Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 31, 2017 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | HORACE MANN EDUCATORS CORP /DE/ | |
Entity Central Index Key | 850,141 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Trading Symbol | HMN | |
Entity Common Stock, Shares Outstanding | 40,673,282 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Investments | ||
Fixed maturity securities, available for sale, at fair value (amortized cost 2017, $7,161,917; 2016, $7,152,127) | $ 7,578,585 | $ 7,456,708 |
Equity securities, available for sale, at fair value (cost 2017, $140,553; 2016, $134,013) | 156,909 | 141,649 |
Short-term and other investments | 502,443 | 401,015 |
Total investments | 8,237,937 | 7,999,372 |
Cash | 16,006 | 16,670 |
Deferred policy acquisition costs | 256,878 | 267,580 |
Goodwill | 47,396 | 47,396 |
Other assets | 341,684 | 321,874 |
Separate Account (variable annuity) assets | 1,976,234 | 1,923,932 |
Total assets | 10,876,135 | 10,576,824 |
Policy liabilities | ||
Investment contract and life policy reserves | 5,480,863 | 5,447,969 |
Unpaid claims and claim expenses | 352,513 | 329,888 |
Unearned premiums | 248,123 | 246,274 |
Total policy liabilities | 6,081,499 | 6,024,131 |
Other policyholder funds | 713,004 | 708,950 |
Other liabilities | 495,931 | 378,620 |
Long-term debt | 247,337 | 247,209 |
Separate Account (variable annuity) liabilities | 1,976,234 | 1,923,932 |
Total liabilities | 9,514,005 | 9,282,842 |
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, 2017, 65,341,779; 2016, 64,917,683 | 65 | 65 |
Additional paid-in capital | 459,317 | 453,479 |
Retained earnings | 1,150,270 | 1,155,732 |
Accumulated other comprehensive income (loss), net of taxes: | ||
Net unrealized investment gains on fixed maturity and equity securities | 243,510 | 175,738 |
Net funded status of benefit plans | (11,817) | (11,817) |
Treasury stock, at cost, 2017, 24,672,932 shares; 2016, 24,672,932 shares | (479,215) | (479,215) |
Total shareholders’ equity | 1,362,130 | 1,293,982 |
Total liabilities and shareholders’ equity | $ 10,876,135 | $ 10,576,824 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Fixed maturities, available for sale, amortized cost (in usd) | $ 7,161,917 | $ 7,152,127 |
Equity securities, available for sale, cost (in usd) | $ 140,553 | $ 134,013 |
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 65,341,779 | 64,917,683 |
Treasury stock (in shares) | 24,672,932 | 24,672,932 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues | ||||
Insurance premiums and contract charges earned | $ 195,718 | $ 188,360 | $ 391,440 | $ 373,810 |
Net investment income | 91,994 | 91,179 | 182,705 | 175,838 |
Net realized investment gains | 2,072 | 3,080 | 1,830 | 2,926 |
Other income | 1,652 | 939 | 2,765 | 2,287 |
Total revenues | 291,436 | 283,558 | 578,740 | 554,861 |
Benefits, losses and expenses | ||||
Benefits, claims and settlement expenses | 165,879 | 148,408 | 309,975 | 267,921 |
Interest credited | 49,348 | 47,576 | 98,122 | 94,266 |
Policy acquisition expenses amortized | 24,808 | 24,587 | 49,694 | 48,639 |
Operating expenses | 46,228 | 43,345 | 94,984 | 86,141 |
Interest expense | 2,945 | 2,948 | 5,901 | 5,883 |
Total benefits, losses and expenses | 289,208 | 266,864 | 558,676 | 502,850 |
Income before income taxes | 2,228 | 16,694 | 20,064 | 52,011 |
Income tax (benefit) expense | (33) | 4,828 | 2,485 | 14,992 |
Net income | $ 2,261 | $ 11,866 | $ 17,579 | $ 37,019 |
Net income per share | ||||
Basic (in usd per share) | $ 0.05 | $ 0.29 | $ 0.43 | $ 0.90 |
Diluted (in usd per share) | $ 0.05 | $ 0.29 | $ 0.42 | $ 0.89 |
Weighted average number of shares and equivalent shares (in thousands) | ||||
Basic (in shares) | 41,368 | 41,082 | 41,268 | 41,200 |
Diluted (in shares) | 41,493 | 41,314 | 41,416 | 41,416 |
Net realized investment gains (losses) | ||||
Total other-than-temporary impairment losses on securities | $ (3,564) | $ (3,853) | $ (6,361) | $ (7,526) |
Portion of losses recognized in other comprehensive income | 0 | (290) | 0 | (290) |
Net other-than-temporary impairment losses on securities recognized in earnings | (3,564) | (3,563) | (6,361) | (7,236) |
Realized investment gains, net | 5,636 | 6,643 | 8,191 | 10,162 |
Total | $ 2,072 | $ 3,080 | $ 1,830 | $ 2,926 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Comprehensive income | ||||
Net income | $ 2,261 | $ 11,866 | $ 17,579 | $ 37,019 |
Other comprehensive income, net of taxes: | ||||
Change in net unrealized investment gains on fixed maturity and equity securities | 45,239 | 84,996 | 67,772 | 154,486 |
Change in net funded status of benefit plans | 0 | 0 | 0 | 0 |
Other comprehensive income | 45,239 | 84,996 | 67,772 | 154,486 |
Total | $ 47,500 | $ 96,862 | $ 85,351 | $ 191,505 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income, net of taxes | Treasury stock, at cost |
Beginning balance at Dec. 31, 2015 | $ 65 | $ 442,648 | $ 1,116,277 | $ 163,373 | $ (457,702) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Options exercised, 2017, 127,774 shares; 2016, 94,225 shares | 0 | |||||
Conversion of common stock units, 2017, 15,981 shares; 2016, 8,538 shares | 0 | |||||
Conversion of restricted stock units, 2017, 280,341 shares; 2016, 171,042 shares | 0 | |||||
Options exercised and conversion of common stock units and restricted stock units | 939 | |||||
Share-based compensation expense | 3,917 | |||||
Net income | $ 37,019 | 37,019 | ||||
Cash dividends, 2017, $0.55 per share; 2016, $0.53 per share | (22,174) | |||||
Change in net unrealized investment gains and losses on fixed maturity and equity securities | 154,486 | 154,486 | ||||
Change in net funded status of benefit plans | 0 | 0 | ||||
Acquisition of shares, 2017, 0 shares; 2016, 701,410 shares | (21,513) | |||||
Ending balance at Jun. 30, 2016 | 1,417,335 | 65 | 447,504 | 1,131,122 | 317,859 | (479,215) |
Beginning balance at Mar. 31, 2016 | 232,863 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 11,866 | |||||
Change in net unrealized investment gains and losses on fixed maturity and equity securities | 84,996 | |||||
Change in net funded status of benefit plans | 0 | |||||
Ending balance at Jun. 30, 2016 | 1,417,335 | 65 | 447,504 | 1,131,122 | 317,859 | (479,215) |
Beginning balance at Dec. 31, 2016 | 1,293,982 | 65 | 453,479 | 1,155,732 | 163,921 | (479,215) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Options exercised, 2017, 127,774 shares; 2016, 94,225 shares | 0 | |||||
Conversion of common stock units, 2017, 15,981 shares; 2016, 8,538 shares | 0 | |||||
Conversion of restricted stock units, 2017, 280,341 shares; 2016, 171,042 shares | 0 | |||||
Options exercised and conversion of common stock units and restricted stock units | 1,909 | |||||
Share-based compensation expense | 3,929 | |||||
Net income | 17,579 | 17,579 | ||||
Cash dividends, 2017, $0.55 per share; 2016, $0.53 per share | (23,041) | |||||
Change in net unrealized investment gains and losses on fixed maturity and equity securities | 67,772 | 67,772 | ||||
Change in net funded status of benefit plans | 0 | 0 | ||||
Acquisition of shares, 2017, 0 shares; 2016, 701,410 shares | 0 | |||||
Ending balance at Jun. 30, 2017 | 1,362,130 | 65 | 459,317 | 1,150,270 | 231,693 | (479,215) |
Beginning balance at Mar. 31, 2017 | 186,454 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 2,261 | |||||
Change in net unrealized investment gains and losses on fixed maturity and equity securities | 45,239 | |||||
Change in net funded status of benefit plans | 0 | |||||
Ending balance at Jun. 30, 2017 | $ 1,362,130 | $ 65 | $ 459,317 | $ 1,150,270 | $ 231,693 | $ (479,215) |
CONSOLIDATED STATEMENTS OF CHA7
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - $ / shares | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 | ||
Treasury stock (in shares) | 24,672,932 | 24,672,932 | ||
Common stock | ||||
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 | ||
Options exercised (in shares) | 127,774 | 94,225 | ||
Conversion of common stock units (in shares) | 15,981 | 8,538 | ||
Conversion of restricted stock units (in shares) | 280,341 | 171,042 | ||
Retained earnings | ||||
Cash dividends (in usd per share) | $ 0.55 | $ 0.53 | ||
Treasury stock, at cost | ||||
Treasury stock (in shares) | 24,672,932 | 24,672,932 | 24,672,932 | 23,971,522 |
Treasury stock, acquisitions (in shares) | 0 | 701,410 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows - operating activities | ||
Premiums collected | $ 392,715 | $ 367,182 |
Policyholder benefits paid | (274,256) | (268,212) |
Policy acquisition and other operating expenses paid | (141,913) | (138,612) |
Federal income taxes paid | (8,068) | (15,094) |
Investment income collected | 185,546 | 175,541 |
Interest expense paid | (5,738) | (5,989) |
Other | 6,167 | 954 |
Net cash provided by operating activities | 154,453 | 115,770 |
Fixed maturities | ||
Purchases | (723,354) | (834,114) |
Sales | 229,690 | 257,033 |
Maturities, paydowns, calls and redemptions | 491,739 | 475,532 |
Purchase of other invested assets | (53,716) | (33,809) |
Net cash provided by (used in) short-term and other investments | (32,391) | 7,925 |
Net cash (used in) investing activities | (88,032) | (127,433) |
Cash flows - financing activities | ||
Dividends paid to shareholders | (23,041) | (22,174) |
Acquisition of treasury stock | 0 | (21,513) |
Proceeds from exercise of stock options | 3,130 | 1,926 |
Withholding tax payments on RSUs tendered | (2,604) | (3,233) |
Annuity contracts: variable, fixed and FHLB funding agreements | ||
Deposits | 234,133 | 237,265 |
Benefits, withdrawals and net transfers to Separate Account (variable annuity) assets | (200,845) | (162,575) |
Transfer of Company 401(k) assets to a third-party provider | (77,898) | 0 |
Life policy accounts | ||
Deposits | 2,240 | 1,680 |
Withdrawals and surrenders | (2,287) | (1,995) |
Change in bank overdrafts | 87 | 17,205 |
Net cash (used in) provided by financing activities | (67,085) | 46,586 |
Net (decrease) increase in cash | (664) | 34,923 |
Cash at beginning of period | 16,670 | 15,509 |
Cash at end of period | $ 16,006 | $ 50,432 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited consolidated financial statements of Horace Mann Educators Corporation (“HMEC”; and together with its subsidiaries, the “Company” or “Horace Mann”) 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-Q. Certain information and disclosures normally included in annual financial statements prepared in accordance with GAAP, but are not required for interim reporting purposes, have been omitted. The Company believes that these consolidated financial statements contain all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to present fairly the Company’s consolidated financial position as of June 30, 2017 , the consolidated results of operations and comprehensive income for the three and six months ended June 30, 2017 and 2016 , and the consolidated changes in shareholders’ equity and cash flows for the six months ended June 30, 2017 and 2016 . 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 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. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes to consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . The results of operations for the three and six months ended June 30, 2017 are not necessarily indicative of the results to be expected for the full year. The Company reclassified the presentation of certain prior period information to conform to the 2017 presentation. See “Adopted Accounting Standards”. Investment Contract and Life Policy Reserves This table summarizes the Company’s investment contract and life policy reserves. ($ in thousands) June 30, 2017 December 31, 2016 Investment contract reserves $ 4,377,759 $ 4,360,456 Life policy reserves 1,103,104 1,087,513 Total $ 5,480,863 $ 5,447,969 Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) represents the accumulated change in shareholders’ equity from transactions and other events and circumstances from non-shareholder sources. For the Company, accumulated other comprehensive income (loss) includes the after tax change in net unrealized investment gains and losses on fixed maturity and equity securities and the after tax change in net funded status of benefit plans for the period as shown in the Consolidated Statement of Changes in Shareholders’ Equity. The following tables reconcile these components. ($ in thousands) Net Unrealized Investment Gains and Losses on Fixed Maturity and Equity Securities (1)(2) Benefit Plans (1) Total (1) Beginning balance, April 1, 2017 $ 198,271 $ (11,817 ) $ 186,454 Other comprehensive income (loss) before reclassifications 46,303 — 46,303 Amounts reclassified from accumulated other comprehensive income (loss) (1,064 ) — (1,064 ) Net current period other comprehensive income 45,239 — 45,239 Ending balance, June 30, 2017 $ 243,510 $ (11,817 ) $ 231,693 Beginning balance, January 1, 2017 $ 175,738 $ (11,817 ) $ 163,921 Other comprehensive income (loss) before reclassifications 68,633 — 68,633 Amounts reclassified from accumulated other comprehensive income (loss) (861 ) — (861 ) Net current period other comprehensive income 67,772 — 67,772 Ending balance, June 30, 2017 $ 243,510 $ (11,817 ) $ 231,693 (1) All amounts are net of tax. (2) The pretax amounts reclassified from accumulated other comprehensive income (loss), $1,638 thousand and $1,325 thousand , are included in net realized investment gains and losses and the related income tax expenses, $574 thousand and $464 thousand are included in income tax expense in the Consolidated Statements of Operations for the three and six months ended June 30, 2017 , respectively. ($ in thousands) Net Unrealized Investment Gains and Losses on Fixed Maturity and Equity Securities (1)(2) Benefit Plans (1) Total (1) Beginning balance, April 1, 2016 $ 244,657 $ (11,794 ) $ 232,863 Other comprehensive income (loss) before reclassifications 87,809 — 87,809 Amounts reclassified from accumulated other comprehensive income (loss) (2,813 ) — (2,813 ) Net current period other comprehensive income 84,996 — 84,996 Ending balance, June 30, 2016 $ 329,653 $ (11,794 ) $ 317,859 Beginning balance, January 1, 2016 $ 175,167 $ (11,794 ) $ 163,373 Other comprehensive income (loss) before reclassifications 157,780 — 157,780 Amounts reclassified from accumulated other comprehensive income (loss) (3,294 ) — (3,294 ) Net current period other comprehensive income 154,486 — 154,486 Ending balance, June 30, 2016 $ 329,653 $ (11,794 ) $ 317,859 (1) All amounts are net of tax. (2) The pretax amounts reclassified from accumulated other comprehensive income (loss), $4,327 thousand and $5,067 thousand , are included in net realized investment gains and losses and the related income tax expenses, $1,514 thousand and $1,773 thousand , are included in income tax expense in the Consolidated Statements of Operations for the three and six months ended June 30, 2016 , respectively. 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 -- Net Unrealized Investment Gains and Losses on Fixed Maturity and Equity Securities”. Adopted Accounting Standards Employee Share-based Payment Accounting Effective January 1, 2017, the Company adopted new accounting guidance for employee share-based payments which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The recognition and classification of the excess tax benefit provisions were applied prospectively in the results of operations. This adoption resulted in additional excess tax benefits of $2,638 thousand which reduced the current provision for income taxes in the results of operations. The statutory tax withholding classification, which are cash payments made to taxing authorities for withheld taxes funded through tendered shares, were applied retrospectively and the Company reclassified the statutory tax withholding requirements in the statement of cash flows from Other in operating activities to Withholding tax payments on RSUs tendered in financing activities. This statutory withholding reclassification resulted in $2,604 thousand and $3,233 thousand being included in financing activities for the six months ended June 30, 2017 and 2016 , respectively. There were no cumulative effect adjustments upon adoption of the new accounting guidance. Pending Accounting Standards Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued accounting guidance to provide a single comprehensive model in accounting for revenue arising from contracts with customers. The guidance applies to all contracts with customers; however, insurance contracts are specifically excluded from this updated guidance. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those years. Early adoption is permitted only for annual reporting periods beginning after December 15, 2016. The Company plans to adopt the guidance as of January 1, 2018. Management believes the adoption of this accounting guidance will not have a material effect on the results of operations or financial position, and related disclosures, of the Company. Recognition and Measurement of Financial Assets and Liabilities In January 2016, the FASB issued accounting guidance to improve certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. Among other things, this guidance requires public entities to measure equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) at fair value with changes in fair value recognized in net income and to perform a qualitative assessment to identify impairment for equity investments without readily determinable fair values. Companies are required to apply this guidance by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the year of adoption and, for the guidance related to equity securities without readily determinable fair values, companies are required to apply a prospective approach to equity investments that exist as of the date of adoption. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those years. Early application is permitted. The guidance will not have an impact on the Company’s financial position and management is evaluating the impact that this guidance will have on the Company’s results of operations. Statement of Cash Flows -- Classification In August 2016, the FASB issued guidance to reduce diversity in practice in the statement of cash flows between operating, investing and financing activities related to the classification of cash receipts and cash payments for eight specific issues. The FASB acknowledged that current GAAP either is unclear or does not include specific guidance on these eight cash flow classification issues: (1) debt prepayment or extinguishment costs; (2) settlement of zero-coupon bonds (pertains to issuers); (3) contingent consideration payments made after a business combination; (4) proceeds from the settlement of insurance claims (pertains to claimants); (5) proceeds from the settlement of corporate-owned life insurance policies; (6) distributions received from equity method investees; (7)beneficial interests in securitization transactions (pertains to transferors) and (8) separately identifiable cash flows and application of the predominance principle. For public business entities, the guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those years, using a retrospective approach. The guidance allows prospective adoption for individual issues if it is impracticable to apply the amendments retrospectively for those issues. Early application is permitted. Management believes the adoption of this accounting guidance will not have a material effect on the classifications in the Company’s consolidated statement of cash flows. The adoption of this accounting guidance will not have any effect on the results of operations or financial position of the Company. Accounting for Leases In February 2016, the FASB issued accounting and disclosure guidance to improve financial reporting and comparability among organizations about leasing transactions. Under the new guidance, for leases with lease terms of more than 12 months, a lessee will be required to recognize assets and liabilities on the balance sheet for the rights and obligations created by those leases. Consistent with current accounting guidance, the recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or an operating lease. However, while current guidance requires only capital leases to be recognized on the balance sheet, the new guidance will require both operating and capital leases to be recognized on the balance sheet. In transition to the new guidance, companies are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those years. Early application is permitted. Management is evaluating the impact this guidance will have on the results of operations and financial position of the Company. Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued guidance to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments, including reinsurance receivables, held by companies. The new guidance replaces the incurred loss impairment methodology and requires an organization to measure and recognize all current expected credit losses (“CECL”) for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Companies will need to utilize forward-looking information to better inform their credit loss estimates. Companies will continue to use judgment to determine which loss estimation method is appropriate for their circumstances. Credit losses related to available for sale debt securities -- which represent over 90% of Horace Mann’s total investment portfolio -- will be recorded through an allowance for credit losses with this allowance having a limit equal to the amount by which fair value is below amortized cost. The guidance also requires enhanced qualitative and quantitative disclosures to provide additional information about the amounts recorded in the financial statements. For public business entities that are SEC filers, the guidance is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those years, using a modified-retrospective approach. Early application is permitted for annual reporting periods, and interim periods within those years, beginning after December 15, 2018. Management is evaluating the impact this guidance will have on the results of operations and financial position of the Company. Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued guidance to simplify the accounting for goodwill impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. All other goodwill impairment guidance will remain largely unchanged. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The same one-step impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying amounts. Entities will be required to disclose the amount of goodwill for reporting units with zero or negative carrying amounts. Public business entities should adopt the guidance prospectively for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early application is permitted. Management believes the adoption of this accounting guidance will not have a material effect on how it tests goodwill for impairment. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | The Company’s investment portfolio includes free-standing derivative financial instruments (currently over the counter (“OTC”) index call option contracts) to economically hedge risk associated with its fixed indexed annuity (“FIA”) and indexed universal life (“IUL”) products’ contingent liabilities. The Company’s FIA and IUL products include embedded derivative features that are discussed in “Note 1 -- Summary of Significant Accounting Policies -- Investment Contract and Life Policy Reserves -- Reserves for Fixed Indexed Annuities and Indexed Universal Life Policies” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . The Company’s investment portfolio included no other free-standing derivative financial instruments (futures, forwards, swaps, option contracts or other financial instruments with similar characteristics), and there were no other embedded derivative features related to the Company’s investment or insurance products during the six months ended June 30, 2017 and 2016 . Fixed Maturity and Equity Securities The Company’s investment portfolio is comprised primarily of fixed maturity securities and also includes 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 (“AOCI”) of all fixed maturity and equity securities in the portfolio were as follows: ($ in thousands) Amortized Cost or Cost Unrealized Investment Gains Unrealized Investment Losses Fair Value OTTI in AOCI (1) June 30, 2017 Fixed maturity securities U.S. Government and federally sponsored agency obligations (2): Mortgage-backed securities $ 589,643 $ 36,054 $ 2,633 $ 623,064 $ — Other, including U.S. Treasury securities 588,713 23,550 5,913 606,350 — Municipal bonds 1,659,648 168,001 10,429 1,817,220 — Foreign government bonds 93,779 6,272 5 100,046 — Corporate bonds 2,645,268 186,601 4,261 2,827,608 — Other mortgage-backed securities 1,584,866 26,076 6,645 1,604,297 1,447 Totals $ 7,161,917 $ 446,554 $ 29,886 $ 7,578,585 $ 1,447 Equity securities (3) $ 140,553 $ 17,911 $ 1,555 $ 156,909 $ — December 31, 2016 Fixed maturity securities U.S. Government and federally sponsored agency obligations (2): Mortgage-backed securities $ 587,355 $ 34,256 $ 6,720 $ 614,891 $ — Other, including U.S. Treasury securities 458,745 18,518 10,120 467,143 — Municipal bonds 1,648,252 143,733 22,588 1,769,397 — Foreign government bonds 93,864 5,102 297 98,669 — Corporate bonds 2,672,818 152,229 14,826 2,810,221 — Other mortgage-backed securities 1,691,093 21,153 15,859 1,696,387 1,618 Totals $ 7,152,127 $ 374,991 $ 70,410 $ 7,456,708 $ 1,618 Equity securities (3) $ 134,013 $ 13,210 $ 5,574 $ 141,649 $ — (1) Related to securities for which an unrealized loss was bifurcated to distinguish the credit-related portion and the portion driven by other market factors. Represents the amount of OTTI losses in AOCI which was not included in earnings; amounts also include net unrealized investment gains and losses on such impaired securities relating to changes in the fair value of those securities subsequent to the impairment measurement date. (2) Fair value includes securities issued by Federal National Mortgage Association (“FNMA”) of $310,403 thousand and $272,668 thousand ; Federal Home Loan Mortgage Corporation (“FHLMC”) of $368,396 thousand and $378,683 thousand ; and Government National Mortgage Association (“GNMA”) of $111,458 thousand and $115,627 thousand as of June 30, 2017 and December 31, 2016 , respectively. (3) Includes nonredeemable (perpetual) preferred stocks, common stocks and closed-end funds. The following table presents the fair value and gross unrealized losses of fixed maturity and equity securities in an unrealized loss position at June 30, 2017 and December 31, 2016 , respectively. The Company views the decrease in value of all of the securities with unrealized losses at June 30, 2017 -- which was driven largely by changes in interest rates, spread widening, financial market illiquidity and/or market volatility from the date of acquisition -- as temporary. For fixed maturity securities, management does not have the intent to sell the securities and it is not more likely than not the Company will be required to sell the securities before the anticipated recovery of the amortized cost bases, and management expects to recover the entire amortized cost bases of the fixed maturity securities. For equity securities, the Company has the ability and intent to hold the securities for the recovery of cost and recovery of cost is expected within a reasonable period of time. ($ in thousands) 12 Months or Less More than 12 Months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses June 30, 2017 Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 101,350 $ 2,320 $ 3,480 $ 313 $ 104,830 $ 2,633 Other 223,396 5,913 — — 223,396 5,913 Municipal bonds 179,314 6,893 10,023 3,536 189,337 10,429 Foreign government bonds 1,980 5 — — 1,980 5 Corporate bonds 157,230 2,949 26,907 1,312 184,137 4,261 Other mortgage-backed securities 449,341 4,764 133,899 1,881 583,240 6,645 Total fixed maturity securities 1,112,611 22,844 174,309 7,042 1,286,920 29,886 Equity securities (1) 8,748 727 4,863 828 13,611 1,555 Combined totals $ 1,121,359 $ 23,571 $ 179,172 $ 7,870 $ 1,300,531 $ 31,441 Number of positions with a 413 60 473 Fair value as a percentage of 14.5 % 2.3 % 16.8 % December 31, 2016 Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 186,439 $ 6,176 $ 3,235 $ 544 $ 189,674 $ 6,720 Other 219,372 10,120 — — 219,372 10,120 Municipal bonds 408,163 19,006 9,928 3,582 418,091 22,588 Foreign government bonds 24,182 297 — — 24,182 297 Corporate bonds 459,402 11,056 57,261 3,770 516,663 14,826 Other mortgage-backed securities 640,691 10,470 229,106 5,389 869,797 15,859 Total fixed maturity securities 1,938,249 57,125 299,530 13,285 2,237,779 70,410 Equity securities (1) 56,676 4,567 7,956 1,007 64,632 5,574 Combined totals $ 1,994,925 $ 61,692 $ 307,486 $ 14,292 $ 2,302,411 $ 75,984 Number of positions with a gross unrealized loss 629 102 731 Fair value as a percentage of total fixed maturity and equity securities fair value 26.3 % 4.0 % 30.3 % (1) Includes nonredeemable (perpetual) preferred stocks, common stocks and closed-end funds. Fixed maturity and equity securities with an investment grade rating represented 82% of the gross unrealized losses as of June 30, 2017 . With respect to fixed maturity 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 OTTI losses on fixed maturity securities held as of June 30, 2017 and 2016 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 OTTI losses were recognized in other comprehensive income: ($ in thousands) Six Months Ended June 30, 2017 2016 Cumulative credit loss (1) Beginning of period $ 13,703 $ 7,844 New credit losses — 300 Increases to previously recognized credit losses 1,910 2,480 Gains related to securities sold or paid down during the period (2 ) — End of period $ 15,611 $ 10,624 (1) The cumulative credit loss amounts exclude OTTI 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. Maturities/Sales of Fixed Maturity 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. ($ in thousands) Percent of Total Fair Value June 30, 2017 June 30, 2017 December 31, 2016 Fair Value Amortized Cost Estimated expected maturity: Due in 1 year or less 3.6 % 3.9 % $ 275,005 $ 269,431 Due after 1 year through 5 years 27.4 28.7 2,079,595 1,981,639 Due after 5 years through 10 years 34.1 35.2 2,580,296 2,478,678 Due after 10 years through 20 years 22.8 19.5 1,729,382 1,609,894 Due after 20 years 12.1 12.7 914,307 822,275 Total 100.0 % 100.0 % $ 7,578,585 $ 7,161,917 Average option-adjusted duration, in years 6.0 5.9 Proceeds received from sales of fixed maturity 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 period were: ($ in thousands) Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Fixed maturity securities Proceeds received $ 118,818 $ 174,944 $ 229,690 $ 257,033 Gross gains realized 4,080 8,382 6,569 10,858 Gross losses realized (496 ) (948 ) (1,377 ) (1,440 ) Equity securities Proceeds received $ 11,507 $ 6,474 $ 16,996 $ 12,622 Gross gains realized 1,702 650 2,750 1,170 Gross losses realized (236 ) (195 ) (428 ) (841 ) Net Unrealized Investment Gains and Losses on Fixed Maturity and Equity Securities Net unrealized investment gains and losses are computed as the difference between fair value and amortized cost for fixed maturity securities 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: ($ in thousands) Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Net unrealized investment gains and losses on fixed maturity securities, net of tax Beginning of period $ 219,385 $ 276,381 $ 197,978 $ 198,714 Change in net unrealized investment gains and losses 51,523 89,744 73,414 168,085 Reclassification of net realized investment gains to net income (74 ) 5,331 (558 ) 4,657 End of period $ 270,834 $ 371,456 $ 270,834 $ 371,456 Net unrealized investment gains and losses on equity securities, net of tax Beginning of period $ 8,952 $ 5,030 $ 4,963 $ 2,649 Change in net unrealized investment gains and losses 2,670 4,710 5,972 6,898 Reclassification of net realized investment losses to net income (991 ) (1,557 ) (304 ) (1,364 ) End of period $ 10,631 $ 8,183 $ 10,631 $ 8,183 Offsetting of Assets and Liabilities The Company’s derivative instruments (call options) are subject to enforceable master netting arrangements. Collateral support agreements associated with each master netting arrangement provide that the Company will receive or pledge financial collateral in the event minimum thresholds are reached. The following table presents the instruments that were subject to a master netting arrangement for the Company. ($ in thousands) Gross Amounts Offset in the Net Amounts of Assets/ Liabilities Presented in the Gross Amounts Not Offset in the Consolidated Balance Sheets Gross Amounts Consolidated Balance Sheets Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount June 30, 2017 Asset derivatives: Free-standing derivatives $ 9,969 $ — $ 9,969 $ — $ 10,959 $ (990 ) December 31, 2016 Asset derivatives: Free-standing derivatives $ 8,694 $ — $ 8,694 $ — $ 8,824 $ (130 ) Deposits At June 30, 2017 and December 31, 2016 , fixed maturity securities with a fair value of $18,038 thousand and $18,119 thousand , 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 June 30, 2017 and December 31, 2016 , fixed maturity securities with a fair value of $621,068 thousand and $620,489 thousand , respectively, were on deposit with the Federal Home Loan Bank of Chicago (“FHLB”) as collateral for amounts subject to funding agreements which were equal to $575,000 thousand at both of the respective dates. The deposited securities are included in Fixed maturity securities on the Company’s Consolidated Balance Sheets. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | The Company is required under GAAP to disclose estimated fair values for certain financial and nonfinancial assets and liabilities. Fair values of the Company’s insurance contracts other than annuity contracts are not required to be disclosed. However, the estimated fair values of liabilities under all insurance contracts are taken into consideration in the Company’s overall management of interest rate risk through the matching of investment maturities with amounts due under insurance contracts. Information regarding the three-level hierarchy presented below and the valuation methodologies utilized by the Company to estimate fair values at a point in time is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 , specifically in “Note 3 -- Fair Value of Financial Instruments”. Financial Instruments Measured and Carried at Fair Value The following table presents the Company’s fair value hierarchy for those assets and liabilities measured and carried at fair value on a recurring basis. At June 30, 2017 , Level 3 invested assets comprised 3.1% of the Company’s total investment portfolio fair value. ($ in thousands) Fair Value Measurements at Carrying Fair Reporting Date Using Amount Value Level 1 Level 2 Level 3 June 30, 2017 Financial Assets Investments Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 623,064 $ 623,064 $ — $ 619,479 $ 3,585 Other, including U.S. Treasury securities 606,350 606,350 14,341 592,009 — Municipal bonds 1,817,220 1,817,220 — 1,768,097 49,123 Foreign government bonds 100,046 100,046 — 100,046 — Corporate bonds 2,827,608 2,827,608 14,976 2,735,580 77,052 Other mortgage-backed securities 1,604,297 1,604,297 — 1,487,558 116,739 Total fixed maturity securities 7,578,585 7,578,585 29,317 7,302,769 246,499 Equity securities 156,909 156,909 101,847 55,056 6 Short-term investments 104,087 104,087 104,087 — — Other investments 21,482 21,482 — 21,482 — Totals $ 7,861,063 $ 7,861,063 $ 235,251 $ 7,379,307 $ 246,505 Financial Liabilities Investment contract and life policy reserves, embedded derivatives $ 286 $ 286 $ — $ 286 $ — Other policyholder funds, embedded derivatives 67,995 67,995 — — 67,995 December 31, 2016 Financial Assets Investments Fixed maturity securities U.S. Government and federally Mortgage-backed securities $ 614,891 $ 614,891 $ — $ 611,476 $ 3,415 Other, including U.S. Treasury securities 467,143 467,143 13,631 453,512 — Municipal bonds 1,769,397 1,769,397 — 1,722,900 46,497 Foreign government bonds 98,669 98,669 — 98,669 — Corporate bonds 2,810,221 2,810,221 13,532 2,736,498 60,191 Other mortgage-backed securities 1,696,387 1,696,387 — 1,595,143 101,244 Total fixed maturity securities 7,456,708 7,456,708 27,163 7,218,198 211,347 Equity securities 141,649 141,649 98,632 43,011 6 Short-term investments 44,918 44,918 44,167 — 751 Other investments 20,194 20,194 — 20,194 — Totals $ 7,663,469 $ 7,663,469 $ 169,962 $ 7,281,403 $ 212,104 Financial Liabilities Investment contract and life policy reserves, embedded derivatives $ 158 $ 158 $ — $ 158 $ — Other policyholder funds, embedded derivatives 59,393 59,393 — — 59,393 During the six months ended June 30, 2017 , an equity security was transferred into Level 1 from Level 2 as a result of increased liquidity in the market and a sustained increase in the market activity for this asset. The following table presents reconciliations for the periods indicated for all Level 3 assets and liabilities measured at fair value on a recurring basis. ($ in thousands) Financial Assets Financial Liabilities(1) Municipal Bonds Corporate Bonds Mortgage- Backed Securities (2) Total Fixed Maturity Securities Equity Securities Short-term Investments Total Beginning balance, April 1, 2017 $ 53,462 $ 82,495 $ 112,794 $ 248,751 $ 6 $ — $ 248,757 $ 64,261 Transfers into Level 3 (3) — 2,001 9,482 11,483 — — 11,483 — Transfers out of Level 3 (3) (5,557 ) (5,853 ) — (11,410 ) — — (11,410 ) — Total gains or losses Net realized investment gains (losses) included in net income related to financial assets — — (1,714 ) (1,714 ) — — (1,714 ) — Net realized (gains) losses included in net income related to financial liabilities — — — — — — — 1,238 Net unrealized investment gains (losses) included in other comprehensive income 1,287 359 3,093 4,739 — — 4,739 — Purchases — — — — — — — — Issuances — — — — — — — 3,397 Sales — — — — — — — — Settlements — — — — — — — — Paydowns, maturities and distributions (69 ) (1,950 ) (3,331 ) (5,350 ) — — (5,350 ) (901 ) Ending balance, June 30, 2017 $ 49,123 $ 77,052 $ 120,324 $ 246,499 $ 6 $ — $ 246,505 $ 67,995 Beginning balance, January 1, 2017 $ 46,497 $ 60,191 $ 104,659 $ 211,347 $ 6 $ 751 $ 212,104 $ 59,393 Transfers into Level 3 (3) 5,214 31,919 24,521 61,654 — — 61,654 — Transfers out of Level 3 (3) (5,557 ) (11,963 ) — (17,520 ) — (751 ) (18,271 ) — Total gains or losses Net realized investment gains (losses) included in net income related to financial assets — — (1,714 ) (1,714 ) — — (1,714 ) — Net realized (gains) losses included in net income related to financial liabilities — — — — — — — 3,546 Net unrealized investment gains (losses) included in other comprehensive income 3,158 455 2,322 5,935 — — 5,935 — Purchases — — — — — — — — Issuances — — — — — — — 6,786 Sales — — — — — — — — Settlements — — — — — — — — Paydowns, maturities and distributions (189 ) (3,550 ) (9,464 ) (13,203 ) — — (13,203 ) (1,730 ) Ending balance, June 30, 2017 $ 49,123 $ 77,052 $ 120,324 $ 246,499 $ 6 $ — $ 246,505 $ 67,995 (1) Represents embedded derivatives, all related to the Company’s FIA products, reported in Other policyholder funds in the Company’s Consolidated Balance Sheets. (2) Includes U.S. Government and federally sponsored agency obligations for mortgage-backed securities and other mortgage-backed securities. (3) Transfers into and out of Level 3 during the three and six months ended June 30, 2017 were attributable to changes in the availability of observable market information for individual fixed maturity securities and short-term investments. 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. ($ in thousands) Financial Assets Financial Liabilities(1) Municipal Bonds Corporate Bonds Mortgage- Backed Securities (2) Total Fixed Maturity Securities Equity Securities Short-term Investments Total Beginning balance, April 1, 2016 $ 46,493 $ 70,071 $ 83,821 $ 200,385 $ 6 $ — $ 200,391 $ 42,085 Transfers into Level 3 (3) — 5,017 12,984 18,001 — — 18,001 — Transfers out of Level 3 (3) — — — — — — — — Total gains or losses Net realized investment gains (losses) included in net income related to financial assets — (657 ) — (657 ) — — (657 ) — Net realized (gains) losses included in net income related to financial liabilities — — — — — — — 1,324 Net unrealized investment gains (losses) included in other comprehensive income 1,297 1,393 229 2,919 — — 2,919 — Purchases — — — — — — — — Issuances — — — — — — — 4,993 Sales — — — — — — — — Settlements — — — — — — — — Paydowns, maturities and distributions (143 ) (2,416 ) (453 ) (3,012 ) — — (3,012 ) (696 ) Ending balance, June 30, 2016 $ 47,647 $ 73,408 $ 96,581 $ 217,636 $ 6 $ — $ 217,642 $ 47,706 Beginning balance, January 1, 2016 $ 30,379 $ 67,575 $ 75,466 $ 173,420 $ 6 $ — $ 173,426 $ 39,021 Transfers into Level 3 (3) 14,751 11,076 24,626 50,453 — — 50,453 — Transfers out of Level 3 (3) — — — — — — — — Total gains or losses Net realized investment gains (losses) included in net income related to financial assets — (657 ) — (657 ) — — (657 ) — Net realized (gains) losses included in net income related to financial liabilities — — — — — — — 1,998 Net unrealized investment gains (losses) included in other comprehensive income 2,781 1,781 222 4,784 — — 4,784 — Purchases — — — — — — — — Issuances — — — — — — — 8,484 Sales — — — — — — — — Settlements — — — — — — — — Paydowns, maturities and distributions (264 ) (6,367 ) (3,733 ) (10,364 ) — — (10,364 ) (1,797 ) Ending balance, June 30, 2016 $ 47,647 $ 73,408 $ 96,581 $ 217,636 $ 6 $ — $ 217,642 $ 47,706 (1) Represents embedded derivatives, all related to the Company’s FIA products, reported in Other policyholder funds in the Company’s Consolidated Balance Sheets. (2) Includes U.S. Government and federally sponsored agency obligations for mortgage-backed securities and other mortgage-backed securities. (3) Transfers into and out of Level 3 during the three and six months ended June 30, 2016 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 June 30, 2017 , the Company impaired two Level 3 securities for a $1,714 thousand realized loss. At June 30, 2016, there were no net realized investment gains or losses included in earnings that were attributable to changes in the fair value of Level 3 assets still held. For the three and six months ended June 30, 2017 , net realized losses of $1,238 thousand and $3,546 thousand , respectively, were included in earnings that were attributable to the changes in the fair value of Level 3 liabilities (embedded derivatives) still held; for the three and six months ended June 30, 2016 , the respective amounts were $1,324 thousand and $1,998 thousand . The valuation techniques and significant unobservable inputs used in the fair value measurement for financial assets classified as Level 3 are subject to the control processes as described in “Note 3 -- Fair Value of Financial Instruments -- Investments” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Generally, valuation techniques for fixed maturity securities include spread pricing, matrix pricing and discounted cash flow methodologies; include inputs such as quoted prices for identical or similar securities that are less liquid; and are 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 those used for fixed maturity securities. The sensitivity of the estimated fair values to changes in the significant unobservable inputs for fixed maturity and equity securities included in Level 3 generally relates 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 Not Carried at Fair Value; Disclosure Required 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. ($ in thousands) Fair Value Measurements at Carrying Fair Reporting Date Using Amount Value Level 1 Level 2 Level 3 June 30, 2017 Financial Assets Investments Other investments $ 152,970 $ 157,530 $ — $ — $ 157,530 Financial Liabilities Investment contract and life policy 4,377,759 4,288,095 — — 4,288,095 Investment contract and life policy 80,768 86,175 — — 86,175 Other policyholder funds 645,009 645,009 — 575,475 69,534 Long-term debt 247,337 257,929 257,929 — — December 31, 2016 Financial Assets Investments Other investments $ 151,965 $ 156,536 $ — $ — $ 156,536 Financial Liabilities Investment contract and life policy reserves, fixed annuity contracts 4,360,456 4,280,528 — — 4,280,528 Investment contract and life policy reserves, account values on life contracts 79,591 85,066 — — 85,066 Other policyholder funds 649,557 649,557 — 575,253 74,304 Long-term debt 247,209 248,191 248,191 — — |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | The Company offers FIA products, which are deferred fixed annuities that guarantee the return of principal to the contractholder and credit interest based on a percentage of the gain in a specified market index, and IUL products, which also credit interest based on a percentage of the gain in a specified market index. When deposits are received for FIA and IUL contracts, a portion is used to purchase derivatives consisting of OTC call options on the applicable market indices to fund the index credits due to FIA and IUL policyholders. For the Company, substantially all of such call options are one-year options purchased to match the funding requirements of the underlying contracts. The call options are carried at fair value with changes in fair value included in Net realized investment gains and losses, a component of Revenues, in the Consolidated Statements of Operations. The change in fair value of derivatives includes the gains or losses recognized at the expiration of the option term or early termination and the changes in fair value for open positions. Call options are not purchased to fund the index liabilities which may arise after the next deposit anniversary date. On the respective anniversary dates of the indexed deposits, the index used to compute the annual index credit is reset and new one-year call options are purchased to fund the next annual index credit. The cost of these purchases is managed through the terms of the FIA and IUL contracts, which permit changes to index return caps, participation rates and/or asset fees, subject to guaranteed minimums on each contract’s anniversary date. By adjusting the index return caps, participation rates or asset fees, crediting rates generally can be managed except in cases where the contractual features would prevent further modifications. The future annual index credits on FIA contracts are treated as a “series of embedded derivatives” over the expected life of the applicable contract with a corresponding reserve recorded. For the IUL contracts, the embedded derivative represents a single year liability for the index return. The Company carries all derivative instruments as assets or liabilities in the Consolidated Balance Sheets at fair value. The Company elected to not use hedge accounting for derivative transactions related to the FIA and IUL products. As a result, the Company records the purchased call options and the embedded derivatives related to the provision of a contingent return at fair value, with changes in the fair value of the derivatives recognized immediately in the Consolidated Statements of Operations. The fair values of derivative instruments, including derivative instruments embedded in FIA and IUL contracts, presented in the Consolidated Balance Sheets were as follows: ($ in thousands) June 30, 2017 December 31, 2016 Assets Derivative instruments, included in Short-term and other investments $ 9,969 $ 8,694 Liabilities FIA - embedded derivatives, included in Other policyholder funds $ 67,995 $ 59,393 IUL - embedded derivatives, included in Investment contract and life policy reserves 286 158 In general, the change in the fair value of the embedded derivatives related to FIA contracts will not correspond to the change in fair value of the purchased call options because the purchased call options are one-year options while the options valued in those embedded derivatives represent the rights of the policyholder to receive index credits over the entire period the FIA contracts are expected to be in force, which typically exceeds 10 years. The changes in fair value of derivatives included in the Consolidated Statements of Operations were as follows: ($ in thousands) Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Change in fair value of derivatives (1): Revenues Net realized investment gains (losses) $ 1,729 $ 78 $ 4,166 $ (140 ) Change in fair value of embedded derivatives: Revenues Net realized investment losses $ (1,295 ) $ (1,325 ) $ (3,661 ) $ (2,001 ) (1) Includes the gains or losses recognized at the expiration of the option term or early termination and the changes in fair value for open options. The Company’s strategy attempts to mitigate potential risk of loss under these agreements through a regular monitoring process, which evaluates the program’s effectiveness. The Company is exposed to risk of loss in the event of nonperformance by the counterparties and, accordingly, option contracts are purchased from multiple counterparties, which are evaluated for creditworthiness prior to purchase of the contracts. All of these options have been purchased from nationally recognized financial institutions with a Standard and Poor’s Financial Services LLC ("S&P") long-term credit rating of “BBB+” or higher at the time of purchase and the maximum credit exposure to any single counterparty is subject to concentration limits. The Company also obtains credit support agreements that allow it to request the counterparty to provide collateral when the fair value of the exposure to the counterparty exceeds specified amounts. The notional amount and fair value of call options by counterparty and each counterparty’s long-term credit ratings were as follows: ($ in thousands) June 30, 2017 December 31, 2016 Credit Rating Notional Fair Notional Fair Counterparty S&P Amount Value Amount Value Bank of America, N.A. A+ $ 43,000 $ 829 $ 38,500 $ 1,934 Barclays Bank PLC A- 83,700 2,837 66,800 1,543 Citigroup Inc. BBB+ — — — — Credit Suisse International A 50,800 4,762 65,200 4,281 Societe Generale A 44,800 1,541 15,600 936 Total $ 222,300 $ 9,969 $ 186,100 $ 8,694 As of June 30, 2017 and December 31, 2016 , the Company held $10,959 thousand and $8,824 thousand , respectively, of cash received from counterparties for derivative collateral, which is included in Other liabilities on the Consolidated Balance Sheets. This derivative collateral limits the Company’s maximum amount of economic loss due to credit risk that would be incurred if parties to the call options failed completely to perform according to the terms of the contracts to $250 thousand per counterparty. |
Property and Casualty Unpaid Cl
Property and Casualty Unpaid Claims and Claim Expenses | 6 Months Ended |
Jun. 30, 2017 | |
Insurance Loss Reserves [Abstract] | |
Property and Casualty Unpaid Claims and Claim Expenses | The following table is a summary reconciliation of the beginning and ending Property and Casualty unpaid claims and claim expense reserves for the periods indicated. The table presents reserves on both gross and net (after reinsurance) bases. The total net Property and Casualty insurance claims and claim expense incurred amounts are reflected in the Consolidated Statements of Operations. The end of the period gross reserve (before reinsurance) balances and the reinsurance recoverable balances are reflected on a gross basis in the Consolidated Balance Sheets. ($ in thousands) Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Property and Casualty segment Beginning Gross reserves (1) $ 316,173 $ 319,276 $ 307,757 $ 301,569 Less: reinsurance recoverables 61,804 60,429 61,199 50,332 Net reserves, beginning of period (2) 254,369 258,847 246,558 251,237 Incurred claims and claim expenses: Claims occurring in the current period 148,348 131,355 271,552 234,561 Decrease in estimated reserves for claims occurring in prior periods (3) (600 ) (1,600 ) (1,600 ) (3,600 ) Total claims and claim expenses incurred (4) 147,748 129,755 269,952 230,961 Claims and claim expense payments for claims occurring during: Current period 95,645 89,549 148,025 128,630 Prior periods 35,538 38,591 97,551 93,106 Total claims and claim expense payments 131,183 128,140 245,576 221,736 Net reserves, end of period (2) 270,934 260,462 270,934 260,462 Plus: reinsurance recoverables 58,897 60,499 58,897 60,499 Ending Gross reserves (1) $ 329,831 $ 320,961 $ 329,831 $ 320,961 (1) Unpaid claims and claim expenses as reported in the Consolidated Balance Sheets also include reserves for the Life and Retirement segments of $22,682 thousand and $23,783 thousand as of June 30, 2017 and 2016 , 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. (4) Benefits, claims and settlement expenses as reported in the Consolidated Statements of Operations also include amounts for the Life and Retirement segments of $18,131 thousand and $40,023 thousand for the three and six months ended June 30, 2017 , respectively, in addition to the Property and Casualty segment amounts. The Life and Retirement segments for the three and six months ended June 30, 2016 were $18,653 thousand and $36,960 thousand , respectively. Net favorable development of total reserves for Property and Casualty claims occurring in prior years was $1,600 thousand and $3,600 thousand for the six month periods ended June 30, 2017 and 2016 , respectively. The favorable development for both of the six month periods ended June 30, 2017 and 2016 was predominantly the result of favorable severity trends in homeowners loss emergence. This favorable development was for accident years 2015 and prior for the six months ended June 30, 2017 and accident years 2014 and prior for the six months ended June 30, 2016. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Indebtedness outstanding was as follows: ($ in thousands) June 30, 2017 December 31, 2016 Short-term debt: Bank Credit Facility, expires July 30, 2019 $ — $ — Long-term debt: 4.50% Senior Notes, due December 1, 2025. Aggregate 247,337 247,209 The Credit Agreement with Financial Institutions (“Bank Credit Facility”) and 4.50% Senior Notes due 2025 (“Senior Notes due 2025”) are described in “Notes to Consolidated Financial Statements -- Note 7 -- Debt” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . |
Reinsurance
Reinsurance | 6 Months Ended |
Jun. 30, 2017 | |
Insurance [Abstract] | |
Reinsurance | 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: ($ in thousands) Gross Amount Ceded to Other Companies Assumed from Other Companies Net Amount Three months ended June 30, 2017 Premiums written and contract deposits $ 316,123 $ 5,643 $ 1,134 $ 311,614 Premiums and contract charges earned 200,351 5,665 1,032 195,718 Benefits, claims and settlement expenses 168,218 3,185 846 165,879 Three months ended June 30, 2016 Premiums written and contract deposits $ 316,798 $ 5,921 $ 1,002 $ 311,879 Premiums and contract charges earned 193,396 5,952 916 188,360 Benefits, claims and settlement expenses 151,998 4,444 854 148,408 Six months ended June 30, 2017 Premiums written and contract deposits $ 617,635 $ 11,153 $ 1,864 $ 608,346 Premiums and contract charges earned 400,806 11,199 1,833 391,440 Benefits, claims and settlement expenses 315,489 7,068 1,554 309,975 Six months ended June 30, 2016 Premiums written and contract deposits $ 604,790 $ 11,689 $ 1,947 $ 595,048 Premiums and contract charges earned 383,629 11,721 1,902 373,810 Benefits, claims and settlement expenses 283,238 17,106 1,789 267,921 |
Commitments
Commitments | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Investment Commitments From time to time, the Company has outstanding commitments to purchase investments and/or commitments to lend funds under bridge loans. Unfunded commitments to purchase investments were $139,737 thousand and $135,054 thousand at June 30, 2017 and December 31, 2016 , respectively. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | The Company conducts and manages its business through four segments. The three operating segments, representing the major lines of business, are: Property and Casualty segment, primarily personal lines automobile and homeowners insurance products; Retirement segment, primarily tax-qualified fixed and variable annuities; and Life segment, life insurance. The Company does not allocate the impact of corporate-level transactions to these operating segments, consistent with the basis for management’s evaluation of the results of those segments, but classifies those items in the fourth segment, Corporate and Other. In addition to ongoing transactions such as corporate debt service, net realized investment gains and losses and certain public company expenses, such items also have included corporate debt retirement costs/gains, when applicable. Summarized financial information for these segments is as follows: ($ in thousands) Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Insurance premiums and contract charges earned Property and Casualty $ 160,460 $ 153,673 $ 318,778 $ 305,793 Retirement 6,759 6,098 13,360 12,166 Life 28,499 28,589 59,302 55,851 Total $ 195,718 $ 188,360 $ 391,440 $ 373,810 Net investment income Property and Casualty $ 8,113 $ 10,151 $ 17,290 $ 18,979 Retirement 65,139 62,727 128,581 120,776 Life 18,928 18,502 37,216 36,486 Corporate and Other 18 14 30 29 Intersegment eliminations (204 ) (215 ) (412 ) (432 ) Total $ 91,994 $ 91,179 $ 182,705 $ 175,838 Net income (loss) Property and Casualty $ (13,956 ) $ (4,463 ) $ (11,221 ) $ 9,332 Retirement 11,800 13,063 23,330 23,616 Life 5,610 4,622 9,495 8,489 Corporate and Other (1,193 ) (1,356 ) (4,025 ) (4,418 ) Total $ 2,261 $ 11,866 $ 17,579 $ 37,019 ($ in thousands) June 30, 2017 December 31, 2016 Assets Property and Casualty $ 1,133,015 $ 1,110,958 Retirement 7,671,701 7,449,777 Life 1,972,540 1,912,771 Corporate and Other 128,101 140,104 Intersegment eliminations (29,222 ) (36,786 ) Total $ 10,876,135 $ 10,576,824 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited consolidated financial statements of Horace Mann Educators Corporation (“HMEC”; and together with its subsidiaries, the “Company” or “Horace Mann”) 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-Q. Certain information and disclosures normally included in annual financial statements prepared in accordance with GAAP, but are not required for interim reporting purposes, have been omitted. The Company believes that these consolidated financial statements contain all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to present fairly the Company’s consolidated financial position as of June 30, 2017 , the consolidated results of operations and comprehensive income for the three and six months ended June 30, 2017 and 2016 , and the consolidated changes in shareholders’ equity and cash flows for the six months ended June 30, 2017 and 2016 . 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 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. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes to consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . The results of operations for the three and six months ended June 30, 2017 are not necessarily indicative of the results to be expected for the full year. The Company reclassified the presentation of certain prior period information to conform to the 2017 presentation. See “Adopted Accounting Standards”. |
Accumulated Other Comprehensive Income (Loss) | 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 -- Net Unrealized Investment Gains and Losses on Fixed Maturity and Equity Securities”. Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) represents the accumulated change in shareholders’ equity from transactions and other events and circumstances from non-shareholder sources. For the Company, accumulated other comprehensive income (loss) includes the after tax change in net unrealized investment gains and losses on fixed maturity and equity securities and the after tax change in net funded status of benefit plans for the period as shown in the Consolidated Statement of Changes in Shareholders’ Equity. The following tables reconcile these components. |
Adopted and Pending Accounting Standards | Adopted Accounting Standards Employee Share-based Payment Accounting Effective January 1, 2017, the Company adopted new accounting guidance for employee share-based payments which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The recognition and classification of the excess tax benefit provisions were applied prospectively in the results of operations. This adoption resulted in additional excess tax benefits of $2,638 thousand which reduced the current provision for income taxes in the results of operations. The statutory tax withholding classification, which are cash payments made to taxing authorities for withheld taxes funded through tendered shares, were applied retrospectively and the Company reclassified the statutory tax withholding requirements in the statement of cash flows from Other in operating activities to Withholding tax payments on RSUs tendered in financing activities. This statutory withholding reclassification resulted in $2,604 thousand and $3,233 thousand being included in financing activities for the six months ended June 30, 2017 and 2016 , respectively. There were no cumulative effect adjustments upon adoption of the new accounting guidance. Pending Accounting Standards Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued accounting guidance to provide a single comprehensive model in accounting for revenue arising from contracts with customers. The guidance applies to all contracts with customers; however, insurance contracts are specifically excluded from this updated guidance. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those years. Early adoption is permitted only for annual reporting periods beginning after December 15, 2016. The Company plans to adopt the guidance as of January 1, 2018. Management believes the adoption of this accounting guidance will not have a material effect on the results of operations or financial position, and related disclosures, of the Company. Recognition and Measurement of Financial Assets and Liabilities In January 2016, the FASB issued accounting guidance to improve certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. Among other things, this guidance requires public entities to measure equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) at fair value with changes in fair value recognized in net income and to perform a qualitative assessment to identify impairment for equity investments without readily determinable fair values. Companies are required to apply this guidance by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the year of adoption and, for the guidance related to equity securities without readily determinable fair values, companies are required to apply a prospective approach to equity investments that exist as of the date of adoption. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those years. Early application is permitted. The guidance will not have an impact on the Company’s financial position and management is evaluating the impact that this guidance will have on the Company’s results of operations. Statement of Cash Flows -- Classification In August 2016, the FASB issued guidance to reduce diversity in practice in the statement of cash flows between operating, investing and financing activities related to the classification of cash receipts and cash payments for eight specific issues. The FASB acknowledged that current GAAP either is unclear or does not include specific guidance on these eight cash flow classification issues: (1) debt prepayment or extinguishment costs; (2) settlement of zero-coupon bonds (pertains to issuers); (3) contingent consideration payments made after a business combination; (4) proceeds from the settlement of insurance claims (pertains to claimants); (5) proceeds from the settlement of corporate-owned life insurance policies; (6) distributions received from equity method investees; (7)beneficial interests in securitization transactions (pertains to transferors) and (8) separately identifiable cash flows and application of the predominance principle. For public business entities, the guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those years, using a retrospective approach. The guidance allows prospective adoption for individual issues if it is impracticable to apply the amendments retrospectively for those issues. Early application is permitted. Management believes the adoption of this accounting guidance will not have a material effect on the classifications in the Company’s consolidated statement of cash flows. The adoption of this accounting guidance will not have any effect on the results of operations or financial position of the Company. Accounting for Leases In February 2016, the FASB issued accounting and disclosure guidance to improve financial reporting and comparability among organizations about leasing transactions. Under the new guidance, for leases with lease terms of more than 12 months, a lessee will be required to recognize assets and liabilities on the balance sheet for the rights and obligations created by those leases. Consistent with current accounting guidance, the recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or an operating lease. However, while current guidance requires only capital leases to be recognized on the balance sheet, the new guidance will require both operating and capital leases to be recognized on the balance sheet. In transition to the new guidance, companies are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those years. Early application is permitted. Management is evaluating the impact this guidance will have on the results of operations and financial position of the Company. Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued guidance to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments, including reinsurance receivables, held by companies. The new guidance replaces the incurred loss impairment methodology and requires an organization to measure and recognize all current expected credit losses (“CECL”) for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Companies will need to utilize forward-looking information to better inform their credit loss estimates. Companies will continue to use judgment to determine which loss estimation method is appropriate for their circumstances. Credit losses related to available for sale debt securities -- which represent over 90% of Horace Mann’s total investment portfolio -- will be recorded through an allowance for credit losses with this allowance having a limit equal to the amount by which fair value is below amortized cost. The guidance also requires enhanced qualitative and quantitative disclosures to provide additional information about the amounts recorded in the financial statements. For public business entities that are SEC filers, the guidance is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those years, using a modified-retrospective approach. Early application is permitted for annual reporting periods, and interim periods within those years, beginning after December 15, 2018. Management is evaluating the impact this guidance will have on the results of operations and financial position of the Company. Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued guidance to simplify the accounting for goodwill impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. All other goodwill impairment guidance will remain largely unchanged. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The same one-step impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying amounts. Entities will be required to disclose the amount of goodwill for reporting units with zero or negative carrying amounts. Public business entities should adopt the guidance prospectively for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early application is permitted. Management believes the adoption of this accounting guidance will not have a material effect on how it tests goodwill for impairment. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Investment Contract And Life Policy Reserves | This table summarizes the Company’s investment contract and life policy reserves. ($ in thousands) June 30, 2017 December 31, 2016 Investment contract reserves $ 4,377,759 $ 4,360,456 Life policy reserves 1,103,104 1,087,513 Total $ 5,480,863 $ 5,447,969 |
Accumulated Other Comprehensive Income (Loss) | The following tables reconcile these components. ($ in thousands) Net Unrealized Investment Gains and Losses on Fixed Maturity and Equity Securities (1)(2) Benefit Plans (1) Total (1) Beginning balance, April 1, 2017 $ 198,271 $ (11,817 ) $ 186,454 Other comprehensive income (loss) before reclassifications 46,303 — 46,303 Amounts reclassified from accumulated other comprehensive income (loss) (1,064 ) — (1,064 ) Net current period other comprehensive income 45,239 — 45,239 Ending balance, June 30, 2017 $ 243,510 $ (11,817 ) $ 231,693 Beginning balance, January 1, 2017 $ 175,738 $ (11,817 ) $ 163,921 Other comprehensive income (loss) before reclassifications 68,633 — 68,633 Amounts reclassified from accumulated other comprehensive income (loss) (861 ) — (861 ) Net current period other comprehensive income 67,772 — 67,772 Ending balance, June 30, 2017 $ 243,510 $ (11,817 ) $ 231,693 (1) All amounts are net of tax. (2) The pretax amounts reclassified from accumulated other comprehensive income (loss), $1,638 thousand and $1,325 thousand , are included in net realized investment gains and losses and the related income tax expenses, $574 thousand and $464 thousand are included in income tax expense in the Consolidated Statements of Operations for the three and six months ended June 30, 2017 , respectively. ($ in thousands) Net Unrealized Investment Gains and Losses on Fixed Maturity and Equity Securities (1)(2) Benefit Plans (1) Total (1) Beginning balance, April 1, 2016 $ 244,657 $ (11,794 ) $ 232,863 Other comprehensive income (loss) before reclassifications 87,809 — 87,809 Amounts reclassified from accumulated other comprehensive income (loss) (2,813 ) — (2,813 ) Net current period other comprehensive income 84,996 — 84,996 Ending balance, June 30, 2016 $ 329,653 $ (11,794 ) $ 317,859 Beginning balance, January 1, 2016 $ 175,167 $ (11,794 ) $ 163,373 Other comprehensive income (loss) before reclassifications 157,780 — 157,780 Amounts reclassified from accumulated other comprehensive income (loss) (3,294 ) — (3,294 ) Net current period other comprehensive income 154,486 — 154,486 Ending balance, June 30, 2016 $ 329,653 $ (11,794 ) $ 317,859 (1) All amounts are net of tax. (2) The pretax amounts reclassified from accumulated other comprehensive income (loss), $4,327 thousand and $5,067 thousand , are included in net realized investment gains and losses and the related income tax expenses, $1,514 thousand and $1,773 thousand , are included in income tax expense in the Consolidated Statements of Operations for the three and six months ended June 30, 2016 , respectively. |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Unrealized gains and losses on fixed maturities and equity securities | The amortized cost or cost, unrealized investment gains and losses, fair values and other-than-temporary impairment (“OTTI”) included in accumulated other comprehensive income (“AOCI”) of all fixed maturity and equity securities in the portfolio were as follows: ($ in thousands) Amortized Cost or Cost Unrealized Investment Gains Unrealized Investment Losses Fair Value OTTI in AOCI (1) June 30, 2017 Fixed maturity securities U.S. Government and federally sponsored agency obligations (2): Mortgage-backed securities $ 589,643 $ 36,054 $ 2,633 $ 623,064 $ — Other, including U.S. Treasury securities 588,713 23,550 5,913 606,350 — Municipal bonds 1,659,648 168,001 10,429 1,817,220 — Foreign government bonds 93,779 6,272 5 100,046 — Corporate bonds 2,645,268 186,601 4,261 2,827,608 — Other mortgage-backed securities 1,584,866 26,076 6,645 1,604,297 1,447 Totals $ 7,161,917 $ 446,554 $ 29,886 $ 7,578,585 $ 1,447 Equity securities (3) $ 140,553 $ 17,911 $ 1,555 $ 156,909 $ — December 31, 2016 Fixed maturity securities U.S. Government and federally sponsored agency obligations (2): Mortgage-backed securities $ 587,355 $ 34,256 $ 6,720 $ 614,891 $ — Other, including U.S. Treasury securities 458,745 18,518 10,120 467,143 — Municipal bonds 1,648,252 143,733 22,588 1,769,397 — Foreign government bonds 93,864 5,102 297 98,669 — Corporate bonds 2,672,818 152,229 14,826 2,810,221 — Other mortgage-backed securities 1,691,093 21,153 15,859 1,696,387 1,618 Totals $ 7,152,127 $ 374,991 $ 70,410 $ 7,456,708 $ 1,618 Equity securities (3) $ 134,013 $ 13,210 $ 5,574 $ 141,649 $ — (1) Related to securities for which an unrealized loss was bifurcated to distinguish the credit-related portion and the portion driven by other market factors. Represents the amount of OTTI losses in AOCI which was not included in earnings; amounts also include net unrealized investment gains and losses on such impaired securities relating to changes in the fair value of those securities subsequent to the impairment measurement date. (2) Fair value includes securities issued by Federal National Mortgage Association (“FNMA”) of $310,403 thousand and $272,668 thousand ; Federal Home Loan Mortgage Corporation (“FHLMC”) of $368,396 thousand and $378,683 thousand ; and Government National Mortgage Association (“GNMA”) of $111,458 thousand and $115,627 thousand as of June 30, 2017 and December 31, 2016 , respectively. (3) Includes nonredeemable (perpetual) preferred stocks, common stocks and closed-end funds. |
Summary of fair value and gross unrealized losses of fixed maturity securities and equity securities in an unrealized loss position | For equity securities, the Company has the ability and intent to hold the securities for the recovery of cost and recovery of cost is expected within a reasonable period of time. ($ in thousands) 12 Months or Less More than 12 Months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses June 30, 2017 Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 101,350 $ 2,320 $ 3,480 $ 313 $ 104,830 $ 2,633 Other 223,396 5,913 — — 223,396 5,913 Municipal bonds 179,314 6,893 10,023 3,536 189,337 10,429 Foreign government bonds 1,980 5 — — 1,980 5 Corporate bonds 157,230 2,949 26,907 1,312 184,137 4,261 Other mortgage-backed securities 449,341 4,764 133,899 1,881 583,240 6,645 Total fixed maturity securities 1,112,611 22,844 174,309 7,042 1,286,920 29,886 Equity securities (1) 8,748 727 4,863 828 13,611 1,555 Combined totals $ 1,121,359 $ 23,571 $ 179,172 $ 7,870 $ 1,300,531 $ 31,441 Number of positions with a 413 60 473 Fair value as a percentage of 14.5 % 2.3 % 16.8 % December 31, 2016 Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 186,439 $ 6,176 $ 3,235 $ 544 $ 189,674 $ 6,720 Other 219,372 10,120 — — 219,372 10,120 Municipal bonds 408,163 19,006 9,928 3,582 418,091 22,588 Foreign government bonds 24,182 297 — — 24,182 297 Corporate bonds 459,402 11,056 57,261 3,770 516,663 14,826 Other mortgage-backed securities 640,691 10,470 229,106 5,389 869,797 15,859 Total fixed maturity securities 1,938,249 57,125 299,530 13,285 2,237,779 70,410 Equity securities (1) 56,676 4,567 7,956 1,007 64,632 5,574 Combined totals $ 1,994,925 $ 61,692 $ 307,486 $ 14,292 $ 2,302,411 $ 75,984 Number of positions with a gross unrealized loss 629 102 731 Fair value as a percentage of total fixed maturity and equity securities fair value 26.3 % 4.0 % 30.3 % (1) Includes nonredeemable (perpetual) preferred stocks, common stocks and closed-end funds. |
Summary of cumulative credit losses | The following table summarizes the cumulative amounts related to the Company’s credit loss component of OTTI losses on fixed maturity securities held as of June 30, 2017 and 2016 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 OTTI losses were recognized in other comprehensive income: ($ in thousands) Six Months Ended June 30, 2017 2016 Cumulative credit loss (1) Beginning of period $ 13,703 $ 7,844 New credit losses — 300 Increases to previously recognized credit losses 1,910 2,480 Gains related to securities sold or paid down during the period (2 ) — End of period $ 15,611 $ 10,624 (1) The cumulative credit loss amounts exclude OTTI 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. |
Distribution of the Company's fixed maturity portfolio by estimated expected maturity | 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. ($ in thousands) Percent of Total Fair Value June 30, 2017 June 30, 2017 December 31, 2016 Fair Value Amortized Cost Estimated expected maturity: Due in 1 year or less 3.6 % 3.9 % $ 275,005 $ 269,431 Due after 1 year through 5 years 27.4 28.7 2,079,595 1,981,639 Due after 5 years through 10 years 34.1 35.2 2,580,296 2,478,678 Due after 10 years through 20 years 22.8 19.5 1,729,382 1,609,894 Due after 20 years 12.1 12.7 914,307 822,275 Total 100.0 % 100.0 % $ 7,578,585 $ 7,161,917 Average option-adjusted duration, in years 6.0 5.9 |
Proceeds received from sales of fixed maturities and equity securities | Proceeds received from sales of fixed maturity 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 period were: ($ in thousands) Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Fixed maturity securities Proceeds received $ 118,818 $ 174,944 $ 229,690 $ 257,033 Gross gains realized 4,080 8,382 6,569 10,858 Gross losses realized (496 ) (948 ) (1,377 ) (1,440 ) Equity securities Proceeds received $ 11,507 $ 6,474 $ 16,996 $ 12,622 Gross gains realized 1,702 650 2,750 1,170 Gross losses realized (236 ) (195 ) (428 ) (841 ) |
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: ($ in thousands) Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Net unrealized investment gains and losses on fixed maturity securities, net of tax Beginning of period $ 219,385 $ 276,381 $ 197,978 $ 198,714 Change in net unrealized investment gains and losses 51,523 89,744 73,414 168,085 Reclassification of net realized investment gains to net income (74 ) 5,331 (558 ) 4,657 End of period $ 270,834 $ 371,456 $ 270,834 $ 371,456 Net unrealized investment gains and losses on equity securities, net of tax Beginning of period $ 8,952 $ 5,030 $ 4,963 $ 2,649 Change in net unrealized investment gains and losses 2,670 4,710 5,972 6,898 Reclassification of net realized investment losses to net income (991 ) (1,557 ) (304 ) (1,364 ) End of period $ 10,631 $ 8,183 $ 10,631 $ 8,183 |
Offsetting assets and liability | The following table presents the instruments that were subject to a master netting arrangement for the Company. ($ in thousands) Gross Amounts Offset in the Net Amounts of Assets/ Liabilities Presented in the Gross Amounts Not Offset in the Consolidated Balance Sheets Gross Amounts Consolidated Balance Sheets Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount June 30, 2017 Asset derivatives: Free-standing derivatives $ 9,969 $ — $ 9,969 $ — $ 10,959 $ (990 ) December 31, 2016 Asset derivatives: Free-standing derivatives $ 8,694 $ — $ 8,694 $ — $ 8,824 $ (130 ) |
Fair Value of Financial Instr21
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Summary of Company's fair value hierarchy measured at recurring basis | 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 June 30, 2017 , Level 3 invested assets comprised 3.1% of the Company’s total investment portfolio fair value. ($ in thousands) Fair Value Measurements at Carrying Fair Reporting Date Using Amount Value Level 1 Level 2 Level 3 June 30, 2017 Financial Assets Investments Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 623,064 $ 623,064 $ — $ 619,479 $ 3,585 Other, including U.S. Treasury securities 606,350 606,350 14,341 592,009 — Municipal bonds 1,817,220 1,817,220 — 1,768,097 49,123 Foreign government bonds 100,046 100,046 — 100,046 — Corporate bonds 2,827,608 2,827,608 14,976 2,735,580 77,052 Other mortgage-backed securities 1,604,297 1,604,297 — 1,487,558 116,739 Total fixed maturity securities 7,578,585 7,578,585 29,317 7,302,769 246,499 Equity securities 156,909 156,909 101,847 55,056 6 Short-term investments 104,087 104,087 104,087 — — Other investments 21,482 21,482 — 21,482 — Totals $ 7,861,063 $ 7,861,063 $ 235,251 $ 7,379,307 $ 246,505 Financial Liabilities Investment contract and life policy reserves, embedded derivatives $ 286 $ 286 $ — $ 286 $ — Other policyholder funds, embedded derivatives 67,995 67,995 — — 67,995 December 31, 2016 Financial Assets Investments Fixed maturity securities U.S. Government and federally Mortgage-backed securities $ 614,891 $ 614,891 $ — $ 611,476 $ 3,415 Other, including U.S. Treasury securities 467,143 467,143 13,631 453,512 — Municipal bonds 1,769,397 1,769,397 — 1,722,900 46,497 Foreign government bonds 98,669 98,669 — 98,669 — Corporate bonds 2,810,221 2,810,221 13,532 2,736,498 60,191 Other mortgage-backed securities 1,696,387 1,696,387 — 1,595,143 101,244 Total fixed maturity securities 7,456,708 7,456,708 27,163 7,218,198 211,347 Equity securities 141,649 141,649 98,632 43,011 6 Short-term investments 44,918 44,918 44,167 — 751 Other investments 20,194 20,194 — 20,194 — Totals $ 7,663,469 $ 7,663,469 $ 169,962 $ 7,281,403 $ 212,104 Financial Liabilities Investment contract and life policy reserves, embedded derivatives $ 158 $ 158 $ — $ 158 $ — Other policyholder funds, embedded derivatives 59,393 59,393 — — 59,393 |
Table for reconciliations for all Level 3 assets measured at fair value on a recurring basis | The following table presents reconciliations for the periods indicated for all Level 3 assets and liabilities measured at fair value on a recurring basis. ($ in thousands) Financial Assets Financial Liabilities(1) Municipal Bonds Corporate Bonds Mortgage- Backed Securities (2) Total Fixed Maturity Securities Equity Securities Short-term Investments Total Beginning balance, April 1, 2017 $ 53,462 $ 82,495 $ 112,794 $ 248,751 $ 6 $ — $ 248,757 $ 64,261 Transfers into Level 3 (3) — 2,001 9,482 11,483 — — 11,483 — Transfers out of Level 3 (3) (5,557 ) (5,853 ) — (11,410 ) — — (11,410 ) — Total gains or losses Net realized investment gains (losses) included in net income related to financial assets — — (1,714 ) (1,714 ) — — (1,714 ) — Net realized (gains) losses included in net income related to financial liabilities — — — — — — — 1,238 Net unrealized investment gains (losses) included in other comprehensive income 1,287 359 3,093 4,739 — — 4,739 — Purchases — — — — — — — — Issuances — — — — — — — 3,397 Sales — — — — — — — — Settlements — — — — — — — — Paydowns, maturities and distributions (69 ) (1,950 ) (3,331 ) (5,350 ) — — (5,350 ) (901 ) Ending balance, June 30, 2017 $ 49,123 $ 77,052 $ 120,324 $ 246,499 $ 6 $ — $ 246,505 $ 67,995 Beginning balance, January 1, 2017 $ 46,497 $ 60,191 $ 104,659 $ 211,347 $ 6 $ 751 $ 212,104 $ 59,393 Transfers into Level 3 (3) 5,214 31,919 24,521 61,654 — — 61,654 — Transfers out of Level 3 (3) (5,557 ) (11,963 ) — (17,520 ) — (751 ) (18,271 ) — Total gains or losses Net realized investment gains (losses) included in net income related to financial assets — — (1,714 ) (1,714 ) — — (1,714 ) — Net realized (gains) losses included in net income related to financial liabilities — — — — — — — 3,546 Net unrealized investment gains (losses) included in other comprehensive income 3,158 455 2,322 5,935 — — 5,935 — Purchases — — — — — — — — Issuances — — — — — — — 6,786 Sales — — — — — — — — Settlements — — — — — — — — Paydowns, maturities and distributions (189 ) (3,550 ) (9,464 ) (13,203 ) — — (13,203 ) (1,730 ) Ending balance, June 30, 2017 $ 49,123 $ 77,052 $ 120,324 $ 246,499 $ 6 $ — $ 246,505 $ 67,995 (1) Represents embedded derivatives, all related to the Company’s FIA products, reported in Other policyholder funds in the Company’s Consolidated Balance Sheets. (2) Includes U.S. Government and federally sponsored agency obligations for mortgage-backed securities and other mortgage-backed securities. (3) Transfers into and out of Level 3 during the three and six months ended June 30, 2017 were attributable to changes in the availability of observable market information for individual fixed maturity securities and short-term investments. 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. ($ in thousands) Financial Assets Financial Liabilities(1) Municipal Bonds Corporate Bonds Mortgage- Backed Securities (2) Total Fixed Maturity Securities Equity Securities Short-term Investments Total Beginning balance, April 1, 2016 $ 46,493 $ 70,071 $ 83,821 $ 200,385 $ 6 $ — $ 200,391 $ 42,085 Transfers into Level 3 (3) — 5,017 12,984 18,001 — — 18,001 — Transfers out of Level 3 (3) — — — — — — — — Total gains or losses Net realized investment gains (losses) included in net income related to financial assets — (657 ) — (657 ) — — (657 ) — Net realized (gains) losses included in net income related to financial liabilities — — — — — — — 1,324 Net unrealized investment gains (losses) included in other comprehensive income 1,297 1,393 229 2,919 — — 2,919 — Purchases — — — — — — — — Issuances — — — — — — — 4,993 Sales — — — — — — — — Settlements — — — — — — — — Paydowns, maturities and distributions (143 ) (2,416 ) (453 ) (3,012 ) — — (3,012 ) (696 ) Ending balance, June 30, 2016 $ 47,647 $ 73,408 $ 96,581 $ 217,636 $ 6 $ — $ 217,642 $ 47,706 Beginning balance, January 1, 2016 $ 30,379 $ 67,575 $ 75,466 $ 173,420 $ 6 $ — $ 173,426 $ 39,021 Transfers into Level 3 (3) 14,751 11,076 24,626 50,453 — — 50,453 — Transfers out of Level 3 (3) — — — — — — — — Total gains or losses Net realized investment gains (losses) included in net income related to financial assets — (657 ) — (657 ) — — (657 ) — Net realized (gains) losses included in net income related to financial liabilities — — — — — — — 1,998 Net unrealized investment gains (losses) included in other comprehensive income 2,781 1,781 222 4,784 — — 4,784 — Purchases — — — — — — — — Issuances — — — — — — — 8,484 Sales — — — — — — — — Settlements — — — — — — — — Paydowns, maturities and distributions (264 ) (6,367 ) (3,733 ) (10,364 ) — — (10,364 ) (1,797 ) Ending balance, June 30, 2016 $ 47,647 $ 73,408 $ 96,581 $ 217,636 $ 6 $ — $ 217,642 $ 47,706 (1) Represents embedded derivatives, all related to the Company’s FIA products, reported in Other policyholder funds in the Company’s Consolidated Balance Sheets. (2) Includes U.S. Government and federally sponsored agency obligations for mortgage-backed securities and other mortgage-backed securities. (3) Transfers into and out of Level 3 during the three and six months ended June 30, 2016 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. |
Summary of fair value assets and liabilities measured on nonrecurring basis | 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. ($ in thousands) Fair Value Measurements at Carrying Fair Reporting Date Using Amount Value Level 1 Level 2 Level 3 June 30, 2017 Financial Assets Investments Other investments $ 152,970 $ 157,530 $ — $ — $ 157,530 Financial Liabilities Investment contract and life policy 4,377,759 4,288,095 — — 4,288,095 Investment contract and life policy 80,768 86,175 — — 86,175 Other policyholder funds 645,009 645,009 — 575,475 69,534 Long-term debt 247,337 257,929 257,929 — — December 31, 2016 Financial Assets Investments Other investments $ 151,965 $ 156,536 $ — $ — $ 156,536 Financial Liabilities Investment contract and life policy reserves, fixed annuity contracts 4,360,456 4,280,528 — — 4,280,528 Investment contract and life policy reserves, account values on life contracts 79,591 85,066 — — 85,066 Other policyholder funds 649,557 649,557 — 575,253 74,304 Long-term debt 247,209 248,191 248,191 — — |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The fair values of derivative instruments, including derivative instruments embedded in FIA and IUL contracts, presented in the Consolidated Balance Sheets were as follows: ($ in thousands) June 30, 2017 December 31, 2016 Assets Derivative instruments, included in Short-term and other investments $ 9,969 $ 8,694 Liabilities FIA - embedded derivatives, included in Other policyholder funds $ 67,995 $ 59,393 IUL - embedded derivatives, included in Investment contract and life policy reserves 286 158 |
Derivative Instruments, Gain (Loss) | The changes in fair value of derivatives included in the Consolidated Statements of Operations were as follows: ($ in thousands) Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Change in fair value of derivatives (1): Revenues Net realized investment gains (losses) $ 1,729 $ 78 $ 4,166 $ (140 ) Change in fair value of embedded derivatives: Revenues Net realized investment losses $ (1,295 ) $ (1,325 ) $ (3,661 ) $ (2,001 ) (1) Includes the gains or losses recognized at the expiration of the option term or early termination and the changes in fair value for open options. |
Financing Receivable Credit Quality Indicators | The notional amount and fair value of call options by counterparty and each counterparty’s long-term credit ratings were as follows: ($ in thousands) June 30, 2017 December 31, 2016 Credit Rating Notional Fair Notional Fair Counterparty S&P Amount Value Amount Value Bank of America, N.A. A+ $ 43,000 $ 829 $ 38,500 $ 1,934 Barclays Bank PLC A- 83,700 2,837 66,800 1,543 Citigroup Inc. BBB+ — — — — Credit Suisse International A 50,800 4,762 65,200 4,281 Societe Generale A 44,800 1,541 15,600 936 Total $ 222,300 $ 9,969 $ 186,100 $ 8,694 |
Property and Casualty Unpaid 23
Property and Casualty Unpaid Claims and Claim Expenses (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Insurance Loss Reserves [Abstract] | |
Reconciliation of property and casualty unpaid claims and claim expenses | The end of the period gross reserve (before reinsurance) balances and the reinsurance recoverable balances are reflected on a gross basis in the Consolidated Balance Sheets. ($ in thousands) Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Property and Casualty segment Beginning Gross reserves (1) $ 316,173 $ 319,276 $ 307,757 $ 301,569 Less: reinsurance recoverables 61,804 60,429 61,199 50,332 Net reserves, beginning of period (2) 254,369 258,847 246,558 251,237 Incurred claims and claim expenses: Claims occurring in the current period 148,348 131,355 271,552 234,561 Decrease in estimated reserves for claims occurring in prior periods (3) (600 ) (1,600 ) (1,600 ) (3,600 ) Total claims and claim expenses incurred (4) 147,748 129,755 269,952 230,961 Claims and claim expense payments for claims occurring during: Current period 95,645 89,549 148,025 128,630 Prior periods 35,538 38,591 97,551 93,106 Total claims and claim expense payments 131,183 128,140 245,576 221,736 Net reserves, end of period (2) 270,934 260,462 270,934 260,462 Plus: reinsurance recoverables 58,897 60,499 58,897 60,499 Ending Gross reserves (1) $ 329,831 $ 320,961 $ 329,831 $ 320,961 (1) Unpaid claims and claim expenses as reported in the Consolidated Balance Sheets also include reserves for the Life and Retirement segments of $22,682 thousand and $23,783 thousand as of June 30, 2017 and 2016 , 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. (4) Benefits, claims and settlement expenses as reported in the Consolidated Statements of Operations also include amounts for the Life and Retirement segments of $18,131 thousand and $40,023 thousand for the three and six months ended June 30, 2017 , respectively, in addition to the Property and Casualty segment amounts. The Life and Retirement segments for the three and six months ended June 30, 2016 were $18,653 thousand and $36,960 thousand , respectively. |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Summary of Indebtedness outstanding | Indebtedness outstanding was as follows: ($ in thousands) June 30, 2017 December 31, 2016 Short-term debt: Bank Credit Facility, expires July 30, 2019 $ — $ — Long-term debt: 4.50% Senior Notes, due December 1, 2025. Aggregate 247,337 247,209 |
Reinsurance (Tables)
Reinsurance (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Insurance [Abstract] | |
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: ($ in thousands) Gross Amount Ceded to Other Companies Assumed from Other Companies Net Amount Three months ended June 30, 2017 Premiums written and contract deposits $ 316,123 $ 5,643 $ 1,134 $ 311,614 Premiums and contract charges earned 200,351 5,665 1,032 195,718 Benefits, claims and settlement expenses 168,218 3,185 846 165,879 Three months ended June 30, 2016 Premiums written and contract deposits $ 316,798 $ 5,921 $ 1,002 $ 311,879 Premiums and contract charges earned 193,396 5,952 916 188,360 Benefits, claims and settlement expenses 151,998 4,444 854 148,408 Six months ended June 30, 2017 Premiums written and contract deposits $ 617,635 $ 11,153 $ 1,864 $ 608,346 Premiums and contract charges earned 400,806 11,199 1,833 391,440 Benefits, claims and settlement expenses 315,489 7,068 1,554 309,975 Six months ended June 30, 2016 Premiums written and contract deposits $ 604,790 $ 11,689 $ 1,947 $ 595,048 Premiums and contract charges earned 383,629 11,721 1,902 373,810 Benefits, claims and settlement expenses 283,238 17,106 1,789 267,921 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Summarized financial information for these segments | Summarized financial information for these segments is as follows: ($ in thousands) Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Insurance premiums and contract charges earned Property and Casualty $ 160,460 $ 153,673 $ 318,778 $ 305,793 Retirement 6,759 6,098 13,360 12,166 Life 28,499 28,589 59,302 55,851 Total $ 195,718 $ 188,360 $ 391,440 $ 373,810 Net investment income Property and Casualty $ 8,113 $ 10,151 $ 17,290 $ 18,979 Retirement 65,139 62,727 128,581 120,776 Life 18,928 18,502 37,216 36,486 Corporate and Other 18 14 30 29 Intersegment eliminations (204 ) (215 ) (412 ) (432 ) Total $ 91,994 $ 91,179 $ 182,705 $ 175,838 Net income (loss) Property and Casualty $ (13,956 ) $ (4,463 ) $ (11,221 ) $ 9,332 Retirement 11,800 13,063 23,330 23,616 Life 5,610 4,622 9,495 8,489 Corporate and Other (1,193 ) (1,356 ) (4,025 ) (4,418 ) Total $ 2,261 $ 11,866 $ 17,579 $ 37,019 ($ in thousands) June 30, 2017 December 31, 2016 Assets Property and Casualty $ 1,133,015 $ 1,110,958 Retirement 7,671,701 7,449,777 Life 1,972,540 1,912,771 Corporate and Other 128,101 140,104 Intersegment eliminations (29,222 ) (36,786 ) Total $ 10,876,135 $ 10,576,824 |
Basis of Presentation - Investm
Basis of Presentation - Investment Contract and Life Policy Reserves (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Investment contract reserves | $ 4,377,759 | $ 4,360,456 |
Life policy reserves | 1,103,104 | 1,087,513 |
Total | $ 5,480,863 | $ 5,447,969 |
Basis of Presentation - Accumul
Basis of Presentation - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 1,293,982 | |||
Other comprehensive income (loss) before reclassifications | $ 46,303 | $ 87,809 | 68,633 | $ 157,780 |
Amounts reclassified from accumulated other comprehensive income (loss) | (1,064) | (2,813) | (861) | (3,294) |
Other comprehensive income | 45,239 | 84,996 | 67,772 | 154,486 |
Ending balance | 1,362,130 | 1,417,335 | 1,362,130 | 1,417,335 |
Other income tax expense (benefit) | 574 | 1,514 | 464 | 1,773 |
Total | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 186,454 | 232,863 | 163,921 | 163,373 |
Ending balance | 231,693 | 317,859 | 231,693 | 317,859 |
Net Unrealized Investment Gains and Losses on Fixed Maturity and Equity Securities (1)(2) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 198,271 | 244,657 | 175,738 | 175,167 |
Other comprehensive income (loss) before reclassifications | 46,303 | 87,809 | 68,633 | 157,780 |
Amounts reclassified from accumulated other comprehensive income (loss) | (1,064) | (2,813) | (861) | (3,294) |
Other comprehensive income | 45,239 | 84,996 | 67,772 | 154,486 |
Ending balance | 243,510 | 329,653 | 243,510 | 329,653 |
Pretax reclassification amounts from accumulated other comprehensive income (loss) | 1,638 | 4,327 | 1,325 | 5,067 |
Benefit Plans | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (11,817) | (11,794) | (11,817) | (11,794) |
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 | 0 | 0 |
Other comprehensive income | 0 | 0 | 0 | 0 |
Ending balance | $ (11,817) | $ (11,794) | $ (11,817) | $ (11,794) |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Basis of Presentation [Line Items] | ||
Additional excess tax benefits | $ 2,638 | |
Net cash provided by financing activities | 67,085 | $ (46,586) |
Net cash provided by operating activities | $ 154,453 | 115,770 |
Percentage of credit losses on available-for-sale deb securities to total investment portfolio | 90.00% | |
Accounting Standards Update 2016-09, Statutory Tax Withholding Component | ||
Basis of Presentation [Line Items] | ||
Net cash provided by financing activities | $ 2,604 | 3,233 |
Net cash provided by operating activities | $ 2,604 | $ 3,233 |
Investments - Summary of Fair V
Investments - Summary of Fair Value and Amortized Costs (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Unrealized gains and losses on fixed maturities and equity securities | ||
Amortized Cost or Cost | $ 7,161,917 | $ 7,152,127 |
Amortized Cost or Cost | 140,553 | 134,013 |
Fair Value | 7,578,585 | 7,456,708 |
Fair Value | 156,909 | 141,649 |
Total Fixed Maturity Securities | ||
Unrealized gains and losses on fixed maturities and equity securities | ||
Amortized Cost or Cost | 7,161,917 | 7,152,127 |
Unrealized Investment Gains | 446,554 | 374,991 |
Unrealized Investment Losses | 29,886 | 70,410 |
Fair Value | 7,578,585 | 7,456,708 |
OTTI in AOCI | 1,447 | 1,618 |
Mortgage-backed securities | ||
Unrealized gains and losses on fixed maturities and equity securities | ||
Amortized Cost or Cost | 589,643 | 587,355 |
Unrealized Investment Gains | 36,054 | 34,256 |
Unrealized Investment Losses | 2,633 | 6,720 |
Fair Value | 623,064 | 614,891 |
OTTI in AOCI | 0 | 0 |
Other, including U.S. Treasury Securities | ||
Unrealized gains and losses on fixed maturities and equity securities | ||
Amortized Cost or Cost | 588,713 | 458,745 |
Unrealized Investment Gains | 23,550 | 18,518 |
Unrealized Investment Losses | 5,913 | 10,120 |
Fair Value | 606,350 | 467,143 |
OTTI in AOCI | 0 | 0 |
Municipal bonds | ||
Unrealized gains and losses on fixed maturities and equity securities | ||
Amortized Cost or Cost | 1,659,648 | 1,648,252 |
Unrealized Investment Gains | 168,001 | 143,733 |
Unrealized Investment Losses | 10,429 | 22,588 |
Fair Value | 1,817,220 | 1,769,397 |
OTTI in AOCI | 0 | 0 |
Foreign government bonds | ||
Unrealized gains and losses on fixed maturities and equity securities | ||
Amortized Cost or Cost | 93,779 | 93,864 |
Unrealized Investment Gains | 6,272 | 5,102 |
Unrealized Investment Losses | 5 | 297 |
Fair Value | 100,046 | 98,669 |
OTTI in AOCI | 0 | 0 |
Corporate bonds | ||
Unrealized gains and losses on fixed maturities and equity securities | ||
Amortized Cost or Cost | 2,645,268 | 2,672,818 |
Unrealized Investment Gains | 186,601 | 152,229 |
Unrealized Investment Losses | 4,261 | 14,826 |
Fair Value | 2,827,608 | 2,810,221 |
OTTI in AOCI | 0 | 0 |
Other mortgage-backed securities | ||
Unrealized gains and losses on fixed maturities and equity securities | ||
Amortized Cost or Cost | 1,584,866 | 1,691,093 |
Unrealized Investment Gains | 26,076 | 21,153 |
Unrealized Investment Losses | 6,645 | 15,859 |
Fair Value | 1,604,297 | 1,696,387 |
OTTI in AOCI | 1,447 | 1,618 |
Equity securities | ||
Unrealized gains and losses on fixed maturities and equity securities | ||
Amortized Cost or Cost | 140,553 | 134,013 |
Unrealized Investment Gains | 17,911 | 13,210 |
Unrealized Investment Losses | 1,555 | 5,574 |
Fair Value | 156,909 | 141,649 |
OTTI in AOCI | 0 | 0 |
Federal National Mortgage Association Certificates and Obligations (FNMA) | ||
Unrealized gains and losses on fixed maturities and equity securities | ||
Fair Value | 310,403 | 272,668 |
Federal Home Loan Mortgage Corporation Certificates and Obligations (FHLMC) | ||
Unrealized gains and losses on fixed maturities and equity securities | ||
Fair Value | 368,396 | 378,683 |
Government National Mortgage Association Certificates and Obligations (GNMA) | ||
Unrealized gains and losses on fixed maturities and equity securities | ||
Fair Value | $ 111,458 | $ 115,627 |
Investments - Fair Value and Gr
Investments - Fair Value and Gross Unrealized Losses (Details) $ in Thousands | Jun. 30, 2017USD ($)security | Dec. 31, 2016USD ($)security |
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | $ 1,121,359 | $ 1,994,925 |
Fixed maturity securities, Fair Value, More than 12 Months | 179,172 | 307,486 |
Fixed maturity securities, Fair Value, Total | 1,300,531 | 2,302,411 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 23,571 | 61,692 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 7,870 | 14,292 |
Fixed maturity securities, Gross Unrealized Losses, Total | $ 31,441 | $ 75,984 |
Number of positions with a gross unrealized loss, 12 Months or Less | security | 413 | 629 |
Number of position with a gross unrealized loss, more than 12 months | security | 60 | 102 |
Number of position with a gross unrealized loss, Total | security | 473 | 731 |
Fair value as a percentage of total fixed maturities and equity securities fair value, 12 Months or Less | 14.50% | 26.30% |
Fair value as a percentage of total fixed maturities and equity securities fair value, more than 12 months | 2.30% | 4.00% |
Fair value as a percentage of total fixed maturities and equity securities fair value, Total | 16.80% | 30.30% |
Mortgage-backed securities | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | $ 101,350 | $ 186,439 |
Fixed maturity securities, Fair Value, More than 12 Months | 3,480 | 3,235 |
Fixed maturity securities, Fair Value, Total | 104,830 | 189,674 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 2,320 | 6,176 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 313 | 544 |
Fixed maturity securities, Gross Unrealized Losses, Total | 2,633 | 6,720 |
Other | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 223,396 | 219,372 |
Fixed maturity securities, Fair Value, More than 12 Months | 0 | 0 |
Fixed maturity securities, Fair Value, Total | 223,396 | 219,372 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 5,913 | 10,120 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 0 | 0 |
Fixed maturity securities, Gross Unrealized Losses, Total | 5,913 | 10,120 |
Municipal bonds | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 179,314 | 408,163 |
Fixed maturity securities, Fair Value, More than 12 Months | 10,023 | 9,928 |
Fixed maturity securities, Fair Value, Total | 189,337 | 418,091 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 6,893 | 19,006 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 3,536 | 3,582 |
Fixed maturity securities, Gross Unrealized Losses, Total | 10,429 | 22,588 |
Foreign government bonds | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 1,980 | 24,182 |
Fixed maturity securities, Fair Value, More than 12 Months | 0 | 0 |
Fixed maturity securities, Fair Value, Total | 1,980 | 24,182 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 5 | 297 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 0 | 0 |
Fixed maturity securities, Gross Unrealized Losses, Total | 5 | 297 |
Corporate bonds | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 157,230 | 459,402 |
Fixed maturity securities, Fair Value, More than 12 Months | 26,907 | 57,261 |
Fixed maturity securities, Fair Value, Total | 184,137 | 516,663 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 2,949 | 11,056 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 1,312 | 3,770 |
Fixed maturity securities, Gross Unrealized Losses, Total | 4,261 | 14,826 |
Other mortgage-backed securities | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 449,341 | 640,691 |
Fixed maturity securities, Fair Value, More than 12 Months | 133,899 | 229,106 |
Fixed maturity securities, Fair Value, Total | 583,240 | 869,797 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 4,764 | 10,470 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 1,881 | 5,389 |
Fixed maturity securities, Gross Unrealized Losses, Total | 6,645 | 15,859 |
Total Fixed Maturity Securities | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 1,112,611 | 1,938,249 |
Fixed maturity securities, Fair Value, More than 12 Months | 174,309 | 299,530 |
Fixed maturity securities, Fair Value, Total | 1,286,920 | 2,237,779 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 22,844 | 57,125 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 7,042 | 13,285 |
Fixed maturity securities, Gross Unrealized Losses, Total | 29,886 | 70,410 |
Equity securities | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 8,748 | 56,676 |
Fixed maturity securities, Fair Value, More than 12 Months | 4,863 | 7,956 |
Fixed maturity securities, Fair Value, Total | 13,611 | 64,632 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 727 | 4,567 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 828 | 1,007 |
Fixed maturity securities, Gross Unrealized Losses, Total | $ 1,555 | $ 5,574 |
Investments - Rollforward of OT
Investments - Rollforward of OTTI Losses (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cumulative credit loss | ||
Beginning of period | $ 13,703 | $ 7,844 |
New credit losses | 0 | 300 |
Increases to previously recognized credit losses | 1,910 | 2,480 |
Gains related to securities sold or paid down during the period | (2) | 0 |
End of period | $ 15,611 | $ 10,624 |
Investments - Distribution of F
Investments - Distribution of Fixed Maturity Securities by Expected Maturity (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Percent of Total Fair Value | ||
Due in 1 year or less, Percent of Total Fair Value | 3.60% | 3.90% |
Due after 1 year through 5 years, Percent of Total Fair Value | 27.40% | 28.70% |
Due after 5 years through 10 years, Percent of Total Fair Value | 34.10% | 35.20% |
Due after 10 years through 20 years, Percent of Total Fair Value | 22.80% | 19.50% |
Due after 20 years, Percent of Total Fair Value | 12.10% | 12.70% |
Total, Percent of Total Fair Value | 100.00% | 100.00% |
Fair Value | ||
Due in 1 year or less, Fair Value | $ 275,005 | |
Due after 1 year through 5 years, Fair Value | 2,079,595 | |
Due after 5 years through 10 years, Fair Value | 2,580,296 | |
Due after 10 years through 20 years, Fair Value | 1,729,382 | |
Due after 20 years, Fair Value | 914,307 | |
Total, Fair Value | 7,578,585 | $ 7,456,708 |
Amortized Cost | ||
Due in 1 year or less, Amortized Cost | 269,431 | |
Due after 1 year through 5 years, Amortized Cost | 1,981,639 | |
Due after 5 years through 10 years, Amortized Cost | 2,478,678 | |
Due after 10 years through 20 years, Amortized Cost | 1,609,894 | |
Due after 20 years, Amortized Cost | 822,275 | |
Total, Amortized Cost | $ 7,161,917 | $ 7,152,127 |
Average option-adjusted duration, in years | 6 years | 5 years 10 months 25 days |
Investments - Summary of Procee
Investments - Summary of Proceeds and Gains (Losses) Realized on Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Proceeds received from sales of fixed maturities and equity securities | ||||
Proceeds received, Fixed maturity securities | $ 118,818 | $ 174,944 | $ 229,690 | $ 257,033 |
Proceeds received, Equity securities | 11,507 | 6,474 | 16,996 | 12,622 |
Fixed maturity securities | ||||
Proceeds received from sales of fixed maturities and equity securities | ||||
Gross gains realized | 4,080 | 8,382 | 6,569 | 10,858 |
Gross losses realized | (496) | (948) | (1,377) | (1,440) |
Equity securities | ||||
Proceeds received from sales of fixed maturities and equity securities | ||||
Gross gains realized | 1,702 | 650 | 2,750 | 1,170 |
Gross losses realized | $ (236) | $ (195) | $ (428) | $ (841) |
Investments - Reconciliation of
Investments - Reconciliation of Net Unrealized Investment Gains (Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 1,293,982 | |||
Ending balance | $ 1,362,130 | $ 1,417,335 | 1,362,130 | $ 1,417,335 |
Net Unrealized Investment Gains and Losses on Fixed Maturity and Equity Securities (1)(2) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 198,271 | 244,657 | 175,738 | 175,167 |
Ending balance | 243,510 | 329,653 | 243,510 | 329,653 |
Net Unrealized Investment Gains and Losses on Fixed Maturity and Equity Securities (1)(2) | Fixed maturity securities | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 219,385 | 276,381 | 197,978 | 198,714 |
Change in net unrealized investment gains and losses | 51,523 | 89,744 | 73,414 | 168,085 |
Reclassification of net realized investment gains to net income | (74) | 5,331 | (558) | 4,657 |
Ending balance | 270,834 | 371,456 | 270,834 | 371,456 |
Net Unrealized Investment Gains and Losses on Fixed Maturity and Equity Securities (1)(2) | Equity securities | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 8,952 | 5,030 | 4,963 | 2,649 |
Change in net unrealized investment gains and losses | 2,670 | 4,710 | 5,972 | 6,898 |
Reclassification of net realized investment gains to net income | (991) | (1,557) | (304) | (1,364) |
Ending balance | $ 10,631 | $ 8,183 | $ 10,631 | $ 8,183 |
Investments - Offsetting of Ass
Investments - Offsetting of Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Asset derivatives: | ||
Net Amounts of Assets/Liabilities Presented in the Consolidated Balance Sheets | $ 9,969 | $ 8,694 |
Free-standing derivatives | ||
Asset derivatives: | ||
Gross Amounts | 9,969 | 8,694 |
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | 0 |
Net Amounts of Assets/Liabilities Presented in the Consolidated Balance Sheets | 9,969 | 8,694 |
Gross Amounts Not Offset in the Consolidated Balance Sheets, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Consolidated Balance Sheets, Cash Collateral Received | 10,959 | 8,824 |
Net Amount | $ (990) | $ (130) |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Investment Holdings [Line Items] | ||
Investment Grade Rate | 82.00% | |
Fair value of issued securities | $ 7,578,585 | $ 7,456,708 |
Federal Home Loan Bank Funding Agreements | 575,000 | 575,000 |
Federal Home Loans Bank Of Chicago | ||
Investment Holdings [Line Items] | ||
Fair value of issued securities | 621,068 | 620,489 |
Governmental Agencies as Required by Law in Various States | ||
Investment Holdings [Line Items] | ||
Fair value of issued securities | $ 18,038 | $ 18,119 |
Fair Value of Financial Instr38
Fair Value of Financial Instruments - Financial Instruments Measured and Carried at Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Carrying Amount | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | $ 7,861,063 | $ 7,663,469 |
Financial Liabilities | ||
Investment contract and life policy reserves, embedded derivatives | 286 | 158 |
Other policyholder funds, embedded derivatives | 67,995 | 59,393 |
Carrying Amount | Recurring | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 7,578,585 | 7,456,708 |
Carrying Amount | Short-term investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 104,087 | 44,918 |
Carrying Amount | Mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 623,064 | 614,891 |
Carrying Amount | Other, including U.S. Treasury Securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 606,350 | 467,143 |
Carrying Amount | Municipal bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 1,817,220 | 1,769,397 |
Carrying Amount | Foreign government bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 100,046 | 98,669 |
Carrying Amount | Corporate bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 2,827,608 | 2,810,221 |
Carrying Amount | Other mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 1,604,297 | 1,696,387 |
Carrying Amount | Equity securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 156,909 | 141,649 |
Carrying Amount | Other investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 21,482 | 20,194 |
Fair Value | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 7,861,063 | 7,663,469 |
Financial Liabilities | ||
Investment contract and life policy reserves, embedded derivatives | 286 | 158 |
Other policyholder funds, embedded derivatives | 67,995 | 59,393 |
Fair Value | Recurring | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 7,578,585 | 7,456,708 |
Fair Value | Short-term investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 104,087 | 44,918 |
Fair Value | Mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 623,064 | 614,891 |
Fair Value | Other, including U.S. Treasury Securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 606,350 | 467,143 |
Fair Value | Municipal bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 1,817,220 | 1,769,397 |
Fair Value | Foreign government bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 100,046 | 98,669 |
Fair Value | Corporate bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 2,827,608 | 2,810,221 |
Fair Value | Other mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 1,604,297 | 1,696,387 |
Fair Value | Equity securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 156,909 | 141,649 |
Fair Value | Other investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 21,482 | 20,194 |
Fair Value | Level 1 | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 235,251 | 169,962 |
Financial Liabilities | ||
Investment contract and life policy reserves, embedded derivatives | 0 | 0 |
Other policyholder funds, embedded derivatives | 0 | 0 |
Fair Value | Level 1 | Recurring | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 29,317 | 27,163 |
Fair Value | Level 1 | Short-term investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 104,087 | 44,167 |
Fair Value | Level 1 | Mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 0 | 0 |
Fair Value | Level 1 | Other, including U.S. Treasury Securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 14,341 | 13,631 |
Fair Value | Level 1 | Municipal bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 0 | 0 |
Fair Value | Level 1 | Foreign government bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 0 | 0 |
Fair Value | Level 1 | Corporate bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 14,976 | 13,532 |
Fair Value | Level 1 | Other mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 0 | 0 |
Fair Value | Level 1 | Equity securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 101,847 | 98,632 |
Fair Value | Level 1 | Other investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 0 | 0 |
Fair Value | Level 2 | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 7,379,307 | 7,281,403 |
Financial Liabilities | ||
Investment contract and life policy reserves, embedded derivatives | 286 | 158 |
Other policyholder funds, embedded derivatives | 0 | 0 |
Fair Value | Level 2 | Recurring | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 7,302,769 | 7,218,198 |
Fair Value | Level 2 | Short-term investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 0 | 0 |
Fair Value | Level 2 | Mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 619,479 | 611,476 |
Fair Value | Level 2 | Other, including U.S. Treasury Securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 592,009 | 453,512 |
Fair Value | Level 2 | Municipal bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 1,768,097 | 1,722,900 |
Fair Value | Level 2 | Foreign government bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 100,046 | 98,669 |
Fair Value | Level 2 | Corporate bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 2,735,580 | 2,736,498 |
Fair Value | Level 2 | Other mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 1,487,558 | 1,595,143 |
Fair Value | Level 2 | Equity securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 55,056 | 43,011 |
Fair Value | Level 2 | Other investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 21,482 | 20,194 |
Fair Value | Level 3 | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 246,505 | 212,104 |
Financial Liabilities | ||
Investment contract and life policy reserves, embedded derivatives | 0 | 0 |
Other policyholder funds, embedded derivatives | 67,995 | 59,393 |
Fair Value | Level 3 | Recurring | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 246,499 | 211,347 |
Fair Value | Level 3 | Short-term investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 0 | 751 |
Fair Value | Level 3 | Mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 3,585 | 3,415 |
Fair Value | Level 3 | Other, including U.S. Treasury Securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 0 | 0 |
Fair Value | Level 3 | Municipal bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 49,123 | 46,497 |
Fair Value | Level 3 | Foreign government bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 0 | 0 |
Fair Value | Level 3 | Corporate bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 77,052 | 60,191 |
Fair Value | Level 3 | Other mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 116,739 | 101,244 |
Fair Value | Level 3 | Equity securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | 6 | 6 |
Fair Value | Level 3 | Other investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Investments | $ 0 | $ 0 |
Fair Value of Financial Instr39
Fair Value of Financial Instruments - Rollforward of Instruments Measured on Recurring Basis (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Financial Assets | ||||
Beginning balance | $ 248,757 | $ 200,391 | $ 212,104 | $ 173,426 |
Transfers into Level 3 | 11,483 | 18,001 | 61,654 | 50,453 |
Transfers out of Level 3 | (11,410) | 0 | (18,271) | 0 |
Total gains or losses | ||||
Net realized investment gains (losses) included in net income related to financial assets | (1,714) | (657) | (1,714) | (657) |
Net unrealized investment gains (losses) included in other comprehensive income | 4,739 | 2,919 | 5,935 | 4,784 |
Purchases | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Paydowns, maturities and distributions | (5,350) | (3,012) | (13,203) | (10,364) |
Ending balance | 246,505 | 217,642 | 246,505 | 217,642 |
Financial Liabilities | ||||
Beginning balance | 64,261 | 42,085 | 59,393 | 39,021 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Total gains or losses | ||||
Net realized gains (losses) included in net income related to financial liabilities | 1,238 | 1,324 | 3,546 | 1,998 |
Net unrealized investment gains (losses) included in other comprehensive income | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Issuances | 3,397 | 4,993 | 6,786 | 8,484 |
Sales | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Paydowns, maturities and distributions | (901) | (696) | (1,730) | (1,797) |
Ending balance | 67,995 | 47,706 | 67,995 | 47,706 |
Short-term Investments | ||||
Financial Assets | ||||
Beginning balance | 0 | 0 | 751 | 0 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | (751) | 0 |
Total gains or losses | ||||
Net realized investment gains (losses) included in net income related to financial assets | 0 | 0 | 0 | 0 |
Net unrealized investment gains (losses) included in other comprehensive income | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Paydowns, maturities and distributions | 0 | 0 | 0 | 0 |
Ending balance | 0 | 0 | 0 | 0 |
Municipal bonds | ||||
Financial Assets | ||||
Beginning balance | 53,462 | 46,493 | 46,497 | 30,379 |
Transfers into Level 3 | 0 | 0 | 5,214 | 14,751 |
Transfers out of Level 3 | (5,557) | 0 | (5,557) | 0 |
Total gains or losses | ||||
Net realized investment gains (losses) included in net income related to financial assets | 0 | 0 | 0 | 0 |
Net unrealized investment gains (losses) included in other comprehensive income | 1,287 | 1,297 | 3,158 | 2,781 |
Purchases | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Paydowns, maturities and distributions | (69) | (143) | (189) | (264) |
Ending balance | 49,123 | 47,647 | 49,123 | 47,647 |
Corporate bonds | ||||
Financial Assets | ||||
Beginning balance | 82,495 | 70,071 | 60,191 | 67,575 |
Transfers into Level 3 | 2,001 | 5,017 | 31,919 | 11,076 |
Transfers out of Level 3 | (5,853) | 0 | (11,963) | 0 |
Total gains or losses | ||||
Net realized investment gains (losses) included in net income related to financial assets | 0 | (657) | 0 | (657) |
Net unrealized investment gains (losses) included in other comprehensive income | 359 | 1,393 | 455 | 1,781 |
Purchases | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Paydowns, maturities and distributions | (1,950) | (2,416) | (3,550) | (6,367) |
Ending balance | 77,052 | 73,408 | 77,052 | 73,408 |
Mortgage-Backed Securities | ||||
Financial Assets | ||||
Beginning balance | 112,794 | 83,821 | 104,659 | 75,466 |
Transfers into Level 3 | 9,482 | 12,984 | 24,521 | 24,626 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Total gains or losses | ||||
Net realized investment gains (losses) included in net income related to financial assets | (1,714) | 0 | (1,714) | 0 |
Net unrealized investment gains (losses) included in other comprehensive income | 3,093 | 229 | 2,322 | 222 |
Purchases | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Paydowns, maturities and distributions | (3,331) | (453) | (9,464) | (3,733) |
Ending balance | 120,324 | 96,581 | 120,324 | 96,581 |
Total Fixed Maturity Securities | ||||
Financial Assets | ||||
Beginning balance | 248,751 | 200,385 | 211,347 | 173,420 |
Transfers into Level 3 | 11,483 | 18,001 | 61,654 | 50,453 |
Transfers out of Level 3 | (11,410) | 0 | (17,520) | 0 |
Total gains or losses | ||||
Net realized investment gains (losses) included in net income related to financial assets | (1,714) | (657) | (1,714) | (657) |
Net unrealized investment gains (losses) included in other comprehensive income | 4,739 | 2,919 | 5,935 | 4,784 |
Purchases | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Paydowns, maturities and distributions | (5,350) | (3,012) | (13,203) | (10,364) |
Ending balance | 246,499 | 217,636 | 246,499 | 217,636 |
Equity securities | ||||
Financial Assets | ||||
Beginning balance | 6 | 6 | 6 | 6 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Total gains or losses | ||||
Net realized investment gains (losses) included in net income related to financial assets | 0 | 0 | 0 | 0 |
Net unrealized investment gains (losses) included in other comprehensive income | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Paydowns, maturities and distributions | 0 | 0 | 0 | 0 |
Ending balance | $ 6 | $ 6 | $ 6 | $ 6 |
Fair Value of Financial Instr40
Fair Value of Financial Instruments - Financial Instrument Not Carried at Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Level 1 | ||
Investments | ||
Other investments | $ 0 | $ 0 |
Financial Liabilities | ||
Investment contract and life policy reserves, fixed annuity contracts | 0 | 0 |
Investment contract and life policy reserves, account values on life contracts | 0 | 0 |
Other policyholder funds | 0 | 0 |
Long-term debt | 257,929 | 248,191 |
Level 2 | ||
Investments | ||
Other investments | 0 | 0 |
Financial Liabilities | ||
Investment contract and life policy reserves, fixed annuity contracts | 0 | 0 |
Investment contract and life policy reserves, account values on life contracts | 0 | 0 |
Other policyholder funds | 575,475 | 575,253 |
Long-term debt | 0 | 0 |
Level 3 | ||
Investments | ||
Other investments | 157,530 | 156,536 |
Financial Liabilities | ||
Investment contract and life policy reserves, fixed annuity contracts | 4,288,095 | 4,280,528 |
Investment contract and life policy reserves, account values on life contracts | 86,175 | 85,066 |
Other policyholder funds | 69,534 | 74,304 |
Long-term debt | 0 | 0 |
Carrying Amount | ||
Investments | ||
Other investments | 152,970 | 151,965 |
Financial Liabilities | ||
Investment contract and life policy reserves, fixed annuity contracts | 4,377,759 | 4,360,456 |
Investment contract and life policy reserves, account values on life contracts | 80,768 | 79,591 |
Other policyholder funds | 645,009 | 649,557 |
Long-term debt | 247,337 | 247,209 |
Fair Value | ||
Investments | ||
Other investments | 157,530 | 156,536 |
Financial Liabilities | ||
Investment contract and life policy reserves, fixed annuity contracts | 4,288,095 | 4,280,528 |
Investment contract and life policy reserves, account values on life contracts | 86,175 | 85,066 |
Other policyholder funds | 645,009 | 649,557 |
Long-term debt | $ 257,929 | $ 248,191 |
Fair Value of Financial Instr41
Fair Value of Financial Instruments - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Fair Value of Financial Instruments (Textual) [Abstract] | ||||
Realized loss on impairment of securities | $ 1,714 | |||
Level 3 | ||||
Fair Value of Financial Instruments (Textual) [Abstract] | ||||
Percentage of invested assets in total investment portfolio Level 3 recurring | 3.10% | 3.10% | ||
Net realized investment losses | $ 1,238 | $ 1,324 | $ 3,546 | $ 1,998 |
Derivative Instruments - Fair V
Derivative Instruments - Fair Value of Derivatives in Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Derivative instruments, included in Short-term and other investments | $ 9,969 | $ 8,694 |
Short-term and other investments | ||
Assets | ||
Derivative instruments, included in Short-term and other investments | 9,969 | 8,694 |
Other policyholder funds | ||
Liabilities | ||
FIA - embedded derivatives, included in Other policyholder funds | 67,995 | 59,393 |
Investment contract and life policy reserves | ||
Liabilities | ||
IUL - embedded derivatives, included in Investment contract and life policy reserves | $ 286 | $ 158 |
Derivative Instruments - Fair43
Derivative Instruments - Fair Value of Derivatives Included in Consolidated Statements of Operations (Details) - Revenues - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Change in fair value of derivatives: | ||||
Net realized investment gains (losses) | $ 1,729 | $ 78 | $ 4,166 | $ (140) |
Change in fair value of embedded derivatives: | ||||
Net realized investment losses | $ (1,295) | $ (1,325) | $ (3,661) | $ (2,001) |
Derivative Instruments - Notion
Derivative Instruments - Notional and Fair Value Amounts of Derivative Instruments (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Derivative [Line Items] | ||
Notional Amount | $ 222,300 | $ 186,100 |
Fair Value | 9,969 | 8,694 |
Bank of America, N.A. | ||
Derivative [Line Items] | ||
Notional Amount | 43,000 | 38,500 |
Fair Value | 829 | 1,934 |
Barclays Bank PLC | ||
Derivative [Line Items] | ||
Notional Amount | 83,700 | 66,800 |
Fair Value | 2,837 | 1,543 |
Citigroup Inc. | ||
Derivative [Line Items] | ||
Notional Amount | 0 | 0 |
Fair Value | 0 | 0 |
Credit Suisse International | ||
Derivative [Line Items] | ||
Notional Amount | 50,800 | 65,200 |
Fair Value | 4,762 | 4,281 |
Societe Generale | ||
Derivative [Line Items] | ||
Notional Amount | 44,800 | 15,600 |
Fair Value | $ 1,541 | $ 936 |
S&P | Bank of America, N.A. | ||
Derivative [Line Items] | ||
Credit Rating | A+ | |
S&P | Barclays Bank PLC | ||
Derivative [Line Items] | ||
Credit Rating | A- | |
S&P | Citigroup Inc. | ||
Derivative [Line Items] | ||
Credit Rating | BBB+ | |
S&P | Credit Suisse International | ||
Derivative [Line Items] | ||
Credit Rating | A | |
S&P | Societe Generale | ||
Derivative [Line Items] | ||
Credit Rating | A |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Derivatives, Fair Value [Line Items] | ||
Expected contract term | 10 years | |
Maximum exposure | $ 250,000 | |
Other liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of collateral | $ 10,959,000 | $ 8,824,000 |
Property and Casualty Unpaid 46
Property and Casualty Unpaid Claims and Claim Expenses - Summary of Reinsurance Reserve Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Beginning Gross reserves | $ 329,888 | |||
Claims and claim expense payments for claims occurring during: | ||||
Ending Gross reserves | $ 352,513 | 352,513 | ||
Benefits, claims and settlement expenses | 165,879 | $ 148,408 | 309,975 | $ 267,921 |
Property and Casualty segment | ||||
Segment Reporting Information [Line Items] | ||||
Beginning Gross reserves | 316,173 | 319,276 | 307,757 | 301,569 |
Less: reinsurance recoverables | 61,804 | 60,429 | 61,199 | 50,332 |
Net reserves, beginning of year | 254,369 | 258,847 | 246,558 | 251,237 |
Incurred claims and claim expenses: | ||||
Claims occurring in the current period | 148,348 | 131,355 | 271,552 | 234,561 |
Decrease in estimated reserves for claims occurring in prior years | (600) | (1,600) | (1,600) | (3,600) |
Total claims and claim expenses incurred | 147,748 | 129,755 | 269,952 | 230,961 |
Claims and claim expense payments for claims occurring during: | ||||
Current period | 95,645 | 89,549 | 148,025 | 128,630 |
Prior periods | 35,538 | 38,591 | 97,551 | 93,106 |
Total claims and claim expense payments | 131,183 | 128,140 | 245,576 | 221,736 |
Net reserves, end of year | 270,934 | 260,462 | 270,934 | 260,462 |
Plus: reinsurance recoverables | 58,897 | 60,499 | 58,897 | 60,499 |
Ending Gross reserves | 329,831 | 320,961 | 329,831 | 320,961 |
Life and Annuity segments | ||||
Claims and claim expense payments for claims occurring during: | ||||
Net reserves, end of year | 22,682 | 23,783 | 22,682 | 23,783 |
Benefits, claims and settlement expenses | $ 18,131 | $ 18,653 | $ 40,023 | $ 36,960 |
Property and Casualty Unpaid 47
Property and Casualty Unpaid Claims and Claim Expenses - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Insurance Loss Reserves [Abstract] | ||
Favorable development of total reserves for property and casualty claims occurring in prior years | $ 1,600 | $ 3,600 |
Debt - Summary of Indebtedness
Debt - Summary of Indebtedness (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Short-term debt: | ||
Bank Credit Facility, expires July 30, 2019 | $ 0 | $ 0 |
Long-term debt: | ||
Long-term debt | $ 247,337,000 | 247,209,000 |
Expiration date | Jul. 30, 2019 | |
4.50% Senior Notes | ||
Long-term debt: | ||
Long-term debt | $ 247,337,000 | 247,209,000 |
Senior Notes 2025 | 4.50% Senior Notes | ||
Long-term debt: | ||
Unamortized discount | $ 575,000 | 603,000 |
Stated rate | 4.50% | |
Face amount | $ 250,000,000 | |
Maturity date | Dec. 1, 2025 | |
Unamortized debt issuance costs | $ 2,088,000 | $ 2,188,000 |
Reinsurance - Summary of Reinsu
Reinsurance - Summary of Reinsurance Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Gross Amount | ||||
Premiums written and contract deposits, Gross Amount | $ 316,123 | $ 316,798 | $ 617,635 | $ 604,790 |
Premiums and contract charges earned, Gross Amount | 200,351 | 193,396 | 400,806 | 383,629 |
Benefits, claims and settlement expenses, Gross Amount | 168,218 | 151,998 | 315,489 | 283,238 |
Ceded to Other Companies | ||||
Premiums written and contract deposits, Ceded to Other Companies | 5,643 | 5,921 | 11,153 | 11,689 |
Premiums and contract charges earned, Ceded to Other Companies | 5,665 | 5,952 | 11,199 | 11,721 |
Benefits, claims and settlement expenses, Ceded to Other Companies | 3,185 | 4,444 | 7,068 | 17,106 |
Assumed from Other Companies | ||||
Premiums written and contract deposits, Assumed from Other Companies | 1,134 | 1,002 | 1,864 | 1,947 |
Premiums and contract charges earned, Assumed from Other Companies | 1,032 | 916 | 1,833 | 1,902 |
Benefits, claims and settlement expenses, Assumed from Other Companies | 846 | 854 | 1,554 | 1,789 |
Net Amount | ||||
Premiums written and contract deposits, Net Amount | 311,614 | 311,879 | 608,346 | 595,048 |
Premiums and contract charges earned, Net Amount | 195,718 | 188,360 | 391,440 | 373,810 |
Benefits, claims and settlement expenses, Net Amount | $ 165,879 | $ 148,408 | $ 309,975 | $ 267,921 |
Commitments - Narrative (Detail
Commitments - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Commitments and Contingencies Disclosure [Abstract] | ||
Unfunded commitments to purchase investments | $ 139,737 | $ 135,054 |
Segment Information - Summary o
Segment Information - Summary of Segment Activity (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)segment | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Segment Reporting Information [Line Items] | |||||
Reportable segments | segment | 4 | ||||
Operating segments | segment | 3 | ||||
Summarized financial information for these segments | |||||
Insurance premiums and contract charges earned | $ 195,718 | $ 188,360 | $ 391,440 | $ 373,810 | |
Net investment income | 91,994 | 91,179 | 182,705 | 175,838 | |
Net income (loss) | 2,261 | 11,866 | 17,579 | 37,019 | |
Assets | 10,876,135 | 10,876,135 | $ 10,576,824 | ||
Intersegment eliminations | |||||
Summarized financial information for these segments | |||||
Net investment income | (204) | (215) | (412) | (432) | |
Assets | (29,222) | (29,222) | (36,786) | ||
Property and Casualty | |||||
Summarized financial information for these segments | |||||
Insurance premiums and contract charges earned | 160,460 | 153,673 | 318,778 | 305,793 | |
Property and Casualty | Operating segments | |||||
Summarized financial information for these segments | |||||
Net investment income | 8,113 | 10,151 | 17,290 | 18,979 | |
Net income (loss) | (13,956) | (4,463) | (11,221) | 9,332 | |
Assets | 1,133,015 | 1,133,015 | 1,110,958 | ||
Retirement | |||||
Summarized financial information for these segments | |||||
Insurance premiums and contract charges earned | 6,759 | 6,098 | 13,360 | 12,166 | |
Retirement | Operating segments | |||||
Summarized financial information for these segments | |||||
Net investment income | 65,139 | 62,727 | 128,581 | 120,776 | |
Net income (loss) | 11,800 | 13,063 | 23,330 | 23,616 | |
Assets | 7,671,701 | 7,671,701 | 7,449,777 | ||
Life | |||||
Summarized financial information for these segments | |||||
Insurance premiums and contract charges earned | 28,499 | 28,589 | 59,302 | 55,851 | |
Life | Operating segments | |||||
Summarized financial information for these segments | |||||
Net investment income | 18,928 | 18,502 | 37,216 | 36,486 | |
Net income (loss) | 5,610 | 4,622 | 9,495 | 8,489 | |
Assets | 1,972,540 | 1,972,540 | 1,912,771 | ||
Corporate and Other | |||||
Summarized financial information for these segments | |||||
Net investment income | 18 | 14 | 30 | 29 | |
Net income (loss) | (1,193) | $ (1,356) | (4,025) | $ (4,418) | |
Assets | $ 128,101 | $ 128,101 | $ 140,104 |