,815 | 657,344 |
Amortization of deferred policy acquisition costs | 84,643 | 79,519 | 83,398 |
Other operating expenses | 174,348 | 170,307 | 162,642 |
Property and casualty segment [Member] | ' | ' | ' |
Supplementary Insurance Information by Segment | ' | ' | ' |
Deferred policy acquisition costs | 26,048 | 24,650 | 22,906 |
Future policy benefits, claims and claims expenses | 275,809 | 274,542 | 281,080 |
Discount, if any, deducted in previous column | 0 | 0 | 0 |
Unearned premiums | 217,841 | 209,431 | 204,996 |
Other policy claims and benefits payable | 0 | 0 | 0 |
Premium revenue/ premium earned | 561,954 | 546,339 | 547,540 |
Net investment income | 36,208 | 36,792 | 36,886 |
Benefits, claims and settlement expenses | 385,601 | 389,430 | 442,517 |
Claims and claims adjustment expense incurred related to current year | 403,589 | 406,605 | 452,827 |
Claims and claims adjustment expense incurred related to prior years | -17,988 | -17,175 | -10,310 |
Amortization of deferred policy acquisition costs | 68,516 | 63,768 | 61,374 |
Other operating expenses | 87,064 | 83,579 | 80,133 |
Paid claims and claims adjustment expense | 384,736 | 398,210 | 462,298 |
Premiums written | 570,363 | 550,774 | 545,950 |
Annuity [Member] | ' | ' | ' |
Supplementary Insurance Information by Segment | ' | ' | ' |
Deferred policy acquisition costs | 170,749 | 125,437 | 139,316 |
Future policy benefits, claims and claims expenses | 3,523,901 | 3,264,128 | 2,951,004 |
Unearned premiums | 562 | 526 | 34 |
Other policy claims and benefits payable | 342,795 | 99,603 | 110,734 |
Premium revenue/ premium earned | 22,575 | 21,794 | 18,883 |
Net investment income | 208,419 | 200,785 | 182,806 |
Benefits, claims and settlement expenses | 128,768 | 124,693 | 115,468 |
Amortization of deferred policy acquisition costs | 7,957 | 6,868 | 12,334 |
Other operating expenses | 34,004 | 34,148 | 31,802 |
Life [Member] | ' | ' | ' |
Supplementary Insurance Information by Segment | ' | ' | ' |
Deferred policy acquisition costs | 48,558 | 46,798 | 54,234 |
Future policy benefits, claims and claims expenses | 1,008,369 | 984,716 | 959,931 |
Unearned premiums | 2,711 | 3,311 | 3,933 |
Other policy claims and benefits payable | 3,497 | 3,624 | 3,796 |
Premium revenue/ premium earned | 106,409 | 102,394 | 100,697 |
Net investment income | 69,932 | 69,409 | 69,633 |
Benefits, claims and settlement expenses | 103,841 | 97,692 | 99,359 |
Amortization of deferred policy acquisition costs | 8,170 | 8,883 | 9,690 |
Other operating expenses | 34,394 | 33,589 | 33,135 |
Other, including consolidating eliminations [Member] | ' | ' | ' |
Supplementary Insurance Information by Segment | ' | ' | ' |
Deferred policy acquisition costs | 0 | 0 | 0 |
Future policy benefits, claims and claims expenses | 0 | 0 | 0 |
Premium revenue/ premium earned | 0 | 0 | 0 |
Net investment income | -949 | -983 | -1,014 |
Benefits, claims and settlement expenses | 0 | 0 | 0 |
Amortization of deferred policy acquisition costs | 0 | 0 | 0 |
Other operating expenses | $18,886 | $18,991 | $17,572 |
Reinsurance_Details
Reinsurance (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Reinsurance | ' | ' | ' |
Gross Amount | $717,494 | $696,721 | $695,264 |
Ceded to Other Companies | 29,990 | 29,634 | 31,940 |
Assumed from Other Companies | 3,434 | 3,440 | 3,796 |
Net Amount | 690,938 | 670,527 | 667,120 |
Percentage of Amount Assumed to Net | 0.50% | 0.50% | 0.60% |
Life Insurance in Force [Member] | ' | ' | ' |
Reinsurance | ' | ' | ' |
Gross Amount | 15,102,466 | 14,632,272 | 14,161,408 |
Ceded to Other Companies | 3,231,421 | 3,070,951 | 2,836,731 |
Assumed from Other Companies | 0 | 0 | 0 |
Net Amount | 11,871,045 | 11,561,321 | 11,324,677 |
Percentage of Amount Assumed to Net | 0.00% | 0.00% | 0.00% |
Property and casualty segment [Member] | ' | ' | ' |
Reinsurance | ' | ' | ' |
Gross Amount | 582,780 | 566,853 | 570,264 |
Ceded to Other Companies | 24,260 | 23,954 | 26,520 |
Assumed from Other Companies | 3,434 | 3,440 | 3,796 |
Net Amount | 561,954 | 546,339 | 547,540 |
Percentage of Amount Assumed to Net | 0.60% | 0.60% | 0.70% |
Annuity [Member] | ' | ' | ' |
Reinsurance | ' | ' | ' |
Gross Amount | 22,575 | 21,794 | 18,883 |
Ceded to Other Companies | 0 | 0 | 0 |
Assumed from Other Companies | 0 | 0 | 0 |
Net Amount | 22,575 | 21,794 | 18,883 |
Percentage of Amount Assumed to Net | 0.00% | 0.00% | 0.00% |
Life [Member] | ' | ' | ' |
Reinsurance | ' | ' | ' |
Gross Amount | 112,139 | 108,074 | 106,117 |
Ceded to Other Companies | 5,730 | 5,680 | 5,420 |
Assumed from Other Companies | 0 | 0 | 0 |
Net Amount | $106,409 | $102,394 | $100,697 |
Percentage of Amount Assumed to Net | 0.00% | 0.00% | 0.00% |