Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 15, 2020 | Jun. 30, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 1-10890 | ||
Entity Registrant Name | HORACE MANN EDUCATORS CORPORATION | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 37-0911756 | ||
Entity Address, Address Line One | 1 Horace Mann Plaza | ||
Entity Address, City or Town | Springfield | ||
Entity Address, State or Province | IL | ||
Entity Address, Postal Zip Code | 62715-0001 | ||
City Area Code | 217 | ||
Local Phone Number | 789-2500 | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
Trading Symbol | HMN | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,619.7 | ||
Entity Common Stock, Shares Outstanding | 41,266,751 | ||
Documents Incorporated by Reference | Certain portions of the registrant's Proxy Statement for the 2020 Annual Meeting of Shareholders are incorporated by reference into Part III Items 10, 11, 12, 13 and 14 of this Form 10-K as specified in those Items and will be filed with the Securities and Exchange Commission within 120 days after December 31, 2019 . | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0000850141 | ||
Current Fiscal Year End Date | --12-31 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Investments | ||
Fair Value | $ 5,791,676 | $ 7,515,318 |
Equity securities at fair value | 101,864 | 111,750 |
Limited partnership interests | 383,717 | 328,516 |
Short-term and other investments | 361,976 | 295,093 |
Total investments | 6,639,233 | 8,250,677 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 25,508 | 11,906 |
Deferred policy acquisition costs | 276,668 | 298,742 |
Deposit asset on reinsurance | 2,346,166 | 0 |
Intangible assets, net | 177,217 | 0 |
Goodwill | 49,079 | 47,396 |
Other assets | 474,364 | 422,047 |
Separate Account (variable annuity) assets | 2,490,469 | 2,001,128 |
Total assets | 12,478,704 | 11,031,896 |
Policy liabilities | ||
Investment contract and policy reserves | 6,234,452 | 5,711,193 |
Unpaid claims and claim expenses | 442,854 | 396,714 |
Unearned premiums | 279,163 | 276,225 |
Total policy liabilities | 6,956,469 | 6,384,132 |
Other policyholder funds | 647,283 | 767,988 |
Other liabilities | 384,173 | 290,358 |
Short-term debt | 135,000 | 0 |
Long-term debt | 298,025 | 297,740 |
Separate Account (variable annuity) liabilities | 2,490,469 | 2,001,128 |
Total liabilities | 10,911,419 | 9,741,346 |
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, 2019, 66,088,808; 2018, 65,820,369 | 66 | 66 |
Additional paid-in capital | 480,962 | 475,109 |
Retained earnings | 1,352,539 | 1,216,582 |
Accumulated other comprehensive income (loss), net of tax: | ||
Net unrealized investment gains on fixed maturity securities | 230,448 | 96,941 |
Net funded status of benefit plans | (10,767) | (12,185) |
Treasury stock, at cost, 2019, 24,850,484 shares; 2018, 24,850,484 shares | (485,963) | (485,963) |
Total shareholders' equity | 1,567,285 | 1,290,550 |
Total liabilities and shareholders' equity | $ 12,478,704 | $ 11,031,896 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | |||
Fixed maturities, available for sale, amortized cost (in usd) | $ 5,456,980 | $ 7,373,911 | |
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 | $ 0.001 |
Common stock, shares authorized | 75,000,000 | 75,000,000 | |
Common stock, shares issued | 66,088,808 | 65,820,369 | |
Treasury stock, shares | 24,850,484 | 24,850,484 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | |||
Insurance premiums and contract charges earned | $ 897,954 | $ 817,333 | $ 794,703 |
Net investment income | 365,064 | 376,507 | 373,630 |
Net investment gains (losses) | 153,340 | (12,543) | (3,406) |
Other income | 14,127 | 10,302 | 6,623 |
Total revenues | 1,430,485 | 1,191,599 | 1,171,550 |
Benefits, losses and expenses | |||
Benefits, claims and settlement expenses | 585,068 | 637,560 | 582,306 |
Interest credited | 212,786 | 206,199 | 198,635 |
Operating expenses | 234,609 | 205,413 | 187,789 |
DAC unlocking and amortization expense | 109,181 | 109,889 | 102,185 |
Intangible asset amortization expense | 8,790 | 0 | 0 |
Interest expense | 15,577 | 13,001 | 11,948 |
Other expense - goodwill impairment | 28,025 | 0 | 0 |
Total benefits, losses and expenses | 1,194,036 | 1,172,062 | 1,082,863 |
Income before income taxes | 236,449 | 19,537 | 88,687 |
Income tax expense (benefit) | 52,006 | 1,194 | (80,772) |
Net income | $ 184,443 | $ 18,343 | $ 169,459 |
Net income per share | |||
Basic (in usd per share) | $ 4.42 | $ 0.44 | $ 4.10 |
Diluted (in usd per share) | $ 4.40 | $ 0.44 | $ 4.08 |
Weighted average number of shares and equivalent shares | |||
Basic (in shares) | 41,737,876 | 41,570,492 | 41,364,546 |
Diluted (in shares) | 41,948,531 | 41,894,232 | 41,564,979 |
Net investment gains (losses) | |||
Total other-than-temporary impairment losses on securities | $ (1,380) | $ (1,530) | $ (12,620) |
Portion of losses recognized in other comprehensive income (loss) | 0 | 0 | 0 |
Net other-than-temporary impairment losses on securities recognized in earnings | (1,380) | (1,530) | (12,620) |
Sales and other, net | 151,495 | 3,491 | 7,756 |
Change in fair value - equity securities | 7,308 | (18,323) | 0 |
Change in fair value and gains realized on settlements - derivatives | (4,083) | 3,819 | 1,458 |
Total | $ 153,340 | $ (12,543) | $ (3,406) |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Comprehensive income (loss) | |||
Net income | $ 184,443 | $ 18,343 | $ 169,459 |
Other comprehensive income (loss), net of tax: | |||
Change in net unrealized investment gains (losses) on securities | 133,507 | (188,195) | 74,405 |
Change in net funded status of benefit plans | 1,418 | 1,032 | 734 |
Cumulative effect of change in accounting principle | 0 | (15,041) | 0 |
Other comprehensive income (loss) | 134,925 | (202,204) | 75,139 |
Total | $ 319,368 | $ (183,861) | $ 244,598 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss), net of tax: | Treasury stock, at cost |
Beginning balance at Dec. 31, 2016 | $ 65 | $ 453,479 | $ 1,155,732 | $ 163,921 | $ (479,215) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Options exercised | 0 | |||||
Conversion of common stock units | 0 | |||||
Conversion of restricted common stock units | 0 | |||||
Options exercised and conversion of common stock units and restricted stock units | 2,962 | |||||
Share-based compensation expense | 7,805 | |||||
Net income | $ 169,459 | 169,459 | ||||
Dividends, 2019, $1.15 per share; 2018, $1.14 per share; 2017, $1.10 per share | (46,114) | |||||
Reclassification of deferred taxes | 47,900 | (47,900) | 47,900 | |||
Cumulative effect of change in accounting principle | 0 | 0 | 0 | |||
Change in net unrealized investment gains (losses) on securities | 74,405 | 74,405 | ||||
Change in net funded status of benefit plans | 734 | 734 | ||||
Acquisition of shares | (1,660) | |||||
Ending balance at Dec. 31, 2017 | 1,501,573 | 65 | 464,246 | 1,231,177 | 286,960 | (480,875) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Options exercised | 0 | |||||
Conversion of common stock units | 0 | |||||
Conversion of restricted common stock units | 1 | |||||
Options exercised and conversion of common stock units and restricted stock units | 3,008 | |||||
Share-based compensation expense | 7,855 | |||||
Net income | 18,343 | 18,343 | ||||
Dividends, 2019, $1.15 per share; 2018, $1.14 per share; 2017, $1.10 per share | (47,979) | |||||
Reclassification of deferred taxes | 0 | 0 | ||||
Cumulative effect of change in accounting principle | (15,041) | 15,041 | (15,041) | |||
Change in net unrealized investment gains (losses) on securities | (188,195) | (188,195) | ||||
Change in net funded status of benefit plans | 1,032 | 1,032 | ||||
Acquisition of shares | (5,088) | |||||
Ending balance at Dec. 31, 2018 | 1,290,550 | 66 | 475,109 | 1,216,582 | 84,756 | (485,963) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Options exercised | 0 | |||||
Conversion of common stock units | 0 | |||||
Conversion of restricted common stock units | 0 | |||||
Options exercised and conversion of common stock units and restricted stock units | (555) | |||||
Share-based compensation expense | 6,408 | |||||
Net income | 184,443 | 184,443 | ||||
Dividends, 2019, $1.15 per share; 2018, $1.14 per share; 2017, $1.10 per share | (48,486) | |||||
Reclassification of deferred taxes | 0 | 0 | ||||
Cumulative effect of change in accounting principle | 0 | 0 | 0 | |||
Change in net unrealized investment gains (losses) on securities | 133,507 | 133,507 | ||||
Change in net funded status of benefit plans | 1,418 | 1,418 | ||||
Acquisition of shares | 0 | |||||
Ending balance at Dec. 31, 2019 | $ 1,567,285 | $ 66 | $ 480,962 | $ 1,352,539 | $ 219,681 | $ (485,963) |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Stockholders' Equity [Abstract] | |||
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Cash dividends (in usd per share) | $ 1.15 | $ 1.14 | $ 1.10 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities | |||
Net income | $ 184,443 | $ 18,343 | $ 169,459 |
Net investment (gains) losses | (153,340) | 12,543 | 3,406 |
Amortization of premiums and accretion of discounts on fixed maturity securities, net | 3,806 | (10,095) | (13,385) |
Depreciation and intangible asset amortization | 15,629 | 7,357 | 6,615 |
Share-based compensation expense | 7,338 | 8,346 | 8,592 |
Other expense - goodwill impairment | 28,025 | 0 | 0 |
Changes in: | |||
Accrued investment income | 46,858 | 4,449 | (3,404) |
Insurance liabilities | (96,802) | 203,370 | 119,311 |
Premium receivables | (5,031) | (10,026) | (12,917) |
Deferred policy acquisition costs | (1,274) | (783) | (7,967) |
Reinsurance recoverables | 22,006 | (21,317) | 11 |
Income tax liabilities | 28,726 | (3,383) | (4,620) |
Other operating assets and liabilities | 53,406 | (2,048) | (1,692) |
Other | (6,217) | (5,868) | (6,823) |
Net cash provided by operating activities | 127,573 | 200,888 | 256,586 |
Fixed maturity securities | |||
Purchases | (1,058,747) | (1,428,889) | (1,569,220) |
Sales | 805,887 | 625,527 | 500,760 |
Maturities, paydowns, calls and redemptions | 799,526 | 737,535 | 927,665 |
Equity securities | |||
Purchases | (15,583) | (13,430) | (32,312) |
Sales and repayments | 33,502 | 25,498 | 53,100 |
Limited partnership interests | |||
Purchases | (129,389) | (93,545) | (103,200) |
Sales | 91,587 | 16,997 | 20,234 |
Change in short-term and other investments, net | (49,325) | (56,192) | (25,691) |
Acquisition of businesses, net of cash acquired | (421,516) | 0 | 0 |
Net cash provided by (used in) investing activities | 55,942 | (186,499) | (228,664) |
Cash flows from financing activities | |||
Dividends paid to shareholders | (47,333) | (46,689) | (46,114) |
Principal borrowings on senior revolving credit facility | 135,000 | 0 | 0 |
FHLB borrowings | 0 | 0 | 50,000 |
Acquisition of treasury stock | 0 | (5,088) | (1,660) |
Proceeds from exercise of stock options | 1,730 | 3,627 | 4,190 |
Withholding tax payments on RSUs tendered | (3,680) | (3,165) | (3,245) |
Annuity contracts: variable, fixed and FHLB funding agreements | |||
Deposits | 637,538 | 489,097 | 453,146 |
Benefits, withdrawals and net transfers to Separate Account (variable annuity) assets | (419,001) | (473,003) | (411,061) |
Principal repayment on FHLB funding agreements | (305,005) | 0 | 0 |
Transfer of Company 401(k) to a third-party provider | 0 | 0 | (77,898) |
Life policy accounts | |||
Deposits | 9,391 | 8,149 | 4,883 |
Withdrawals and surrenders | (3,558) | (4,910) | (4,458) |
Change in deposit asset on reinsurance, net | (150,434) | 0 | 0 |
Change in book overdrafts | (24,561) | 21,872 | (4,748) |
Net cash used in financing activities | (169,913) | (10,110) | (36,965) |
Net increase (decrease) in cash | 13,602 | 4,279 | (9,043) |
Cash and restricted cash at beginning of period | 11,906 | 7,627 | 16,670 |
Cash and restricted cash at end of period | $ 25,508 | $ 11,906 | $ 7,627 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying audited consolidated financial statements of Horace Mann Educators Corporation and its wholly-owned subsidiaries (HMEC; and together with its subsidiaries, the Company or Horace Mann) have been prepared in accordance with accounting principles generally accepted in the U.S. (GAAP) and with the rules and regulations of the Securities and Exchange Commission (SEC). 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. Effective for the year ended December 31, 2019, the Company decided to change the approach it uses for presentation in its Consolidated Statements of Cash Flows from the direct method to the indirect method as management considers presentation under the indirect method as more comparable to the method used by others in the insurance industry. Accordingly, the Company has recast all prior periods presented in the Consolidated Statements of Cash Flows to conform to the current year’s presentation. The consolidated financial statements include the accounts of HMEC and its wholly-owned subsidiaries. HMEC and its subsidiaries have common management, share office facilities and are parties to intercompany service agreements for management, administrative, utilization of personnel, financial, investment advisory, underwriting, claims adjusting, agency and data processing services. Under these agreements, costs have been allocated among the companies in conformity with GAAP. In addition, certain of the subsidiaries have entered into intercompany reinsurance agreements. HMEC and its subsidiaries (with exception of National Teachers Associates Life Insurance Company and NTA Life Insurance Company of New York) file a consolidated federal income tax return, and there are related tax sharing agreements. All significant intercompany balances and transactions have been eliminated in consolidation. The subsidiaries of HMEC market and underwrite personal lines of property and casualty insurance products (primarily personal lines automobile and property insurance), supplemental insurance products (primarily heart, cancer, accident and limited supplemental disability coverages), retirement products (primarily tax-qualified annuities) 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, Horace Mann Lloyds, National Teachers Associates Life Insurance Company and NTA Life Insurance Company of New York. As described more fully in Note 2, the Company acquired NTA Life Enterprises, LLC (NTA) on July 1, 2019. As a result, the Company’s reporting segments have changed effective in the third quarter of 2019. A new reporting segment titled "Supplemental" was added to report on the personal lines of supplemental insurance products (primarily heart, cancer, accident and limited short-term supplemental disability coverages) that are marketed and underwritten by NTA. The Company has evaluated subsequent events through the date these consolidated financial statements were issued. There were no subsequent events requiring adjustment to the consolidated financial statements or disclosure. Cash Cash reported on the Consolidated Balance Sheet at December 31, 2019 includes restricted cash in the amount of $0.3 million , representing funds held in segregated accounts for insurance premiums to be remitted to insurance companies on behalf of the Company’s customers or for the purpose of reimbursement to cafeteria plan participants. Investments The Company invests predominantly in fixed maturity securities. This category includes primarily bonds and notes, but also includes redeemable preferred stocks. These securities are classified as available for sale and carried at fair value, of which a portion represent securities that are hard-to-value. The fair value of a fixed maturity security is the estimated amount at which the security could be exchanged in an orderly transaction between knowledgeable, unrelated and willing parties. The Company utilizes its investment managers and its custodian bank to obtain fair value prices from independent third-party valuation service providers, broker-dealer quotes, and model prices. Each month, the Company obtains fair value prices from its investment managers and custodian bank, each of which use a variety of independent, nationally recognized pricing sources to determine market valuations for fixed maturity securities. Differences in prices between the sources that the Company considers significant are researched and the Company utilizes the price that it considers most representative of an exit price. Typical inputs used by these pricing sources include, but are not limited to, reported trades, bids, offers, benchmark yield curves, benchmarking of like securities, rating designations, sector groupings, issuer spreads, and/or estimated cash flows, prepayment and default speeds, among others. The Company's fixed maturity securities portfolio is primarily publicly traded, which allows for a high percentage of the portfolio to be priced through pricing services. Approximately 94.1% of the portfolio, based on fair value, was priced through pricing services or index priced using observable inputs as of December 31, 2019. The valuation of hard-to-value fixed maturity securities (generally 100 - 150 securities) is more subjective because the markets are less liquid and there is a lack of observable market-based inputs. This may increase the potential that the estimated fair value of an investment is not reflective of the price at which an actual transaction would occur. When the pricing sources cannot provide fair value determinations, the investment managers and custodian bank obtain non-binding price quotes from broker-dealers. For those securities where the investment manager cannot obtain broker-dealer quotes, they will model the security, generally using anticipated cash flows of the underlying collateral. Broker-dealers' valuation methodologies as well as investment managers’ modeling methodologies are sometimes matrix-based, using indicative evaluation measures and adjustments for specific security characteristics and market sentiment. The selection of the market inputs and assumptions used to estimate the fair value of hard-to-value fixed maturity securities require judgment and include: benchmark yield, liquidity premium, estimated cash flows, prepayment and default speeds, spreads, weighted average life, and credit rating. The extent of the use of each market input depends on the market sector and market conditions. Depending on the security, the priority of the use of inputs may change or some market inputs may not be relevant. For some securities, additional inputs may be necessary. An adjustment for net unrealized investment gains (losses) on all securities available for sale and carried at fair value, is recognized as a separate component of accumulated other comprehensive income (AOCI) within shareholders' equity, net of applicable deferred taxes and the related impact on DAC associated with annuity contracts and life insurance products with account values that would have occurred if the securities had been sold at their aggregate fair value and the proceeds reinvested at current yields. Beginning January 1, 2018, equity securities are carried at fair value with changes in fair value recognized as Net investment gains (losses). This category includes nonredeemable preferred stocks and common stocks. Limited partnership interests include investments in commercial mortgage loans, infrastructure, corporate credit, private equity, real estate and other funds. All investments in limited partnership interests are accounted for in accordance with the equity method of accounting. Short-term and other investments are comprised of short-term fixed maturity securities, generally carried at cost which approximates fair value; derivatives, carried at fair value; policy loans, carried at unpaid principal balances; mortgage loans, carried at unpaid principal balances; and restricted Federal Home Loan Bank (FHLB) membership and activity stocks, carried at redemption value which approximates fair value. The Company invests in fixed maturity securities and alternative investment funds that could qualify as interests in variable interest entities (VIEs), including corporate securities, mortgage-backed securities and asset-backed securities. Such interests in VIEs have been reviewed and the Company determined that those VIEs are not subject to consolidation as the Company is not the primary beneficiary because it does not have the power to direct the activities that most significantly impact those VIEs' economic performance. Investment income is recognized as earned. Investment income reflects amortization of premiums and accrual of discounts on an effective-yield basis. Realized gains and losses arising from the disposal (recorded on a trade date basis) or impairment of securities are determined based upon specific identification of securities. The Company evaluates all investments in its portfolio for other-than-temporary declines in fair value as described in the following section. Other-than-temporary Impairment The Company's methodology of assessing other-than-temporary impairments (OTTI) for fixed maturity securities is based on security-specific facts and circumstances as of the reporting date. Based on these facts, if (1) the Company has the intent to sell the security, (2) it is more likely than not the Company will be required to sell the security before the anticipated recovery of the amortized cost basis, or (3) management does not expect to recover the entire amortized cost basis of the security, OTTI is considered to have occurred. Additionally, if events become known that call into question whether the security issuer has the ability to honor its contractual commitments, such security holding will be evaluated to determine whether or not such security has suffered an other-than-temporary decline in fair value. The Company has a policy and process to evaluate fixed maturity securities (at the cusip/issuer level) on a quarterly basis to assess whether there has been OTTI. These reviews, in conjunction with the Company's investment managers' monthly credit reports and relevant factors such as (1) the financial condition and near-term prospects of the issuer, (2) the length of time and extent to which the fair value has been less than the amortized cost basis (3) the Company's intent to sell a security or whether it is more likely than not the Company will be required to sell the security before the anticipated recovery of the amortized cost basis, (4) the market leadership position of the issuer, (5) the debt ratings of the issuer, and (6) the cash flows and liquidity of the issuer or the underlying cash flows for asset-backed securities, are all considered in the impairment assessment. When OTTI is deemed to have occurred, the investment is written-down to fair value at the trade lot level and the credit-related loss portion is recognized as a net investment loss during the period. The amount of total OTTI related to non-credit factors for fixed maturity securities is recognized in other comprehensive income (OCI), net of applicable taxes, in which the Company has the intent to sell the security or if it is more likely than not the Company will be required to sell the security before the anticipated recovery of the amortized cost basis. With respect to fixed maturity securities involving securitized financial assets — primarily asset-backed and commercial mortgage-backed securities in the Company's portfolio — the underlying collateral cash flows are stress tested to determine if there has been any adverse change in the expected future cash flows. A decline in fair value below the amortized cost basis is not assumed to be other-than-temporary for fixed maturity securities with unrealized losses due to spread widening, market illiquidity or changes in interest rates where there exists a reasonable expectation based on the Company's consideration of all objective information available that the Company will recover the entire amortized cost basis of the security and the Company does not have the intent to sell the security before maturity or a market recovery is realized and it is more likely than not the Company will not be required to sell the security. OTTI will be recognized based upon all relevant facts and circumstances for each investment, as appropriate. Additional considerations for certain types of securities include the following: Corporate Fixed Maturity Securities Judgments regarding whether a corporate fixed maturity security is other-than-temporarily impaired include analyzing the issuer's financial condition and whether there has been a decline in the issuer's ability to service the specific security. The analysis of the security issuer is based on asset coverage, cash flow multiples or other industry standards. Several factors assessed include, but are not limited to, credit quality ratings, cash flow sustainability, liquidity, financial strength, industry and market position. Sources of information include, but are not limited to, management projections, independent consultants, external analysts' research, peer analysis and the Company's internal analysis. If the Company has concerns regarding the viability of the issuer or its ability to service the specific security after this assessment, a cash flow analysis is prepared to determine if the present value of future cash flows has declined below the amortized cost basis of the fixed maturity security. This analysis to determine an estimate of ultimate recovery value is combined with the estimated timing to recovery and any other applicable cash flows that are expected to be collected. If a cash flow analysis estimate is not feasible, then the market's view of cash flows implied by the period end fair value, market discount rates and effective yield are the primary factors used to estimate an ultimate recovery value. Mortgage-Backed Securities Not Issued By the U.S. Government or Federally Sponsored Agencies The Company uses an estimate of future cash flows expected to be collected to evaluate its mortgage-backed securities for OTTI. The determination of cash flow estimates is inherently subjective and methodologies may vary depending on facts and circumstances specific to the security. All reasonably available information relevant to the collectability of the security, including past events, current conditions, and reasonable and supportable assumptions and forecasts, are considered when developing the estimate of future cash flows expected to be collected. Information includes, but is not limited to, debt-servicing, missed refinancing opportunities and geography. Loan level characteristics such as issuer, FICO score, payment terms, level of documentation, property or residency type, and economic outlook are also utilized in financial models, along with historical performance, to estimate or measure the loan's propensity to default. Additionally, financial models take into account loan age, lease rollovers, rent volatilities, vacancy rates and exposure to refinancing as additional drivers of default. For transactions where loan level data is not available, financial models use a proxy that is based on the collateral characteristics. Loss severity is a function of multiple factors including, but not limited to, the unpaid balance, interest rate, mortgage insurance ratios, assessed property value at origination, change in property valuation and loan-to-value ratio at origination. Prepayment speeds, both actual and estimated, cost of capital rates and debt service ratios are also considered. The cash flows generated by the collateral securing these securities are then estimated with these default, loss severity and prepayment assumptions. These collateral cash flows are then utilized, along with consideration for the Company's position in the overall structure, to estimate the future cash flows associated with the residential or commercial mortgage-backed security held by the Company. Municipal Bonds The Company's municipal bond portfolio consists primarily of revenue bonds, which present unique considerations in evaluating OTTI, but also includes general obligation bonds. The Company evaluates revenue bonds for OTTI based on guarantees associated with the repayment from revenues generated by the specified revenue-generating activity associated with the purpose of the bonds. Judgments regarding whether a municipal bond is other-than-temporarily impaired include analyzing the issuer's financial condition and whether there has been a decline in the overall financial condition of the issuer or its ability to service the specific security. Security credit ratings are reviewed with emphasis on the economy, finances, debt and management of the municipal issuer. Certain securities may be guaranteed by the mono - line credit insurers or other forms of guarantee. While not relied upon in the initial security purchase decision, insurance benefits are considered in the assessments for OTTI, including the credit-worthiness of the guarantor. Municipalities possess unique powers, along with a special legal standing and protections, that enable them to act quickly to restore budgetary balance and fiscal integrity. These powers include the sovereign power to tax, access to one-time revenue sources, capacity to issue or restructure debt, and ability to shift spending to other authorities. State governments often provide secondary support to local governments in times of financial stress and the federal government has provided assistance to state governments during recessions. If the Company has concerns regarding the viability of the municipal issuer or its ability to service the specific security after this analysis, a cash flow analysis is prepared to determine a present value and whether it has declined below the amortized cost basis of the security. If a cash flow analysis is not feasible, then the market's view of the period end fair value, market discount rates and effective yield are the primary factors used to estimate the present value. Credit Losses The Company estimates the amount of the credit loss component of a fixed maturity security impairment as the difference between amortized cost basis and the present value of the expected future cash flows of the security. The present value is determined using the best estimate of cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset-backed or floating rate security. The methodology and assumptions for establishing the best estimate of cash flows vary depending on the type of security. Corporate fixed maturity security and municipal bond cash flow estimates are derived from scenario-based outcomes of expected restructurings or the disposition of assets using specific facts and other circumstances, including timing, security interests and loss severity and when not reasonably estimable, such securities are impaired to fair value as management's best estimate of the present value of future cash flows. The cash flow estimates for mortgage-backed and other structured securities are based on security specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity and prepayment speeds, and structural support, including subordination and guarantees. Deferred Policy Acquisition Costs The Company's deferred policy acquisition costs (DAC) by reporting segment was as follows: ($ in thousands) December 31, 2019 2018 Property and Casualty $ 28,616 $ 30,033 Supplemental 1,967 N/A Retirement (annuity) 185,294 209,231 Life 60,791 59,478 Total $ 276,668 $ 298,742 DAC consists of commissions, policy issuance and other costs which are incremental and directly related to the successful acquisition of new or renewal business, which are deferred and amortized on a basis consistent with the type of insurance coverage. For property and casualty policies, DAC is amortized over the terms of the insurance policies ( 6 or 12 months). For supplemental policies, DAC is amortized in proportion to anticipated premiums over the terms of the insurance policies (approximately 6 years, based on an estimated average duration across all supplemental products). For all investment (annuity) contracts, DAC is amortized over 20 years in proportion to estimated gross profits. DAC is amortized in proportion to estimated gross profits over 20 years for certain life insurance products with account values and over 30 years for indexed universal life (IUL) products. For other individual life contracts, DAC is amortized in proportion to anticipated premiums over the terms of the insurance policies ( 10 , 15 , 20 , 30 years). The Company periodically reviews the assumptions and estimates used in DAC and also periodically reviews its estimations of gross profits, a process sometimes referred to as "unlocking". The most significant assumptions that are involved in the estimation of annuity gross profits include interest rate spreads, future financial market performance, business surrender/lapse rates, expenses and the impact of net investment gains (losses) on fixed maturity and equity securities. For the variable deposit portion of Retirement, the Company amortizes DAC utilizing a future financial market performance assumption of an 8% reversion to the mean approach with a 200 basis point corridor around the mean during the reversion period, representing a cap and a floor on the Company's long-term assumption. The Company's practice with regard to future financial market performance assumes that long-term appreciation in the financial markets is not changed by short-term market fluctuations, but is only changed when sustained deviations are experienced. The Company monitors these fluctuations and only changes the assumption when long-term expectations change. The most significant assumptions that are involved in the estimation of life insurance gross profits include interest rates expected to be received on investments, business persistency, and mortality. Conversions from term to permanent insurance cause an immediate write down of the associated DAC. The impact on amortization due to assumption changes has an immaterial impact on the results of operations. The most significant assumptions that are involved in the estimation of supplemental gross profits include morbidity, persistency, expenses and interest rates expected to be received on investments. When a supplemental policy lapses, there is an immediate write down of the associated DAC. The impact on amortization due to assumption changes has an immaterial impact on the results of operations. Annually, the Company performs a gross premium valuation on life insurance and supplemental policies to assess whether a loss recognition event has occurred. This involves discounting expected future benefits and expenses less expected future premiums. To the extent that this amount is greater than the liability for future benefits less the DAC asset, in aggregate for the life insurance or the supplemental block, a loss would be recognized by first writing off the DAC and then increasing the liability. In the event actual experience differs significantly from assumptions or assumptions are significantly revised, the Company may be required to recognize a material charge or credit to current period amortization expense for the period in which the adjustment is made. The Company recognized the following adjustments to amortization expense as a result of evaluating actual experience and prospective assumptions, the impact of unlocking: ($ in thousands) Year Ended December 31, 2019 2018 2017 Increase (decrease) to DAC amortization expense: Retirement $ 3,480 $ 3,948 $ 1,081 Life (267 ) 283 (200 ) Total $ 3,213 $ 4,231 $ 881 DAC for investment contracts and life insurance products with account values are adjusted for the impact on estimated future gross profits as if net unrealized investment gains (losses) on securities had been realized at the reporting date. This adjustment reduced DAC by $41.2 million and $17.9 million at December 31, 2019 and 2018 , respectively. The after tax impact of this adjustment is included in AOCI (net unrealized investment gains (losses) on securities) within shareholders' equity. DAC is reviewed for recoverability from future income, including net investment income, and costs that are deemed unrecoverable are expensed in the period in which the determination is made. No such costs were deemed unrecoverable during the years ended December 31, 2019 , 2018 and 2017 . Intangible Assets The value of business acquired (VOBA) represents the difference between the fair value of insurance contracts and insurance policy reserves measured in accordance with the Company's accounting policies for insurance contracts acquired. VOBA was based on an actuarial estimate of the present value of future distributable earnings for insurance in force on the acquisition date. VOBA was $90.7 million as of December 31, 2019 and is being amortized by product based on the present value of future premiums to be received. The Company estimates that it will recognize VOBA amortization of $7.1 million in 2020, $6.7 million in 2021, $6.2 million in 2022, $5.8 million in 2023 and $5.4 million in 2024. The Company accounts for the value of distribution acquired (VODA) associated with the acquisition of NTA based on an actuarial estimate of the present value of future business to be written by the existing distribution channel. VODA was $47.5 million as of December 31, 2019 and is being amortized on a straight-line basis. The Company estimates that it will recognize VODA amortization of $2.9 million in each of the years 2020 through 2024, respectively. The Company accounts for VODA associated with the acquisition of Benefit Consultants Group, Inc. (BCG) based on management's estimate of the present value of future business to be written by the existing distribution channel. VODA was $4.6 million as of December 31, 2019 and is being amortized based on the present value of future profits to be received. The Company estimates that it will recognize VODA amortization of $0.4 million in each of the years 2020 through 2024, respectively. The Company accounts for the value of agency relationships based on the present value of commission overrides retained by NTA. Agency relationships was $15.5 million as of December 31, 2019 and is being amortized based on the present value of future premiums to be received. The Company estimates that it will recognize agency relationships amortization of $2.6 million in 2020, $2.2 million in 2021, $1.9 million in 2022, $1.6 million in 2023 and $1.4 million in 2024. The Company accounts for the value of customer relationships based on the present value of expected profits from existing BCG customers in force at the date of acquisition. Customer relationships was $7.3 million as of December 31, 2019 and is being amortized based on the present value of future profits to be received. The Company estimates that it will recognize customer relationships amortization of $1.5 million in 2020, $1.2 million in 2021, $1.0 million in 2022, $0.9 million in 2023 and $0.7 million in 2024. Trade names represents the present value of future savings accruing to NTA and BCG by virtue of not having to pay royalties for the use of the trade names, valued using the relief from royalty method. State licenses represents the regulatory licenses held by NTA that were valued using the cost approach. Both trade names and state licenses are indefinite-lived intangibles that are not subject to amortization. VOBA is reviewed for recoverability from future income, including net investment income, and costs which are deemed unrecoverable are expensed in the period in which the determination is made. No such costs were deemed unrecoverable during the year ended December 31, 2019. Amortizing intangible assets (i.e., VODA, agency relationships and customer relationships) are tested for recoverability whenever events or changes in circumstances indicate that its carrying value may not be recoverable. The carrying amount of an amortizing intangible asset is not recoverable if it exceeds the sum of undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the carrying value is not recoverable from undiscounted cash flows, the impairment is measured as the difference between the carrying value and fair value. Intangible assets that are not subject to amortization (i.e., trade names and state licenses) are tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test consists of a comparison of the fair value of an intangible asset with its carrying value. If the carrying value of an intangible asset that is not subject to amortization exceeds its fair value, an impairment loss is to be recognized in an amount equal to that excess. Goodwill When the Company was acquired from CIGNA Corporation by HME Holdings, Inc. in 1989, intangible assets were recognized as goodwill in the application of purchase accounting. In addition, goodwill was recognized in 1994 related to the acquisition of Horace Mann Property & Casualty Insurance Company and in 2019 related to the acquisitions of BCG and NTA. Goodwill represents the excess of the amounts paid to acquire a business over the fair value of its net assets at the date of acquisition. Goodwill is not amortized, but is tested for impairment at the reporting unit level at least annually or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. A reporting unit is defined as an operating segment or a business unit one level below an operating segment, if separate financial information is prepared and regularly reviewed by management at that level. The Company's reporting units, for which goodwill has been allocated, are equivalent to the Company's operating segments. Refer to Note 7 for the allocation of goodwill by reporting unit as of December 31, 2019 . The goodwill impairment test, as defined in GAAP, allows an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying value. If an entity determines it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the entity performs a quantitative goodwill impairment test by comparing the fair value of a reporting unit to its carrying value for purposes of confirming and measuring an impairment. In the second quarter of 2019, the Company adopted guidance to eliminate Step 2 of the goodwill impairment test. Goodwill impairment is now the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Any amount of goodwill determined to be impaired will be recognized as an expense in the period in which the impairment determination is made. As of October 1, 2019, the Company performed a qualitative assessment to determine whether it was necessary to perform a quantitative goodwill impairment test. Based on the assessment of qualitative factors, there were no events or circumstances that lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying value. During each year from 2017 through 2019, the Company completed the required annual goodwill impairment testing. With exception to the goodwill impairment charge described in Note 7, no other goodwill impairment charges were necessary as a result of such assessments. The assessment of |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions On January 2, 2019, the Company acquired all of the equity interests in BCG for a total purchase consideration of $25.0 million . BCG provides advisory and benefit plan record keeping services. BCG's results are reported in Retirement. The acquisition of BCG resulted in the recognition of intangible assets of $16.2 million and goodwill of $10.1 million as a result of the purchase accounting. The intangible assets that are amortizable have lives of 10 to 16 years . See Note 7 for further information. The amount of goodwill that is expected to be deductible for federal income tax purposes is $10.1 million . On July 1, 2019, the Company acquired all the equity interests in NTA pursuant to a Purchase Agreement (Agreement) dated as of December 10, 2018. The purchase price of the transaction was $425.9 million which includes $20.9 million representing NTA's share of "adjusted earnings" (as determined in accordance with the terms of the Agreement) from July 1, 2018 to July 1, 2019. As a result of the acquisition, NTA became a wholly owned subsidiary of the Company. NTA provides supplemental insurance products (primarily heart, cancer, accident and limited short-term supplemental disability coverages) primarily within the public sector for which approximately 80% are individuals employed by educational institutions, with the remainder employed in state and local governments and emergency services facilities. NTA's results are being reported in a newly created reporting segment titled "Supplemental". During the fourth quarter of 2019, the Company finalized its estimates of the fair value of NTA assets acquired and liabilities assumed, including, but not limited to, intangible assets, policy reserves, certain tax-related balances and certain investments. In accordance with Accounting Standards Codification (ASC) 805, Business Combinations, changes to the preliminary estimates and allocation as a result of events or conditions as of the acquisition date have been reported in the Company's consolidated financial statements as adjustments to the assets acquired and liabilities assumed. Such adjustments were insignificant. The Company has allocated all of the goodwill associated with the NTA acquisition to the Supplemental segment. The factors that contributed to recognition of goodwill include synergies from economies of scale within underwriting operations, acquiring a talented workforce and cost savings opportunities. Based on the Company's final allocation of the purchase price, the fair value of the assets acquired and liabilities assumed were as follows: ($ in millions) Assets: Investments $ 542.6 Cash and short-term investments 73.8 Intangible assets (1) 169.8 Other assets 18.3 Liabilities: Policy reserves 366.8 Policy claims 21.8 Unearned premiums 4.1 Other liabilities 5.5 Total identifiable net assets acquired 406.3 Goodwill (2) 19.6 Purchase price $ 425.9 (1) Intangible assets consist of the value of business acquired, value of distribution acquired, agency relationships, trade names and state licenses. The intangible assets that are amortizable have a total weighted average useful life of 23 years. See Note 7 for further information. (2) The amount of goodwill that is expected to be deductible for federal income tax purposes is $17.9 million . The following unaudited pro forma information presents the Company's results of operations as if the acquisition of NTA occurred on January 1, 2018. The adjustments to arrive at the unaudited pro forma information below includes, among other things, adjustments for lost investment income on the cash used to fund the acquisition, amortization of an estimated fair value adjustment on NTA's policy reserves, amortization of acquired intangible assets, interest expense on debt incurred to finance the acquisition and exclusion of certain transaction costs attributable to the acquisition as such costs are considered non-recurring. ($ in thousands, except per share data) Unaudited Year Ended December 31, 2019 2018 Total revenues $ 1,507,352 $ 1,339,896 Total expenses 1,259,213 1,288,690 Income before income taxes 248,139 51,206 Net income $ 193,755 $ 43,373 Net income per share: (1) Basic $ 4.64 $ 1.04 Diluted $ 4.62 $ 1.04 (1) The unaudited pro forma basic and diluted net income per share calculations are based on the Company's historical basic and diluted weighted average number of shares outstanding for the years ended December 31, 2019 and 2018, respectively. The unaudited pro forma financial information is not necessarily indicative of the consolidated results of operations that might have been achieved had the transaction in fact occurred at the beginning of the periods presented, nor does the information project results for any future period. The unaudited pro forma information does not include the impact of any future cost savings or synergies that may be achieved as a result of the acquisition. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Net Investment Income The components of net investment income for the following periods were: ($ in thousands) Year Ended December 31, 2019 2018 2017 Fixed maturity securities $ 283,228 $ 353,303 $ 354,290 Equity securities 4,923 6,017 6,411 Limited partnership interests 25,694 15,406 12,555 Short-term and other investments 60,703 11,981 10,214 Total investment income 374,548 386,707 383,470 Investment expenses (9,484 ) (10,200 ) (9,840 ) Net investment income $ 365,064 $ 376,507 $ 373,630 Net Investment Gains (Losses) Net investment gains (losses) for the following periods were: ($ in thousands) Year Ended December 31, 2019 2018 2017 Fixed maturity securities (1) $ 141,448 $ (5,713 ) $ (8,867 ) Equity securities 15,975 (10,649 ) 4,003 Short-term investments and other (4,083 ) 3,819 1,458 Net investment gains (losses) $ 153,340 $ (12,543 ) $ (3,406 ) (1) Net investment gains realized on fixed maturity securities include a $135.3 million realized investment gain associated with a transfer of investments to a reinsurer as consideration paid during the second quarter of 2019 in connection with the reinsurance of a $2.9 billion block of in force fixed and variable annuity business. See Notes 6 and 17 for further information. The Company, from time to time, sells invested assets subsequent to the reporting date that were considered temporarily impaired at the reporting date. Such sales are due to issuer specific events occurring subsequent to the reporting date that result in a change in the Company's intent or ability to hold an invested asset. The types of events that may result in a sale include significant changes in the economic facts and circumstances related to the invested asset, significant unforeseen changes in liquidity needs, or changes in the Company's investment strategy. Net Investment Gains (Losses) by Transaction Type The following table reconciles net investment gains (losses) by transaction type: ($ in thousands) Year Ended December 31, 2019 2018 2017 Impairment write-downs $ (1,105 ) $ — $ (1,778 ) Change in intent write-downs (275 ) (1,530 ) (10,842 ) Net OTTI losses recognized in earnings (1,380 ) (1,530 ) (12,620 ) Sales and other, net 151,495 3,491 7,756 Change in fair value - equity securities (1) 7,308 (18,323 ) — Change in fair value and gains (losses) realized on settlements - derivatives (4,083 ) 3,819 1,458 Net investment gains (losses) $ 153,340 $ (12,543 ) $ (3,406 ) (1) Effective January 1, 2018, with the adoption of new accounting guidance for recognition and measurement of financial instruments, equity securities are reported at fair value with changes in fair value recognized in Net investment gains (losses) and are no longer included in impairment write-downs or change in intent write-downs. Fixed Maturity Securities The Company's investment portfolio is comprised primarily of fixed maturity securities. Amortized cost, net unrealized investment gains (losses) and fair values of all fixed maturity securities in the portfolio were as follows: ($ in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value December 31, 2019 Fixed maturity securities U.S. Government and federally sponsored agency obligations: (1) Mortgage-backed securities $ 684,543 $ 41,263 $ 1,487 $ 724,319 Other, including U.S. Treasury securities 436,665 22,824 621 458,868 Municipal bonds 1,545,787 141,996 1,580 1,686,203 Foreign government bonds 42,801 2,569 — 45,370 Corporate bonds 1,464,444 118,775 1,795 1,581,424 Other mortgage-backed securities 1,282,740 20,883 8,131 1,295,492 Totals $ 5,456,980 $ 348,310 $ 13,614 $ 5,791,676 December 31, 2018 Fixed maturity securities U.S. Government and federally sponsored agency obligations: (1) Mortgage-backed securities $ 778,038 $ 22,724 $ 13,321 $ 787,441 Other, including U.S. Treasury securities 835,096 16,127 17,681 833,542 Municipal bonds 1,884,313 133,150 13,494 2,003,969 Foreign government bonds 83,343 2,321 760 84,904 Corporate bonds 2,054,105 64,296 38,891 2,079,510 Other mortgage-backed securities 1,739,016 10,467 23,531 1,725,952 Totals $ 7,373,911 $ 249,085 $ 107,678 $ 7,515,318 (1) Fair value includes securities issued by Federal National Mortgage Association (FNMA) of $405.1 million and $441.3 million ; Federal Home Loan Mortgage Corporation (FHLMC) of $283.1 million and $417.3 million ; and Government National Mortgage Association (GNMA) of $147.4 million and $96.5 million as of December 31, 2019 and 2018 , respectively. The following table presents the fair value and gross unrealized losses securities in an unrealized loss position at December 31, 2019 and 2018 , respectively. The Company views the decrease in fair value of all of the securities with unrealized losses at December 31, 2019 — which was driven largely by increasing interest rates, spread widening, financial market illiquidity and/or market volatility from the date of acquisition — as temporary. As of December 31, 2019 , the Company has not made the decision to sell and it is not more likely than not the Company will be required to sell fixed maturity securities with unrealized losses before recovery of the amortized cost basis. Therefore, it was determined that the unrealized losses on the securities presented in the table below were not other-than-temporarily impaired as of December 31, 2019 . ($ 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 December 31, 2019 Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 72,422 $ 1,282 $ 2,620 $ 205 $ 75,042 $ 1,487 Other 38,341 619 1,527 2 39,868 621 Municipal bonds 91,195 977 9,160 603 100,355 1,580 Foreign government bonds — — — — — — Corporate bonds 58,198 886 16,622 909 74,820 1,795 Other mortgage-backed securities 218,710 1,970 442,791 6,161 661,501 8,131 Total $ 478,866 $ 5,734 $ 472,720 $ 7,880 $ 951,586 $ 13,614 Number of positions with a gross unrealized loss 330 137 467 Fair value as a percentage of total fixed maturities securities fair value 8.3 % 8.2 % 16.5 % December 31, 2018 Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 193,447 $ 5,026 $ 157,295 $ 8,295 $ 350,742 $ 13,321 Other 263,497 6,746 246,213 10,935 509,710 17,681 Municipal bonds 291,869 7,603 95,297 5,891 387,166 13,494 Foreign government bonds 16,250 760 — — 16,250 760 Corporate bonds 818,519 27,429 99,171 11,462 917,690 38,891 Other mortgage-backed securities 913,858 16,076 291,442 7,455 1,205,300 23,531 Total $ 2,497,440 $ 63,640 $ 889,418 $ 44,038 $ 3,386,858 $ 107,678 Number of positions with a gross unrealized loss 1,052 359 1,411 Fair value as a percentage of total fixed maturities and equity securities fair value 32.7 % 11.7 % 44.4 % Fixed maturity securities with an investment grade rating represented 93.9% of the gross unrealized losses as of December 31, 2019 . 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 December 31, 2019 and 2018 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 basis, for which the non-credit portions of OTTI losses were recognized in OCI: ($ in thousands) Year Ended December 31, 2019 2018 Cumulative credit loss (1) Beginning of period $ 1,529 $ 3,825 New credit losses — — Increases to previously recognized credit losses — 246 Losses related to securities sold or paid down during the period — (2,542 ) End of period $ 1,529 $ 1,529 (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 of Fixed Maturity 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) December 31, 2019 Amortized Cost Fair Value Percent of Total Fair Value Estimated expected maturity: Due in 1 year or less $ 205,798 $ 211,420 3.6 % Due after 1 year through 5 years 1,541,749 1,587,300 27.4 % Due after 5 years through 10 years 1,613,539 1,712,236 29.6 % Due after 10 years through 20 years 1,393,503 1,512,769 26.1 % Due after 20 years 702,391 767,951 13.3 % Total $ 5,456,980 $ 5,791,676 100.0 % Average option-adjusted duration, in years 6.0 Sales of Fixed Maturity 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 year were: ($ in thousands) Year Ended December 31, 2019 (1) 2018 2017 Fixed maturity securities Proceeds received $ 805,887 $ 625,527 $ 500,760 Gross gains realized 150,852 10,536 13,570 Gross losses realized (7,807 ) (14,932 ) (11,842 ) Equity securities Proceeds received $ 29,863 $ 25,498 $ 50,113 Gross gains realized 9,193 8,592 7,753 Gross losses realized (788 ) (917 ) (1,972 ) (1) Gross gains realized presented above include a $135.3 million realized investment gain associated with a transfer of investments to a reinsurer as consideration paid during the second quarter of 2019 in connection with the reinsurance of a $2.9 billion block of in force fixed and variable annuity business. See Notes 6 and 17 for further information. Net Unrealized Investment Gains (Losses) on Fixed Maturity Securities Net unrealized investment gains (losses) on securities are computed as the difference between fair value and amortized cost for fixed maturity securities or cost for equity securities. The following table reconciles the net unrealized investment gains (losses) on securities, net of tax, included in AOCI, before the impact on DAC: ($ in thousands) Year Ended December 31, 2019 2018 2017 Net unrealized investment gains (losses) on fixed maturity securities, net of tax Beginning of period $ 111,712 $ 286,176 $ 202,941 Change in unrealized investment gains (losses) on fixed maturity securities 277,062 (172,350 ) 80,073 Reclassification of net investment (gains) losses on securities to net income (124,364 ) 12,927 3,162 Cumulative effect of change in accounting principle (1) — (15,041 ) — End of period $ 264,410 $ 111,712 $ 286,176 (1) Effective January 1, 2018, with the adoption of new accounting guidance for recognition and measurement of financial instruments, available for sale equity securities were reclassified to equity securities at fair value and the related net unrealized gains were reclassified from AOCI to Retained earnings. Limited Partnership Interests As of December 31, 2019 and 2018 , the carrying value of equity method limited partnerships totaled $383.7 million and $328.5 million , respectively. Principal factors influencing carrying value appreciation or decline include operating performance, comparable public company earnings multiples, capitalization rates and the economic environment. The Company recognizes an impairment loss for equity method limited partnerships when evidence demonstrates that the loss is other than temporary. Evidence of a loss in value that is other than temporary may include the absence of an ability to recover the carrying amount of the investment or the inability of the investee to sustain a level of earnings that would justify the carrying amount of the investment. Investment in Entities Exceeding 10% of Shareholders' Equity At December 31, 2019 and 2018 , there were no investments which exceeded 10% of total shareholders' equity in entities other than obligations of the U.S. Government and federally sponsored government agencies and authorities. Offsetting of Assets and Liabilities The Company's derivatives (call options) are subject to enforceable master netting arrangements. Collateral support agreements associated with each master netting arrangement provide that the Company will receive or pledge cash collateral in the event minimum thresholds have been reached. The following table presents the instruments that were subject to a master netting arrangement for the Company. ($ 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 December 31, 2019 Asset derivatives Free-standing derivatives $ 13,239 $ — $ 13,239 $ 7,687 $ 6,640 $ (1,088 ) December 31, 2018 Asset derivatives Free-standing derivatives 2,647 — 2,647 — 1,868 779 Deposits At December 31, 2019 and 2018 , fixed maturity securities with a fair value of $26.0 million and $17.7 million , respectively, were on deposit with governmental agencies as required by law in various states in which the insurance subsidiaries of the Company conduct business. In addition, at December 31, 2019 and 2018 , fixed maturity securities with a fair value of $594.2 million and $740.0 million , respectively, were on deposit with FHLB as collateral for amounts subject to funding agreements, advances and borrowings that were equal to $545.0 million and $675.0 million at 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 | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 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 (which are investment contracts) are not required to be disclosed. However, the estimated fair values of liabilities under all insurance contracts are taken into consideration in the Company's overall management of interest rate risk through the matching of investment maturities with amounts due under insurance contracts. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between knowledgeable, unrelated and willing market participants on the measurement date. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The Company categorizes its financial and nonfinancial assets and liabilities into a three-level hierarchy based on the priority of the inputs to the valuation technique. The three levels of inputs that may be used to measure fair value are: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include fixed maturity and equity securities (both common stock and preferred stock) that are traded in an active exchange market, as well as U.S. Treasury securities. Level 2 Unadjusted observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for the assets or liabilities. Level 2 assets and liabilities include fixed maturity securities (1) with quoted prices that are traded less frequently than exchange-traded instruments or (2) values based on discounted cash flows with observable inputs. This category generally includes certain U.S. Government and agency mortgage-backed securities, non-agency structured securities, corporate fixed maturity securities, preferred stocks, derivatives and embedded derivatives. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, certain discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation and for which the significant inputs are unobservable. This category generally includes certain private debt and equity investments, as well as embedded derivatives. When the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. As a result, a Level 3 fair value measurement may include inputs that are observable (Level 1 or Level 2) and unobservable (Level 3). Net transfers into or out of each of the three levels are reported as having occurred at the end of the reporting period in which the transfers were determined. The following discussion describes the valuation methodologies used for financial assets and financial liabilities measured at fair value. The techniques utilized in estimating the fair values are affected by the assumptions used, including discount rates and estimates of the amount and timing of expected future cash flows. The use of different methodologies, assumptions and inputs may have a material effect on the estimated fair values of the Company's investment holdings. Care is exercised in deriving conclusions about the Company's business, its value or financial position based on the fair value information of financial assets and liabilities presented below. Fair value estimates are made at a specific point in time, based on available market information and judgments about the financial asset or financial liability, including estimates of both the timing and amount of expected future cash flows and the credit standing of the issuer. In some cases, fair value estimates cannot be substantiated by comparison to independent markets. In addition, the disclosed fair value may not be realized in the immediate settlement of the financial asset or financial liability. The disclosed fair values do not reflect any premium or discount that could result from offering for sale at one time an entire holding of a particular financial asset or financial liability. In periods of market disruption, the ability to observe prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified from Level 1 to Level 2 or from Level 2 to Level 3. Potential taxes and other expenses that would be incurred in an actual sale or settlement are not reflected in amounts disclosed. Investments The fair value of a fixed maturity security is the estimated amount at which the security could be exchanged in an orderly transaction between knowledgeable, unrelated and willing parties. The Company utilizes its investment managers and its custodian bank to obtain fair value prices from independent third-party valuation service providers, broker-dealer quotes, and model prices. Each month, the Company obtains fair value prices from its investment managers and custodian bank, each of which use a variety of independent, nationally recognized pricing sources to determine market valuations for fixed maturity securities. Differences in prices between the sources that the Company considers significant are researched and the Company utilizes the price that it considers most representative of an exit price. Typical inputs used by these pricing sources include, but are not limited to, reported trades, bids, offers, benchmark yield curves, benchmarking of like securities, rating designations, sector groupings, issuer spreads, and/or estimated cash flows, prepayment and default speeds, among others. The Company's fixed maturity securities portfolio is primarily publicly traded, which allows for a high percentage of the portfolio to be priced through pricing services. Approximately 94.1% and 90.7% of the portfolio, based on fair value, was priced through pricing services or index priced as of December 31, 2019 and 2018 , respectively. The remainder of the portfolio was priced by broker-dealers or pricing models. When non-binding broker-dealer quotes can be corroborated by comparison to other vendor quotes, pricing models or analyses, the securities are generally classified as Level 2, otherwise they are classified as Level 3. There were no significant changes to the valuation process during 2019. The valuation of hard-to-value fixed maturity securities (generally 100 -150 securities) is more subjective because the markets are less liquid and there is a lack of observable market-based inputs. This may increase the potential that the estimated fair value of an investment is not reflective of the price at which an actual transaction would occur. When the pricing sources cannot provide fair value determinations, the investment managers and custodian bank obtain non-binding price quotes from broker-dealers. For those securities where the investment manager cannot obtain broker-dealer quotes, they will model the security, generally using anticipated cash flows of the underlying collateral. Broker-dealers' valuation methodologies as well as investment managers’ modeling methodologies are sometimes matrix-based, using indicative evaluation measures and adjustments for specific security characteristics and market sentiment. The selection of the market inputs and assumptions used to estimate the fair value of hard-to-value fixed maturity securities require judgment and include: benchmark yield, liquidity premium, estimated cash flows, prepayment and default speeds, spreads, weighted average life, and credit rating. The extent of the use of each market input depends on the market sector and market conditions. Depending on the security, the priority of the use of inputs may change or some market inputs may not be relevant. For some securities, additional inputs may be necessary. The Company gains assurance that its portfolio of fixed maturity securities and hard-to-value fixed maturity securities is appropriately valued through the execution of various processes and controls designed to ensure the overall reasonableness and consistent application of valuation methodologies, including inputs and assumptions, and compliance with accounting standards. The Company’s processes and controls are designed to ensure (1) the valuation methodologies are appropriate and consistently applied, (2) the inputs and assumptions are reasonable and consistent with the objective of determining fair value, and (3) the fair values are accurately recorded. For example, on a continuing basis, the Company assesses the reasonableness of individual fair values that have stale security prices or that exceed certain thresholds as compared to previous fair values received from valuation service providers. The Company performs procedures to understand and assess the methodologies, processes and controls of valuation service providers. In addition, the Company may validate the reasonableness of fair values by comparing information obtained from valuation service providers or broker-dealers to other third-party valuation sources for selected securities. To determine the fair value of equity securities, the Company utilizes its investment managers and its custodian bank to obtain fair value prices from independent third-party valuation service providers. Each month, the Company obtains fair value prices from its investment managers and custodian bank, each of which use a variety of independent, nationally recognized pricing sources to determine market valuations for equity securities. Policy loans and mortgage loans as well as certain alternative investments which are accounted for using the equity method of accounting are excluded from the fair value hierarchy. In summary, the following investments are carried at fair value: • Fixed maturity securities, as described above. • Equity securities, as described above. • Short-term fixed maturity securities — Because of the nature of these assets, carrying amounts generally approximate fair values. • Derivatives, all call options — Fair values are based on the amount of cash expected to be received to settle each derivative on the reporting date. These amounts are obtained from each of the counterparties using industry accepted valuation models and observable inputs. Significant inputs include contractual terms, underlying index prices, market volatilities, interest rates and dividend yields. • FHLB membership and activity stocks — Fair value is based on redemption value, which is equal to par value. Financial Instruments Measured and Carried at Fair Value The following table presents the Company's fair value hierarchy for those assets and liabilities measured and carried at fair value on a recurring basis. At December 31, 2019 , Level 3 investments comprised approximately 4.8% of the Company's total investment portfolio at fair value. ($ in thousands) Carrying Fair Fair Value Measurements at Reporting Date Using Amount Value Level 1 Level 2 Level 3 December 31, 2019 Financial Assets Investments Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 724,319 $ 724,319 $ — $ 711,004 $ 13,315 Other, including U.S. Treasury securities 458,868 458,868 17,699 441,169 — Municipal bonds 1,686,203 1,686,203 — 1,641,912 44,291 Foreign government bonds 45,370 45,370 — 45,370 — Corporate bonds 1,581,424 1,581,424 14,470 1,463,002 103,952 Other mortgage-backed securities 1,295,492 1,295,492 — 1,161,979 133,513 Total fixed maturity securities 5,791,676 5,791,676 32,169 5,464,436 295,071 Equity securities 101,864 101,864 49,834 51,923 107 Short-term investments 172,667 172,667 172,667 — — Other investments 25,997 25,997 — 25,997 — Totals $ 6,092,204 $ 6,092,204 $ 254,670 $ 5,542,356 $ 295,178 Separate Account (variable annuity) assets (1) $ 2,490,469 $ 2,490,469 $ 2,490,469 $ — $ — Financial Liabilities Investment contract and life policy reserves, embedded derivatives $ 1,314 $ 1,314 $ — $ 1,314 $ — Other policyholder funds, embedded derivatives $ 93,733 $ 93,733 $ — $ — $ 93,733 December 31, 2018 Financial Assets Investments Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 787,441 $ 787,441 $ — $ 784,224 $ 3,217 Other, including U.S. Treasury securities 833,542 833,542 13,291 820,251 — Municipal bonds 2,003,969 2,003,969 — 1,956,438 47,531 Foreign government bonds 84,904 84,904 — 84,904 — Corporate bonds 2,079,510 2,079,510 12,281 1,986,487 80,742 Other mortgage-backed securities 1,725,952 1,725,952 — 1,608,958 116,994 Total fixed maturity securities 7,515,318 7,515,318 25,572 7,241,262 248,484 Equity securities 111,750 111,750 64,330 47,415 5 Short-term investments 122,222 122,222 117,296 4,926 — Other investments 16,147 16,147 — 16,147 — Totals $ 7,765,437 $ 7,765,437 $ 207,198 $ 7,309,750 $ 248,489 Separate Account (variable annuity) assets (1) $ 2,001,128 $ 2,001,128 $ 2,001,128 $ — $ — Financial Liabilities Investment contract and life policy reserves, embedded derivatives $ 248 $ 248 $ — $ 248 $ — Other policyholder funds, embedded derivatives $ 78,700 $ 78,700 $ — $ — $ 78,700 (1) Separate Account (variable annuity) assets represent contractholder funds invested in various actively traded mutual funds that have daily quoted net asset values that are readily determinable for identical assets that the Company can access. Separate Account (variable annuity) liabilities are equal to the estimated fair value of Separate Account (variable annuity) assets. The Company did not have any transfers between Levels 1 and 2 during 2019 and 2018 . The following tables present 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 Other Mortgage- Backed Securities (2) Total Fixed Maturity Securities Equity Securities Total Beginning balance, January 1, 2019 $ 47,531 $ 80,742 $ 120,211 $ 248,484 $ 5 $ 248,489 $ 78,700 Transfers into Level 3 (3) — 33,475 56,766 90,241 65 90,306 — Transfers out of Level 3 (3) — (7,698 ) (2,568 ) (10,266 ) — (10,266 ) — Total gains or losses Net investment gains (losses) included in net income related to financial assets — — (1,105 ) (1,105 ) 38 (1,067 ) — Net realized (gains) losses included in net income related to financial liabilities — — — — — — 12,636 Net unrealized investment gains (losses) included in OCI 474 4,461 6,100 11,035 — 11,035 — Purchases — 2,483 — 2,483 — 2,483 — Issuances — — — — — — 10,039 Sales — — (607 ) (607 ) (1 ) (608 ) — Settlements — — — — — — — Paydowns, maturities and distributions (3,714 ) (9,511 ) (31,969 ) (45,194 ) — (45,194 ) (7,642 ) Ending balance, December 31, 2019 $ 44,291 $ 103,952 $ 146,828 $ 295,071 $ 107 $ 295,178 $ 93,733 Beginning balance, January 1, 2018 $ 49,328 $ 72,979 $ 107,944 $ 230,251 $ 6 $ 230,257 $ 80,733 Transfers into Level 3 (3) — 40,488 50,771 91,259 — 91,259 — Transfers out of Level 3 (3) — (11,279 ) (5,200 ) (16,479 ) — (16,479 ) — Total gains or losses Net investment gains (losses) included in net income related to financial assets — (487 ) — (487 ) 3 (484 ) — Net realized (gains) losses included in net income related to financial liabilities — — — — — — (7,518 ) Net unrealized investment gains (losses) included in OCI (1,195 ) (2,840 ) (5,570 ) (9,605 ) — (9,605 ) — Purchases — — — — — — — Issuances — — — — — — 11,183 Sales — (6,135 ) (187 ) (6,322 ) (4 ) (6,326 ) — Settlements — — — — — — — Paydowns, maturities and distributions (602 ) (11,984 ) (27,547 ) (40,133 ) — (40,133 ) (5,698 ) Ending balance, December 31, 2018 $ 47,531 $ 80,742 $ 120,211 $ 248,484 $ 5 $ 248,489 $ 78,700 (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 years ended December 31, 2019 and 2018 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. At December 31, 2019 , the Company realized a loss of $1.1 million on Level 3 securities. At December 31, 2018 the Company realized a loss of $0.5 million on Level 3 securities. For the years ended December 31, 2019 and 2018 , a realized loss of $12.6 million and a realized gain of $7.5 million , respectively, were included in earnings that were attributable to the changes in the fair value of Level 3 liabilities (embedded derivatives) still held. The valuation techniques and significant unobservable inputs used in the fair value measurement for financial assets and liabilities classified as Level 3 are subject to the control processes as previously described in this Note. 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) Carrying Fair Fair Value Measurements at Reporting Date Using Amount Value Level 1 Level 2 Level 3 December 31, 2019 Financial Assets Investments Other investments $ 163,312 $ 167,185 $ — $ — $ 167,185 Deposit asset on reinsurance 2,346,166 2,634,012 — — 2,634,012 Financial Liabilities Investment contract and policy reserves, fixed annuity contracts 4,675,774 4,609,880 — — 4,609,880 Investment contract and life policy reserves, account values on life contracts 93,465 98,332 — — 98,332 Other policyholder funds 553,550 553,550 — 495,812 57,738 Short-term debt 135,000 135,000 — — 135,000 Long-term debt 298,025 322,678 — 322,678 — December 31, 2018 Financial Assets Investments Other investments $ 156,725 $ 161,449 $ — $ — $ 161,449 Financial Liabilities Investment contract and policy reserves, fixed annuity contracts 4,555,849 4,478,338 — — 4,478,338 Investment contract and life policy reserves, account values on life contracts 87,229 90,402 — — 90,402 Other policyholder funds 689,287 689,287 — 626,325 62,962 Long-term debt 297,740 291,938 — 291,938 — Other Investments Other investments includes policy loans and mortgage loans. For policy loans, fair value is based on estimates using discounted cash flow analysis and current interest rates being offered for new loans. For mortgage loans, fair value is estimated by discounting the future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and similar remaining maturities. Deposit Asset on Reinsurance The fair value of the deposit asset on reinsurance is estimated by discounting the future cash flows that are expected to arise out of the annuity reinsurance transaction. The treasury yield curve, plus an assumed credit spread, is used to determine the appropriate discount rate. Investment Contract and Policy Reserves The fair values of fixed annuity contract liabilities and policyholder account balances on life contracts are equal to the discounted estimated future cash flows (using the Company's current interest rates for similar products including consideration of minimum guaranteed interest rates). The Company carries these financial liabilities at cost. Also, included in investment contract and policy reserves are embedded derivatives related to the Company's IUL products which are carried at fair value. See Note 5 for further information. Other Policyholder Funds Other policyholder funds are liabilities related to supplementary contracts without life contingencies and dividend accumulations, as well as balances outstanding under funding agreements with the FHLB and embedded derivatives related to the FIA products. Except for embedded derivatives, each of these components is carried at cost, which management believes is a reasonable estimate of fair value due to the relatively short duration of these items, based on the Company's past experience. The fair value of the embedded derivatives related to FIA products is estimated at each reporting date by (1) projecting policy contract values and minimum guaranteed contract values over the expected lives of the contracts and (2) discounting the excess of the projected contract value amounts at the applicable risk free interest rates adjusted for the Company's nonperformance risk related to those liabilities. The projections of policy contract values are based on the Company's best estimate assumptions for future contract growth and decrements. The assumptions for future contract growth include the expected index credits which are derived from the fair values of the underlying call options purchased to fund such index credits and the expected costs of annual call options that will be purchased in the future to fund index credits beyond the next contract anniversary. Projections of minimum guaranteed contract values include the same best estimate assumptions for contract decrements used to project policy contract values. Short-term Debt The Company carries short-term debt at amortized cost which approximates fair value. Long-term Debt The Company carries long-term debt at amortized cost. The fair value of long-term debt is estimated based on unadjusted quoted market prices of the Company's securities or unadjusted market prices based on similar publicly traded issues when trading activity for the Company's securities is not sufficient to provide a market price. |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | 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. The Company also offers IUL products which 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 call options on the applicable market indices to fund the index credits due to FIA and IUL policyholders. For the Company, substantially all 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 investment gains (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 that 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 are accounted for as a "series of embedded derivatives" over the expected life of the applicable contract with a corresponding reserve recognized. For IUL, the embedded derivative represents a single year liability for the index return. The Company carries all derivatives at fair value in the Consolidated Balance Sheets. The Company elected to not use hedge accounting for derivative transactions related to the FIA and IUL products. As a result, the Company recognizes 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 as Net investment gains (losses) in the Consolidated Statements of Operations. The fair values of derivatives, including derivatives embedded in FIA and IUL contracts, are presented in the Consolidated Balance Sheets as follows: ($ in thousands) December 31, 2019 2018 Assets Derivatives, included in Short-term and other investments $ 13,239 $ 2,647 Liabilities Fixed indexed annuities - embedded derivatives, included in Other policyholder funds 93,733 78,700 Indexed universal life - embedded derivatives, included in Investment contract and policy reserves 1,314 248 In general, the change in the fair value of the embedded derivatives related to FIA 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 the 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) Years Ended December 31, 2019 2018 2017 Change in fair value of derivatives: (1) Revenues Net investment gains (losses) $ 9,493 $ (4,112 ) $ 14,867 Change in fair value of embedded derivatives: Revenues Net investment gains (losses) (13,576 ) 7,931 (13,410 ) (1) Includes 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 S&P/Moody's Investors Service, Inc. (Moody's) long-term credit rating of "BBB+/A3" 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 cash 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) December 31, 2019 December 31, 2018 Credit Rating Notional Fair Notional Fair Counterparty S&P Moody's Amount Value Amount Value Bank of America, N.A. A+ Aa2 $ 174,900 $ 8,523 $ 144,500 $ 870 Barclays Bank PLC A A2 115,300 3,348 28,500 247 Citigroup Inc. BBB+ A3 — — — — Credit Suisse International A+ A1 — — 16,100 55 Societe Generale A A1 27,800 1,369 89,100 1,475 Total $ 318,000 $ 13,240 $ 278,200 $ 2,647 As of December 31, 2019 and 2018 , the Company held $14.3 million and $1.9 million , respectively, of cash and securities 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 $0.3 million per counterparty. |
Deposit Asset on Reinsurance
Deposit Asset on Reinsurance | 12 Months Ended |
Dec. 31, 2019 | |
Reinsurance Disclosures [Abstract] | |
Deposit Asset on Reinsurance | The Company reinsured a $2.9 billion block of in force fixed and variable annuity business with a minimum crediting rate of 4.5% . This represented approximately 50% of the Company’s in force fixed annuity account balances. The arrangement contains investment guidelines and a trust to help meet the Company’s risk management objectives. The annuity reinsurance transaction was effective April 1, 2019. Under the agreement, approximately $2.2 billion of fixed annuity reserves were reinsured on a coinsurance basis for consideration of approximately $2.3 billion which resulted in recognition of an after tax realized investment gain of $106.9 million . The separate account assets and liabilities of approximately $0.7 billion were reinsured on a modified coinsurance basis and thus, remain on the Company's consolidated financial statements, but the related results of operations are fully reinsured. The Company determined that the reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk. Therefore, the Company recognizes the reinsurance agreement using the deposit method of accounting. The assets transferred to the reinsurer as consideration paid is reported as a Deposit asset on reinsurance on the Company's Consolidated Balance Sheet. As amounts are received or paid, consistent with the underlying reinsured contracts, the Deposit asset on reinsurance is adjusted. The Deposit asset on reinsurance is accreted to the estimated ultimate cash flows using the interest method and the adjustment is reported as Net investment income. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, net | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, net | any conducts impairment testing for goodwill at least annually, or more often if events, changes or circumstances indicate that the carrying amount may not be recoverable. See Note 1 for further description of impairment testing. The annuity reinsurance transaction described in Note 6 triggered a requirement to evaluate the goodwill associated with the annuity business of the Retirement reporting unit. For the evaluation, the fair value of the Retirement reporting unit was measured using a discounted cash flow method. The carrying value exceeded the fair value, resulting in a $28.0 million non-cash goodwill impairment charge during the second quarter of 2019. In the second quarter of 2019, the Company adopted guidance to eliminate Step 2 of the goodwill impairment test and as such, the goodwill impairment charge represented the entire balance of the goodwill associated with the annuity business of the Retirement reporting unit. The goodwill impairment charge was reported as Other expense - goodwill impairment in the Consolidated Statement of Operations. The changes in the carrying amount of goodwill by reportable segment for the year ended December 31, 2019 were as follows: ($ in thousands) December 31, 2018 Impairment Acquisitions December 31, 2019 Property and Casualty $ 9,460 $ — $ — $ 9,460 Supplemental — — 19,621 19,621 Retirement 28,025 (28,025 ) 10,087 10,087 Life 9,911 — — 9,911 Total $ 47,396 $ (28,025 ) $ 29,708 $ 49,079 As of December 31, 2019 , the outstanding amounts of definite-lived intangible assets subject to amortization are attributable to the acquisitions of BCG and NTA during 2019. The acquisition of BCG resulted in initial recognition of definite-lived intangible assets subject to amortization in the amount of $14.1 million and the acquisition of NTA resulted in initial recognition of definite-lived intangible assets subject to amortization in the amount of $160.4 million . As of December 31, 2019 the outstanding amounts of definite-lived intangible assets subject to amortization were as follows: ($ in thousands) Weighted Average Useful Life (in Years) At inception: Value of business acquired 30 $ 94,419 Value of distribution acquired 17 53,996 Value of agency relationships 14 16,981 Value of customer relationships 10 9,080 Total 23 174,476 Accumulated amortization: Value of business acquired (3,697 ) Value of distribution acquired (1,871 ) Value of agency relationships (1,489 ) Value of customer relationships (1,733 ) Total (8,790 ) Net intangible assets subject to amortization: $ 165,686 In regard to the definite-lived intangible assets in the table above, the VOBA intangible asset represents the difference between the fair value of insurance contracts and insurance policy reserves measured in accordance with the Company's accounting policies for insurance contracts acquired. VOBA was based on an actuarial estimate of the present value of future distributable earnings for insurance in force as of the acquisition date. The VODA intangible asset represents the present value of future business to be written by the existing distribution channel. The value of agency relationships intangible asset represents the present value of the commission overrides retained by NTA. The value of customer relationships intangible asset represents the present value of the expected profits from existing BCG customers in force at the date of acquisition. All of the aforementioned definite-lived intangible assets were valued using the income approach. Estimated future amortization of the Company's definite-lived intangible assets were as follows: ($ in thousands) Year Ending December 31, 2020 $ 14,488 2021 13,411 2022 12,433 2023 11,577 2024 10,805 Thereafter 102,972 Total $ 165,686 The VOBA intangible asset is being amortized by product based on the present value of future premiums to be received. The VODA intangible asset in respect to the acquisition of NTA is being amortized on a straight-line basis. The VODA intangible asset in respect to the acquisition of BCG is being amortized based on the present value of future profits to be received. The value of agency relationships intangible asset is being amortized based on the present value of future premiums to be received. The value of customer relationships intangible asset is being amortized based on the present value of future profits to be received. Indefinite-lived intangible assets (not subject to amortization) as of December 31, 2019 were as follows: ($ in thousands) Trade names $ 8,645 State licenses 2,886 Total $ 11,531 The trade names intangible asset represents the present value of future savings accruing NTA and BCG by virtue of not having to pay royalties for the use of the trade names, valued using the relief from royalty method. The state licenses intangible asset represents the regulatory licenses held by NTA that were valued using the cost approach. |
Property and Casualty Unpaid Cl
Property and Casualty Unpaid Claims and Claim Expenses | 12 Months Ended |
Dec. 31, 2019 | |
Insurance Loss Reserves [Abstract] | |
Property and Casualty Unpaid Claims and Claim Expenses | 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) basis. 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 year gross reserve (before reinsurance) balances and the reinsurance recoverable balances are reflected on a gross basis in the Consolidated Balance Sheets. ($ in thousands) Years Ended December 31, 2019 2018 2017 Property and Casualty segment Gross reserves, beginning of year (1) $ 367,180 $ 319,182 $ 307,757 Less: reinsurance recoverables 89,725 57,409 61,199 Net reserves, beginning of year (2) 277,455 261,773 246,558 Incurred claims and claim expenses: Claims occurring in the current year 483,062 547,959 498,989 Decrease in estimated reserves for claims occurring in prior years (3) (7,500 ) (300 ) (2,700 ) Total claims and claim expenses incurred (4) 475,562 547,659 496,289 Claims and claim expense payments for claims occurring during: Current year 329,475 369,194 333,385 Prior years 157,072 162,783 147,689 Total claims and claim expense payments 486,547 531,977 481,074 Net reserves, end of year (2) 266,470 277,455 261,773 Plus: reinsurance recoverables 120,506 89,725 57,409 Gross reserves, end of year (1) $ 386,976 $ 367,180 $ 319,182 (1) Unpaid claims and claim expenses as reported in the Consolidated Balance Sheets also include reserves for Supplemental, Retirement and Life of $55.9 million , $29.5 million and $28.6 million as of December 31, 2019 , 2018 and 2017 , respectively, in addition to Property and Casualty reserves. (2) Reserves are net of anticipated reinsurance recoverables. (3) Shows the amounts by which the Company decreased its reserves in each of the periods indicated for claims occurring in previous periods to reflect subsequent information on such claims and changes in their projected final settlement costs. Also refer to the paragraphs below for additional information regarding the reserve development recorded in 2019 , 2018 and 2017 . (4) Benefits, claims and settlement expenses as reported in the Consolidated Statements of Operations also include amounts for Supplemental, Retirement and Life of $109.5 million , $89.9 million , and $86.0 million for the years ended December 31, 2019 , 2018 and 2017 , respectively, in addition to Property and Casualty amounts. Underwriting results for Property and Casualty are significantly influenced by estimates of the Company's ultimate liability for insured events. There is a high degree of uncertainty inherent in the estimates of ultimate losses underlying the liability for unpaid claims and claim settlement expenses. This inherent uncertainty is particularly significant for liability-related exposures due to the extended period, often many years, which transpires between a loss event, receipt of related claims data from policyholders and ultimate settlement of the claim. Reserves for Property and Casualty claims include provisions for payments to be made on reported claims (case reserves), IBNR claims and associated settlement expenses (together, loss reserves). The process by which these reserves are established requires reliance upon estimates based on known facts and on interpretations of circumstances, including the Company's experience with similar cases and historical trends involving claim payments and related patterns, pending levels of unpaid claims and product mix, as well as other factors including court decisions, economic conditions, public attitudes and medical costs. The Company believes the Property and Casualty loss reserves are appropriately established based on available facts, laws, and regulations. The Company calculates and records a single best estimate of the reserve (which is equal to the actuarial point estimate) as of each reporting date, for each line of business and its coverages for reported losses and for IBNR losses and as a result believes no other estimate is better than the recognized amount. Due to uncertainties involved, the ultimate cost of losses may vary materially from recognized amounts. The Company continually updates loss estimates using both quantitative and qualitative information from its reserving actuaries and information derived from other sources. Adjustments may be required as information develops which varies from experience, or, in some cases, augments data which previously were not considered sufficient for use in determining liabilities. The effects of these adjustments may be significant and are charged or credited to income in the period in which the adjustments are made. Numerous risk factors will affect more than one product line. One of these factors is changes in claim department practices, including claim closure rates, number of claims closed without payment, the use of third-party claim adjusters and the level of needed case reserve estimated by the adjuster. Other risk factors include changes in claim frequency, changes in claim severity, regulatory and legislative actions, court actions, changes in economic conditions and trends (e.g., medical costs, labor rates and the cost of materials), the occurrence of unusually large or frequent catastrophic loss events, timeliness of claim reporting, the state in which the claim occurred and degree of claimant fraud. The extent of the impact of a risk factor will also vary by coverages within a product line. Individual risk factors are also subject to interactions with other risk factors within product line coverages. While all product lines are exposed to these risks, there are some loss types or product lines for which the financial effect will be more significant. For instance, given the relatively large proportion (approximately 80.0% as of December 31, 2019 ) of the Company's reserves that are in the longer-tail automobile liability coverages, regulatory and court actions, changes in economic conditions and trends, and medical costs could be expected to impact this product line more extensively than others. Reserves are established for claims as they occur for each line of business based on estimates of the ultimate cost to settle the claims. The actual loss results are compared to prior estimates and differences are recorded as re-estimates. The primary actuarial techniques (development of paid loss dollars, development of reported loss dollars, methods based on expected loss ratios and methods utilizing frequency and severity of claims) used to estimate reserves and provide for losses are applied to actual paid losses and reported losses (paid losses plus individual case reserves set by claim adjusters) for an accident year to create an estimate of how losses are likely to develop over time. An accident year refers to classifying claims based on the year in which the claims occurred. For estimating short-tail coverage reserves (e.g., homeowners and automobile physical damage), which comprise approximately 20.0% of the Company's total loss reserves as of December 31, 2019 , the primary actuarial technique utilized is the development of paid loss dollars due to the relatively quick claim settlement period. As it relates to estimating long-tail coverage reserves (primarily related to automobile liability), which comprise approximately 80.0% of the Company's total loss reserves as of December 31, 2019 , the primary actuarial technique utilized is the development of reported loss dollars due to the relatively long claim settlement period. In all of the loss estimation techniques referred to above, a ratio (development factor) is calculated which compares current results to results in the prior period for each accident year. Various development factors, based on historical results, are multiplied by the current experience to estimate the development of losses of each accident year from the current time period into the next time period. The development factors for the next time period for each accident year are compounded over the remaining calendar years to calculate an estimate of ultimate losses for each accident year. Occasionally, unusual aberrations in loss patterns are caused by factors such as changes in claim reporting, settlement patterns, unusually large losses, process changes, legal or regulatory environment changes, and other influences. In these instances, analyses of alternate development factor selections are performed to evaluate the effect of these factors and judgment is applied to make appropriate development factor assumptions needed to develop a best estimate of ultimate losses. Paid losses are then subtracted from estimated ultimate losses to determine the indicated loss reserves. The difference between indicated reserves and recorded reserves is the amount of reserve re-estimate. Reserves are re-estimated quarterly. When new development factors are calculated from actual losses, and they differ from estimated development factors used in previous reserve estimates, assumptions about losses and required reserves are revised based on the new development factors. Changes to reserves are recognized in the period in which development factor changes result in reserve re-estimates. Claim count estimates are also established for claims as they occur for each line of business based on estimates of the ultimate claim counts. (These counts are derived by counting the number of claimants by insurance coverage.) The primary actuarial techniques (development of paid claim counts and development of reported claim counts) used to estimate ultimate claim counts are applied to actual paid claim counts and reported claim counts (paid claims plus individual unpaid claims set by claim adjusters) for an accident year to create an estimate of how claims are likely to develop over time. An accident year refers to classifying claims based on the year in which the claim occurred. The ultimate claim count generally gives equal consideration to the results of the two actuarial techniques described. Occasionally, unusual aberrations in claim reporting patterns or claims payment patterns may occur. In these instances, analyses of alternate development factor selections are performed to evaluate the effect of these factors and judgment is applied to make appropriate development factor assumptions needed to develop a best estimate of ultimate claims. See tables on the following pages of Note 8 for details of the average annual percentage payout of incurred claims by age, also referred to as a history of claims duration and tables illustrating the incurred and paid claims development information by accident year on a net basis for the lines of Homeowners, Auto Liability, and Auto Physical Damage, which represent s 99.0% of the Company's incurred losses for 2019 . Numerous actuarial estimates of the types described above are prepared each quarter to monitor losses for each line of business, including the line's individual coverages; for reported losses and IBNR. Often, several different estimates are prepared for each detailed component, incorporating alternative analyses of changing claim settlement patterns and other influences on losses, from which the Company selects the best estimate for each component, occasionally incorporating additional analyses and judgment, as described above. These estimates also incorporate the historical impact of inflation into reserve estimates, the implicit assumption being that a multi-year average development factor represents an adequate provision. Based on the Company's review of these estimates, as well as the review of the independent reserve studies, the best estimate of required reserves for each line of business, including the line's individual coverages, is determined by management and is recognized for each accident year, then the required reserves for each component are summed to create the reserve balances carried on the Company's Consolidated Balance Sheets. Based on the Company's products and coverages, historical experience, and various actuarial methodologies used to develop reserve estimates, the Company estimates that the potential variability of the Property and Casualty loss reserves within a reasonable probability of other possible outcomes may be approximately plus or minus 6.0% of reserves, which equates to plus or minus approximately $13.0 million of net income as of December 31, 2019 . Although this evaluation reflects the most likely outcomes, it is possible the final outcome may fall below or above these estimates. Net favorable development of total reserves for Property and Casualty claims occurring in prior years was $7.5 million in 2019 , $0.3 million in 2018 and $2.7 million in 2017 . In 2019, the favorable development was predominantly the result of favorable severity trends in Auto for accident year 2018. In 2018, the favorable development was predominantly the result of favorable severity trends in property for accident years 2016 and prior. In 2017, the favorable development was predominantly the result of favorable severity trends in property for accident years 2015 and prior. The Company completes a detailed study of Property and Casualty reserves based on information available at the end of each quarter and year. Trends of reported losses (paid amounts and case reserves on claims reported to the Company) for each accident year are reviewed and ultimate loss costs for those accident years are estimated. The Company engages an independent property and casualty actuarial consulting firm to prepare an independent study of the Company's Property and Casualty reserves at December 31 st of each year. The result of the independent actuarial study at December 31, 2019 was consistent with management's analysis and selected estimates and did not result in any adjustments to the Company's Property and Casualty reserves recognized. At the time each of the reserve analyses was performed, the Company believed that each estimate was based upon sound methodology and such methodologies were appropriately applied and that there were no trends which indicated the likelihood of future loss reserve development. The financial impact of the net reserve development was therefore accounted for in the period that the development was determined. No other adjustments were made in the determination of the liabilities during the periods covered by these consolidated financial statements. Management believes that, based on data currently available, it has reasonably estimated the Company's ultimate losses. Below is the average annual percentage payout of incurred claims by age, also referred to as a history of claims duration: Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Homeowners 79.5 % 16.6 % 2.2 % 1.0 % 0.4 % 0.3 % — — — — Auto liability 40.8 % 34.9 % 13.8 % 6.1 % 3.0 % 1.0 % 0.3 % 0.1 % — — Auto physical damage 95.6 % 4.4 % — — — — — — — — The following tables illustrate the incurred and paid claims development by accident year on a net basis for the lines of homeowners, auto liability and auto physical damage. Conditions and trends that have affected the development of these reserves in the past will not necessarily reoccur in the future. It may not be appropriate to use this cumulative history in the projection of future performance. The information about incurred and paid claims development for the years ended December 31, 2010 to 2018 is presented as unaudited supplementary information. ($ in thousands) Homeowners Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, As of December 31, 2019 Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims Cumulative Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 140,994 $ 136,907 $ 133,358 $ 133,235 $ 133,216 $ 133,136 $ 132,859 $ 132,905 $ 132,627 $ 132,627 $ — 25,150 2011 150,141 150,334 150,791 148,860 148,755 148,414 148,370 148,079 148,067 — 29,531 2012 108,754 109,156 109,360 106,486 106,308 106,348 106,000 106,028 — 21,578 2013 105,584 107,489 103,982 102,407 102,345 101,769 101,709 — 19,221 2014 111,647 113,505 109,059 106,844 106,554 106,458 59 20,084 2015 111,706 115,134 114,404 114,053 115,050 276 18,714 2016 115,931 118,604 117,009 117,933 280 19,853 2017 126,285 129,818 132,666 2,285 19,827 2018 166,793 157,404 4,170 20,954 2019 130,391 16,842 16,155 Total $ 1,248,333 ($ in thousands) Homeowners Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 98,190 $ 124,326 $ 129,790 $ 132,246 $ 132,523 $ 132,604 $ 132,599 $ 132,602 $ 132,602 $ 132,602 2011 123,046 142,846 145,852 146,908 147,451 148,026 148,014 148,069 148,067 2012 84,260 101,566 104,203 105,156 105,561 105,909 105,993 106,021 2013 76,890 96,599 99,361 100,968 101,527 101,677 101,709 2014 83,314 103,030 105,704 106,081 106,258 106,388 2015 90,704 109,303 111,882 113,321 114,648 2016 95,772 113,186 115,053 117,537 2017 106,800 128,518 129,767 2018 130,548 152,356 2019 103,790 Total 1,212,885 Outstanding prior to 2010 32 Prior years paid 668 Liabilities for claims and claim adjustment expenses, net of reinsurance $ 35,480 ($ in thousands) Auto Liability Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, As of December 31, 2019 Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims Cumulative Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 157,712 $ 160,058 $ 156,369 $ 154,222 $ 152,483 $ 151,653 $ 149,818 $ 149,425 $ 149,542 $ 149,481 $ — 48,942 2011 150,803 146,713 145,735 143,133 142,488 139,840 138,891 138,949 138,849 94 45,976 2012 156,448 153,815 150,336 149,346 147,594 145,847 145,620 145,515 204 45,984 2013 153,860 152,858 150,720 150,657 148,111 147,993 148,135 575 47,369 2014 155,105 157,249 158,470 159,937 159,794 159,355 665 49,386 2015 165,517 172,553 177,021 178,325 178,654 1,850 50,618 2016 180,380 184,440 184,567 186,568 2,649 51,995 2017 187,983 188,756 188,625 8,025 48,906 2018 200,314 195,284 26,931 47,078 2019 181,141 64,778 42,587 Total $ 1,671,607 ($ in thousands) Auto Liability Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 63,416 $ 118,345 $ 137,012 $ 144,255 $ 147,337 $ 148,751 $ 149,247 $ 149,364 $ 149,439 $ 149,474 2011 61,070 108,837 126,812 133,931 136,906 138,151 138,358 138,689 138,692 2012 61,279 109,574 127,185 138,641 142,916 144,622 145,121 145,184 2013 62,224 108,856 131,214 139,954 145,291 146,770 147,409 2014 61,329 117,468 139,463 149,059 155,758 157,596 2015 70,836 134,473 157,980 170,088 174,495 2016 73,073 140,901 166,815 177,834 2017 70,682 139,531 166,614 2018 77,528 141,537 2019 69,665 Total 1,468,500 Outstanding prior to 2010 73 Prior years paid (219 ) Liabilities for claims and claim adjustment expenses, net of reinsurance $ 203,180 ($ in thousands) Auto Physical Damage Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, As of December 31, 2019 Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims Cumulative Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 84,112 $ 83,420 $ 83,103 $ 83,046 $ 83,052 $ 83,050 $ 83,036 $ 83,028 $ 83,018 $ 83,011 $ — 81,581 2011 86,205 85,507 86,023 85,120 85,143 85,116 85,108 85,102 85,090 — 80,804 2012 83,770 82,337 83,402 83,431 83,354 83,342 83,334 83,322 — 78,165 2013 91,448 88,856 88,672 88,627 88,455 88,525 88,457 — 80,920 2014 95,572 95,634 95,422 95,239 95,232 95,241 — 87,901 2015 99,291 97,994 97,624 97,455 97,612 (18 ) 87,497 2016 112,430 109,515 109,348 109,603 (17 ) 93,225 2017 115,483 111,798 110,520 (161 ) 91,270 2018 109,040 108,886 (326 ) 94,388 2019 111,577 (6,829 ) 89,207 Total $ 973,319 ($ in thousands) Auto Physical Damage Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 79,329 $ 83,120 $ 83,103 $ 83,087 $ 83,067 $ 83,051 $ 83,036 $ 83,028 $ 83,015 $ 83,009 2011 83,227 85,254 85,181 85,148 85,127 85,116 85,108 85,095 85,090 2012 80,519 83,418 83,372 83,355 83,347 83,342 83,326 83,322 2013 85,110 88,688 88,580 88,532 88,484 88,471 88,452 2014 88,939 95,444 95,266 95,256 95,258 95,243 2015 92,138 97,850 97,685 97,638 97,625 2016 106,459 109,686 109,536 109,611 2017 105,156 110,817 110,674 2018 103,559 109,103 2019 106,243 Total 968,372 Outstanding prior to 2010 — Prior years paid — Liabilities for claims and claim adjustment expenses, net of reinsurance $ 4,947 The reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses in the Consolidated Balance Sheet is as follows: ($ in thousands) Years Ended December 31, 2019 Property and Casualty segment Net reserves Homeowners $ 35,480 Auto liability 203,180 Auto physical damage 4,947 Other short duration lines 2,892 Total net reserves for unpaid claims and claim adjustment expense, net of reinsurance 246,499 Reinsurance recoverable on unpaid claims Homeowners 12,394 Auto liability 100,866 Other short duration lines 7,246 Total reinsurance recoverable on unpaid claims 120,506 Insurance lines other than short duration (1) 55,878 Unallocated claims adjustment expenses 19,971 Total other than short duration and unallocated claims adjustment expenses 75,849 Gross reserves, end of year (1) $ 442,854 (1) This line includes Supplemental, Retirement and Life reserves as included in the Consolidated Balance Sheet. |
Reinsurance and Catastrophes
Reinsurance and Catastrophes | 12 Months Ended |
Dec. 31, 2019 | |
Insurance [Abstract] | |
Reinsurance and Catastrophes | Reinsurance and Catastrophes In the normal course of business, the Company's insurance subsidiaries assume and cede reinsurance with other insurers. Reinsurance is ceded primarily to limit losses from large events and to permit recovery of a portion of direct losses; however, such a transfer does not relieve the originating insurance company of primary liability. The Company is a national underwriter and therefore has exposure to catastrophic losses in certain coastal states and other regions throughout the U.S. Catastrophes can be caused by various events including hurricanes, windstorms, hail, severe winter weather, wildfires and earthquakes, and the frequency and severity of catastrophes are inherently unpredictable. The financial impact from catastrophic losses results from both the total amount of insured exposure in the area affected by the catastrophe as well as the severity of the event. The Company seeks to reduce its exposure to catastrophe losses through the geographic diversification of its insurance coverage, deductibles, maximum coverage limits and the purchase of catastrophe reinsurance. The Company's catastrophe losses incurred of approximately $52.0 million , $107.3 million and $61.8 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. For 2019 , catastrophe losses were impacted by winter storm events in the first part of the year, wind/hail/tornado events in spring and summer months as well as losses from several storms in the latter part of the year. The total amounts of reinsurance recoverable on unpaid insurance reserves classified as assets and reported in Other assets in the Consolidated Balance Sheets were as follows: ($ in thousands) December 31, 2019 2018 Reinsurance recoverables on reserves and unpaid claims Property and Casualty Reinsurance companies $ 19,640 $ 33,754 State insurance facilities 100,866 55,971 Life and health 8,707 9,785 Total $ 129,213 $ 99,510 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, IBNR claims 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 (1) Assumed from Other Companies Net Amount Year Ended December 31, 2019 Premiums written and contract deposits (2) $ 1,337,847 $ 23,872 $ 10,567 $ 1,324,542 Premiums and contract charges earned 917,610 30,412 10,756 897,954 Benefits, claims and settlement expenses 633,874 56,325 7,519 585,068 Year Ended December 31, 2018 Premiums written and contract deposits (2) 1,255,557 28,773 8,259 1,235,043 Premiums and contract charges earned 841,147 28,837 5,023 817,333 Benefits, claims and settlement expenses 769,664 136,601 4,497 637,560 Year Ended December 31, 2017 Premiums written and contract deposits (2) 1,244,500 21,989 4,606 1,227,117 Premiums and contract charges earned 812,099 22,036 4,640 794,703 Benefits, claims and settlement expenses 588,621 10,472 4,157 582,306 (1) Excludes the annuity reinsurance agreement accounted for under the deposit method that is discussed in Note 6. (2) This measure is not based on accounting principles generally accepted in the U.S. (non-GAAP). An explanation of this non-GAAP measure is contained in the Glossary of Selected Terms included as an exhibit in the Company's reports filed with the SEC. There were no losses from uncollectible reinsurance recoverables in the three years ended December 31, 2019 . Past due reinsurance recoverables as of December 31, 2019 were not material. The Company maintains catastrophe excess of loss reinsurance coverage. For 2019 , the Company's catastrophe excess of loss coverage consisted of one contract in addition to a minimal amount of coverage by the Florida Hurricane Catastrophe Fund (FHCF). The catastrophe excess of loss contract provided 95% coverage for catastrophe losses above a retention of $25.0 million per occurrence up to $175.0 million per occurrence. This contract consisted of three layers, each of which provided for one mandatory reinstatement. The layers were $25.0 million excess of $25.0 million , $40.0 million excess of $50.0 million and $85.0 million excess of $90.0 million . For liability coverages, in 2019 , the Company reinsured each loss above a retention of $1.0 million with coverage up to $5.0 million on a per occurrence basis and $20.0 million in a clash event. (A clash cover is a reinsurance casualty excess contract requiring two or more casualty coverages or policies issued by the Company to be involved in the same loss occurrence for coverage to apply.) For property coverages, in 2019, the Company reinsured each loss above a retention of $1.0 million up to $5.0 million on a per risk basis, including catastrophe losses. Also, the Company could submit to the reinsurers two per risk losses from the same occurrence for a total of $8.0 million of property recovery in any one event. The maximum individual life insurance risk retained by the Company is $0.5 million on any individual life, while either $0.1 million or $0.125 million is retained on each group life policy depending on the type of coverage. Excess amounts are reinsured. The Company also maintains a life catastrophe reinsurance program. For 2019, the Company reinsured 100% of the catastrophe risk in excess of $1.0 million up to $35.0 million per occurrence, with one reinstatement. The Company's life catastrophe risk reinsurance program covers acts of terrorism and includes nuclear, biological and chemical explosions but excludes other acts of war. The Company retains all of the risk on its supplemental health product lines, including accidental death risk embedded within certain products. However, the Company’s other accidental death and dismemberment risk issued through all other policies and riders are ceded 100%. The maximum risk retained on any individual life by the Company is $0.1 million . |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt Indebtedness and scheduled maturities consisted of the following: ($ in thousands) Effective Interest Rates Final Maturity December 31, 2019 2018 Short-term debt Bank Credit Facility Variable 2024 $ 135,000 $ — Long-term debt (1) 4.50% Senior Notes, Aggregate principal amount of $250,000 less unaccrued discount of $426 and $488 and unamortized debt issuance costs of $1,549 and $1,772 4.50% 2025 248,025 247,740 Federal Home Loan Bank borrowing 1.99% 2022 50,000 50,000 Total $ 433,025 $ 297,740 (1) The Company designates debt obligations as "long-term" based on maturity date at issuance. Credit Agreement with Financial Institutions (Bank Credit Facility) On June 21, 2019, the Company, as borrower, replaced its current line of credit with a new five-year Credit Agreement (Bank Credit Facility). The new Bank Credit Facility increased the amount available on this senior revolving credit facility to $225.0 million from $150.0 million . PNC Capital Markets, LLC and JPMorgan Chase Bank, N.A. served as joint leads on the new agreement, with The Northern Trust Company, U.S. Bank National Association, KeyBank National Association, Comerica Bank and Illinois National Bank participating in the syndicate. Terms and conditions of the new Bank Credit Facility are substantially consistent with the prior agreement, with an interest rate based on LIBOR plus 115 basis points. On July 1, 2019, the Company utilized the senior revolving credit facility to partially fund the acquisition of NTA. As of December 31, 2019 , the amount outstanding on the senior revolving credit facility was $135.0 million . The unused portion of the Bank Credit Facility is subject to a variable commitment fee, which was 0.15% on an annual basis at December 31, 2019 . Senior Notes On November 23, 2015, the Company issued $250.0 million aggregate principal amount of 4.50% senior notes, which will mature on December 1, 2025, issued at a discount of 0.265% resulting in an effective yield of 4.53% (Senior Notes). Interest on the Senior Notes is payable semi-annually at a rate of 4.50% . The Senior Notes are redeemable in whole or in part, at any time, at the Company's option, at a redemption price equal to the greater of (1) 100% of the principal amount of the notes being redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted, on a semi-annual basis, at the Treasury yield (as defined in the indenture) plus 35 basis points, plus, in either of the above cases, accrued interest to the date of redemption. Federal Home Loan Bank Borrowings In 2017, Horace Mann Insurance Company (HMIC) became a member of the FHLB, which provides HMIC with access to collateralized borrowings and other FHLB products. As membership requires the ownership of membership stock, in June 2017, HMIC purchased common stock to meet the membership requirement. Any borrowing from the FHLB requires the purchase of FHLB activity-based common stock in an amount equal to 4.5% of the borrowing, or a lower percentage - such as 2.0% based on the Reduced Capitalization Advance Program. In the fourth quarter of 2017, HMIC purchased common stock to meet the activity-based requirement. In 2019, the Board authorized a maximum amount equal to 15% of net aggregate admitted assets less separate account assets of the insurance subsidiaries for FHLB borrowings. During the fourth quarter of 2017, the Company received $50.0 million in executed borrowings for HMIC. Of the total $50.0 million received, $25.0 million matures on October 5, 2022 and $25.0 million matures on December 2, 2022. Interest on the borrowings accrues at an annual weighted average rate of 1.99% as of December 31, 2019 . HMIC's FHLB borrowings of $50.0 million are included in Long-term debt in the Consolidated Balance Sheets. Covenants The Company is in compliance with all of the financial covenants contained in the Senior Notes indenture and the Bank Credit Facility agreement, consisting primarily of relationships of (1) debt to capital, (2) net worth, as defined in the financial covenants, (3) insurance subsidiaries' risk-based capital and (4) securities subject to funding agreements and repurchase agreements. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The income tax assets and liabilities included in Other assets and Other liabilities, respectively, in the Consolidated Balance Sheets were as follows: ($ in thousands) December 31, 2019 2018 Income tax (asset) liability Current $ (12,184 ) $ (20,793 ) Deferred 160,624 103,686 Deferred tax assets and liabilities are recognized for all future tax consequences attributable to "temporary differences" between the financial statement carrying value of existing assets and liabilities and their respective tax bases. There are no deferred tax liabilities that have not been recognized. The "temporary differences" that gave rise to the deferred tax balances were as follows: ($ in thousands) December 31, 2019 2018 Deferred tax assets Unearned premium reserve reduction $ 12,103 $ 12,112 Compensation accruals 8,866 6,866 Reinsurance commissions 6,804 — Impaired securities 1,245 1,295 Other comprehensive income - net funded status of benefit plans 2,875 3,254 Discounting of unpaid claims and claim expense tax reserves 2,530 2,772 Postretirement benefits other than pensions 285 302 Charitable contributions carryforwards — 89 Net operating loss carryforwards 3,803 10,969 Total gross deferred tax assets 38,511 37,659 Deferred tax liabilities Other comprehensive income - net unrealized gains on securities 74,645 32,897 Deferred policy acquisition costs 49,326 60,330 Life insurance future policy benefit reserve 38,210 9,304 Life insurance future policy benefit reserve (transitional rule) 12,786 14,910 Discounting of unpaid claims and claim expense tax reserves (transitional rule) 947 1,203 Investment related adjustments 15,718 17,531 Intangibles 2,021 2,557 Other, net 5,482 2,613 Total gross deferred tax liabilities 199,135 141,345 Net deferred tax liability $ 160,624 $ 103,686 The Company evaluated sources and character of income, including historical earnings, loss carryback potential, taxable income from future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences, and taxable income from prudent and feasible tax planning strategies. Although realization of deferred tax assets is not assured, the Company believes it is more likely than not that gross deferred tax assets will be fully realized and that a valuation allowance with respect to the realization of the total gross deferred tax assets was not necessary as of December 31, 2019 and 2018 . At December 31, 2019 , the Company had available the following carryforwards or credits. ($ in thousands) Pretax Amount Expiration Year Operating loss carryforwards $ 12,711 2038 Operating loss carryforwards 5,397 Indefinite The components of the provision for income tax expense (benefit) were as follows: ($ in thousands) Years Ended December 31, 2019 2018 2017 Current $ 31,518 $ 4,152 $ 3,813 Deferred 20,488 (2,958 ) (84,585 ) Total income tax expense (benefit) $ 52,006 $ 1,194 $ (80,772 ) Income tax expense for the following periods differed from the expected tax computed by applying the federal corporate tax rate of 21% for 2019 and 2018 and 35% for 2017 to income before income taxes as follows: ($ in thousands) Years Ended December 31, 2019 2018 2017 Expected federal tax on income $ 49,654 $ 4,103 $ 31,041 Add (deduct) tax effects of: Tax-exempt interest (4,159 ) (3,726 ) (5,335 ) Dividend received deduction (1,392 ) (412 ) (4,810 ) Goodwill impairment 5,885 — — Tax Act DTL re-measurement — — (98,988 ) Employee share-based compensation 272 (1,134 ) (3,258 ) Compensation deduction limitation 680 1,754 326 Prior year adjustments (716 ) 300 (293 ) Other, net 1,782 309 545 Income tax expense (benefit) provided on income $ 52,006 $ 1,194 $ (80,772 ) The Company's federal income tax returns for years prior to 2014 are no longer subject to examination by the Internal Revenue Service (IRS). The Company recognizes tax benefits from tax return positions only if it is more likely than not the position will be sustainable, upon examination, on its technical merits and any relevant administrative practices or precedents. As a result, the Company applies a more likely than not recognition threshold for all tax uncertainties. The Company records liabilities for uncertain tax filing positions where it is more likely than not that the position will not be sustainable upon audit by taxing authorities. These liabilities are reevaluated routinely and are adjusted appropriately based upon changes in facts or law. The Company has no unrecorded liabilities from uncertain tax filing positions. HMEC and its subsidiaries file a consolidated federal income tax return. The federal income tax sharing agreements between HMEC and its subsidiaries, as approved by the Board, provide that tax on income is charged to each subsidiary as if it were filing a separate tax return with the limitation that each subsidiary will receive the benefit of any losses or tax credits to the extent utilized in the consolidated tax return. Intercompany balances are settled quarterly with a final settlement after filing the consolidated federal income tax return with the IRS. National Teachers Associates Life Insurance Company and NTA Life Insurance Company of New York are not included in the consolidated federal income tax return and will file separate federal income tax returns until they are eligible to participate in the consolidated federal income tax return. This is expected to occur in 2025. A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, is as follows: ($ in thousands) Years Ended December 31, 2019 2018 2017 Balance as of the beginning of the year $ 1,734 $ 1,790 $ 1,594 Increases related to prior year tax positions 109 — 101 Decreases related to prior year tax positions — (152 ) — Increases related to current year tax positions 123 96 422 Settlements — — — Lapse of statute — — (327 ) Balance as of the end of the year $ 1,966 $ 1,734 $ 1,790 The Company's effective tax rate would be affected to the extent there were unrecognized tax benefits that could be recognized. There are no positions for which it is reasonably possible that the total amount of unrecognized tax benefit will significantly change within the next 12 months. The Company classifies all tax related interest and penalties as income tax expense. Interest and penalties were both immaterial in each of the years ended December 31, 2019 , 2018 and 2017 . |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Operating Leases | Operating Leases The Company has various operating lease agreements, primarily for real estate offices. Such leases have remaining lease terms of 1 year to 6 years , some of which may include options to extend certain leases for up to an additional 25 years . The components of lease expense were as follows: ($ in thousands) Year Ended December 31, 2019 Operating lease cost $ 3,841 Short-term lease cost 208 Total lease cost $ 4,049 Supplemental cash flow information related to operating leases was as follows: ($ in thousands) Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities $ 3,447 Supplemental balance sheet information related to operating leases were as follows: ($ in thousands, except lease term and discount rate) December 31, 2019 Assets Right of use assets, included in Other assets $ 16,483 Liabilities Operating lease liabilities, included in Other liabilities $ 17,499 Weighted average remaining lease term 4.51 Weighted average discount rate 3.78 % Future minimum lease payments under non-cancellable operating leases as of December 31, 2019 are as follows: ($ in thousands) Year Ending December 31, 2020 $ 4,440 2021 4,285 2022 4,156 2023 3,459 2024 1,929 Thereafter 787 Total future minimum lease payments 19,056 Less imputed interest (1,557 ) Total $ 17,499 As of December 31, 2019 , the Company has no additional operating leases that have not yet commenced. |
Shareholders' Equity and Common
Shareholders' Equity and Common Stock Equivalents | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Shareholders' Equity and Common Stock Equivalents | Share Repurchase Program and Treasury Shares On September 30, 2015, the Board authorized a share repurchase program allowing repurchases of up to $50.0 million of HMEC's common stock, par value $0.001 (Program). The Program authorizes the repurchase of common shares in open market or privately negotiated transactions, from time to time, depending on market conditions. The Program does not have an expiration date and may be limited or terminated at any time without notice. During 2017, the Company repurchased 48,440 shares of its common stock, or 0.1% of the shares outstanding as of December 31, 2016, at an aggregate cost of $1.7 million , or an average price of $34.28 per share. During 2018, the Company repurchased 129,112 shares of its common stock, or 0.3% of the shares outstanding as of December 31, 2017, at an aggregate cost of $5.1 million , or an average price of $39.41 per share. During 2019, the Company did not repurchase any shares of its common stock. In total and through December 31, 2019, 2,977,162 shares were repurchased under the Program at an average price of $25.94 per share. The repurchase of shares was funded through use of cash. As of December 31, 2019 , $22.8 million remained authorized for future share repurchases under the Program. At December 31, 2019 , the Company held 24,850,484 shares in treasury. Authorization of Preferred Stock In 1996, the shareholders of HMEC approved authorization of 1,000,000 shares of $0.001 par value preferred stock. The Board is authorized to (1) direct the issuance of the preferred stock in one or more series, (2) fix the dividend rate, conversion or exchange rights, redemption price and liquidation preference, of any series of the preferred stock, (3) fix the number of shares for any series and (4) increase or decrease the number of shares of any series. No shares of preferred stock were issued or outstanding at December 31, 2019 and 2018 . 2010 Comprehensive Executive Compensation Plan In 2010, the shareholders of HMEC approved the 2010 Comprehensive Executive Compensation Plan (the Comprehensive Plan). The purpose of the Comprehensive Plan is to aid the Company in attracting, retaining, motivating and rewarding employees and non-employee Directors; to provide for equitable and competitive compensation opportunities, including deferral opportunities; to encourage long-term service; to recognize individual contributions and reward achievement of Company goals; and to promote the creation of long-term value for the Company's shareholders by closely aligning the interests of plan participants with those of shareholders. The Comprehensive Plan authorizes share-based and cash-based incentives for plan participants. In 2012, the shareholders of HMEC approved the implementation of a fungible share pool under which grants of full value shares will count against the share limit as two and one half shares for every share subject to a full value award. In 2015, the shareholders of HMEC approved an amendment and restatement of the Comprehensive Plan which included an increase of 3,250,000 in the number of shares of common stock reserved for issuance under the Comprehensive Plan. As of December 31, 2019 , approximately 1,187,200 shares were available for grant under the Comprehensive Plan. Shares of common stock issued under the Comprehensive Plan may be either authorized and unissued shares of HMEC or shares that have been reacquired by HMEC; however, new shares have been issued historically. As further described in the paragraphs below, CSUs, stock options and RSUs under the Comprehensive Plan were as follows: December 31, 2019 2018 2017 CSUs related to deferred compensation for Directors 28,526 32,288 61,677 CSUs related to deferred compensation for employees 25,194 24,498 24,903 Stock options 908,557 774,821 719,015 RSUs related to incentive compensation 889,438 1,008,249 1,149,679 Total 1,851,715 1,839,856 1,955,274 Director Common Stock Units Deferred compensation for Directors is in the form of CSUs, which represent an equal number of common shares to be issued in the future. The outstanding units of Directors serving on the Board accrue dividends at the same rate as dividends paid to HMEC's shareholders. These dividends are reinvested into additional CSUs. Employee Common Stock Units Deferred compensation for employees is in the form of CSUs, which represent an equal number of common shares to be issued in the future. Distributions of employee deferred compensation are allowed to be either in common shares or cash. Through December 31, 2019 , all distributions have been in cash. The outstanding units accrue dividends at the same rate as dividends paid to HMEC's shareholders. These dividends are reinvested into additional CSUs. Stock Options Options to purchase shares of HMEC common stock may be granted to executive officers, other employees and Directors. The options become exercisable in installments based on service generally beginning in the first year from the date of grant and generally become fully vested 4 years from the date of grant. The options generally expire 7 to 10 years from the date of grant. The exercise price of the option is equal to the market price of HMEC's common stock on the date of grant resulting in a grant date intrinsic value of $0 . Changes in outstanding options were as follows: Weighted Average Option Price per Share Range of Option Prices per Share Options Outstanding Vested and Exercisable December 31, 2018 $36.65 $17.32-$44.75 774,821 271,116 Granted $39.22 $38.99-$42.73 282,040 — Vested $34.46 $20.60-$44.75 — 161,679 Exercised $26.98 $17.32-$42.95 (64,095 ) (64,095 ) Forfeited $39.97 $31.01-$44.75 (84,209 ) — Expired — — — — December 31, 2019 $37.82 $20.60-$44.75 908,557 368,700 Option information segregated by ranges of exercise prices were as follows: December 31, 2019 Total Outstanding Options Vested and Exercisable Options Range of Option Prices per Share Options Weighted Average Option Price per Share Weighted Average Remaining Term Options Weighted Average Option Price per Share Weighted Average Remaining Term $20.60-$22.69 11,100 $22.34 0.36 11,100 $22.34 0.36 years $28.88-$32.35 271,579 $30.94 5.65 222,499 $30.92 5.53 years $38.05-$41.95 415,356 $40.14 8.36 85,766 $41.80 7.19 years $42.95-$44.75 210,522 $42.94 8.30 49,335 $43.00 8.19 years Total 908,557 $37.82 7.44 368,700 $34.81 6.11 years The weighted average exercise prices of vested and exercisable options as of December 31, 2018 and 2017 were $31.42 and $27.12 , respectively. As of December 31, 2019 , based on a closing stock price of $43.66 per share, the aggregate intrinsic (in-the-money) values of vested options and all options outstanding were $3.3 million and $5.3 million , respectively. Restricted Stock Units RSUs may be granted to executive officers, other employees and Directors and represent an equal number of common shares to be issued in the future. The RSUs vest in installments based on service or attainment of performance criteria generally beginning in the first year from the date of grant and generally become fully vested 1 to 5 years from the date of grant. The outstanding units accrue dividends at the same rate as dividends paid to HMEC's shareholders. These dividends are reinvested into additional RSUs. Changes in outstanding RSUs were as follows: Total Outstanding Units Vested Units Units Weighted Average Grant Date Fair Value per Unit Units Weighted Average Grant Date Fair Value per Unit December 31, 2018 1,008,249 $35.64 417,179 $20.22 Granted (1) 210,712 $41.52 — — Adjustment for performance achievement (3,789 ) $32.16 — — Vested — — 417,454 $33.93 Forfeited (34,895 ) $43.08 — — Distributed (2) (290,839 ) $31.39 (290,839 ) $31.39 December 31, 2019 889,438 $31.94 543,794 $24.77 (1) Includes dividends reinvested into additional RSUs. (2) Includes distributed units which were utilized to satisfy withholding taxes due on the distribution. |
Statutory Information and Restr
Statutory Information and Restrictions | 12 Months Ended |
Dec. 31, 2019 | |
Insurance [Abstract] | |
Statutory Information and Restrictions | The insurance departments of various states in which the insurance subsidiaries of HMEC are domiciled recognize as net income and surplus those amounts determined in conformity with statutory accounting principles prescribed or permitted by the insurance departments, which differ in certain respects from GAAP. Reconciliations of statutory capital and surplus and net income, as determined using statutory accounting principles, to the amounts included in the accompanying consolidated financial statements are as follows: ($ in thousands) December 31, 2019 2018 Statutory capital and surplus of insurance subsidiaries $ 868,839 $ 903,564 Increase (decrease) due to: Deferred policy acquisition costs 276,668 298,742 Deposit asset on reinsurance 2,346,166 — Annuity reserves ceded (2,239,717 ) — Difference in policyholder reserves 209,127 142,601 Goodwill 49,079 47,396 Intangible assets, net 177,217 — Investment fair value adjustments on fixed maturity securities 397,762 142,512 Difference in investment reserves 102,380 105,430 Federal income tax liability (178,026 ) (115,667 ) Net funded status of benefit plans (13,690 ) (15,495 ) Non-admitted assets and other, net (53,801 ) 20,412 Shareholders' equity of parent company and non-insurance subsidiaries 8,306 8,795 Parent company short-term and long-term debt (383,025 ) (247,740 ) Shareholders' equity as reported herein $ 1,567,285 $ 1,290,550 ($ in thousands) Years Ended December 31, 2019 2018 2017 Statutory net income of insurance subsidiaries $ 62,316 $ 45,977 $ 82,587 Net loss of non-insurance companies (9,537 ) (9,755 ) (4,496 ) Interest expense (14,272 ) (11,892 ) (11,836 ) Tax benefit of interest expense and other parent company current tax adjustments 8,993 121 5,654 Combined net income 47,500 24,451 71,909 Increase (decrease) due to: Deferred policy acquisition costs 2,101 1,015 9,385 Intangible asset amortization expense (8,790 ) — — Policyholder benefits 117,369 26,318 30,609 Federal income tax (expense) benefit (23,492 ) 3,020 84,198 Investment reserves 88,627 (31,529 ) (20,966 ) Other adjustments, net (38,872 ) (4,932 ) (5,676 ) Net income as reported herein $ 184,443 $ 18,343 $ 169,459 The Company has principal insurance subsidiaries domiciled in Illinois, New York and Texas. The statutory financial statements of these subsidiaries are prepared in accordance with accounting principles prescribed or permitted by the Illinois Department of Insurance, the New York Department of Insurance and the Texas Department of Insurance, as applicable. Prescribed statutory accounting principles include a variety of publications of the National Association of Insurance Commissioners (NAIC), as well as state laws, regulations and general administrative rules. The NAIC has risk-based capital guidelines to evaluate the adequacy of statutory capital and surplus in relation to risks assumed in investments, reserving policies, and volume and types of insurance business written. At December 31, 2019 and 2018 , the minimum statutory-basis capital and surplus required to be maintained by HMEC's insurance subsidiaries was $108.1 million and $108.5 million , respectively. At December 31, 2019 and 2018 , statutory capital and surplus of each of the Company's insurance subsidiaries was above required levels. The restricted net assets of HMEC's insurance subsidiaries were $26.0 million and $17.7 million as of December 31, 2019 and 2018 , respectively. The minimum statutory basis capital and surplus amount at each date is the total estimated authorized control level risk-based capital for all of HMEC's insurance subsidiaries combined. Authorized control level risk-based capital represents the minimum level of statutory basis capital and surplus necessary before the insurance commissioner in the respective state of domicile is authorized to take whatever regulatory actions considered necessary to protect the best interests of the policyholders and creditors of the insurer. The amount of restricted net assets represents the combined fair value of securities on deposit with governmental agencies for the insurance subsidiaries as required by law in various states in which the insurance subsidiaries of HMEC conduct business. HMEC relies largely on dividends from its insurance subsidiaries to meet its obligations for payment of principal and interest on debt, dividends to shareholders and parent company operating expenses, including tax payments pursuant to tax sharing agreements. Payments for share repurchase programs also have this dependency. HMEC's insurance subsidiaries are subject to various regulatory restrictions which limit the amount of annual dividends or other distributions, including loans or cash advances, available to HMEC without prior approval of the insurance regulatory authorities. As a result, HMEC may not be able to receive dividends from such subsidiaries at times and in amounts necessary to pay desired dividends to shareholders. The maximum amount of dividends that may be paid in 2020 from all of HMEC's insurance subsidiaries without prior regulatory approval is $105.3 million , excluding the impact and timing of prior year dividends. As disclosed in the reconciliation of the statutory capital and surplus of insurance subsidiaries to the consolidated GAAP shareholders' equity, the insurance subsidiaries have statutory capital and surplus of $868.8 million as of December 31, 2019 , which is subject to regulatory restrictions. |
Retirement Plans and Other Post
Retirement Plans and Other Postretirement Benefits | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Retirement Plans and Other Postretirement Benefits | Retirement Plans and Other Postretirement Benefits The Company sponsors two qualified and three non-qualified retirement plans. Substantially all employees participate in the 401(k) plan. Both the qualified defined benefit plan and the two non-qualified supplemental defined benefit plans have been frozen since 2002. All participants in the frozen plans are 100% vested in their accrued benefit and all non-qualified supplemental defined benefit plan participants are receiving payments. Certain employees participate in a non-qualified defined contribution plan. Qualified Plans All employees participate in the 401(k) plan and receive a 100% vested 3% "safe harbor" company contribution based on employees' eligible earnings. The Company matches each dollar of employee contributions up to a 5% maximum — in addition to maintaining the automatic 3% "safe harbor" contribution. The matching company contribution vests after 5 years of service. The 401(k) plan is fully funded. The Company's policy for the frozen defined benefit plan is to contribute to the plan amounts which are actuarially determined to provide sufficient funding to meet future benefit payments as defined by federal laws and regulations. For the two qualified plans, all assets are held in their respective plan trusts. Non-qualified Plans The non-qualified plans were established for specific employees whose otherwise eligible earnings exceeded the statutory limits under the qualified plans. Benefit accruals under the non-qualified supplemental defined benefit plans were frozen in 2002 and all participants are currently in payment status. Both the non-qualified frozen supplemental defined benefit plans and the non-qualified contribution plan are unfunded plans with the Company's contributions made at the time payments are made to participants. Total Expense and Contribution Plans' Information Total expense recorded for the non-qualified defined contribution, 401(k), defined benefit and supplemental retirement plans was $9.3 million , $8.9 million and $9.1 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. Contributions to employees' accounts under the 401(k) plan and the non-qualified defined contribution plan, as well as total assets of the plans, were as follows: ($ in thousands) Year Ended December 31, 2019 2018 2017 401(k) plan Contributions to employees' accounts $ 8,233 $ 7,655 $ 7,637 Total assets at the end of the year 206,247 167,767 180,514 Non-qualified defined contribution plan Contributions to employees' accounts 58 70 84 Total assets at the end of the year — — — Defined Benefit Plan and Supplemental Retirement Plans The following tables summarize the funded status of the defined benefit and supplemental retirement pension plans as of December 31, 2019 , 2018 and 2017 (the measurement dates) and identify (1) the assumptions used to determine the projected benefit obligation and (2) the components of net pension cost for the defined benefit plan and supplemental retirement plans for the following periods: ($ in thousands) Defined Benefit Plan Supplemental Defined Benefit Plans December 31, December 31, 2019 2018 2017 2019 2018 2017 Change in benefit obligation: Projected benefit obligation at beginning of year $ 25,075 $ 28,432 $ 29,407 $ 15,404 $ 16,832 $ 16,847 Service cost 650 650 650 — — — Interest cost 997 947 1,091 620 566 631 Plan amendments — — — — — — Actuarial loss (gain) 101 (2,208 ) (721 ) 516 (789 ) 805 Benefits paid (2,003 ) (2,746 ) (1,995 ) (1,312 ) (1,205 ) (1,451 ) Settlements — — — — — — Projected benefit obligation at end of year $ 24,820 $ 25,075 $ 28,432 $ 15,228 $ 15,404 $ 16,832 Change in plan assets: Fair value of plan assets at beginning of year $ 22,090 $ 25,843 $ 25,446 $ — $ — $ — Actual return on plan assets 3,471 (640 ) 2,909 — — — Employer contributions — — — 1,312 1,205 1,451 Benefits paid (2,003 ) (2,746 ) (1,995 ) (1,312 ) (1,205 ) (1,451 ) Expenses paid (394 ) (367 ) (517 ) — — — Settlements — — — — — — Fair value of plan assets at end of year $ 23,164 $ 22,090 $ 25,843 $ — $ — $ — Funded status $ (1,656 ) $ (2,985 ) $ (2,589 ) $ (15,228 ) $ (15,404 ) $ (16,832 ) Prepaid (accrued) benefit expense $ 6,690 $ 7,425 $ 8,016 $ (9,884 ) $ (10,320 ) $ (10,648 ) Total amount recognized in Consolidated Balance Sheets, all in Other liabilities $ (1,656 ) $ (2,985 ) $ (2,589 ) $ (15,228 ) $ (15,404 ) $ (16,832 ) Amounts recognized in accumulated other comprehensive income (loss) (AOCI): Prior service cost $ — $ — $ — $ — $ — $ — Net actuarial loss (8,345 ) 10,410 10,605 (5,345 ) 5,084 6,184 Total amount recognized in AOCI $ (8,345 ) $ 10,410 $ 10,605 $ (5,345 ) $ 5,084 $ 6,184 Information for pension plans with an accumulated benefit obligation greater than plan assets: Projected benefit obligation $ 24,820 $ 25,075 $ 28,432 $ 15,228 $ 15,404 $ 16,832 Accumulated benefit obligation 24,820 25,075 28,432 15,228 15,404 16,832 Fair value of plan assets 23,164 22,090 25,843 — — — The change in the Company's AOCI for the defined benefit plans for the year ended December 31, 2019 was primarily attributable to better than expected asset returns, updates to mortality assumptions and updated census dates offset by a decrease in the discount rate. The change in the Company's AOCI for the defined benefit plans for the year ended December 31, 2018 was primarily attributable to lower than expected asset returns and updates to mortality assumptions and an increase in the discount rate. The change in the Company's AOCI for the defined benefit plans for the year ended December 31, 2017 was primarily attributable to better than expected asset returns and updates to mortality assumptions partially offset by a decrease in the discount rate. ($ in thousands) Defined Benefit Plan Supplemental Defined Benefit Plans Year Ended December 31, Year Ended December 31, 2019 2018 2017 2019 2018 2017 Components of net periodic pension (income) expense: Service cost: Benefit accrual $ — $ — $ — $ — $ — $ — Other expenses 650 650 650 — — — Interest cost 997 947 1,091 620 566 631 Expected return on plan assets (1,222 ) (1,377 ) (1,493 ) — — — Settlement loss — — — — — — Amortization of: Prior service cost — — — — — — Actuarial loss 310 371 389 256 310 258 Net periodic pension expense $ 735 $ 591 $ 637 $ 876 $ 876 $ 889 Changes in plan assets and benefit obligations included in other comprehensive income (loss): Prior service cost $ — $ — $ — $ — $ — $ — Net actuarial loss (gain) (1,755 ) 177 (1,619 ) 516 (789 ) 805 Amortization of: Prior service cost — — — — — — Actuarial loss (310 ) (371 ) (389 ) (256 ) (310 ) (258 ) Total recognized in other comprehensive income (loss) $ (2,065 ) $ (194 ) $ (2,008 ) $ 260 $ (1,099 ) $ 547 Weighted average assumptions used to determine expense: Discount rate 4.20 % 3.50 % 3.90 % 4.20 % 3.50 % 3.90 % Expected return on plan assets 5.75 % 5.90 % 6.25 % * * * Annual rate of salary increase * * * * * * Weighted average assumptions used to determine benefit obligations as of December 31: Discount rate 3.10 % 4.20 % 3.50 % 3.10 % 4.20 % 3.50 % Expected return on plan assets 5.75 % 5.90 % 6.25 % * * * Annual rate of salary increase * * * * * * * Not applicable. The discount rates at December 31, 2019 were based on the average yield for long-term, high-grade securities available during the benefit payout period. To set its discount rate, the Company looks to leading indicators, including the Mercer Above Mean Yield Curve. The assumption for the long-term rate of return on plan assets was determined by considering actual investment experience during the lifetime of the plan, balanced with reasonable expectations of future growth considering the various classes of assets and percentage allocation for each asset class. The Company has an investment policy for the defined benefit pension plan that aligns the assets within the plan's trust to an approximate allocation of 50% equity and 50% fixed income funds. Management believes this allocation will produce the targeted long-term rate of return on assets necessary for payment of future benefit obligations, while providing adequate liquidity for payments to current beneficiaries. Assets are reviewed against the defined benefit pension plan's investment policy and the trustee has been directed to adjust invested assets at least quarterly to maintain the target allocation percentages. Fair values of the equity security funds and fixed income funds have been determined from public quotations. The following table presents the fair value hierarchy for the Company's defined benefit pension plan assets, excluding cash held. ($ in thousands) Fair Value Measurements at Reporting Date Using Total Level 1 Level 2 Level 3 December 31, 2019 Asset category Equity security funds (1) United States $ 8,883 $ — $ 8,883 $ — International 2,214 — 2,214 — Fixed income funds 11,116 — 11,116 — Short-term investment funds 951 951 — — Total $ 23,164 $ 951 $ 22,213 $ — December 31, 2018 Asset category Equity security funds (1) United States $ 8,198 $ — $ 8,198 $ — International 2,089 — 2,089 — Fixed income funds 11,003 — 11,003 — Short-term investments funds 800 800 — — Total $ 22,090 $ 800 $ 21,290 $ — (1) None of the trust fund assets for the defined benefit pension plan have been invested in shares of HMEC's common stock. There were no Level 3 assets held during the years ended December 31, 2019 and 2018 . In 2020 , the Company expects amortization of net losses of $0.3 million and $0.3 million for the defined benefit plan and the supplemental retirement plans, respectively, and expects no amortization of prior service cost for the supplemental retirement plans to be included in net periodic pension expense. Postretirement Benefits Other than Pensions As of December 31, 2006, upon discontinuation of retiree medical benefits, Health Reimbursement Accounts (HRAs) were established for eligible participants and totaled $7.3 million . As of December 31, 2019 , the balance of the previously established HRAs was $1.4 million . Funding of HRAs was $0.1 million , $0.1 million and $0.1 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. 2020 Contributions In 2020 , there is no minimum funding requirement for the Company's defined benefit plan. The following table discloses that minimum funding requirement and the expected full year contributions for the Company's plans. ($ in thousands) Defined Benefit Pension Plans Defined Benefit Plan Supplemental Defined Benefit Plans Minimum funding requirement for 2019 $ — N/A Expected contributions (approximations) for the year ended December 31, 2020 as of the time of this Form 10-K (1) $ — $ 1,282 N/A - Not applicable. (1) HMEC's Annual Report on Form 10-K for the year ended December 31, 2019 . Estimated Future Benefit Payments The Company's defined benefit plan may be subject to settlement accounting. Assumptions for both the number of individuals retiring in a calendar year and their elections regarding lump sum distributions are significant factors impacting the payout patterns for each of the plans below. Therefore, actual results could vary from the estimates shown. Estimated future benefit payments as of December 31, 2019 were as follows: ($ in thousands) 2020 2021 2022 2023 2024 2025-2029 Pension plans Defined benefit plan $ 2,478 $ 2,277 $ 2,219 $ 1,987 $ 2,099 $ 7,927 Supplemental retirement plans 1,282 1,265 1,245 1,222 1,195 5,407 |
Contingencies and Commitments
Contingencies and Commitments | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Commitments | Contingencies and Commitments Lawsuits and Legal Proceedings Companies in the insurance industry have been subject to substantial litigation resulting from claims, disputes and other matters. For instance, they have faced expensive claims, including class action lawsuits, alleging, among other things, improper sales practices and improper claims settlement procedures. Negotiated settlements of certain such actions have had a material adverse effect on many insurance companies. At the time of issuance of this Annual Report on Form 10-K, the Company does not have pending litigation from which there is a reasonable possibility of material loss. Assessments for Insolvencies of Unaffiliated Insurance Companies The Company is contingently liable for possible assessments under regulatory requirements pertaining to potential insolvencies of unaffiliated insurance companies. Liabilities, which are established based upon regulatory guidance, have generally been insignificant. Investment Commitments From time to time, the Company has outstanding commitments to fund investments in limited partnership interests, commercial mortgage loans and bank loans. Such unfunded commitments were $306.2 million and $145.4 million for the years ended December 31, 2019 and 2018 , respectively. |
Supplementary Disclosure of Con
Supplementary Disclosure of Consolidated Cash Flow Information | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplementary Disclosure of Consolidated Cash Flow Information | ($ in thousands) Years Ended December 31, 2019 2018 2017 Cash $ 25,206 $ 11,906 $ 7,627 Restricted cash 302 — — Total cash and restricted cash shown in the Consolidated Statements of Cash Flows $ 25,508 $ 11,906 $ 7,627 Cash paid during the year for: Interest $ 14,104 $ 12,532 $ 11,555 Income taxes 22,946 8,679 16,259 Non-cash investing activities include $2.1 billion of investments transferred to a reinsurer as consideration paid during the second quarter of 2019 in connection with the Company's reinsurance of a $2.9 billion block of in force fixed and variable annuity business. See Note 6 for further information. Non-cash investing activities in respect to modifications or exchanges of fixed maturity securities as well as paid-in-kind activity for policy loans were insignificant for the years ended December 31, 2019 , 2018 and 2017 , respectively. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company conducts and manages its business through five segments. See Note 1 for a description of the Company's reporting segments that changed effective in the third quarter of 2019. The four operating segments, representing the major lines of insurance business, are Property and Casualty (primarily personal lines of automobile and property insurance products), the newly created Supplemental (primarily heart, cancer, accident and limited short-term supplemental disability coverages), Retirement (primarily tax-qualified fixed and variable annuities) and Life (life insurance). The Company does not allocate the impact of corporate-level transactions to these operating segments, consistent with the basis for management's evaluation of the results of those segments, but classifies those items in the fifth segment, Corporate and Other. In addition to ongoing transactions such as corporate debt service, net investment gains (losses) and certain public company expenses, such items also have included corporate debt retirement costs, when applicable. The accounting policies of the segments are the same as those described in Note 1. The Company accounts for intersegment transactions, primarily the allocation of operating and agency costs from Corporate and Other to Property and Casualty, Supplemental, Retirement and Life, on a direct cost basis. Summarized financial information for these segments is as follows: ($ in thousands) Years Ended December 31, 2019 2018 2017 Insurance premiums and contract charges earned Property and Casualty $ 683,454 $ 665,734 $ 648,263 Supplemental 65,815 N/A N/A Retirement 29,083 31,269 28,003 Life 119,602 120,330 118,437 Total $ 897,954 $ 817,333 $ 794,703 Net investment income Property and Casualty $ 41,740 $ 40,104 $ 36,178 Supplemental 7,480 N/A N/A Retirement 245,475 262,634 261,994 Life 71,957 74,399 76,195 Corporate and Other (85 ) 142 78 Intersegment eliminations (1,503 ) (772 ) (815 ) Total $ 365,064 $ 376,507 $ 373,630 Net income (loss) Property and Casualty $ 54,359 $ (14,243 ) $ 17,790 Supplemental 17,989 N/A N/A Retirement (4,867 ) 41,736 88,473 Life 17,574 18,754 77,595 Corporate and Other 99,388 (27,904 ) (14,399 ) Total $ 184,443 $ 18,343 $ 169,459 ($ in thousands) December 31, 2019 2018 2017 Assets Property and Casualty $ 1,327,099 $ 1,236,362 $ 1,217,394 Supplemental 747,602 N/A N/A Retirement 8,330,127 7,866,969 8,063,912 Life 1,964,993 1,821,351 1,815,732 Corporate and Other 172,955 149,014 143,784 Intersegment eliminations (64,072 ) (41,800 ) (42,482 ) Total $ 12,478,704 $ 11,031,896 $ 11,198,340 Additional significant financial information for these segments is as follows: ($ in thousands) Years Ended December 31, 2019 2018 2017 DAC amortization expense Property and Casualty $ 79,453 $ 79,073 $ 76,967 Supplemental 438 N/A N/A Retirement 21,446 23,186 17,759 Life 7,844 7,630 7,459 Total $ 109,181 $ 109,889 $ 102,185 Income tax expense (benefit) Property and Casualty $ 13,954 $ (6,622 ) $ (3,279 ) Supplemental 5,105 N/A N/A Retirement 33,772 10,000 (19,498 ) Life 4,907 4,979 (51,876 ) Corporate and Other (5,732 ) (7,163 ) (6,119 ) Total $ 52,006 $ 1,194 $ (80,772 ) |
Unaudited Selected Quarterly Fi
Unaudited Selected Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Selected Quarterly Financial Data | Selected quarterly financial data is presented below. ($ in thousands, except per share data) Three Months Ended December 31, September 30, June 30, March 31, 2019 Insurance premiums and contract charges earned (1) $ 240,392 $ 239,681 $ 208,096 $ 209,785 Insurance premiums written and contract deposits (1)(2)(3) 346,242 371,216 311,691 295,394 Total revenues (1) 331,376 334,418 451,478 313,213 Net income (1) 33,001 25,454 93,822 32,166 Per share information Basic Net income (1) $ 0.79 $ 0.61 $ 2.25 $ 0.77 Shares of common stock - weighted average (4) 41,814 41,785 41,762 41,610 Diluted Net income (1) $ 0.78 $ 0.60 $ 2.24 $ 0.77 Shares of common stock and equivalent shares - weighted average (4) 42,093 42,030 41,921 41,785 2018 Insurance premiums and contract charges earned $ 201,905 $ 206,820 $ 205,610 $ 202,998 Insurance premiums written and contract deposits (2) 311,216 338,097 301,722 284,008 Total revenues 278,535 311,318 306,257 295,489 Net income (loss) (20,257 ) 12,528 5,917 20,155 Per share information Basic Net income (loss) $ (0.49 ) $ 0.30 $ 0.14 $ 0.49 Shares of common stock - weighted average (4) 41,596 41,683 41,600 41,497 Diluted Net income (loss) $ (0.49 ) $ 0.30 $ 0.14 $ 0.48 Shares of common stock and equivalent shares - weighted average (4) 41,911 41,850 41,735 41,653 2017 Insurance premiums and contract charges earned $ 204,328 $ 198,935 $ 195,718 $ 195,722 Insurance premiums written and contract deposits (2) 300,416 318,355 311,614 296,732 Total revenues 302,993 289,817 291,436 287,304 Net income 125,329 26,551 2,261 15,318 Per share information Basic Net income (5) $ 3.03 $ 0.64 $ 0.05 $ 0.37 Shares of common stock - weighted average (4) 41,419 41,433 41,368 41,135 Diluted Net income (5) $ 3.00 $ 0.64 $ 0.05 $ 0.37 Shares of common stock and equivalent shares - weighted average (4) 41,718 41,575 41,493 41,342 (1) See Note 2 for more information regarding the acquisition of NTA on July 1, 2019. (2) This measure is not based on accounting principles generally accepted in the U.S. (non-GAAP). An explanation of this measure is contained in the Glossary of Selected Terms included as an exhibit in the Company's reports filed with the SEC. (3) Excludes the annuity reinsurance agreement accounted for under the deposit method that is discussed in Note 6. (4) Rounded to thousands. (5) For the three months ended December 31, 2017, net income per basic share of $3.03 and net income per diluted share of $3.00 benefited $2.39 and $2.37 , respectively, from TCJA. |
Schedule I Summary of Investmen
Schedule I Summary of Investments-Other Than Investments in Related Parties | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Abstract] | |
Summary of Investments-Other Than Investments in Related Parties | HORACE MANN EDUCATORS CORPORATION SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES December 31, 2019 ($ in thousands) Type of Investments Cost (1) Fair Value Amount Shown in Balance Sheet Fixed maturity securities U.S. Government and federally sponsored agency obligations $ 906,886 $ 956,104 $ 956,104 States, municipalities and political subdivisions 1,545,787 1,686,203 1,686,203 Foreign government bonds 42,801 45,370 45,370 Public utilities 54,519 61,748 61,748 All other corporate bonds 1,388,035 1,495,426 1,495,426 Asset-backed securities 1,068,661 1,079,586 1,079,586 Residential mortgage-backed securities (non-agency) 76,237 75,933 75,933 Commercial mortgage-backed securities 352,164 367,055 367,055 Redeemable preferred stocks 21,890 24,251 24,251 Total fixed maturity securities 5,456,980 5,791,676 5,791,676 Equity securities Industrial, miscellaneous and all other 13,360 13,360 13,360 Banking & finance and insurance companies 5,706 5,706 5,706 Public utilities 1,052 1,052 1,052 Non-redeemable preferred stocks 60,325 60,325 60,325 Closed-end fund 21,421 21,421 21,421 Total equity securities 101,864 101,864 101,864 Limited partnership interests 383,717 XXX 383,717 Short-term investments 172,667 XXX 172,667 Policy loans 153,541 XXX 153,541 Derivatives 8,657 $ 13,239 13,239 Mortgage loans 9,771 XXX 9,771 Other 12,758 XXX 12,758 Total investments $ 6,299,955 XXX $ 6,639,233 (1) Bonds at original cost reduced by repayments and adjusted for amortization of premiums or accrual of discounts and impairment in value of specifically identified investments. See accompanying Report of Independent Registered Public Accounting Firm. |
Schedule II Condensed Financial
Schedule II Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule II Condensed Financial Information of Registrant | HORACE MANN EDUCATORS CORPORATION (Parent Company Only) CONDENSED FINANCIAL INFORMATION OF REGISTRANT BALANCE SHEETS As of December 31, 2019 and 2018 ($ in thousands, except share data) December 31, 2019 2018 ASSETS Investments and cash $ 1,453 $ 5,255 Investment in subsidiaries 1,901,725 1,473,538 Other assets 62,442 66,138 Total assets $ 1,965,620 $ 1,544,931 LIABILITIES AND SHAREHOLDERS' EQUITY Short-term debt $ 135,000 $ — Long-term debt 248,025 247,740 Other liabilities 15,310 6,641 Total liabilities 398,335 254,381 Preferred stock, $0.001 par value, authorized 1,000,000 shares; none issued — — Common stock, $0.001 par value, authorized 75,000,000 shares; issued, 2019, 66,088,808; 2018, 65,820,369 66 66 Additional paid-in capital 480,962 475,109 Retained earnings 1,352,539 1,216,582 Accumulated other comprehensive income (loss), net of taxes: Net unrealized investment gains on securities 230,448 96,941 Net funded status of benefit plans (10,767 ) (12,185 ) Treasury stock, at cost, 2019, 24,850,484 shares; 2018, 24,850,484 shares (485,963 ) (485,963 ) Total shareholders' equity 1,567,285 1,290,550 Total liabilities and shareholders' equity $ 1,965,620 $ 1,544,931 See accompanying Note to Condensed Financial Statements. See accompanying Report of Independent Registered Public Accounting Firm. SCHEDULE II (continued) HORACE MANN EDUCATORS CORPORATION (Parent Company Only) CONDENSED FINANCIAL INFORMATION OF REGISTRANT STATEMENTS OF OPERATIONS ($ in thousands) Year Ended December 31, 2019 2018 2017 Revenues Net investment income $ (135 ) $ 100 $ 34 Realized investment gains — — — Total revenues (135 ) 100 34 Expenses Interest expense 14,272 11,892 11,835 Other 12,632 10,898 5,101 Total expenses 26,904 22,790 16,936 Loss before income tax benefit and equity in net earnings of subsidiaries (27,039 ) (22,690 ) (16,902 ) Income tax benefit (6,029 ) (4,723 ) (6,667 ) Loss before equity in net earnings of subsidiaries (21,010 ) (17,967 ) (10,235 ) Equity in net earnings of subsidiaries 205,453 36,310 179,694 Net income $ 184,443 $ 18,343 $ 169,459 See accompanying Note to Condensed Financial Statements. See accompanying Report of Independent Registered Public Accounting Firm. SCHEDULE II (continued) HORACE MANN EDUCATORS CORPORATION (Parent Company Only) CONDENSED FINANCIAL INFORMATION OF REGISTRANT STATEMENTS OF CASH FLOWS ($ in thousands) Year Ended December 31, 2019 2018 2017 Cash flows from operating activities Net Income $ 184,443 $ 18,343 $ 169,459 Equity in net income of subsidiaries (205,453 ) (36,310 ) (179,694 ) Dividends received from subsidiaries 363,250 61,000 56,900 Changes in: Income taxes 3,369 (4,939 ) (7,041 ) Operating assets and liabilities 8,310 (1,792 ) (260 ) Other 686 13,804 9,861 Net cash provided by operating activities 354,605 50,106 49,225 Cash flows from investing activities Net increase (decrease) in short-term investments 3,336 1,621 (2,338 ) Acquisition of businesses (444,124 ) — — Net cash provided by (used in) investing activities (440,788 ) 1,621 (2,338 ) Cash flows from financing activities Dividends paid to shareholders (47,333 ) (46,689 ) (46,114 ) Principal borrowings on senior revolving credit facility 135,000 — — Acquisition of treasury stock — (5,088 ) (1,660 ) Proceeds from exercise of stock options 1,730 3,627 4,190 Withholding tax payments on RSUs tendered (3,680 ) (3,165 ) (3,245 ) Net cash provided by (used in) financing activities 85,717 (51,315 ) (46,829 ) Net increase (decrease) in cash (466 ) 412 58 Cash at beginning of period 538 126 68 Cash at end of period $ 72 $ 538 $ 126 See accompanying Note to Condensed Financial Statements. See accompanying Report of Independent Registered Public Accounting Firm. SCHEDULE II (continued) HORACE MANN EDUCATORS CORPORATION (Parent Company Only) CONDENSED FINANCIAL INFORMATION OF REGISTRANT NOTE TO CONDENSED FINANCIAL STATEMENTS The accompanying condensed financial statements should be read in conjunction with the Consolidated Financial Statements and the accompanying notes thereto. |
Schedule III and VI Supplementa
Schedule III and VI Supplementary Insurance Information Supplemental Information Concerning Property and Casualty Insurance Operations | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-18, Supplemental Information, Property-Casualty Insurance Underwriters [Abstract] | |
Schedule III and VI Supplementary Insurance Information Supplemental Information Concerning Property and Casualty Insurance Operations | HORACE MANN EDUCATORS CORPORATION SCHEDULE III: SUPPLEMENTARY INSURANCE INFORMATION SCHEDULE VI: SUPPLEMENTAL INFORMATION CONCERNING PROPERTY AND CASUALTY INSURANCE OPERATIONS ($ in thousands) Column identification for Schedule III: A B C D E F G H I J K Schedule VI: A B C D E F G H I J K Deferred policy acquisition costs Future policy Discount, if any, deducted in previous column Unearned premiums Other policy claims and benefits payable Premium revenue/ premium earned Net investment income Benefits, claims and settlement expenses Claims and claim adjustment expenses incurred related to Amortization of deferred policy acquisition costs Other operating expenses Paid claims and claim adjustment expenses Premiums written Segment Current year Prior years Year Ended December 31, 2019 Property and Casualty $ 28,616 $ 386,976 $ — $ 273,998 $ — $ 683,454 $ 41,740 $ 475,563 $ 483,062 $ (7,500 ) $ 79,453 $ 105,489 $ 486,547 $ 683,101 Supplemental 1,967 390,276 xxx 3,218 — 65,815 7,480 24,723 xxx xxx 438 26,476 xxx xxx Retirement 185,294 4,698,461 xxx 734 643,826 29,083 245,475 173,116 xxx xxx 21,446 90,782 xxx xxx Life 60,791 1,201,593 xxx 1,213 3,457 119,602 71,957 124,452 xxx xxx 7,844 37,820 xxx xxx Other, including consolidating eliminations N/A N/A xxx N/A N/A N/A (1,588 ) N/A xxx xxx N/A 26,434 xxx xxx Total $ 276,668 $ 6,677,306 xxx $ 279,163 $ 647,283 $ 897,954 $ 365,064 $ 797,854 xxx xxx $ 109,181 $ 287,001 xxx xxx Year Ended December 31, 2018 Property and Casualty $ 30,033 $ 367,180 $ — $ 274,351 $ — $ 665,734 $ 40,104 $ 547,659 $ 547,959 $ (300 ) $ 79,073 $ 101,834 $ 531,977 $ 681,583 Retirement 209,232 4,573,170 xxx 704 764,607 31,269 262,634 168,732 xxx xxx 23,186 57,269 xxx xxx Life 59,477 1,167,557 xxx 1,170 3,381 120,330 74,399 127,368 xxx xxx 7,630 36,314 xxx xxx Other, including consolidating eliminations N/A N/A xxx N/A N/A N/A (630 ) N/A xxx xxx N/A 22,997 xxx xxx Total $ 298,742 $ 6,107,907 xxx $ 276,225 $ 767,988 $ 817,333 $ 376,507 $ 843,759 xxx xxx $ 109,889 $ 218,414 xxx xxx Year Ended December 31, 2017 Property and Casualty $ 29,191 $ 319,182 $ — $ 258,502 $ — $ 648,263 $ 36,178 $ 496,289 $ 498,989 $ (2,700 ) $ 76,967 $ 96,488 $ 481,074 $ 662,760 Retirement 174,661 4,466,039 xxx 705 720,926 28,003 261,994 159,385 xxx xxx 17,759 49,733 xxx xxx Life 53,974 1,136,263 xxx 1,332 3,335 118,437 76,195 125,267 xxx xxx 7,459 36,550 xxx xxx Other, including consolidating eliminations N/A N/A xxx N/A N/A N/A (737 ) N/A xxx xxx N/A 16,966 xxx xxx Total $ 257,826 $ 5,921,484 xxx $ 260,539 $ 724,261 $ 794,703 $ 373,630 $ 780,941 xxx xxx $ 102,185 $ 199,737 xxx xxx N/A - Not applicable. See accompanying Report of Independent Registered Public Accounting Firm. |
Schedule IV Reinsurance
Schedule IV Reinsurance | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract] | |
Schedule IV Reinsurance | HORACE MANN EDUCATORS CORPORATION REINSURANCE ($ in thousands) Column A Column B Column C Column D Column E Column F Gross Amount Ceded to Other Companies Assumed from Other Companies Net Amount Percentage of Amount Assumed to Net Year Ended December 31, 2019 Life insurance in force $ 19,179,823 $ 4,813,185 $ — $ 14,366,638 — Premiums Property and Casualty $ 689,156 $ 16,457 $ 10,755 $ 683,454 1.6 % Supplemental 65,918 104 1 65,815 — Retirement 35,602 6,519 — 29,083 — Life 126,934 7,332 — 119,602 — Total premiums $ 917,610 $ 30,412 $ 10,756 $ 897,954 1.2 % Year Ended December 31, 2018 Life insurance in force $ 18,277,691 $ 4,505,208 $ — $ 13,772,483 — Premiums Property and Casualty $ 682,478 $ 21,767 $ 5,023 $ 665,734 0.8 % Retirement 31,269 — — 31,269 — Life 127,400 7,070 — 120,330 — Total premiums $ 841,147 $ 28,837 $ 5,023 $ 817,333 0.6 % Year Ended December 31, 2017 Life insurance in force $ 17,564,270 $ 4,295,412 $ — $ 13,268,858 — Premiums Property and Casualty $ 658,960 $ 15,337 $ 4,640 $ 648,263 0.7 % Retirement 28,003 — — 28,003 — Life 125,136 6,699 — 118,437 — Total premiums $ 812,099 $ 22,036 $ 4,640 $ 794,703 0.6 % Note: Premiums above include insurance premiums earned and contract charges earned. See accompanying Report of Independent Registered Public Accounting Firm. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying audited consolidated financial statements of Horace Mann Educators Corporation and its wholly-owned subsidiaries (HMEC; and together with its subsidiaries, the Company or Horace Mann) have been prepared in accordance with accounting principles generally accepted in the U.S. (GAAP) and with the rules and regulations of the Securities and Exchange Commission (SEC). 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. Effective for the year ended December 31, 2019, the Company decided to change the approach it uses for presentation in its Consolidated Statements of Cash Flows from the direct method to the indirect method as management considers presentation under the indirect method as more comparable to the method used by others in the insurance industry. Accordingly, the Company has recast all prior periods presented in the Consolidated Statements of Cash Flows to conform to the current year’s presentation. The consolidated financial statements include the accounts of HMEC and its wholly-owned subsidiaries. HMEC and its subsidiaries have common management, share office facilities and are parties to intercompany service agreements for management, administrative, utilization of personnel, financial, investment advisory, underwriting, claims adjusting, agency and data processing services. Under these agreements, costs have been allocated among the companies in conformity with GAAP. In addition, certain of the subsidiaries have entered into intercompany reinsurance agreements. HMEC and its subsidiaries (with exception of National Teachers Associates Life Insurance Company and NTA Life Insurance Company of New York) file a consolidated federal income tax return, and there are related tax sharing agreements. All significant intercompany balances and transactions have been eliminated in consolidation. The subsidiaries of HMEC market and underwrite personal lines of property and casualty insurance products (primarily personal lines automobile and property insurance), supplemental insurance products (primarily heart, cancer, accident and limited supplemental disability coverages), retirement products (primarily tax-qualified annuities) 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, Horace Mann Lloyds, National Teachers Associates Life Insurance Company and NTA Life Insurance Company of New York. As described more fully in Note 2, the Company acquired NTA Life Enterprises, LLC (NTA) on July 1, 2019. As a result, the Company’s reporting segments have changed effective in the third quarter of 2019. A new reporting segment titled "Supplemental" was added to report on the personal lines of supplemental insurance products (primarily heart, cancer, accident and limited short-term supplemental disability coverages) that are marketed and underwritten by NTA. |
Investments | Investments The Company invests predominantly in fixed maturity securities. This category includes primarily bonds and notes, but also includes redeemable preferred stocks. These securities are classified as available for sale and carried at fair value, of which a portion represent securities that are hard-to-value. The fair value of a fixed maturity security is the estimated amount at which the security could be exchanged in an orderly transaction between knowledgeable, unrelated and willing parties. The Company utilizes its investment managers and its custodian bank to obtain fair value prices from independent third-party valuation service providers, broker-dealer quotes, and model prices. Each month, the Company obtains fair value prices from its investment managers and custodian bank, each of which use a variety of independent, nationally recognized pricing sources to determine market valuations for fixed maturity securities. Differences in prices between the sources that the Company considers significant are researched and the Company utilizes the price that it considers most representative of an exit price. Typical inputs used by these pricing sources include, but are not limited to, reported trades, bids, offers, benchmark yield curves, benchmarking of like securities, rating designations, sector groupings, issuer spreads, and/or estimated cash flows, prepayment and default speeds, among others. The Company's fixed maturity securities portfolio is primarily publicly traded, which allows for a high percentage of the portfolio to be priced through pricing services. Approximately 94.1% of the portfolio, based on fair value, was priced through pricing services or index priced using observable inputs as of December 31, 2019. The valuation of hard-to-value fixed maturity securities (generally 100 - 150 securities) is more subjective because the markets are less liquid and there is a lack of observable market-based inputs. This may increase the potential that the estimated fair value of an investment is not reflective of the price at which an actual transaction would occur. When the pricing sources cannot provide fair value determinations, the investment managers and custodian bank obtain non-binding price quotes from broker-dealers. For those securities where the investment manager cannot obtain broker-dealer quotes, they will model the security, generally using anticipated cash flows of the underlying collateral. Broker-dealers' valuation methodologies as well as investment managers’ modeling methodologies are sometimes matrix-based, using indicative evaluation measures and adjustments for specific security characteristics and market sentiment. The selection of the market inputs and assumptions used to estimate the fair value of hard-to-value fixed maturity securities require judgment and include: benchmark yield, liquidity premium, estimated cash flows, prepayment and default speeds, spreads, weighted average life, and credit rating. The extent of the use of each market input depends on the market sector and market conditions. Depending on the security, the priority of the use of inputs may change or some market inputs may not be relevant. For some securities, additional inputs may be necessary. An adjustment for net unrealized investment gains (losses) on all securities available for sale and carried at fair value, is recognized as a separate component of accumulated other comprehensive income (AOCI) within shareholders' equity, net of applicable deferred taxes and the related impact on DAC associated with annuity contracts and life insurance products with account values that would have occurred if the securities had been sold at their aggregate fair value and the proceeds reinvested at current yields. Beginning January 1, 2018, equity securities are carried at fair value with changes in fair value recognized as Net investment gains (losses). This category includes nonredeemable preferred stocks and common stocks. Limited partnership interests include investments in commercial mortgage loans, infrastructure, corporate credit, private equity, real estate and other funds. All investments in limited partnership interests are accounted for in accordance with the equity method of accounting. Short-term and other investments are comprised of short-term fixed maturity securities, generally carried at cost which approximates fair value; derivatives, carried at fair value; policy loans, carried at unpaid principal balances; mortgage loans, carried at unpaid principal balances; and restricted Federal Home Loan Bank (FHLB) membership and activity stocks, carried at redemption value which approximates fair value. The Company invests in fixed maturity securities and alternative investment funds that could qualify as interests in variable interest entities (VIEs), including corporate securities, mortgage-backed securities and asset-backed securities. Such interests in VIEs have been reviewed and the Company determined that those VIEs are not subject to consolidation as the Company is not the primary beneficiary because it does not have the power to direct the activities that most significantly impact those VIEs' economic performance. Investment income is recognized as earned. Investment income reflects amortization of premiums and accrual of discounts on an effective-yield basis. Realized gains and losses arising from the disposal (recorded on a trade date basis) or impairment of securities are determined based upon specific identification of securities. The Company evaluates all investments in its portfolio for other-than-temporary declines in fair value as described in the following section. |
Other-than-Temporary Impairment | Other-than-temporary Impairment The Company's methodology of assessing other-than-temporary impairments (OTTI) for fixed maturity securities is based on security-specific facts and circumstances as of the reporting date. Based on these facts, if (1) the Company has the intent to sell the security, (2) it is more likely than not the Company will be required to sell the security before the anticipated recovery of the amortized cost basis, or (3) management does not expect to recover the entire amortized cost basis of the security, OTTI is considered to have occurred. Additionally, if events become known that call into question whether the security issuer has the ability to honor its contractual commitments, such security holding will be evaluated to determine whether or not such security has suffered an other-than-temporary decline in fair value. The Company has a policy and process to evaluate fixed maturity securities (at the cusip/issuer level) on a quarterly basis to assess whether there has been OTTI. These reviews, in conjunction with the Company's investment managers' monthly credit reports and relevant factors such as (1) the financial condition and near-term prospects of the issuer, (2) the length of time and extent to which the fair value has been less than the amortized cost basis (3) the Company's intent to sell a security or whether it is more likely than not the Company will be required to sell the security before the anticipated recovery of the amortized cost basis, (4) the market leadership position of the issuer, (5) the debt ratings of the issuer, and (6) the cash flows and liquidity of the issuer or the underlying cash flows for asset-backed securities, are all considered in the impairment assessment. When OTTI is deemed to have occurred, the investment is written-down to fair value at the trade lot level and the credit-related loss portion is recognized as a net investment loss during the period. The amount of total OTTI related to non-credit factors for fixed maturity securities is recognized in other comprehensive income (OCI), net of applicable taxes, in which the Company has the intent to sell the security or if it is more likely than not the Company will be required to sell the security before the anticipated recovery of the amortized cost basis. With respect to fixed maturity securities involving securitized financial assets — primarily asset-backed and commercial mortgage-backed securities in the Company's portfolio — the underlying collateral cash flows are stress tested to determine if there has been any adverse change in the expected future cash flows. A decline in fair value below the amortized cost basis is not assumed to be other-than-temporary for fixed maturity securities with unrealized losses due to spread widening, market illiquidity or changes in interest rates where there exists a reasonable expectation based on the Company's consideration of all objective information available that the Company will recover the entire amortized cost basis of the security and the Company does not have the intent to sell the security before maturity or a market recovery is realized and it is more likely than not the Company will not be required to sell the security. OTTI will be recognized based upon all relevant facts and circumstances for each investment, as appropriate. Additional considerations for certain types of securities include the following: Corporate Fixed Maturity Securities Judgments regarding whether a corporate fixed maturity security is other-than-temporarily impaired include analyzing the issuer's financial condition and whether there has been a decline in the issuer's ability to service the specific security. The analysis of the security issuer is based on asset coverage, cash flow multiples or other industry standards. Several factors assessed include, but are not limited to, credit quality ratings, cash flow sustainability, liquidity, financial strength, industry and market position. Sources of information include, but are not limited to, management projections, independent consultants, external analysts' research, peer analysis and the Company's internal analysis. If the Company has concerns regarding the viability of the issuer or its ability to service the specific security after this assessment, a cash flow analysis is prepared to determine if the present value of future cash flows has declined below the amortized cost basis of the fixed maturity security. This analysis to determine an estimate of ultimate recovery value is combined with the estimated timing to recovery and any other applicable cash flows that are expected to be collected. If a cash flow analysis estimate is not feasible, then the market's view of cash flows implied by the period end fair value, market discount rates and effective yield are the primary factors used to estimate an ultimate recovery value. Mortgage-Backed Securities Not Issued By the U.S. Government or Federally Sponsored Agencies The Company uses an estimate of future cash flows expected to be collected to evaluate its mortgage-backed securities for OTTI. The determination of cash flow estimates is inherently subjective and methodologies may vary depending on facts and circumstances specific to the security. All reasonably available information relevant to the collectability of the security, including past events, current conditions, and reasonable and supportable assumptions and forecasts, are considered when developing the estimate of future cash flows expected to be collected. Information includes, but is not limited to, debt-servicing, missed refinancing opportunities and geography. Loan level characteristics such as issuer, FICO score, payment terms, level of documentation, property or residency type, and economic outlook are also utilized in financial models, along with historical performance, to estimate or measure the loan's propensity to default. Additionally, financial models take into account loan age, lease rollovers, rent volatilities, vacancy rates and exposure to refinancing as additional drivers of default. For transactions where loan level data is not available, financial models use a proxy that is based on the collateral characteristics. Loss severity is a function of multiple factors including, but not limited to, the unpaid balance, interest rate, mortgage insurance ratios, assessed property value at origination, change in property valuation and loan-to-value ratio at origination. Prepayment speeds, both actual and estimated, cost of capital rates and debt service ratios are also considered. The cash flows generated by the collateral securing these securities are then estimated with these default, loss severity and prepayment assumptions. These collateral cash flows are then utilized, along with consideration for the Company's position in the overall structure, to estimate the future cash flows associated with the residential or commercial mortgage-backed security held by the Company. Municipal Bonds The Company's municipal bond portfolio consists primarily of revenue bonds, which present unique considerations in evaluating OTTI, but also includes general obligation bonds. The Company evaluates revenue bonds for OTTI based on guarantees associated with the repayment from revenues generated by the specified revenue-generating activity associated with the purpose of the bonds. Judgments regarding whether a municipal bond is other-than-temporarily impaired include analyzing the issuer's financial condition and whether there has been a decline in the overall financial condition of the issuer or its ability to service the specific security. Security credit ratings are reviewed with emphasis on the economy, finances, debt and management of the municipal issuer. Certain securities may be guaranteed by the mono - line credit insurers or other forms of guarantee. While not relied upon in the initial security purchase decision, insurance benefits are considered in the assessments for OTTI, including the credit-worthiness of the guarantor. Municipalities possess unique powers, along with a special legal standing and protections, that enable them to act quickly to restore budgetary balance and fiscal integrity. These powers include the sovereign power to tax, access to one-time revenue sources, capacity to issue or restructure debt, and ability to shift spending to other authorities. State governments often provide secondary support to local governments in times of financial stress and the federal government has provided assistance to state governments during recessions. If the Company has concerns regarding the viability of the municipal issuer or its ability to service the specific security after this analysis, a cash flow analysis is prepared to determine a present value and whether it has declined below the amortized cost basis of the security. If a cash flow analysis is not feasible, then the market's view of the period end fair value, market discount rates and effective yield are the primary factors used to estimate the present value. Credit Losses The Company estimates the amount of the credit loss component of a fixed maturity security impairment as the difference between amortized cost basis and the present value of the expected future cash flows of the security. The present value is determined using the best estimate of cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset-backed or floating rate security. The methodology and assumptions for establishing the best estimate of cash flows vary depending on the type of security. Corporate fixed maturity security and municipal bond cash flow estimates are derived from scenario-based outcomes of expected restructurings or the disposition of assets using specific facts and other circumstances, including timing, security interests and loss severity and when not reasonably estimable, such securities are impaired to fair value as management's best estimate of the present value of future cash flows. The cash flow estimates for mortgage-backed and other structured securities are based on security specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity and prepayment speeds, and structural support, including subordination and guarantees. |
Deferred Policy Acquisition Costs | Deferred Policy Acquisition Costs The Company's deferred policy acquisition costs (DAC) by reporting segment was as follows: ($ in thousands) December 31, 2019 2018 Property and Casualty $ 28,616 $ 30,033 Supplemental 1,967 N/A Retirement (annuity) 185,294 209,231 Life 60,791 59,478 Total $ 276,668 $ 298,742 DAC consists of commissions, policy issuance and other costs which are incremental and directly related to the successful acquisition of new or renewal business, which are deferred and amortized on a basis consistent with the type of insurance coverage. For property and casualty policies, DAC is amortized over the terms of the insurance policies ( 6 or 12 months). For supplemental policies, DAC is amortized in proportion to anticipated premiums over the terms of the insurance policies (approximately 6 years, based on an estimated average duration across all supplemental products). For all investment (annuity) contracts, DAC is amortized over 20 years in proportion to estimated gross profits. DAC is amortized in proportion to estimated gross profits over 20 years for certain life insurance products with account values and over 30 years for indexed universal life (IUL) products. For other individual life contracts, DAC is amortized in proportion to anticipated premiums over the terms of the insurance policies ( 10 , 15 , 20 , 30 years). The Company periodically reviews the assumptions and estimates used in DAC and also periodically reviews its estimations of gross profits, a process sometimes referred to as "unlocking". The most significant assumptions that are involved in the estimation of annuity gross profits include interest rate spreads, future financial market performance, business surrender/lapse rates, expenses and the impact of net investment gains (losses) on fixed maturity and equity securities. For the variable deposit portion of Retirement, the Company amortizes DAC utilizing a future financial market performance assumption of an 8% reversion to the mean approach with a 200 basis point corridor around the mean during the reversion period, representing a cap and a floor on the Company's long-term assumption. The Company's practice with regard to future financial market performance assumes that long-term appreciation in the financial markets is not changed by short-term market fluctuations, but is only changed when sustained deviations are experienced. The Company monitors these fluctuations and only changes the assumption when long-term expectations change. The most significant assumptions that are involved in the estimation of life insurance gross profits include interest rates expected to be received on investments, business persistency, and mortality. Conversions from term to permanent insurance cause an immediate write down of the associated DAC. The impact on amortization due to assumption changes has an immaterial impact on the results of operations. The most significant assumptions that are involved in the estimation of supplemental gross profits include morbidity, persistency, expenses and interest rates expected to be received on investments. When a supplemental policy lapses, there is an immediate write down of the associated DAC. The impact on amortization due to assumption changes has an immaterial impact on the results of operations. Annually, the Company performs a gross premium valuation on life insurance and supplemental policies to assess whether a loss recognition event has occurred. This involves discounting expected future benefits and expenses less expected future premiums. To the extent that this amount is greater than the liability for future benefits less the DAC asset, in aggregate for the life insurance or the supplemental block, a loss would be recognized by first writing off the DAC and then increasing the liability. In the event actual experience differs significantly from assumptions or assumptions are significantly revised, the Company may be required to recognize a material charge or credit to current period amortization expense for the period in which the adjustment is made. The Company recognized the following adjustments to amortization expense as a result of evaluating actual experience and prospective assumptions, the impact of unlocking: ($ in thousands) Year Ended December 31, 2019 2018 2017 Increase (decrease) to DAC amortization expense: Retirement $ 3,480 $ 3,948 $ 1,081 Life (267 ) 283 (200 ) Total $ 3,213 $ 4,231 $ 881 DAC for investment contracts and life insurance products with account values are adjusted for the impact on estimated future gross profits as if net unrealized investment gains (losses) on securities had been realized at the reporting date. This adjustment reduced DAC by $41.2 million and $17.9 million at December 31, 2019 and 2018 , respectively. The after tax impact of this adjustment is included in AOCI (net unrealized investment gains (losses) on securities) within shareholders' equity. DAC is reviewed for recoverability from future income, including net investment income, and costs that are deemed unrecoverable are expensed in the period in which the determination is made. No such costs were deemed unrecoverable during the years ended December 31, 2019 , 2018 and 2017 . |
Goodwill | Goodwill When the Company was acquired from CIGNA Corporation by HME Holdings, Inc. in 1989, intangible assets were recognized as goodwill in the application of purchase accounting. In addition, goodwill was recognized in 1994 related to the acquisition of Horace Mann Property & Casualty Insurance Company and in 2019 related to the acquisitions of BCG and NTA. Goodwill represents the excess of the amounts paid to acquire a business over the fair value of its net assets at the date of acquisition. Goodwill is not amortized, but is tested for impairment at the reporting unit level at least annually or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. A reporting unit is defined as an operating segment or a business unit one level below an operating segment, if separate financial information is prepared and regularly reviewed by management at that level. The Company's reporting units, for which goodwill has been allocated, are equivalent to the Company's operating segments. Refer to Note 7 for the allocation of goodwill by reporting unit as of December 31, 2019 . The goodwill impairment test, as defined in GAAP, allows an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying value. If an entity determines it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the entity performs a quantitative goodwill impairment test by comparing the fair value of a reporting unit to its carrying value for purposes of confirming and measuring an impairment. In the second quarter of 2019, the Company adopted guidance to eliminate Step 2 of the goodwill impairment test. Goodwill impairment is now the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Any amount of goodwill determined to be impaired will be recognized as an expense in the period in which the impairment determination is made. |
Property and Equipment | Property and Equipment Property and equipment are carried at cost less accumulated depreciation, which is calculated using the straight-line method based on the estimated useful lives of the assets. The estimated life for real estate is identified by specific property and ranges from 20 to 45 years. The estimated useful lives of leasehold improvements and other property and equipment, including capitalized software, generally range from 3 to 10 years. The following amounts are included in Other assets in the Consolidated Balance Sheets: ($ in thousands) December 31, 2019 2018 Property and equipment $ 166,583 $ 142,243 Less: accumulated depreciation 106,458 101,267 Total $ 60,125 $ 40,976 |
Separate Account (Variable Annuity) Assets and Liabilities | Separate Account (Variable Annuity) Assets and Liabilities |
Investment Contract and Life Policy Reserves | Investment Contract and Policy Reserves This table summarizes the Company's investment contract and policy reserves. ($ in thousands) December 31, 2019 2018 Investment contract reserves $ 4,675,774 $ 4,555,856 Policy reserves 1,558,678 1,155,337 Total $ 6,234,452 $ 5,711,193 Liabilities for future benefits on supplemental, life and annuity policies are established in amounts adequate to meet the estimated future obligations on policies in force. Liabilities for future policy benefits on certain supplemental and life insurance policies are computed using the net level premium method including assumptions as to investment yields, mortality, morbidity, persistency, expenses and other assumptions based on the Company's experience, including a provision for adverse deviation. These assumptions are established at the time the policy is issued and are intended to estimate the experience for the period the policy benefits are payable. If experience is less favorable than the assumptions, additional liabilities may be established, resulting in recognition of a loss for that period. Liabilities for future benefits on annuity contracts and certain long-duration life insurance contracts are carried at accumulated policyholder values without reduction for potential surrender or withdrawal charges. The liability also includes provisions for the unearned portion of certain policy charges. A guaranteed minimum death benefit (GMDB) generally provides an additional benefit if the contractholder dies and the variable annuity contract value is less than a contractually defined amount. The Company has estimated and recorded a GMDB reserve on variable annuity contracts in accordance with GAAP. Contractually defined amounts vary from contract to contract based on the date the contract was entered into as well as the GMDB feature elected by the contractholder. The Company regularly monitors the GMDB reserve considering fluctuations in financial markets. The Company has a relatively low exposure to GMDB risk as shown below. ($ in thousands) December 31, 2019 2018 GMDB reserve $ 126 $ 258 Aggregate in-the-money death benefits under the GMDB provision 29,367 48,083 Variable annuity contract value distribution based on GMDB feature: No guarantee 28 % 30 % Return of premium guarantee 67 % 65 % Guarantee of premium roll-up at an annual rate of 3% or 5% 5 % 5 % Total 100 % 100 % |
Reserves for Fixed Indexed Annuities and Indexed Universal Life Policies | Reserves for Fixed Indexed Annuities and Indexed Universal Life Policies The Company offers fixed indexed annuity (FIA) products with interest crediting strategies linked to the Standard & Poor's (S&P) 500 Index and the Dow Jones Industrial Average (DJIA). The Company purchases call options on the applicable indices as an investment to provide the income needed to fund the annual index credits on the indexed products. These products are deferred fixed annuities with a guaranteed minimum interest rate plus a contingent return based on equity market performance and are considered hybrid financial instruments under GAAP. The Company elected to not use hedge accounting for derivative transactions related to the FIA products. As a result, the Company accounts for the purchased call options and the embedded derivative related to the provision of a contingent return at fair value, with changes in fair value recognized as Net investment gains (losses) in the Consolidated Statements of Operations. The embedded derivative is bifurcated from the host contract and included in Other policyholder funds in the Consolidated Balance Sheets. The host contract is accounted for as a debt instrument in accordance with GAAP and is included in Investment contract and life policy reserves in the Consolidated Balance Sheets with any discount to the minimum account value being accreted using the effective yield method. In the Consolidated Statements of Operations, accreted interest for FIA products and benefit claims on these products incurred during the reporting period are included in Benefits, claims and settlement expenses. The Company offers indexed universal life (IUL) products as part of its product portfolio with interest crediting strategies linked to the S&P 500 Index and the DJIA as well as a fixed option. The Company purchases call options monthly to economically hedge the potential liabilities arising in IUL accounts. The Company elected to not use hedge accounting for derivative transactions related to the IUL products. As a result, the Company records the purchased call options and the embedded derivative related to the provision of a contingent return at fair value, with changes in fair value reported in Net investment gains (losses) in the Consolidated Statements of Operations. IUL policies with a balance in one or more indexed accounts are considered to have an embedded derivative. The benefit reserve for the host contract is measured using the retrospective deposit method, which for Horace Mann's IUL product is equal to the account balance. The embedded derivative is bifurcated from the host contract, carried at fair value, and included in Investment contract and life policy reserves in the Consolidated Balance Sheets. See Note 4 for more information regarding the determination of fair value for the FIA and IUL embedded derivatives and purchased call options. |
Unpaid Claims and Claim Expenses | Unpaid Claims and Claim Expenses Liabilities for Property and Casualty unpaid claims and claim expenses include provisions for payments to be made on reported claims, claims incurred but not yet reported (IBNR) and associated settlement expenses. All of the Company's reserves for Property and Casualty unpaid claims and claim expenses are carried at the full value of estimated liabilities and are not discounted for interest expected to be earned on reserves. Estimated amounts of salvage and subrogation on unpaid Property and Casualty claims are deducted from the liability for unpaid claims. Due to the nature of the Company's personal lines business, the Company has no exposure to losses related to claims for toxic waste cleanup, other environmental remediation or asbestos-related illnesses other than claims under property insurance policies for environmentally related items such as mold. |
Other Policyholder Funds | Other Policyholder Funds Other policyholder funds includes payout annuity contracts without life contingencies and dividend accumulations, as well as balances outstanding under funding agreements with FHLB and embedded derivatives related to FIA products. Except for embedded derivatives, each of these components is carried at cost. Embedded derivatives are carried at fair value. Amounts received and repaid under FHLB funding agreements are classified as financing activities in the Company's Consolidated Statements of Cash Flows combined with annuity contract deposits and disbursements, respectively. FHLB Funding Agreements In 2013, Horace Mann Life Insurance Company (HMLIC), and in 2019, NTA became members of FHLB, which provides both subsidiaries with access to collateralized borrowings and other FHLB products. Any borrowing from FHLB requires the purchase of FHLB activity-based common stock in an amount equal to 4.5% of the borrowing, or a lower percentage — such as 2.0% based on the Reduced Capitalization Advance Program. In 2019, HMEC's Board of Directors (Board) authorized a maximum amount equal to 15% of net aggregate admitted assets less separate account assets of the insurance subsidiaries for FHLB advances and funding agreements combined. In 2019, HMLIC received an additional $175.0 million from FHLB under funding agreements as well as repaid FHLB $305.0 million of principal. Outstanding advances under funding agreements are reported as Other policyholder funds in the Consolidated Balance Sheets and totaled $495.0 million as of December 31, 2019 of which $125.0 million matures on September 11, 2020, $20.0 million matures on November 15, 2023, $100.0 million matures on December 15, 2023, $50.0 million matures on January 12, 2024 and the remaining $200.0 million matures on January 16, 2026. Interest on the funding agreements accrues at an annual weighted average rate of 1.87% as of December 31, 2019 . |
Insurance Premiums and Contract Charges Earned | Insurance Premiums and Contract Charges Earned Property and Casualty insurance premiums are recognized as revenue ratably over the related contract periods in proportion to the risks insured. The unexpired portions of these Property and Casualty premiums are recorded as unearned premiums, using the monthly pro rata method. Premiums and contract charges for life insurance contracts with account values and investment (annuity) contracts consist of charges for the cost of insurance, policy administration and withdrawals. Premiums for long-term traditional life and supplemental policies are recognized as revenues when due over the premium-paying period. Contract deposits to investment contracts and life insurance contracts with account values represent funds deposited by policyholders and are not included in the Company's premiums or contract charges earned. |
Share-Based Compensation | Share-Based Compensation The Company grants stock options and both service-based and performance-based restricted common stock units (RSUs) to executive officers, other employees and Directors in an effort to attract and retain individuals while also aligning compensation with the interests of the Company's shareholders. Additional information regarding the Company's share-based compensation plans is contained in Note 13. Stock options are accounted for under the fair value method of accounting using a Black-Scholes valuation model to measure stock option expense at the date of grant. The fair value of RSUs is measured at the market price of the Company's common stock on the date of grant, with the exception of market-based performance awards, for which the Company uses a Monte Carlo simulation model to determine fair value for purposes of measuring RSU expense. For the years ended December 31, 2019 , 2018 and 2017 , the Company recognized $1.2 million , $1.2 million , and $1.3 million , respectively, of stock option expense as a result of the vesting of stock options during the respective periods. For the years ended December 31, 2019 , 2018 and 2017 , the Company recognized $5.2 million , $6.6 million and $6.5 million , respectively, in RSU expense as a result of the performance and/or vesting of RSUs during the respective periods. In 2019 , 2018 and 2017 , the Company granted stock options as quantified in the table below, which also provides the weighted average grant date fair value for stock options granted in each year. The fair value of stock options granted was estimated on the respective dates of grant using the Black-Scholes option pricing model with the weighted average assumptions shown in the following table. Year Ended December 31, 2019 2018 2017 Number of stock options granted 282,040 223,208 222,828 Weighted average grant date fair value of stock options granted $ 6.26 $ 7.16 $ 6.57 Weighted average assumptions: Risk-free interest rate 2.5 % 2.6 % 2.0 % Expected dividend yield 2.9 % 2.6 % 2.5 % Expected life, in years 5.0 4.8 4.9 Expected volatility (based on historical volatility) 21.9 % 21.5 % 21.4 % The weighted average fair value of nonvested stock options outstanding on December 31, 2019 was $6.42 . Total unrecognized compensation expense relating to the nonvested stock options outstanding as of December 31, 2019 was approximately $2.4 million . This amount will be recognized as expense over the remainder of the vesting period, which is scheduled to be 2020 through 2023. Expense is reflected on a straight-line basis over the vesting period for the entire award. Forfeitures of unvested amounts due to terminations and/or early retirements are recognized as a reduction to the related expenses. Total unrecognized compensation expense relating to RSUs outstanding as of December 31, 2019 was approximately $6.6 million . This amount will be recognized as expense over the remainder of the performance and/or vesting period, which is scheduled to be 2020 through 2022. Expense is reflected on a straight-line basis from the date of grant through the end of the performance and/or vesting period for the entire award. Forfeitures of unvested amounts due to terminations are recognized as a reduction to the related expenses. |
Income Taxes | Income Taxes The Company uses the asset and liability method for calculating deferred federal income taxes. Income tax provisions are generally based on income reported for financial statement purposes. The provisions for federal income taxes for the years ended December 31, 2019 , 2018 and 2017 included amounts currently payable and deferred income taxes resulting from the cumulative differences in the Company's assets and liabilities, determined on a tax return versus financial statement basis. Deferred tax assets and liabilities include provisions for net unrealized investment gains (losses) on securities as well as the net funded status of benefit plans with the changes for each period included in the respective components of AOCI within shareholders' equity. |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed based on the weighted average number of common shares outstanding plus the weighted average number of fully vested RSUs and common stock units (CSUs) payable as shares of HMEC common stock. Diluted earnings per share is computed based on the weighted average number of common shares and common stock equivalents outstanding, to the extent dilutive. The Company's common stock equivalents relate to outstanding common stock options, deferred compensation CSUs and incentive compensation RSUs, which are described in Note 13. The computations of net income per share on both basic and diluted bases, including reconciliations of the numerators and denominators, were as follows: ($ in thousands) Year Ended December 31, 2019 2018 2017 Basic: Net income for the period $ 184,443 $ 18,343 $ 169,459 Weighted average number of common shares during the period (in thousands) 41,738 41,570 41,365 Net income per share - basic $ 4.42 $ 0.44 $ 4.10 Diluted: Net income for the period $ 184,443 $ 18,343 $ 169,459 Weighted average number of common shares during the period (in thousands) 41,738 41,570 41,365 Weighted average number of common equivalent shares to reflect the dilutive effect of common stock equivalent securities (in thousands): Stock options 79 100 112 CSUs related to deferred compensation for employees — 25 25 RSUs related to incentive compensation 132 199 63 Total common and common equivalent shares adjusted to calculate diluted earnings per share (in thousands) 41,949 41,894 41,565 Net income per share - diluted $ 4.40 $ 0.44 $ 4.08 Options to purchase 622,500 shares of common stock at $38.05 to $44.75 per share were granted in 2017 , 2018 and 2019 but were not included in the computation of 2019 diluted earnings per share because of their anti-dilutive effect. These options, which expire in 2027, 2028 and 2029, were still outstanding at December 31, 2019 . |
Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) | Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) Comprehensive income (loss) represents the change in shareholders' equity during a reporting period from transactions and other events and circumstances from non-shareholder sources. For the Company, comprehensive income (loss) is equal to net income plus or minus the after tax change in net unrealized investment gains (losses) on securities and the after tax change in net funded status of benefit plans for the periods as shown in the Consolidated Statements of Changes in Shareholders' Equity. AOCI represents the accumulated change in shareholders' equity from these transactions and other events and circumstances from non-shareholder sources as shown in the Consolidated Balance Sheets. In the Consolidated Balance Sheets, the Company recognizes the net funded status of benefit plans as a component of AOCI, net of tax. Comprehensive Income (Loss) The components of comprehensive income (loss) were as follows: ($ in thousands) Year Ended December 31, 2019 2018 2017 Net income $ 184,443 $ 18,343 $ 169,459 Other comprehensive income (loss): Change in net unrealized investment gains (losses) on securities: Net unrealized investment gains (losses) on securities arising during the period 327,363 (275,094 ) 105,475 Less: reclassification adjustment for net investment gains (losses) included in income before income tax 157,423 (16,363 ) (4,863 ) Total, before tax 169,940 (258,731 ) 110,338 Income tax expense (benefit) 36,433 (55,495 ) 35,933 Total, net of tax 133,507 (203,236 ) 74,405 Change in net funded status of benefit plans: Before tax 1,805 1,294 1,461 Income tax expense 387 262 727 Total, net of tax 1,418 1,032 734 Total comprehensive income (loss) $ 319,368 $ (183,861 ) $ 244,598 Accumulated Other Comprehensive Income (Loss) The following table reconciles the components of AOCI for the periods indicated. ($ in thousands) Net Unrealized Investment Gains (Losses) on Securities (1)(2) Net Funded Status of Benefit Plans (1) Total (1)(3) Beginning balance, January 1, 2019 $ 96,941 $ (12,185 ) $ 84,756 Other comprehensive income (loss) before reclassifications 257,871 1,418 259,289 Amounts reclassified from AOCI (124,364 ) — (124,364 ) Net current period other comprehensive income (loss) 133,507 1,418 134,925 Ending balance, December 31, 2019 $ 230,448 $ (10,767 ) $ 219,681 Beginning balance, January 1, 2018 $ 300,177 $ (13,217 ) $ 286,960 Other comprehensive income (loss) before reclassifications (201,122 ) 1,032 (200,090 ) Amounts reclassified from AOCI 12,927 — 12,927 Cumulative effect of change in accounting principle (4) (15,041 ) — (15,041 ) Net current period other comprehensive income (loss) (203,236 ) 1,032 (202,204 ) Ending balance, December 31, 2018 $ 96,941 $ (12,185 ) $ 84,756 Beginning balance, January 1, 2017 $ 175,738 $ (11,817 ) $ 163,921 Other comprehensive income (loss) before reclassifications 71,244 734 71,978 Amounts reclassified from AOCI 3,161 — 3,161 Reclassification of deferred taxes (3) 50,034 (2,134 ) 47,900 Net current period other comprehensive income (loss) 124,439 (1,400 ) 123,039 Ending balance, December 31, 2017 $ 300,177 $ (13,217 ) $ 286,960 (1) All amounts are net of tax. (2) The pretax amounts reclassified from AOCI, $157.4 million , $(16.4) million and $(4.9) million , are included in net investment gains (losses) and the related tax expenses, $33.1 million , $(3.4) million and $(1.7) million , are included in income tax expense in the Consolidated Statements of Operations for the years ended December 31, 2019 , 2018 and 2017 , respectively. (3) For the period ended December 31, 2017, deferred taxes attributable to net unrealized investment gains (losses) on fixed maturity and equity securities and Defined benefit plans were re-measured as a result of the enactment of the Tax Cuts and Jobs Act of 2017 (TCJA). ASC 740, Income Taxes, requires that the income tax effect from the deferred tax re-measurement be reflected in the Company’s income tax expense, even if the deferred taxes being re-measured were originally established through AOCI. The mismatch between deferred taxes established in AOCI at 35% and re-measuring these same deferred taxes at 21% through income tax expense results in stranded deferred taxes in AOCI. On February 14, 2018, the Financial Accounting Standards Board (FASB) issued accounting guidance that permits recognition of a reclassification adjustment between AOCI and Retained earnings for stranded deferred tax amounts related to the reduced corporate tax rate enacted under the TCJA. As permitted under its provisions, the Company early adopted the accounting guidance effective for the quarterly period that ended December 31, 2017 and has elected to reclassify the stranded deferred tax amounts. The impact from early adoption resulted in an increase to AOCI and a reduction to Retained earnings of approximately $47.9 million ; representing the stranded deferred tax liabilities of $50.0 million and $(2.1) million for net unrealized investment gains (losses) on fixed maturity and equity securities and Defined benefit plans, respectively. (4) The Company adopted guidance on January 1, 2018 that resulted in reclassifying $15.0 million of after tax net unrealized gains on equity securities from AOCI to Retained earnings. 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 3. |
Statements of Cash Flows | Statements of Cash Flows |
Adopted and Pending Accounting Standards | Adopted Accounting Standards Accounting for Leases Effective for the quarter ended March 31, 2019, the Company adopted guidance for leases and elected to utilize a cumulative-effect adjustment to the opening balance of retained earnings. Accordingly, the Company’s reporting for the comparative periods prior to adoption continues to be presented in the financial statements in accordance with previous lease accounting guidance. The Company elected to apply all practical expedients in the guidance for transition for leases in effect at adoption, including using hindsight to determine the lease term of existing leases, the option to not reassess whether an existing contract is a lease or contains a lease and whether the lease is an operating or finance lease. The adoption of the guidance resulted in the Company recognizing a $14.5 million lease liability equal to the present value of lease payments and a $13.9 million right-of-use (ROU) asset, which is the corresponding lease liability adjusted for qualifying accrued lease payments. The lease liability and ROU asset are reported in Other liabilities and Other assets on the Consolidated Balance Sheets. The impact of these changes at adoption had no impact on net income or shareholders' equity. Simplifying the Test for Goodwill Impairment Effective for the quarter ended June 30, 2019, the Company adopted guidance to simplify the accounting for goodwill impairment. Adoption of this guidance removed Step 2 of the goodwill impairment test, which required a hypothetical purchase price allocation. Goodwill impairment is now the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Pending Accounting Standards Measurement of Credit Losses on Financial Instruments In June 2016 , the FASB issued guidance which revises the credit loss recognition criteria for certain financial assets measured at amortized cost, including reinsurance recoverables. The new guidance replaces the existing incurred loss recognition model with an expected loss recognition model. The objective of the expected credit loss model is for a reporting entity to recognize its estimate of expected credit losses for affected financial assets in a valuation allowance that when deducted from the amortized cost basis of the related financial assets results in a net carrying value at the amount expected to be collected. A reporting entity must consider all relevant information available when estimating expected credit losses, including details about past events, current conditions, and reasonable and supportable forecasts over the life of an asset. Financial assets may be evaluated individually or on a pooled basis when they share similar risk characteristics. The measurement of credit losses for available-for-sale debt securities measured at fair value is not affected except that credit losses recognized are limited to the amount by which fair value is below amortized cost and the carrying value adjustment is recognized through a valuation allowance which may change over time but once recorded cannot subsequently be reduced to an amount below zero. The guidance is effective for reporting periods beginning after December 15, 2019, and for most affected instruments must be adopted using a modified retrospective approach, with a cumulative effect adjustment recorded to beginning retained earnings. The Company’s implementation activities are substantially complete and the impacts relate primarily to the Company’s commercial mortgage portfolio, property and casualty reinsurance recoverables and off-balance-sheet credit exposures for unfunded commercial mortgage loan commitments. The Company adopted the new guidance on January 1, 2020 and recognized a cumulative effect adjustment that decreased retained earnings by an insignificant amount. Accounting for Long-Duration Insurance Contracts In August 2018, the FASB issued accounting and disclosure guidance that contains targeted improvements to the accounting for long-duration insurance contracts. Under the new guidance, the cash flow assumptions used to measure the liability for future policy benefits for traditional insurance contracts will be required to be updated at least annually with changes recognized as a benefit expense (i.e., assumptions will no longer be locked-in). Insurance entities will be required to use a standard discount rate to measure the liabilities that will be equivalent to the yield from a high-quality bond. The new guidance also changes the amortization of DAC to be on a constant-level basis over the expected term of the related contracts with no interest accruing on the DAC balance. The new guidance also introduces a new category of contract features associated with deposit type contracts referred to as market risk benefits (MRBs). Contract features meeting the definition of a MRB will be measured at fair value. New disclosures will be required for long-duration insurance contracts in order to provide better transparency into the exposure of insurance entities and the drivers of their results. For public business entities, the guidance is effective for annual reporting periods beginning after December 15, 2021, including interim periods within those years. With regards to the liability for future policy benefits and DAC, the guidance applies to contracts in force as of the beginning of the earliest period presented and may be applied retrospectively. With regards to MRBs, the guidance is to be applied retrospectively at the beginning of the earliest period presented. Early adoption is permitted. Management is evaluating the impact this guidance will have on the results of operations and financial position of the Company. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Deferred policy acquisition costs asset by segment | The Company's deferred policy acquisition costs (DAC) by reporting segment was as follows: ($ in thousands) December 31, 2019 2018 Property and Casualty $ 28,616 $ 30,033 Supplemental 1,967 N/A Retirement (annuity) 185,294 209,231 Life 60,791 59,478 Total $ 276,668 $ 298,742 |
Adjustment to amortization expenses | The Company recognized the following adjustments to amortization expense as a result of evaluating actual experience and prospective assumptions, the impact of unlocking: ($ in thousands) Year Ended December 31, 2019 2018 2017 Increase (decrease) to DAC amortization expense: Retirement $ 3,480 $ 3,948 $ 1,081 Life (267 ) 283 (200 ) Total $ 3,213 $ 4,231 $ 881 |
Property and equipment | The following amounts are included in Other assets in the Consolidated Balance Sheets: ($ in thousands) December 31, 2019 2018 Property and equipment $ 166,583 $ 142,243 Less: accumulated depreciation 106,458 101,267 Total $ 60,125 $ 40,976 |
Investment contract and life policy reserves | This table summarizes the Company's investment contract and policy reserves. ($ in thousands) December 31, 2019 2018 Investment contract reserves $ 4,675,774 $ 4,555,856 Policy reserves 1,558,678 1,155,337 Total $ 6,234,452 $ 5,711,193 |
Summary of guaranteed minimum death benefit | The Company regularly monitors the GMDB reserve considering fluctuations in financial markets. The Company has a relatively low exposure to GMDB risk as shown below. ($ in thousands) December 31, 2019 2018 GMDB reserve $ 126 $ 258 Aggregate in-the-money death benefits under the GMDB provision 29,367 48,083 Variable annuity contract value distribution based on GMDB feature: No guarantee 28 % 30 % Return of premium guarantee 67 % 65 % Guarantee of premium roll-up at an annual rate of 3% or 5% 5 % 5 % Total 100 % 100 % |
Stock options fair value pricing model weighted-average assumptions | The fair value of stock options granted was estimated on the respective dates of grant using the Black-Scholes option pricing model with the weighted average assumptions shown in the following table. Year Ended December 31, 2019 2018 2017 Number of stock options granted 282,040 223,208 222,828 Weighted average grant date fair value of stock options granted $ 6.26 $ 7.16 $ 6.57 Weighted average assumptions: Risk-free interest rate 2.5 % 2.6 % 2.0 % Expected dividend yield 2.9 % 2.6 % 2.5 % Expected life, in years 5.0 4.8 4.9 Expected volatility (based on historical volatility) 21.9 % 21.5 % 21.4 % |
Computations of net income per share on both basic and diluted bases, including reconciliations of the numerators and denominators | The computations of net income per share on both basic and diluted bases, including reconciliations of the numerators and denominators, were as follows: ($ in thousands) Year Ended December 31, 2019 2018 2017 Basic: Net income for the period $ 184,443 $ 18,343 $ 169,459 Weighted average number of common shares during the period (in thousands) 41,738 41,570 41,365 Net income per share - basic $ 4.42 $ 0.44 $ 4.10 Diluted: Net income for the period $ 184,443 $ 18,343 $ 169,459 Weighted average number of common shares during the period (in thousands) 41,738 41,570 41,365 Weighted average number of common equivalent shares to reflect the dilutive effect of common stock equivalent securities (in thousands): Stock options 79 100 112 CSUs related to deferred compensation for employees — 25 25 RSUs related to incentive compensation 132 199 63 Total common and common equivalent shares adjusted to calculate diluted earnings per share (in thousands) 41,949 41,894 41,565 Net income per share - diluted $ 4.40 $ 0.44 $ 4.08 |
Components of comprehensive income | The components of comprehensive income (loss) were as follows: ($ in thousands) Year Ended December 31, 2019 2018 2017 Net income $ 184,443 $ 18,343 $ 169,459 Other comprehensive income (loss): Change in net unrealized investment gains (losses) on securities: Net unrealized investment gains (losses) on securities arising during the period 327,363 (275,094 ) 105,475 Less: reclassification adjustment for net investment gains (losses) included in income before income tax 157,423 (16,363 ) (4,863 ) Total, before tax 169,940 (258,731 ) 110,338 Income tax expense (benefit) 36,433 (55,495 ) 35,933 Total, net of tax 133,507 (203,236 ) 74,405 Change in net funded status of benefit plans: Before tax 1,805 1,294 1,461 Income tax expense 387 262 727 Total, net of tax 1,418 1,032 734 Total comprehensive income (loss) $ 319,368 $ (183,861 ) $ 244,598 |
Accumulated other comprehensive income (loss) | The following table reconciles the components of AOCI for the periods indicated. ($ in thousands) Net Unrealized Investment Gains (Losses) on Securities (1)(2) Net Funded Status of Benefit Plans (1) Total (1)(3) Beginning balance, January 1, 2019 $ 96,941 $ (12,185 ) $ 84,756 Other comprehensive income (loss) before reclassifications 257,871 1,418 259,289 Amounts reclassified from AOCI (124,364 ) — (124,364 ) Net current period other comprehensive income (loss) 133,507 1,418 134,925 Ending balance, December 31, 2019 $ 230,448 $ (10,767 ) $ 219,681 Beginning balance, January 1, 2018 $ 300,177 $ (13,217 ) $ 286,960 Other comprehensive income (loss) before reclassifications (201,122 ) 1,032 (200,090 ) Amounts reclassified from AOCI 12,927 — 12,927 Cumulative effect of change in accounting principle (4) (15,041 ) — (15,041 ) Net current period other comprehensive income (loss) (203,236 ) 1,032 (202,204 ) Ending balance, December 31, 2018 $ 96,941 $ (12,185 ) $ 84,756 Beginning balance, January 1, 2017 $ 175,738 $ (11,817 ) $ 163,921 Other comprehensive income (loss) before reclassifications 71,244 734 71,978 Amounts reclassified from AOCI 3,161 — 3,161 Reclassification of deferred taxes (3) 50,034 (2,134 ) 47,900 Net current period other comprehensive income (loss) 124,439 (1,400 ) 123,039 Ending balance, December 31, 2017 $ 300,177 $ (13,217 ) $ 286,960 (1) All amounts are net of tax. (2) The pretax amounts reclassified from AOCI, $157.4 million , $(16.4) million and $(4.9) million , are included in net investment gains (losses) and the related tax expenses, $33.1 million , $(3.4) million and $(1.7) million , are included in income tax expense in the Consolidated Statements of Operations for the years ended December 31, 2019 , 2018 and 2017 , respectively. (3) For the period ended December 31, 2017, deferred taxes attributable to net unrealized investment gains (losses) on fixed maturity and equity securities and Defined benefit plans were re-measured as a result of the enactment of the Tax Cuts and Jobs Act of 2017 (TCJA). ASC 740, Income Taxes, requires that the income tax effect from the deferred tax re-measurement be reflected in the Company’s income tax expense, even if the deferred taxes being re-measured were originally established through AOCI. The mismatch between deferred taxes established in AOCI at 35% and re-measuring these same deferred taxes at 21% through income tax expense results in stranded deferred taxes in AOCI. On February 14, 2018, the Financial Accounting Standards Board (FASB) issued accounting guidance that permits recognition of a reclassification adjustment between AOCI and Retained earnings for stranded deferred tax amounts related to the reduced corporate tax rate enacted under the TCJA. As permitted under its provisions, the Company early adopted the accounting guidance effective for the quarterly period that ended December 31, 2017 and has elected to reclassify the stranded deferred tax amounts. The impact from early adoption resulted in an increase to AOCI and a reduction to Retained earnings of approximately $47.9 million ; representing the stranded deferred tax liabilities of $50.0 million and $(2.1) million for net unrealized investment gains (losses) on fixed maturity and equity securities and Defined benefit plans, respectively. (4) The Company adopted guidance on January 1, 2018 that resulted in reclassifying $15.0 million of after tax net unrealized gains on equity securities from AOCI to Retained earnings. |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Components of net investment income | The components of net investment income for the following periods were: ($ in thousands) Year Ended December 31, 2019 2018 2017 Fixed maturity securities $ 283,228 $ 353,303 $ 354,290 Equity securities 4,923 6,017 6,411 Limited partnership interests 25,694 15,406 12,555 Short-term and other investments 60,703 11,981 10,214 Total investment income 374,548 386,707 383,470 Investment expenses (9,484 ) (10,200 ) (9,840 ) Net investment income $ 365,064 $ 376,507 $ 373,630 |
Summary of realized investment gains (losses) | Net investment gains (losses) for the following periods were: ($ in thousands) Year Ended December 31, 2019 2018 2017 Fixed maturity securities (1) $ 141,448 $ (5,713 ) $ (8,867 ) Equity securities 15,975 (10,649 ) 4,003 Short-term investments and other (4,083 ) 3,819 1,458 Net investment gains (losses) $ 153,340 $ (12,543 ) $ (3,406 ) (1) Net investment gains realized on fixed maturity securities include a $135.3 million realized investment gain associated with a transfer of investments to a reinsurer as consideration paid during the second quarter of 2019 in connection with the reinsurance of a $2.9 billion block of in force fixed and variable annuity business. See Notes 6 and 17 for further information. The following table reconciles net investment gains (losses) by transaction type: ($ in thousands) Year Ended December 31, 2019 2018 2017 Impairment write-downs $ (1,105 ) $ — $ (1,778 ) Change in intent write-downs (275 ) (1,530 ) (10,842 ) Net OTTI losses recognized in earnings (1,380 ) (1,530 ) (12,620 ) Sales and other, net 151,495 3,491 7,756 Change in fair value - equity securities (1) 7,308 (18,323 ) — Change in fair value and gains (losses) realized on settlements - derivatives (4,083 ) 3,819 1,458 Net investment gains (losses) $ 153,340 $ (12,543 ) $ (3,406 ) (1) Effective January 1, 2018, with the adoption of new accounting guidance for recognition and measurement of financial instruments, equity securities are reported at fair value with changes in fair value recognized in Net investment gains (losses) and are no longer included in impairment write-downs or change in intent write-downs. |
Unrealized gains and losses on fixed maturities and equity securities | Amortized cost, net unrealized investment gains (losses) and fair values of all fixed maturity securities in the portfolio were as follows: ($ in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value December 31, 2019 Fixed maturity securities U.S. Government and federally sponsored agency obligations: (1) Mortgage-backed securities $ 684,543 $ 41,263 $ 1,487 $ 724,319 Other, including U.S. Treasury securities 436,665 22,824 621 458,868 Municipal bonds 1,545,787 141,996 1,580 1,686,203 Foreign government bonds 42,801 2,569 — 45,370 Corporate bonds 1,464,444 118,775 1,795 1,581,424 Other mortgage-backed securities 1,282,740 20,883 8,131 1,295,492 Totals $ 5,456,980 $ 348,310 $ 13,614 $ 5,791,676 December 31, 2018 Fixed maturity securities U.S. Government and federally sponsored agency obligations: (1) Mortgage-backed securities $ 778,038 $ 22,724 $ 13,321 $ 787,441 Other, including U.S. Treasury securities 835,096 16,127 17,681 833,542 Municipal bonds 1,884,313 133,150 13,494 2,003,969 Foreign government bonds 83,343 2,321 760 84,904 Corporate bonds 2,054,105 64,296 38,891 2,079,510 Other mortgage-backed securities 1,739,016 10,467 23,531 1,725,952 Totals $ 7,373,911 $ 249,085 $ 107,678 $ 7,515,318 (1) Fair value includes securities issued by Federal National Mortgage Association (FNMA) of $405.1 million and $441.3 million ; Federal Home Loan Mortgage Corporation (FHLMC) of $283.1 million and $417.3 million ; and Government National Mortgage Association (GNMA) of $147.4 million and $96.5 million as of December 31, 2019 and 2018 , respectively. |
Summary of fair value and gross unrealized losses of fixed maturity securities and equity securities in an unrealized loss position | Therefore, it was determined that the unrealized losses on the securities presented in the table below were not other-than-temporarily impaired as of December 31, 2019 . ($ 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 December 31, 2019 Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 72,422 $ 1,282 $ 2,620 $ 205 $ 75,042 $ 1,487 Other 38,341 619 1,527 2 39,868 621 Municipal bonds 91,195 977 9,160 603 100,355 1,580 Foreign government bonds — — — — — — Corporate bonds 58,198 886 16,622 909 74,820 1,795 Other mortgage-backed securities 218,710 1,970 442,791 6,161 661,501 8,131 Total $ 478,866 $ 5,734 $ 472,720 $ 7,880 $ 951,586 $ 13,614 Number of positions with a gross unrealized loss 330 137 467 Fair value as a percentage of total fixed maturities securities fair value 8.3 % 8.2 % 16.5 % December 31, 2018 Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 193,447 $ 5,026 $ 157,295 $ 8,295 $ 350,742 $ 13,321 Other 263,497 6,746 246,213 10,935 509,710 17,681 Municipal bonds 291,869 7,603 95,297 5,891 387,166 13,494 Foreign government bonds 16,250 760 — — 16,250 760 Corporate bonds 818,519 27,429 99,171 11,462 917,690 38,891 Other mortgage-backed securities 913,858 16,076 291,442 7,455 1,205,300 23,531 Total $ 2,497,440 $ 63,640 $ 889,418 $ 44,038 $ 3,386,858 $ 107,678 Number of positions with a gross unrealized loss 1,052 359 1,411 Fair value as a percentage of total fixed maturities and equity securities fair value 32.7 % 11.7 % 44.4 % |
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 December 31, 2019 and 2018 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 basis, for which the non-credit portions of OTTI losses were recognized in OCI: ($ in thousands) Year Ended December 31, 2019 2018 Cumulative credit loss (1) Beginning of period $ 1,529 $ 3,825 New credit losses — — Increases to previously recognized credit losses — 246 Losses related to securities sold or paid down during the period — (2,542 ) End of period $ 1,529 $ 1,529 (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) December 31, 2019 Amortized Cost Fair Value Percent of Total Fair Value Estimated expected maturity: Due in 1 year or less $ 205,798 $ 211,420 3.6 % Due after 1 year through 5 years 1,541,749 1,587,300 27.4 % Due after 5 years through 10 years 1,613,539 1,712,236 29.6 % Due after 10 years through 20 years 1,393,503 1,512,769 26.1 % Due after 20 years 702,391 767,951 13.3 % Total $ 5,456,980 $ 5,791,676 100.0 % Average option-adjusted duration, in years 6.0 |
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 year were: ($ in thousands) Year Ended December 31, 2019 (1) 2018 2017 Fixed maturity securities Proceeds received $ 805,887 $ 625,527 $ 500,760 Gross gains realized 150,852 10,536 13,570 Gross losses realized (7,807 ) (14,932 ) (11,842 ) Equity securities Proceeds received $ 29,863 $ 25,498 $ 50,113 Gross gains realized 9,193 8,592 7,753 Gross losses realized (788 ) (917 ) (1,972 ) (1) Gross gains realized presented above include a $135.3 million realized investment gain associated with a transfer of investments to a reinsurer as consideration paid during the second quarter of 2019 in connection with the reinsurance of a $2.9 billion block of in force fixed and variable annuity business. See Notes 6 and 17 for further information. |
Reconciliation of net unrealized investment gains (losses) on fixed maturity securities and equity securities | The following table reconciles the net unrealized investment gains (losses) on securities, net of tax, included in AOCI, before the impact on DAC: ($ in thousands) Year Ended December 31, 2019 2018 2017 Net unrealized investment gains (losses) on fixed maturity securities, net of tax Beginning of period $ 111,712 $ 286,176 $ 202,941 Change in unrealized investment gains (losses) on fixed maturity securities 277,062 (172,350 ) 80,073 Reclassification of net investment (gains) losses on securities to net income (124,364 ) 12,927 3,162 Cumulative effect of change in accounting principle (1) — (15,041 ) — End of period $ 264,410 $ 111,712 $ 286,176 (1) Effective January 1, 2018, with the adoption of new accounting guidance for recognition and measurement of financial instruments, available for sale equity securities were reclassified to equity securities at fair value and the related net unrealized gains were reclassified from AOCI to Retained earnings. |
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 December 31, 2019 Asset derivatives Free-standing derivatives $ 13,239 $ — $ 13,239 $ 7,687 $ 6,640 $ (1,088 ) December 31, 2018 Asset derivatives Free-standing derivatives 2,647 — 2,647 — 1,868 779 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of recognized identified assets acquired and liabilities assumed | Based on the Company's final allocation of the purchase price, the fair value of the assets acquired and liabilities assumed were as follows: ($ in millions) Assets: Investments $ 542.6 Cash and short-term investments 73.8 Intangible assets (1) 169.8 Other assets 18.3 Liabilities: Policy reserves 366.8 Policy claims 21.8 Unearned premiums 4.1 Other liabilities 5.5 Total identifiable net assets acquired 406.3 Goodwill (2) 19.6 Purchase price $ 425.9 (1) Intangible assets consist of the value of business acquired, value of distribution acquired, agency relationships, trade names and state licenses. The intangible assets that are amortizable have a total weighted average useful life of 23 years. See Note 7 for further information. (2) The amount of goodwill that is expected to be deductible for federal income tax purposes is $17.9 million . |
Business acquisition, pro forma information | The following unaudited pro forma information presents the Company's results of operations as if the acquisition of NTA occurred on January 1, 2018. The adjustments to arrive at the unaudited pro forma information below includes, among other things, adjustments for lost investment income on the cash used to fund the acquisition, amortization of an estimated fair value adjustment on NTA's policy reserves, amortization of acquired intangible assets, interest expense on debt incurred to finance the acquisition and exclusion of certain transaction costs attributable to the acquisition as such costs are considered non-recurring. ($ in thousands, except per share data) Unaudited Year Ended December 31, 2019 2018 Total revenues $ 1,507,352 $ 1,339,896 Total expenses 1,259,213 1,288,690 Income before income taxes 248,139 51,206 Net income $ 193,755 $ 43,373 Net income per share: (1) Basic $ 4.64 $ 1.04 Diluted $ 4.62 $ 1.04 (1) The unaudited pro forma basic and diluted net income per share calculations are based on the Company's historical basic and diluted weighted average number of shares outstanding for the years ended December 31, 2019 and 2018, respectively. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 December 31, 2019 , Level 3 investments comprised approximately 4.8% of the Company's total investment portfolio at fair value. ($ in thousands) Carrying Fair Fair Value Measurements at Reporting Date Using Amount Value Level 1 Level 2 Level 3 December 31, 2019 Financial Assets Investments Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 724,319 $ 724,319 $ — $ 711,004 $ 13,315 Other, including U.S. Treasury securities 458,868 458,868 17,699 441,169 — Municipal bonds 1,686,203 1,686,203 — 1,641,912 44,291 Foreign government bonds 45,370 45,370 — 45,370 — Corporate bonds 1,581,424 1,581,424 14,470 1,463,002 103,952 Other mortgage-backed securities 1,295,492 1,295,492 — 1,161,979 133,513 Total fixed maturity securities 5,791,676 5,791,676 32,169 5,464,436 295,071 Equity securities 101,864 101,864 49,834 51,923 107 Short-term investments 172,667 172,667 172,667 — — Other investments 25,997 25,997 — 25,997 — Totals $ 6,092,204 $ 6,092,204 $ 254,670 $ 5,542,356 $ 295,178 Separate Account (variable annuity) assets (1) $ 2,490,469 $ 2,490,469 $ 2,490,469 $ — $ — Financial Liabilities Investment contract and life policy reserves, embedded derivatives $ 1,314 $ 1,314 $ — $ 1,314 $ — Other policyholder funds, embedded derivatives $ 93,733 $ 93,733 $ — $ — $ 93,733 December 31, 2018 Financial Assets Investments Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 787,441 $ 787,441 $ — $ 784,224 $ 3,217 Other, including U.S. Treasury securities 833,542 833,542 13,291 820,251 — Municipal bonds 2,003,969 2,003,969 — 1,956,438 47,531 Foreign government bonds 84,904 84,904 — 84,904 — Corporate bonds 2,079,510 2,079,510 12,281 1,986,487 80,742 Other mortgage-backed securities 1,725,952 1,725,952 — 1,608,958 116,994 Total fixed maturity securities 7,515,318 7,515,318 25,572 7,241,262 248,484 Equity securities 111,750 111,750 64,330 47,415 5 Short-term investments 122,222 122,222 117,296 4,926 — Other investments 16,147 16,147 — 16,147 — Totals $ 7,765,437 $ 7,765,437 $ 207,198 $ 7,309,750 $ 248,489 Separate Account (variable annuity) assets (1) $ 2,001,128 $ 2,001,128 $ 2,001,128 $ — $ — Financial Liabilities Investment contract and life policy reserves, embedded derivatives $ 248 $ 248 $ — $ 248 $ — Other policyholder funds, embedded derivatives $ 78,700 $ 78,700 $ — $ — $ 78,700 (1) Separate Account (variable annuity) assets represent contractholder funds invested in various actively traded mutual funds that have daily quoted net asset values that are readily determinable for identical assets that the Company can access. Separate Account (variable annuity) liabilities are equal to the estimated fair value of Separate Account (variable annuity) assets. |
Table for reconciliations for all Level 3 assets measured at fair value on a recurring basis | The following tables present reconciliations for the periods indicated for all Level 3 assets and liabilities measured at fair value on a recurring basis. ($ in thousands) Financial Assets Financial Liabilities (1) Municipal Bonds Corporate Bonds Other Mortgage- Backed Securities (2) Total Fixed Maturity Securities Equity Securities Total Beginning balance, January 1, 2019 $ 47,531 $ 80,742 $ 120,211 $ 248,484 $ 5 $ 248,489 $ 78,700 Transfers into Level 3 (3) — 33,475 56,766 90,241 65 90,306 — Transfers out of Level 3 (3) — (7,698 ) (2,568 ) (10,266 ) — (10,266 ) — Total gains or losses Net investment gains (losses) included in net income related to financial assets — — (1,105 ) (1,105 ) 38 (1,067 ) — Net realized (gains) losses included in net income related to financial liabilities — — — — — — 12,636 Net unrealized investment gains (losses) included in OCI 474 4,461 6,100 11,035 — 11,035 — Purchases — 2,483 — 2,483 — 2,483 — Issuances — — — — — — 10,039 Sales — — (607 ) (607 ) (1 ) (608 ) — Settlements — — — — — — — Paydowns, maturities and distributions (3,714 ) (9,511 ) (31,969 ) (45,194 ) — (45,194 ) (7,642 ) Ending balance, December 31, 2019 $ 44,291 $ 103,952 $ 146,828 $ 295,071 $ 107 $ 295,178 $ 93,733 Beginning balance, January 1, 2018 $ 49,328 $ 72,979 $ 107,944 $ 230,251 $ 6 $ 230,257 $ 80,733 Transfers into Level 3 (3) — 40,488 50,771 91,259 — 91,259 — Transfers out of Level 3 (3) — (11,279 ) (5,200 ) (16,479 ) — (16,479 ) — Total gains or losses Net investment gains (losses) included in net income related to financial assets — (487 ) — (487 ) 3 (484 ) — Net realized (gains) losses included in net income related to financial liabilities — — — — — — (7,518 ) Net unrealized investment gains (losses) included in OCI (1,195 ) (2,840 ) (5,570 ) (9,605 ) — (9,605 ) — Purchases — — — — — — — Issuances — — — — — — 11,183 Sales — (6,135 ) (187 ) (6,322 ) (4 ) (6,326 ) — Settlements — — — — — — — Paydowns, maturities and distributions (602 ) (11,984 ) (27,547 ) (40,133 ) — (40,133 ) (5,698 ) Ending balance, December 31, 2018 $ 47,531 $ 80,742 $ 120,211 $ 248,484 $ 5 $ 248,489 $ 78,700 (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 years ended December 31, 2019 and 2018 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. |
Summary of fair value assets and liabilities measured on nonrecurring basis | The following table presents the carrying value, fair value and fair value hierarchy of these financial assets and financial liabilities. ($ in thousands) Carrying Fair Fair Value Measurements at Reporting Date Using Amount Value Level 1 Level 2 Level 3 December 31, 2019 Financial Assets Investments Other investments $ 163,312 $ 167,185 $ — $ — $ 167,185 Deposit asset on reinsurance 2,346,166 2,634,012 — — 2,634,012 Financial Liabilities Investment contract and policy reserves, fixed annuity contracts 4,675,774 4,609,880 — — 4,609,880 Investment contract and life policy reserves, account values on life contracts 93,465 98,332 — — 98,332 Other policyholder funds 553,550 553,550 — 495,812 57,738 Short-term debt 135,000 135,000 — — 135,000 Long-term debt 298,025 322,678 — 322,678 — December 31, 2018 Financial Assets Investments Other investments $ 156,725 $ 161,449 $ — $ — $ 161,449 Financial Liabilities Investment contract and policy reserves, fixed annuity contracts 4,555,849 4,478,338 — — 4,478,338 Investment contract and life policy reserves, account values on life contracts 87,229 90,402 — — 90,402 Other policyholder funds 689,287 689,287 — 626,325 62,962 Long-term debt 297,740 291,938 — 291,938 — |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative instruments in statement of financial position, fair value | The fair values of derivatives, including derivatives embedded in FIA and IUL contracts, are presented in the Consolidated Balance Sheets as follows: ($ in thousands) December 31, 2019 2018 Assets Derivatives, included in Short-term and other investments $ 13,239 $ 2,647 Liabilities Fixed indexed annuities - embedded derivatives, included in Other policyholder funds 93,733 78,700 Indexed universal life - embedded derivatives, included in Investment contract and policy reserves 1,314 248 |
Derivative instruments, gain (loss) | The changes in fair value of derivatives included in the Consolidated Statements of Operations were as follows: ($ in thousands) Years Ended December 31, 2019 2018 2017 Change in fair value of derivatives: (1) Revenues Net investment gains (losses) $ 9,493 $ (4,112 ) $ 14,867 Change in fair value of embedded derivatives: Revenues Net investment gains (losses) (13,576 ) 7,931 (13,410 ) (1) Includes 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) December 31, 2019 December 31, 2018 Credit Rating Notional Fair Notional Fair Counterparty S&P Moody's Amount Value Amount Value Bank of America, N.A. A+ Aa2 $ 174,900 $ 8,523 $ 144,500 $ 870 Barclays Bank PLC A A2 115,300 3,348 28,500 247 Citigroup Inc. BBB+ A3 — — — — Credit Suisse International A+ A1 — — 16,100 55 Societe Generale A A1 27,800 1,369 89,100 1,475 Total $ 318,000 $ 13,240 $ 278,200 $ 2,647 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | The changes in the carrying amount of goodwill by reportable segment for the year ended December 31, 2019 were as follows: ($ in thousands) December 31, 2018 Impairment Acquisitions December 31, 2019 Property and Casualty $ 9,460 $ — $ — $ 9,460 Supplemental — — 19,621 19,621 Retirement 28,025 (28,025 ) 10,087 10,087 Life 9,911 — — 9,911 Total $ 47,396 $ (28,025 ) $ 29,708 $ 49,079 |
Summary of finite-lived intangible assets | As of December 31, 2019 the outstanding amounts of definite-lived intangible assets subject to amortization were as follows: ($ in thousands) Weighted Average Useful Life (in Years) At inception: Value of business acquired 30 $ 94,419 Value of distribution acquired 17 53,996 Value of agency relationships 14 16,981 Value of customer relationships 10 9,080 Total 23 174,476 Accumulated amortization: Value of business acquired (3,697 ) Value of distribution acquired (1,871 ) Value of agency relationships (1,489 ) Value of customer relationships (1,733 ) Total (8,790 ) Net intangible assets subject to amortization: $ 165,686 |
Future amortization expense | Estimated future amortization of the Company's definite-lived intangible assets were as follows: ($ in thousands) Year Ending December 31, 2020 $ 14,488 2021 13,411 2022 12,433 2023 11,577 2024 10,805 Thereafter 102,972 Total $ 165,686 |
Summary of indefinite-lived intangible assets | Indefinite-lived intangible assets (not subject to amortization) as of December 31, 2019 were as follows: ($ in thousands) Trade names $ 8,645 State licenses 2,886 Total $ 11,531 |
Property and Casualty Unpaid _2
Property and Casualty Unpaid Claims and Claim Expenses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Insurance Loss Reserves [Abstract] | |
Reconciliation of property and casualty unpaid claims and claim expenses | The end of the year gross reserve (before reinsurance) balances and the reinsurance recoverable balances are reflected on a gross basis in the Consolidated Balance Sheets. ($ in thousands) Years Ended December 31, 2019 2018 2017 Property and Casualty segment Gross reserves, beginning of year (1) $ 367,180 $ 319,182 $ 307,757 Less: reinsurance recoverables 89,725 57,409 61,199 Net reserves, beginning of year (2) 277,455 261,773 246,558 Incurred claims and claim expenses: Claims occurring in the current year 483,062 547,959 498,989 Decrease in estimated reserves for claims occurring in prior years (3) (7,500 ) (300 ) (2,700 ) Total claims and claim expenses incurred (4) 475,562 547,659 496,289 Claims and claim expense payments for claims occurring during: Current year 329,475 369,194 333,385 Prior years 157,072 162,783 147,689 Total claims and claim expense payments 486,547 531,977 481,074 Net reserves, end of year (2) 266,470 277,455 261,773 Plus: reinsurance recoverables 120,506 89,725 57,409 Gross reserves, end of year (1) $ 386,976 $ 367,180 $ 319,182 (1) Unpaid claims and claim expenses as reported in the Consolidated Balance Sheets also include reserves for Supplemental, Retirement and Life of $55.9 million , $29.5 million and $28.6 million as of December 31, 2019 , 2018 and 2017 , respectively, in addition to Property and Casualty reserves. (2) Reserves are net of anticipated reinsurance recoverables. (3) Shows the amounts by which the Company decreased its reserves in each of the periods indicated for claims occurring in previous periods to reflect subsequent information on such claims and changes in their projected final settlement costs. Also refer to the paragraphs below for additional information regarding the reserve development recorded in 2019 , 2018 and 2017 . (4) Benefits, claims and settlement expenses as reported in the Consolidated Statements of Operations also include amounts for Supplemental, Retirement and Life of $109.5 million , $89.9 million , and $86.0 million for the years ended December 31, 2019 , 2018 and 2017 , respectively, in addition to Property and Casualty amounts. |
Schedule of average annual percentage payout of incurred claims by age, also referred to as a history of claims duration | Below is the average annual percentage payout of incurred claims by age, also referred to as a history of claims duration: Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Homeowners 79.5 % 16.6 % 2.2 % 1.0 % 0.4 % 0.3 % — — — — Auto liability 40.8 % 34.9 % 13.8 % 6.1 % 3.0 % 1.0 % 0.3 % 0.1 % — — Auto physical damage 95.6 % 4.4 % — — — — — — — — |
Schedule of short-duration insurance contracts, claims development | The following tables illustrate the incurred and paid claims development by accident year on a net basis for the lines of homeowners, auto liability and auto physical damage. Conditions and trends that have affected the development of these reserves in the past will not necessarily reoccur in the future. It may not be appropriate to use this cumulative history in the projection of future performance. The information about incurred and paid claims development for the years ended December 31, 2010 to 2018 is presented as unaudited supplementary information. ($ in thousands) Homeowners Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, As of December 31, 2019 Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims Cumulative Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 140,994 $ 136,907 $ 133,358 $ 133,235 $ 133,216 $ 133,136 $ 132,859 $ 132,905 $ 132,627 $ 132,627 $ — 25,150 2011 150,141 150,334 150,791 148,860 148,755 148,414 148,370 148,079 148,067 — 29,531 2012 108,754 109,156 109,360 106,486 106,308 106,348 106,000 106,028 — 21,578 2013 105,584 107,489 103,982 102,407 102,345 101,769 101,709 — 19,221 2014 111,647 113,505 109,059 106,844 106,554 106,458 59 20,084 2015 111,706 115,134 114,404 114,053 115,050 276 18,714 2016 115,931 118,604 117,009 117,933 280 19,853 2017 126,285 129,818 132,666 2,285 19,827 2018 166,793 157,404 4,170 20,954 2019 130,391 16,842 16,155 Total $ 1,248,333 ($ in thousands) Homeowners Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 98,190 $ 124,326 $ 129,790 $ 132,246 $ 132,523 $ 132,604 $ 132,599 $ 132,602 $ 132,602 $ 132,602 2011 123,046 142,846 145,852 146,908 147,451 148,026 148,014 148,069 148,067 2012 84,260 101,566 104,203 105,156 105,561 105,909 105,993 106,021 2013 76,890 96,599 99,361 100,968 101,527 101,677 101,709 2014 83,314 103,030 105,704 106,081 106,258 106,388 2015 90,704 109,303 111,882 113,321 114,648 2016 95,772 113,186 115,053 117,537 2017 106,800 128,518 129,767 2018 130,548 152,356 2019 103,790 Total 1,212,885 Outstanding prior to 2010 32 Prior years paid 668 Liabilities for claims and claim adjustment expenses, net of reinsurance $ 35,480 ($ in thousands) Auto Liability Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, As of December 31, 2019 Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims Cumulative Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 157,712 $ 160,058 $ 156,369 $ 154,222 $ 152,483 $ 151,653 $ 149,818 $ 149,425 $ 149,542 $ 149,481 $ — 48,942 2011 150,803 146,713 145,735 143,133 142,488 139,840 138,891 138,949 138,849 94 45,976 2012 156,448 153,815 150,336 149,346 147,594 145,847 145,620 145,515 204 45,984 2013 153,860 152,858 150,720 150,657 148,111 147,993 148,135 575 47,369 2014 155,105 157,249 158,470 159,937 159,794 159,355 665 49,386 2015 165,517 172,553 177,021 178,325 178,654 1,850 50,618 2016 180,380 184,440 184,567 186,568 2,649 51,995 2017 187,983 188,756 188,625 8,025 48,906 2018 200,314 195,284 26,931 47,078 2019 181,141 64,778 42,587 Total $ 1,671,607 ($ in thousands) Auto Liability Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 63,416 $ 118,345 $ 137,012 $ 144,255 $ 147,337 $ 148,751 $ 149,247 $ 149,364 $ 149,439 $ 149,474 2011 61,070 108,837 126,812 133,931 136,906 138,151 138,358 138,689 138,692 2012 61,279 109,574 127,185 138,641 142,916 144,622 145,121 145,184 2013 62,224 108,856 131,214 139,954 145,291 146,770 147,409 2014 61,329 117,468 139,463 149,059 155,758 157,596 2015 70,836 134,473 157,980 170,088 174,495 2016 73,073 140,901 166,815 177,834 2017 70,682 139,531 166,614 2018 77,528 141,537 2019 69,665 Total 1,468,500 Outstanding prior to 2010 73 Prior years paid (219 ) Liabilities for claims and claim adjustment expenses, net of reinsurance $ 203,180 ($ in thousands) Auto Physical Damage Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, As of December 31, 2019 Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims Cumulative Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 84,112 $ 83,420 $ 83,103 $ 83,046 $ 83,052 $ 83,050 $ 83,036 $ 83,028 $ 83,018 $ 83,011 $ — 81,581 2011 86,205 85,507 86,023 85,120 85,143 85,116 85,108 85,102 85,090 — 80,804 2012 83,770 82,337 83,402 83,431 83,354 83,342 83,334 83,322 — 78,165 2013 91,448 88,856 88,672 88,627 88,455 88,525 88,457 — 80,920 2014 95,572 95,634 95,422 95,239 95,232 95,241 — 87,901 2015 99,291 97,994 97,624 97,455 97,612 (18 ) 87,497 2016 112,430 109,515 109,348 109,603 (17 ) 93,225 2017 115,483 111,798 110,520 (161 ) 91,270 2018 109,040 108,886 (326 ) 94,388 2019 111,577 (6,829 ) 89,207 Total $ 973,319 ($ in thousands) Auto Physical Damage Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 $ 79,329 $ 83,120 $ 83,103 $ 83,087 $ 83,067 $ 83,051 $ 83,036 $ 83,028 $ 83,015 $ 83,009 2011 83,227 85,254 85,181 85,148 85,127 85,116 85,108 85,095 85,090 2012 80,519 83,418 83,372 83,355 83,347 83,342 83,326 83,322 2013 85,110 88,688 88,580 88,532 88,484 88,471 88,452 2014 88,939 95,444 95,266 95,256 95,258 95,243 2015 92,138 97,850 97,685 97,638 97,625 2016 106,459 109,686 109,536 109,611 2017 105,156 110,817 110,674 2018 103,559 109,103 2019 106,243 Total 968,372 Outstanding prior to 2010 — Prior years paid — Liabilities for claims and claim adjustment expenses, net of reinsurance $ 4,947 |
Schedule of reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses | The reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses in the Consolidated Balance Sheet is as follows: ($ in thousands) Years Ended December 31, 2019 Property and Casualty segment Net reserves Homeowners $ 35,480 Auto liability 203,180 Auto physical damage 4,947 Other short duration lines 2,892 Total net reserves for unpaid claims and claim adjustment expense, net of reinsurance 246,499 Reinsurance recoverable on unpaid claims Homeowners 12,394 Auto liability 100,866 Other short duration lines 7,246 Total reinsurance recoverable on unpaid claims 120,506 Insurance lines other than short duration (1) 55,878 Unallocated claims adjustment expenses 19,971 Total other than short duration and unallocated claims adjustment expenses 75,849 Gross reserves, end of year (1) $ 442,854 (1) This line includes Supplemental, Retirement and Life reserves as included in the Consolidated Balance Sheet. |
Reinsurance and Catastrophes (T
Reinsurance and Catastrophes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Insurance [Abstract] | |
Summary of reinsurance recoverable on unpaid insurance reserves | The total amounts of reinsurance recoverable on unpaid insurance reserves classified as assets and reported in Other assets in the Consolidated Balance Sheets were as follows: ($ in thousands) December 31, 2019 2018 Reinsurance recoverables on reserves and unpaid claims Property and Casualty Reinsurance companies $ 19,640 $ 33,754 State insurance facilities 100,866 55,971 Life and health 8,707 9,785 Total $ 129,213 $ 99,510 |
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 (1) Assumed from Other Companies Net Amount Year Ended December 31, 2019 Premiums written and contract deposits (2) $ 1,337,847 $ 23,872 $ 10,567 $ 1,324,542 Premiums and contract charges earned 917,610 30,412 10,756 897,954 Benefits, claims and settlement expenses 633,874 56,325 7,519 585,068 Year Ended December 31, 2018 Premiums written and contract deposits (2) 1,255,557 28,773 8,259 1,235,043 Premiums and contract charges earned 841,147 28,837 5,023 817,333 Benefits, claims and settlement expenses 769,664 136,601 4,497 637,560 Year Ended December 31, 2017 Premiums written and contract deposits (2) 1,244,500 21,989 4,606 1,227,117 Premiums and contract charges earned 812,099 22,036 4,640 794,703 Benefits, claims and settlement expenses 588,621 10,472 4,157 582,306 (1) Excludes the annuity reinsurance agreement accounted for under the deposit method that is discussed in Note 6. (2) This measure is not based on accounting principles generally accepted in the U.S. (non-GAAP). An explanation of this non-GAAP measure is contained in the Glossary of Selected Terms included as an exhibit in the Company's reports filed with the SEC. |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Summary of indebtedness outstanding | Indebtedness and scheduled maturities consisted of the following: ($ in thousands) Effective Interest Rates Final Maturity December 31, 2019 2018 Short-term debt Bank Credit Facility Variable 2024 $ 135,000 $ — Long-term debt (1) 4.50% Senior Notes, Aggregate principal amount of $250,000 less unaccrued discount of $426 and $488 and unamortized debt issuance costs of $1,549 and $1,772 4.50% 2025 248,025 247,740 Federal Home Loan Bank borrowing 1.99% 2022 50,000 50,000 Total $ 433,025 $ 297,740 (1) The Company designates debt obligations as "long-term" based on maturity date at issuance. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Summary of income tax assets and liabilities | The income tax assets and liabilities included in Other assets and Other liabilities, respectively, in the Consolidated Balance Sheets were as follows: ($ in thousands) December 31, 2019 2018 Income tax (asset) liability Current $ (12,184 ) $ (20,793 ) Deferred 160,624 103,686 |
Summary of deferred tax assets and liabilities | The "temporary differences" that gave rise to the deferred tax balances were as follows: ($ in thousands) December 31, 2019 2018 Deferred tax assets Unearned premium reserve reduction $ 12,103 $ 12,112 Compensation accruals 8,866 6,866 Reinsurance commissions 6,804 — Impaired securities 1,245 1,295 Other comprehensive income - net funded status of benefit plans 2,875 3,254 Discounting of unpaid claims and claim expense tax reserves 2,530 2,772 Postretirement benefits other than pensions 285 302 Charitable contributions carryforwards — 89 Net operating loss carryforwards 3,803 10,969 Total gross deferred tax assets 38,511 37,659 Deferred tax liabilities Other comprehensive income - net unrealized gains on securities 74,645 32,897 Deferred policy acquisition costs 49,326 60,330 Life insurance future policy benefit reserve 38,210 9,304 Life insurance future policy benefit reserve (transitional rule) 12,786 14,910 Discounting of unpaid claims and claim expense tax reserves (transitional rule) 947 1,203 Investment related adjustments 15,718 17,531 Intangibles 2,021 2,557 Other, net 5,482 2,613 Total gross deferred tax liabilities 199,135 141,345 Net deferred tax liability $ 160,624 $ 103,686 |
Summary of loss carryforwards and credits | At December 31, 2019 , the Company had available the following carryforwards or credits. ($ in thousands) Pretax Amount Expiration Year Operating loss carryforwards $ 12,711 2038 Operating loss carryforwards 5,397 Indefinite |
Income taxes expenses | The components of the provision for income tax expense (benefit) were as follows: ($ in thousands) Years Ended December 31, 2019 2018 2017 Current $ 31,518 $ 4,152 $ 3,813 Deferred 20,488 (2,958 ) (84,585 ) Total income tax expense (benefit) $ 52,006 $ 1,194 $ (80,772 ) |
Income taxes expenses reconciliation | Income tax expense for the following periods differed from the expected tax computed by applying the federal corporate tax rate of 21% for 2019 and 2018 and 35% for 2017 to income before income taxes as follows: ($ in thousands) Years Ended December 31, 2019 2018 2017 Expected federal tax on income $ 49,654 $ 4,103 $ 31,041 Add (deduct) tax effects of: Tax-exempt interest (4,159 ) (3,726 ) (5,335 ) Dividend received deduction (1,392 ) (412 ) (4,810 ) Goodwill impairment 5,885 — — Tax Act DTL re-measurement — — (98,988 ) Employee share-based compensation 272 (1,134 ) (3,258 ) Compensation deduction limitation 680 1,754 326 Prior year adjustments (716 ) 300 (293 ) Other, net 1,782 309 545 Income tax expense (benefit) provided on income $ 52,006 $ 1,194 $ (80,772 ) |
Unrecognized tax benefits, excluding interest and penalties | A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, is as follows: ($ in thousands) Years Ended December 31, 2019 2018 2017 Balance as of the beginning of the year $ 1,734 $ 1,790 $ 1,594 Increases related to prior year tax positions 109 — 101 Decreases related to prior year tax positions — (152 ) — Increases related to current year tax positions 123 96 422 Settlements — — — Lapse of statute — — (327 ) Balance as of the end of the year $ 1,966 $ 1,734 $ 1,790 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of components lease expense | The components of lease expense were as follows: ($ in thousands) Year Ended December 31, 2019 Operating lease cost $ 3,841 Short-term lease cost 208 Total lease cost $ 4,049 |
Schedule of supplemental cash flow information related to operating leases | Supplemental cash flow information related to operating leases was as follows: ($ in thousands) Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities $ 3,447 ($ in thousands) Years Ended December 31, 2019 2018 2017 Cash $ 25,206 $ 11,906 $ 7,627 Restricted cash 302 — — Total cash and restricted cash shown in the Consolidated Statements of Cash Flows $ 25,508 $ 11,906 $ 7,627 Cash paid during the year for: Interest $ 14,104 $ 12,532 $ 11,555 Income taxes 22,946 8,679 16,259 |
Schedule of supplemental balance sheet information related to operating leases | Supplemental balance sheet information related to operating leases were as follows: ($ in thousands, except lease term and discount rate) December 31, 2019 Assets Right of use assets, included in Other assets $ 16,483 Liabilities Operating lease liabilities, included in Other liabilities $ 17,499 Weighted average remaining lease term 4.51 Weighted average discount rate 3.78 % |
Schedule of future minimum lease payments under non-cancellable operating leases | Future minimum lease payments under non-cancellable operating leases as of December 31, 2019 are as follows: ($ in thousands) Year Ending December 31, 2020 $ 4,440 2021 4,285 2022 4,156 2023 3,459 2024 1,929 Thereafter 787 Total future minimum lease payments 19,056 Less imputed interest (1,557 ) Total $ 17,499 |
Shareholders' Equity and Comm_2
Shareholders' Equity and Common Stock Equivalents (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Summary of stock units and stock options outstanding under the Comprehensive Plan | As further described in the paragraphs below, CSUs, stock options and RSUs under the Comprehensive Plan were as follows: December 31, 2019 2018 2017 CSUs related to deferred compensation for Directors 28,526 32,288 61,677 CSUs related to deferred compensation for employees 25,194 24,498 24,903 Stock options 908,557 774,821 719,015 RSUs related to incentive compensation 889,438 1,008,249 1,149,679 Total 1,851,715 1,839,856 1,955,274 |
Summary of changes in outstanding options | Changes in outstanding options were as follows: Weighted Average Option Price per Share Range of Option Prices per Share Options Outstanding Vested and Exercisable December 31, 2018 $36.65 $17.32-$44.75 774,821 271,116 Granted $39.22 $38.99-$42.73 282,040 — Vested $34.46 $20.60-$44.75 — 161,679 Exercised $26.98 $17.32-$42.95 (64,095 ) (64,095 ) Forfeited $39.97 $31.01-$44.75 (84,209 ) — Expired — — — — December 31, 2019 $37.82 $20.60-$44.75 908,557 368,700 |
Summary of options outstanding segregated by ranges of exercise prices | Option information segregated by ranges of exercise prices were as follows: December 31, 2019 Total Outstanding Options Vested and Exercisable Options Range of Option Prices per Share Options Weighted Average Option Price per Share Weighted Average Remaining Term Options Weighted Average Option Price per Share Weighted Average Remaining Term $20.60-$22.69 11,100 $22.34 0.36 11,100 $22.34 0.36 years $28.88-$32.35 271,579 $30.94 5.65 222,499 $30.92 5.53 years $38.05-$41.95 415,356 $40.14 8.36 85,766 $41.80 7.19 years $42.95-$44.75 210,522 $42.94 8.30 49,335 $43.00 8.19 years Total 908,557 $37.82 7.44 368,700 $34.81 6.11 years |
Summary of changes in outstanding restricted common stock units | Changes in outstanding RSUs were as follows: Total Outstanding Units Vested Units Units Weighted Average Grant Date Fair Value per Unit Units Weighted Average Grant Date Fair Value per Unit December 31, 2018 1,008,249 $35.64 417,179 $20.22 Granted (1) 210,712 $41.52 — — Adjustment for performance achievement (3,789 ) $32.16 — — Vested — — 417,454 $33.93 Forfeited (34,895 ) $43.08 — — Distributed (2) (290,839 ) $31.39 (290,839 ) $31.39 December 31, 2019 889,438 $31.94 543,794 $24.77 (1) Includes dividends reinvested into additional RSUs. (2) Includes distributed units which were utilized to satisfy withholding taxes due on the distribution. |
Statutory Information and Res_2
Statutory Information and Restrictions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Insurance [Abstract] | |
Statutory surplus and subsidiary dividend restrictions | Reconciliations of statutory capital and surplus and net income, as determined using statutory accounting principles, to the amounts included in the accompanying consolidated financial statements are as follows: ($ in thousands) December 31, 2019 2018 Statutory capital and surplus of insurance subsidiaries $ 868,839 $ 903,564 Increase (decrease) due to: Deferred policy acquisition costs 276,668 298,742 Deposit asset on reinsurance 2,346,166 — Annuity reserves ceded (2,239,717 ) — Difference in policyholder reserves 209,127 142,601 Goodwill 49,079 47,396 Intangible assets, net 177,217 — Investment fair value adjustments on fixed maturity securities 397,762 142,512 Difference in investment reserves 102,380 105,430 Federal income tax liability (178,026 ) (115,667 ) Net funded status of benefit plans (13,690 ) (15,495 ) Non-admitted assets and other, net (53,801 ) 20,412 Shareholders' equity of parent company and non-insurance subsidiaries 8,306 8,795 Parent company short-term and long-term debt (383,025 ) (247,740 ) Shareholders' equity as reported herein $ 1,567,285 $ 1,290,550 ($ in thousands) Years Ended December 31, 2019 2018 2017 Statutory net income of insurance subsidiaries $ 62,316 $ 45,977 $ 82,587 Net loss of non-insurance companies (9,537 ) (9,755 ) (4,496 ) Interest expense (14,272 ) (11,892 ) (11,836 ) Tax benefit of interest expense and other parent company current tax adjustments 8,993 121 5,654 Combined net income 47,500 24,451 71,909 Increase (decrease) due to: Deferred policy acquisition costs 2,101 1,015 9,385 Intangible asset amortization expense (8,790 ) — — Policyholder benefits 117,369 26,318 30,609 Federal income tax (expense) benefit (23,492 ) 3,020 84,198 Investment reserves 88,627 (31,529 ) (20,966 ) Other adjustments, net (38,872 ) (4,932 ) (5,676 ) Net income as reported herein $ 184,443 $ 18,343 $ 169,459 |
Retirement Plans and Other Po_2
Retirement Plans and Other Postretirement Benefits (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Summary of contributions to qualified defined contribution plan, 401(k), non-qualified defined contribution plan and total assets of the plans | Contributions to employees' accounts under the 401(k) plan and the non-qualified defined contribution plan, as well as total assets of the plans, were as follows: ($ in thousands) Year Ended December 31, 2019 2018 2017 401(k) plan Contributions to employees' accounts $ 8,233 $ 7,655 $ 7,637 Total assets at the end of the year 206,247 167,767 180,514 Non-qualified defined contribution plan Contributions to employees' accounts 58 70 84 Total assets at the end of the year — — — |
Funded status of the defined benefit, supplemental retirement pension plans and postretirement benefits other than pensions | The following tables summarize the funded status of the defined benefit and supplemental retirement pension plans as of December 31, 2019 , 2018 and 2017 (the measurement dates) and identify (1) the assumptions used to determine the projected benefit obligation and (2) the components of net pension cost for the defined benefit plan and supplemental retirement plans for the following periods: ($ in thousands) Defined Benefit Plan Supplemental Defined Benefit Plans December 31, December 31, 2019 2018 2017 2019 2018 2017 Change in benefit obligation: Projected benefit obligation at beginning of year $ 25,075 $ 28,432 $ 29,407 $ 15,404 $ 16,832 $ 16,847 Service cost 650 650 650 — — — Interest cost 997 947 1,091 620 566 631 Plan amendments — — — — — — Actuarial loss (gain) 101 (2,208 ) (721 ) 516 (789 ) 805 Benefits paid (2,003 ) (2,746 ) (1,995 ) (1,312 ) (1,205 ) (1,451 ) Settlements — — — — — — Projected benefit obligation at end of year $ 24,820 $ 25,075 $ 28,432 $ 15,228 $ 15,404 $ 16,832 Change in plan assets: Fair value of plan assets at beginning of year $ 22,090 $ 25,843 $ 25,446 $ — $ — $ — Actual return on plan assets 3,471 (640 ) 2,909 — — — Employer contributions — — — 1,312 1,205 1,451 Benefits paid (2,003 ) (2,746 ) (1,995 ) (1,312 ) (1,205 ) (1,451 ) Expenses paid (394 ) (367 ) (517 ) — — — Settlements — — — — — — Fair value of plan assets at end of year $ 23,164 $ 22,090 $ 25,843 $ — $ — $ — Funded status $ (1,656 ) $ (2,985 ) $ (2,589 ) $ (15,228 ) $ (15,404 ) $ (16,832 ) Prepaid (accrued) benefit expense $ 6,690 $ 7,425 $ 8,016 $ (9,884 ) $ (10,320 ) $ (10,648 ) Total amount recognized in Consolidated Balance Sheets, all in Other liabilities $ (1,656 ) $ (2,985 ) $ (2,589 ) $ (15,228 ) $ (15,404 ) $ (16,832 ) Amounts recognized in accumulated other comprehensive income (loss) (AOCI): Prior service cost $ — $ — $ — $ — $ — $ — Net actuarial loss (8,345 ) 10,410 10,605 (5,345 ) 5,084 6,184 Total amount recognized in AOCI $ (8,345 ) $ 10,410 $ 10,605 $ (5,345 ) $ 5,084 $ 6,184 Information for pension plans with an accumulated benefit obligation greater than plan assets: Projected benefit obligation $ 24,820 $ 25,075 $ 28,432 $ 15,228 $ 15,404 $ 16,832 Accumulated benefit obligation 24,820 25,075 28,432 15,228 15,404 16,832 Fair value of plan assets 23,164 22,090 25,843 — — — |
Defined benefit plan and the supplemental defined benefit plans | ($ in thousands) Defined Benefit Plan Supplemental Defined Benefit Plans Year Ended December 31, Year Ended December 31, 2019 2018 2017 2019 2018 2017 Components of net periodic pension (income) expense: Service cost: Benefit accrual $ — $ — $ — $ — $ — $ — Other expenses 650 650 650 — — — Interest cost 997 947 1,091 620 566 631 Expected return on plan assets (1,222 ) (1,377 ) (1,493 ) — — — Settlement loss — — — — — — Amortization of: Prior service cost — — — — — — Actuarial loss 310 371 389 256 310 258 Net periodic pension expense $ 735 $ 591 $ 637 $ 876 $ 876 $ 889 Changes in plan assets and benefit obligations included in other comprehensive income (loss): Prior service cost $ — $ — $ — $ — $ — $ — Net actuarial loss (gain) (1,755 ) 177 (1,619 ) 516 (789 ) 805 Amortization of: Prior service cost — — — — — — Actuarial loss (310 ) (371 ) (389 ) (256 ) (310 ) (258 ) Total recognized in other comprehensive income (loss) $ (2,065 ) $ (194 ) $ (2,008 ) $ 260 $ (1,099 ) $ 547 Weighted average assumptions used to determine expense: Discount rate 4.20 % 3.50 % 3.90 % 4.20 % 3.50 % 3.90 % Expected return on plan assets 5.75 % 5.90 % 6.25 % * * * Annual rate of salary increase * * * * * * Weighted average assumptions used to determine benefit obligations as of December 31: Discount rate 3.10 % 4.20 % 3.50 % 3.10 % 4.20 % 3.50 % Expected return on plan assets 5.75 % 5.90 % 6.25 % * * * Annual rate of salary increase * * * * * * * Not applicable. |
Fair value hierarchy for the Company's defined benefit pension plan assets | Fair values of the equity security funds and fixed income funds have been determined from public quotations. The following table presents the fair value hierarchy for the Company's defined benefit pension plan assets, excluding cash held. ($ in thousands) Fair Value Measurements at Reporting Date Using Total Level 1 Level 2 Level 3 December 31, 2019 Asset category Equity security funds (1) United States $ 8,883 $ — $ 8,883 $ — International 2,214 — 2,214 — Fixed income funds 11,116 — 11,116 — Short-term investment funds 951 951 — — Total $ 23,164 $ 951 $ 22,213 $ — December 31, 2018 Asset category Equity security funds (1) United States $ 8,198 $ — $ 8,198 $ — International 2,089 — 2,089 — Fixed income funds 11,003 — 11,003 — Short-term investments funds 800 800 — — Total $ 22,090 $ 800 $ 21,290 $ — (1) None of the trust fund assets for the defined benefit pension plan have been invested in shares of HMEC's common stock. |
Summary of minimum funding requirement and the expected full year contributions for the Company's plans | The following table discloses that minimum funding requirement and the expected full year contributions for the Company's plans. ($ in thousands) Defined Benefit Pension Plans Defined Benefit Plan Supplemental Defined Benefit Plans Minimum funding requirement for 2019 $ — N/A Expected contributions (approximations) for the year ended December 31, 2020 as of the time of this Form 10-K (1) $ — $ 1,282 N/A - Not applicable. (1) HMEC's Annual Report on Form 10-K for the year ended December 31, 2019 . |
Estimated future benefit payments | Estimated future benefit payments as of December 31, 2019 were as follows: ($ in thousands) 2020 2021 2022 2023 2024 2025-2029 Pension plans Defined benefit plan $ 2,478 $ 2,277 $ 2,219 $ 1,987 $ 2,099 $ 7,927 Supplemental retirement plans 1,282 1,265 1,245 1,222 1,195 5,407 |
Supplementary Disclosure of C_2
Supplementary Disclosure of Consolidated Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Reconciliation of net income to net cash provided by operating activities | Supplemental cash flow information related to operating leases was as follows: ($ in thousands) Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities $ 3,447 ($ in thousands) Years Ended December 31, 2019 2018 2017 Cash $ 25,206 $ 11,906 $ 7,627 Restricted cash 302 — — Total cash and restricted cash shown in the Consolidated Statements of Cash Flows $ 25,508 $ 11,906 $ 7,627 Cash paid during the year for: Interest $ 14,104 $ 12,532 $ 11,555 Income taxes 22,946 8,679 16,259 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Summarized financial information for these segments | Summarized financial information for these segments is as follows: ($ in thousands) Years Ended December 31, 2019 2018 2017 Insurance premiums and contract charges earned Property and Casualty $ 683,454 $ 665,734 $ 648,263 Supplemental 65,815 N/A N/A Retirement 29,083 31,269 28,003 Life 119,602 120,330 118,437 Total $ 897,954 $ 817,333 $ 794,703 Net investment income Property and Casualty $ 41,740 $ 40,104 $ 36,178 Supplemental 7,480 N/A N/A Retirement 245,475 262,634 261,994 Life 71,957 74,399 76,195 Corporate and Other (85 ) 142 78 Intersegment eliminations (1,503 ) (772 ) (815 ) Total $ 365,064 $ 376,507 $ 373,630 Net income (loss) Property and Casualty $ 54,359 $ (14,243 ) $ 17,790 Supplemental 17,989 N/A N/A Retirement (4,867 ) 41,736 88,473 Life 17,574 18,754 77,595 Corporate and Other 99,388 (27,904 ) (14,399 ) Total $ 184,443 $ 18,343 $ 169,459 |
Additional significant financial information for these segments | ($ in thousands) December 31, 2019 2018 2017 Assets Property and Casualty $ 1,327,099 $ 1,236,362 $ 1,217,394 Supplemental 747,602 N/A N/A Retirement 8,330,127 7,866,969 8,063,912 Life 1,964,993 1,821,351 1,815,732 Corporate and Other 172,955 149,014 143,784 Intersegment eliminations (64,072 ) (41,800 ) (42,482 ) Total $ 12,478,704 $ 11,031,896 $ 11,198,340 Additional significant financial information for these segments is as follows: ($ in thousands) Years Ended December 31, 2019 2018 2017 DAC amortization expense Property and Casualty $ 79,453 $ 79,073 $ 76,967 Supplemental 438 N/A N/A Retirement 21,446 23,186 17,759 Life 7,844 7,630 7,459 Total $ 109,181 $ 109,889 $ 102,185 Income tax expense (benefit) Property and Casualty $ 13,954 $ (6,622 ) $ (3,279 ) Supplemental 5,105 N/A N/A Retirement 33,772 10,000 (19,498 ) Life 4,907 4,979 (51,876 ) Corporate and Other (5,732 ) (7,163 ) (6,119 ) Total $ 52,006 $ 1,194 $ (80,772 ) |
Unaudited Selected Quarterly _2
Unaudited Selected Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected quarterly financial data | Selected quarterly financial data is presented below. ($ in thousands, except per share data) Three Months Ended December 31, September 30, June 30, March 31, 2019 Insurance premiums and contract charges earned (1) $ 240,392 $ 239,681 $ 208,096 $ 209,785 Insurance premiums written and contract deposits (1)(2)(3) 346,242 371,216 311,691 295,394 Total revenues (1) 331,376 334,418 451,478 313,213 Net income (1) 33,001 25,454 93,822 32,166 Per share information Basic Net income (1) $ 0.79 $ 0.61 $ 2.25 $ 0.77 Shares of common stock - weighted average (4) 41,814 41,785 41,762 41,610 Diluted Net income (1) $ 0.78 $ 0.60 $ 2.24 $ 0.77 Shares of common stock and equivalent shares - weighted average (4) 42,093 42,030 41,921 41,785 2018 Insurance premiums and contract charges earned $ 201,905 $ 206,820 $ 205,610 $ 202,998 Insurance premiums written and contract deposits (2) 311,216 338,097 301,722 284,008 Total revenues 278,535 311,318 306,257 295,489 Net income (loss) (20,257 ) 12,528 5,917 20,155 Per share information Basic Net income (loss) $ (0.49 ) $ 0.30 $ 0.14 $ 0.49 Shares of common stock - weighted average (4) 41,596 41,683 41,600 41,497 Diluted Net income (loss) $ (0.49 ) $ 0.30 $ 0.14 $ 0.48 Shares of common stock and equivalent shares - weighted average (4) 41,911 41,850 41,735 41,653 2017 Insurance premiums and contract charges earned $ 204,328 $ 198,935 $ 195,718 $ 195,722 Insurance premiums written and contract deposits (2) 300,416 318,355 311,614 296,732 Total revenues 302,993 289,817 291,436 287,304 Net income 125,329 26,551 2,261 15,318 Per share information Basic Net income (5) $ 3.03 $ 0.64 $ 0.05 $ 0.37 Shares of common stock - weighted average (4) 41,419 41,433 41,368 41,135 Diluted Net income (5) $ 3.00 $ 0.64 $ 0.05 $ 0.37 Shares of common stock and equivalent shares - weighted average (4) 41,718 41,575 41,493 41,342 (1) See Note 2 for more information regarding the acquisition of NTA on July 1, 2019. (2) This measure is not based on accounting principles generally accepted in the U.S. (non-GAAP). An explanation of this measure is contained in the Glossary of Selected Terms included as an exhibit in the Company's reports filed with the SEC. (3) Excludes the annuity reinsurance agreement accounted for under the deposit method that is discussed in Note 6. (4) Rounded to thousands. (5) For the three months ended December 31, 2017, net income per basic share of $3.03 and net income per diluted share of $3.00 benefited $2.39 and $2.37 , respectively, from TCJA. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) $ / shares in Units, $ in Thousands | Jan. 02, 2019USD ($) | Dec. 31, 2019USD ($)security$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Jan. 01, 2019USD ($) |
Basis of Presentation [Line Items] | |||||
Restricted cash | $ 302 | $ 0 | $ 0 | ||
Percentage of investment portfolio fair value pricing services or index price | 94.10% | 90.70% | |||
Amortization of acquisition costs for property and casualty contracts, first term | 6 months | ||||
Amortization of acquisition costs for property and casualty contracts, second term | 12 months | ||||
Amortization of acquisition costs for supplemental policies | 6 years | ||||
Amortization term for acquisition costs of annuity contracts | 20 years | ||||
Amortization period of acquisition costs of interest sensitive life contracts | 20 years | ||||
Amortization term for acquisition costs of indexed universal life contracts | 30 years | ||||
Amortization of acquisition costs for individual life contracts, first term | 10 years | ||||
Amortization of acquisition costs for individual life contracts, second term | 15 years | ||||
Amortization of acquisition costs for individual life contracts, third term | 20 years | ||||
Amortization of acquisition costs for individual life contracts, fourth term | 30 years | ||||
Amortization in 2020 | $ 14,488 | ||||
Amortization in 2021 | 13,411 | ||||
Amortization in 2022 | 12,433 | ||||
Amortization in 2023 | 11,577 | ||||
Amortization in 2024 | $ 10,805 | ||||
Percentage of reversion to mean approach utilized to amortized policy acquisition costs | 8.00% | ||||
Deferred policy acquisition costs, corridor around the mean | 2.00% | ||||
Purchase of FHLB activity-based common stock as percentage of borrowing, required | 4.50% | ||||
Purchase of FHLB activity-based common stock as percentage of borrowing, percentage, authorized | 15.00% | ||||
Share-based compensation expense | $ 5,200 | $ 6,600 | $ 6,500 | ||
Weighted average fair value of nonvested options outstanding | $ / shares | $ 6.42 | ||||
Unrecognized share-based compensation expense, nonvested options | $ 2,400 | ||||
Antidilutive securities exclude from EPS computation (in shares) | shares | 622,500 | 622,500 | 622,500 | ||
Minimum exercise price (in usd per share) | $ / shares | $ 38.05 | $ 38.05 | $ 38.05 | ||
Maximum exercise price (in usd per share) | $ / shares | $ 44.75 | $ 44.75 | $ 44.75 | ||
Other comprehensive income (loss), reclassification adjustment from AOCI from sale of securities | $ 157,423 | $ (16,363) | $ (4,863) | ||
Other tax expense (benefit) | 33,100 | (3,400) | (1,700) | ||
Reclassification of deferred taxes | 47,900 | ||||
Stranded deferred tax liabilities | 50,000 | ||||
Stranded deferred tax assets | (2,100) | ||||
Cumulative effect of change in accounting principle | 0 | (15,041) | 0 | ||
Lease liability | 17,499 | ||||
Right of use assets, included in Other assets | 16,483 | $ 13,900 | |||
Accounting Standards Update 2016-02 | Pro Forma | |||||
Basis of Presentation [Line Items] | |||||
Lease liability | $ 14,500 | ||||
Employee stock option | |||||
Basis of Presentation [Line Items] | |||||
Share-based compensation expense | 1,200 | 1,200 | 1,300 | ||
Restricted stock units | |||||
Basis of Presentation [Line Items] | |||||
Unrecognized share-based compensation expense, equity instruments other than options | 6,600 | ||||
Business acquired | |||||
Basis of Presentation [Line Items] | |||||
Value of business acquired | 90,700 | ||||
Amortization in 2020 | 7,100 | ||||
Amortization in 2021 | 6,700 | ||||
Amortization in 2022 | 6,200 | ||||
Amortization in 2023 | 5,800 | ||||
Amortization in 2024 | 5,400 | ||||
HMLIC | |||||
Basis of Presentation [Line Items] | |||||
Received from FHLB | 175,000 | ||||
Payments To FHLB | $ 305,000 | ||||
FHLB interest rate | 1.87% | ||||
HMLIC | Maturing On September 11, 2020 | |||||
Basis of Presentation [Line Items] | |||||
FHLB advances | $ 125,000 | ||||
HMLIC | Maturing On November 15, 2023 | |||||
Basis of Presentation [Line Items] | |||||
FHLB advances | 20,000 | ||||
HMLIC | Maturing On December 15, 2023 | |||||
Basis of Presentation [Line Items] | |||||
FHLB advances | 100,000 | ||||
HMLIC | Maturing On January 12, 2024 | |||||
Basis of Presentation [Line Items] | |||||
FHLB advances | 50,000 | ||||
HMLIC | Maturing On January 16, 2026 | |||||
Basis of Presentation [Line Items] | |||||
FHLB advances | 200,000 | ||||
HMLIC | Investment contracts | |||||
Basis of Presentation [Line Items] | |||||
FHLB advances | $ 495,000 | ||||
Minimum | |||||
Basis of Presentation [Line Items] | |||||
Number of hard-to-value fixed maturity securities | security | 100 | ||||
Purchase of FHLB activity-based common stock as percentage of borrowing, required | 2.00% | ||||
Maximum | |||||
Basis of Presentation [Line Items] | |||||
Number of hard-to-value fixed maturity securities | security | 150 | ||||
Real estate property | Minimum | |||||
Basis of Presentation [Line Items] | |||||
Property, plant and equipment, useful life | 20 years | ||||
Real estate property | Maximum | |||||
Basis of Presentation [Line Items] | |||||
Property, plant and equipment, useful life | 45 years | ||||
Lease hold improvements and other property and equipment | Minimum | |||||
Basis of Presentation [Line Items] | |||||
Property, plant and equipment, useful life | 3 years | ||||
Lease hold improvements and other property and equipment | Maximum | |||||
Basis of Presentation [Line Items] | |||||
Property, plant and equipment, useful life | 10 years | ||||
Interest sensitive life contracts | |||||
Basis of Presentation [Line Items] | |||||
Deferred policy acquisition costs, impact of unrealized investment gains (losses) | $ 41,200 | 17,900 | |||
Retained earnings | |||||
Basis of Presentation [Line Items] | |||||
Reclassification of deferred taxes | 0 | 0 | (47,900) | ||
Cumulative effect of change in accounting principle | 0 | 15,041 | 0 | ||
Net unrealized investment gains (losses) on securities | |||||
Basis of Presentation [Line Items] | |||||
Reclassification of deferred taxes | $ 50,034 | ||||
Cumulative effect of change in accounting principle | 15,000 | $ (15,041) | |||
NTA | Distribution acquired | |||||
Basis of Presentation [Line Items] | |||||
Value of distribution acquired | 47,500 | ||||
Amortization in 2020 | 2,900 | ||||
Amortization in 2021 | 2,900 | ||||
Amortization in 2022 | 2,900 | ||||
Amortization in 2023 | 2,900 | ||||
Amortization in 2024 | 2,900 | ||||
NTA | Agency relationships | |||||
Basis of Presentation [Line Items] | |||||
Value of agency relationship | 15,500 | ||||
Amortization in 2020 | 2,600 | ||||
Amortization in 2021 | 2,200 | ||||
Amortization in 2022 | 1,900 | ||||
Amortization in 2023 | 1,600 | ||||
Amortization in 2024 | 1,400 | ||||
Benefit Consultants Group Inc. | |||||
Basis of Presentation [Line Items] | |||||
Value of business acquired | $ 25,000 | ||||
Benefit Consultants Group Inc. | Distribution acquired | |||||
Basis of Presentation [Line Items] | |||||
Value of distribution acquired | 4,600 | ||||
Amortization in 2020 | 400 | ||||
Amortization in 2021 | 400 | ||||
Amortization in 2022 | 400 | ||||
Benefit Consultants Group Inc. | Customer relationships | |||||
Basis of Presentation [Line Items] | |||||
Value of customer relationship | 7,300 | ||||
Amortization in 2020 | 1,500 | ||||
Amortization in 2021 | 1,200 | ||||
Amortization in 2022 | 1,000 | ||||
Amortization in 2023 | 900 | ||||
Amortization in 2024 | $ 700 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Deferred Policy Acquisition Costs (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Segment Reporting Information [Line Items] | ||
Deferred policy acquisition costs | $ 276,668 | $ 298,742 |
Property and Casualty | ||
Segment Reporting Information [Line Items] | ||
Deferred policy acquisition costs | 28,616 | 30,033 |
Supplemental | ||
Segment Reporting Information [Line Items] | ||
Deferred policy acquisition costs | 1,967 | |
Retirement (annuity) | ||
Segment Reporting Information [Line Items] | ||
Deferred policy acquisition costs | 185,294 | 209,231 |
Life | ||
Segment Reporting Information [Line Items] | ||
Deferred policy acquisition costs | $ 60,791 | $ 59,478 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Adjustments to Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Increase (decrease) to DAC amortization expense: | |||
Total | $ 3,213 | $ 4,231 | $ 881 |
Retirement | |||
Increase (decrease) to DAC amortization expense: | |||
Total | 3,480 | 3,948 | 1,081 |
Life | |||
Increase (decrease) to DAC amortization expense: | |||
Total | $ (267) | $ 283 | $ (200) |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Property and Equipment Included in Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property and Equipment | ||
Property and equipment | $ 166,583 | $ 142,243 |
Less: accumulated depreciation | 106,458 | 101,267 |
Total | $ 60,125 | $ 40,976 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Investment Contract and Life Policy Reserves (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Investment contract reserves | $ 4,675,774 | $ 4,555,856 |
Policy reserves | 1,558,678 | 1,155,337 |
Total | $ 6,234,452 | $ 5,711,193 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Guaranteed Minimum Death Benefit (Details) - Guarantee Minimum Death Benefit - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Net Amount at Risk by Product and Guarantee [Line Items] | ||
GMDB reserve | $ 126 | $ 258 |
Aggregate in-the-money death benefits under the GMDB provision | $ 29,367 | $ 48,083 |
Variable annuity contract value distribution based on GMDB feature: | ||
No guarantee | 28.00% | 30.00% |
Return of premium guarantee | 67.00% | 65.00% |
Guarantee of premium roll-up at an annual rate of 3% or 5% | 5.00% | 5.00% |
Total | 100.00% | 100.00% |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Fair Value Assumptions for Stock Option Pricing (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of stock options granted (in shares) | 282,040 | 223,208 | 222,828 |
Weighted average grant date fair value of stock options granted (in usd per share) | $ 6.26 | $ 7.16 | $ 6.57 |
Weighted average assumptions: | |||
Risk-free interest rate | 2.50% | 2.60% | 2.00% |
Expected dividend yield | 2.90% | 2.60% | 2.50% |
Expected life, in years | 5 years | 4 years 9 months 18 days | 4 years 10 months 24 days |
Expected volatility (based on historical volatility) | 21.90% | 21.50% | 21.40% |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Calculation of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Basic: | |||||||||||||||
Net income (in usd) | $ 33,001 | $ 25,454 | $ 93,822 | $ 32,166 | $ (20,257) | $ 12,528 | $ 5,917 | $ 20,155 | $ 125,329 | $ 26,551 | $ 2,261 | $ 15,318 | $ 184,443 | $ 18,343 | $ 169,459 |
Weighted average number of common shares during the period (in thousands) | 41,814,000,000 | 41,785,000,000 | 41,762,000,000 | 41,610,000,000 | 41,596,000,000 | 41,683,000,000 | 41,600,000,000 | 41,497,000,000 | 41,419,000,000 | 41,433,000,000 | 41,368,000,000 | 41,135,000,000 | 41,737,876 | 41,570,492 | 41,364,546 |
Net income per share - basic (in usd per share) | $ 0.79 | $ 0.61 | $ 2.25 | $ 0.77 | $ (0.49) | $ 0.30 | $ 0.14 | $ 0.49 | $ 3.03 | $ 0.64 | $ 0.05 | $ 0.37 | $ 4.42 | $ 0.44 | $ 4.10 |
Diluted: | |||||||||||||||
Net income (in usd) | $ 33,001 | $ 25,454 | $ 93,822 | $ 32,166 | $ (20,257) | $ 12,528 | $ 5,917 | $ 20,155 | $ 125,329 | $ 26,551 | $ 2,261 | $ 15,318 | $ 184,443 | $ 18,343 | $ 169,459 |
Weighted average number of common shares during the period (in thousands) | 41,814,000,000 | 41,785,000,000 | 41,762,000,000 | 41,610,000,000 | 41,596,000,000 | 41,683,000,000 | 41,600,000,000 | 41,497,000,000 | 41,419,000,000 | 41,433,000,000 | 41,368,000,000 | 41,135,000,000 | 41,737,876 | 41,570,492 | 41,364,546 |
Weighted average number of common equivalent shares to reflect the dilutive effect of common stock equivalent securities (in thousands): | |||||||||||||||
Stock options | 79,000 | 100,000 | 112,000 | ||||||||||||
CSUs related to deferred compensation for employees | 0 | 25,000 | 25,000 | ||||||||||||
RSUs related to incentive compensation | 132,000 | 199,000 | 63,000 | ||||||||||||
Total common and common equivalent shares adjusted to calculate diluted earnings per share (in thousands) | 42,093,000,000 | 42,030,000,000 | 41,921,000,000 | 41,785,000,000 | 41,911,000,000 | 41,850,000,000 | 41,735,000,000 | 41,653,000,000 | 41,718,000,000 | 41,575,000,000 | 41,493,000,000 | 41,342,000,000 | 41,948,531 | 41,894,232 | 41,564,979 |
Net income per share - diluted (in usd per share) | $ 0.78 | $ 0.60 | $ 2.24 | $ 0.77 | $ (0.49) | $ 0.30 | $ 0.14 | $ 0.48 | $ 3 | $ 0.64 | $ 0.05 | $ 0.37 | $ 4.40 | $ 0.44 | $ 4.08 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Components of Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||
Net income | $ 33,001 | $ 25,454 | $ 93,822 | $ 32,166 | $ (20,257) | $ 12,528 | $ 5,917 | $ 20,155 | $ 125,329 | $ 26,551 | $ 2,261 | $ 15,318 | $ 184,443 | $ 18,343 | $ 169,459 |
Change in net unrealized investment gains (losses) on securities: | |||||||||||||||
Net unrealized investment gains (losses) on securities arising during the period | 327,363 | (275,094) | 105,475 | ||||||||||||
Less: reclassification adjustment for net investment gains (losses) included in income before income tax | 157,423 | (16,363) | (4,863) | ||||||||||||
Total, before tax | 169,940 | (258,731) | 110,338 | ||||||||||||
Income tax expense (benefit) | 36,433 | (55,495) | 35,933 | ||||||||||||
Total, net of tax | 133,507 | (203,236) | 74,405 | ||||||||||||
Change in net funded status of benefit plans: | |||||||||||||||
Before tax | 1,805 | 1,294 | 1,461 | ||||||||||||
Income tax expense | 387 | 262 | 727 | ||||||||||||
Total, net of tax | 1,418 | 1,032 | 734 | ||||||||||||
Total comprehensive income (loss) | $ 319,368 | $ (183,861) | $ 244,598 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Amortization of acquisition costs for individual life contracts, first term | 10 years | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ 1,290,550 | $ 1,501,573 | |
Other comprehensive income (loss) before reclassifications | 259,289 | (200,090) | $ 71,978 |
Amounts reclassified from AOCI | (124,364) | 12,927 | 3,161 |
Cumulative effect of change in accounting principle | 0 | (15,041) | 0 |
Reclassification of deferred taxes | 47,900 | ||
Net current period other comprehensive income (loss) | 134,925 | (202,204) | 123,039 |
Ending balance | 1,567,285 | 1,290,550 | 1,501,573 |
Total | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 84,756 | 286,960 | 163,921 |
Cumulative effect of change in accounting principle | 0 | (15,041) | 0 |
Reclassification of deferred taxes | 0 | 0 | 47,900 |
Ending balance | 219,681 | 84,756 | 286,960 |
Net unrealized investment gains (losses) on securities | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 96,941 | 300,177 | 175,738 |
Other comprehensive income (loss) before reclassifications | 257,871 | (201,122) | 71,244 |
Amounts reclassified from AOCI | (124,364) | 12,927 | 3,161 |
Cumulative effect of change in accounting principle | 15,000 | (15,041) | |
Reclassification of deferred taxes | 50,034 | ||
Net current period other comprehensive income (loss) | 133,507 | (203,236) | 124,439 |
Ending balance | 230,448 | 96,941 | 300,177 |
Net Funded Status of Benefit Plans | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (12,185) | (13,217) | (11,817) |
Other comprehensive income (loss) before reclassifications | 1,418 | 1,032 | 734 |
Amounts reclassified from AOCI | 0 | 0 | 0 |
Cumulative effect of change in accounting principle | 0 | ||
Reclassification of deferred taxes | (2,134) | ||
Net current period other comprehensive income (loss) | 1,418 | 1,032 | (1,400) |
Ending balance | $ (10,767) | $ (12,185) | $ (13,217) |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Thousands | Jul. 01, 2019 | Jan. 02, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 49,079 | $ 47,396 | ||
Goodwill expected to be deductible for tax purposes | $ 17,900 | |||
Percentage of individuals employed by educational institutions | 80.00% | |||
Benefit Consultants Group Inc. | ||||
Business Acquisition [Line Items] | ||||
Transaction value | $ 25,000 | |||
Finite-lived intangible assets acquired | 16,200 | |||
Goodwill | 10,100 | |||
Goodwill expected to be deductible for tax purposes | $ 10,100 | |||
NTA | ||||
Business Acquisition [Line Items] | ||||
Transaction value | 425,900 | |||
Goodwill | 19,600 | |||
Acquired finite-lived intangible assets, useful lives | 23 years | |||
Adjusted earnings consideration | $ 20,900 | |||
Minimum | Benefit Consultants Group Inc. | ||||
Business Acquisition [Line Items] | ||||
Acquired finite-lived intangible assets, useful lives | 10 years | |||
Maximum | Benefit Consultants Group Inc. | ||||
Business Acquisition [Line Items] | ||||
Acquired finite-lived intangible assets, useful lives | 16 years |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net Investment Income [Line Items] | |||
Total investment income | $ 374,548 | $ 386,707 | $ 383,470 |
Investment expenses | (9,484) | (10,200) | (9,840) |
Net investment income | 365,064 | 376,507 | 373,630 |
Fixed maturity securities | |||
Net Investment Income [Line Items] | |||
Total investment income | 283,228 | 353,303 | 354,290 |
Equity securities | |||
Net Investment Income [Line Items] | |||
Total investment income | 4,923 | 6,017 | 6,411 |
Limited partnership interests | |||
Net Investment Income [Line Items] | |||
Total investment income | 25,694 | 15,406 | 12,555 |
Short-term and other investments | |||
Net Investment Income [Line Items] | |||
Total investment income | $ 60,703 | $ 11,981 | $ 10,214 |
Acquisitions - Identifiable Ass
Acquisitions - Identifiable Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Jul. 01, 2019 | Dec. 31, 2018 | |
Liabilities: | |||
Goodwill | $ 49,079 | $ 47,396 | |
Goodwill expected to be deductible for tax purposes | $ 17,900 | ||
NTA | |||
Assets: | |||
Investments | 542,600 | ||
Cash and short-term investments | 73,800 | ||
Intangible assets | 169,800 | ||
Other assets | 18,300 | ||
Liabilities: | |||
Policy reserves | 366,800 | ||
Policy claims | 21,800 | ||
Unearned premiums | 4,100 | ||
Other liabilities | 5,500 | ||
Total identifiable net assets acquired | 406,300 | ||
Goodwill | 19,600 | ||
Purchase price | $ 425,900 | ||
Acquired finite-lived intangible assets, useful lives | 23 years |
Investments - Realized Investme
Investments - Realized Investment Gains (Losses) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2019 | |
Gain (Loss) on Securities [Line Items] | ||||
Net investment gains (losses) | $ 153,340 | $ (12,543) | $ (3,406) | |
Investment gain realized on transfer | 135,300 | |||
Reinsurance block of in-force fixed and variable annuity business | 2,900,000 | $ 2,900,000 | ||
Fixed maturity securities | ||||
Gain (Loss) on Securities [Line Items] | ||||
Net investment gains (losses) | 141,448 | (5,713) | (8,867) | |
Equity securities | ||||
Gain (Loss) on Securities [Line Items] | ||||
Net investment gains (losses) | 15,975 | (10,649) | 4,003 | |
Short-term and other investments | ||||
Gain (Loss) on Securities [Line Items] | ||||
Net investment gains (losses) | $ (4,083) | $ 3,819 | $ 1,458 |
Acquisitions - Pro Forma Inform
Acquisitions - Pro Forma Information Operations as Acquisition of NTA (Details) - NTA - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Business Acquisition [Line Items] | ||
Total revenues | $ 1,507,352 | $ 1,339,896 |
Total expenses | 1,259,213 | 1,288,690 |
Income before income taxes | 248,139 | 51,206 |
Net income | $ 193,755 | $ 43,373 |
Earnings Per Share, Pro Forma [Abstract] | ||
Basic (in usd per share) | $ 4.64 | $ 1.04 |
Diluted (in usd per share) | $ 4.62 | $ 1.04 |
Investments - Net Investment Ga
Investments - Net Investment Gains (Losses) By Transaction Type (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |||
Impairment write-downs | $ (1,105) | $ 0 | $ (1,778) |
Change in intent write-downs | (275) | (1,530) | (10,842) |
Net OTTI losses recognized in earnings | (1,380) | (1,530) | (12,620) |
Sales and other, net | 151,495 | 3,491 | 7,756 |
Change in fair value - equity securities | 7,308 | (18,323) | 0 |
Change in fair value and gains realized on settlements - derivatives | (4,083) | 3,819 | 1,458 |
Total | $ 153,340 | $ (12,543) | $ (3,406) |
Investments - Fixed Maturities
Investments - Fixed Maturities and Equity Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 5,456,980 | $ 7,373,911 |
Fair Value | 5,791,676 | 7,515,318 |
Fixed maturity securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 5,456,980 | 7,373,911 |
Unrealized Gains | 348,310 | 249,085 |
Unrealized Losses | 13,614 | 107,678 |
Fair Value | 5,791,676 | 7,515,318 |
Mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 684,543 | 778,038 |
Unrealized Gains | 41,263 | 22,724 |
Unrealized Losses | 1,487 | 13,321 |
Fair Value | 724,319 | 787,441 |
Other, including U.S. Treasury securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 436,665 | 835,096 |
Unrealized Gains | 22,824 | 16,127 |
Unrealized Losses | 621 | 17,681 |
Fair Value | 458,868 | 833,542 |
Municipal bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,545,787 | 1,884,313 |
Unrealized Gains | 141,996 | 133,150 |
Unrealized Losses | 1,580 | 13,494 |
Fair Value | 1,686,203 | 2,003,969 |
Foreign government bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 42,801 | 83,343 |
Unrealized Gains | 2,569 | 2,321 |
Unrealized Losses | 0 | 760 |
Fair Value | 45,370 | 84,904 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,464,444 | 2,054,105 |
Unrealized Gains | 118,775 | 64,296 |
Unrealized Losses | 1,795 | 38,891 |
Fair Value | 1,581,424 | 2,079,510 |
Other mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,282,740 | 1,739,016 |
Unrealized Gains | 20,883 | 10,467 |
Unrealized Losses | 8,131 | 23,531 |
Fair Value | 1,295,492 | 1,725,952 |
FNMA | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 405,100 | 441,300 |
FHLMC | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 283,100 | 417,300 |
GNMA | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | $ 147,400 | $ 96,500 |
Investments - Gross Unrealized
Investments - Gross Unrealized Losses of Fixed Maturities and Equity Securities in Unrealized Loss Position (Details) $ in Thousands | Dec. 31, 2019USD ($)security | Dec. 31, 2018USD ($)security |
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | $ 478,866 | $ 2,497,440 |
Fixed maturity securities, Fair Value, More than 12 Months | 472,720 | 889,418 |
Fixed maturity securities, Fair Value, Total | 951,586 | 3,386,858 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 5,734 | 63,640 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 7,880 | 44,038 |
Fixed maturity securities, Gross Unrealized Losses, Total | $ 13,614 | $ 107,678 |
Number of positions with a gross unrealized loss, 12 Months or Less | security | 330 | 1,052 |
Number of position with a gross unrealized loss, more than 12 months | security | 137 | 359 |
Number of position with a gross unrealized loss, Total | security | 467 | 1,411 |
Fair value as a percentage of total fixed maturities and equity securities fair value, 12 Months or Less | 8.30% | 32.70% |
Fair value as a percentage of total fixed maturities and equity securities fair value, more than 12 months | 8.20% | 11.70% |
Fair value as a percentage of total fixed maturities and equity securities fair value, Total | 16.50% | 44.40% |
Mortgage-backed securities | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | $ 72,422 | $ 193,447 |
Fixed maturity securities, Fair Value, More than 12 Months | 2,620 | 157,295 |
Fixed maturity securities, Fair Value, Total | 75,042 | 350,742 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 1,282 | 5,026 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 205 | 8,295 |
Fixed maturity securities, Gross Unrealized Losses, Total | 1,487 | 13,321 |
Other | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 38,341 | 263,497 |
Fixed maturity securities, Fair Value, More than 12 Months | 1,527 | 246,213 |
Fixed maturity securities, Fair Value, Total | 39,868 | 509,710 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 619 | 6,746 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 2 | 10,935 |
Fixed maturity securities, Gross Unrealized Losses, Total | 621 | 17,681 |
Municipal bonds | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 91,195 | 291,869 |
Fixed maturity securities, Fair Value, More than 12 Months | 9,160 | 95,297 |
Fixed maturity securities, Fair Value, Total | 100,355 | 387,166 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 977 | 7,603 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 603 | 5,891 |
Fixed maturity securities, Gross Unrealized Losses, Total | 1,580 | 13,494 |
Foreign government bonds | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 0 | 16,250 |
Fixed maturity securities, Fair Value, More than 12 Months | 0 | 0 |
Fixed maturity securities, Fair Value, Total | 0 | 16,250 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 0 | 760 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 0 | 0 |
Fixed maturity securities, Gross Unrealized Losses, Total | 0 | 760 |
Corporate bonds | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 58,198 | 818,519 |
Fixed maturity securities, Fair Value, More than 12 Months | 16,622 | 99,171 |
Fixed maturity securities, Fair Value, Total | 74,820 | 917,690 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 886 | 27,429 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 909 | 11,462 |
Fixed maturity securities, Gross Unrealized Losses, Total | 1,795 | 38,891 |
Other mortgage-backed securities | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 218,710 | 913,858 |
Fixed maturity securities, Fair Value, More than 12 Months | 442,791 | 291,442 |
Fixed maturity securities, Fair Value, Total | 661,501 | 1,205,300 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 1,970 | 16,076 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 6,161 | 7,455 |
Fixed maturity securities, Gross Unrealized Losses, Total | $ 8,131 | $ 23,531 |
Investments - Credit Losses (De
Investments - Credit Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cumulative credit loss | ||
Beginning of period | $ 1,529 | $ 3,825 |
New credit losses | 0 | 0 |
Increases to previously recognized credit losses | 0 | 246 |
Losses related to securities sold or paid down during the period | 0 | (2,542) |
End of period | $ 1,529 | $ 1,529 |
Investments - Maturities of Fix
Investments - Maturities of Fixed Maturities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Amortized Cost | ||
Due in 1 year or less | $ 205,798 | |
Due after 1 year through 5 years | 1,541,749 | |
Due after 5 years through 10 years | 1,613,539 | |
Due after 10 years through 20 years | 1,393,503 | |
Due after 20 years | 702,391 | |
Amortized Cost | 5,456,980 | $ 7,373,911 |
Fair Value | ||
Due in 1 year or less | 211,420 | |
Due after 1 year through 5 years | 1,587,300 | |
Due after 5 years through 10 years | 1,712,236 | |
Due after 10 years through 20 years | 1,512,769 | |
Due after 20 years | 767,951 | |
Total | $ 5,791,676 | $ 7,515,318 |
Percent of Total Fair Value | ||
Due in 1 year or less | 3.60% | |
Due after 1 year through 5 years | 27.40% | |
Due after 5 years through 10 years | 29.60% | |
Due after 10 years through 20 years | 26.10% | |
Due after 20 years | 13.30% | |
Total | 100.00% | |
Average option-adjusted duration, in years | 6 years |
Investments - Sales of Fixed Ma
Investments - Sales of Fixed Maturities and Equity Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2019 | |
Debt Securities, Available-for-sale [Line Items] | ||||
Proceeds received | $ 805,887 | $ 625,527 | $ 500,760 | |
Proceeds received | 29,863 | 25,498 | 50,113 | |
Investment gain realized on transfer | 135,300 | |||
Reinsurance block of in-force fixed and variable annuity business | 2,900,000 | $ 2,900,000 | ||
Fixed maturity securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Gross gains realized | 150,852 | 10,536 | 13,570 | |
Gross losses realized | (7,807) | (14,932) | (11,842) | |
Equity securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Gross gains realized | 9,193 | 8,592 | 7,753 | |
Gross losses realized | $ (788) | $ (917) | $ (1,972) |
Investments - Net Unrealized In
Investments - Net Unrealized Investment Gains and Losses on Fixed Maturities and Equity Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ 1,290,550 | $ 1,501,573 | |
Change in unrealized investment gains (losses) on fixed maturity securities | 133,507 | (188,195) | $ 74,405 |
Cumulative effect of change in accounting principle | 0 | (15,041) | 0 |
Ending balance | 1,567,285 | 1,290,550 | 1,501,573 |
Net unrealized investment gains (losses) on securities | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 96,941 | 300,177 | 175,738 |
Cumulative effect of change in accounting principle | 15,000 | (15,041) | |
Ending balance | 230,448 | 96,941 | 300,177 |
Net unrealized investment gains (losses) on securities | Fixed maturity securities | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 111,712 | 286,176 | 202,941 |
Change in unrealized investment gains (losses) on fixed maturity securities | 277,062 | (172,350) | 80,073 |
Reclassification of net investment (gains) losses on securities to net income | (124,364) | 12,927 | 3,162 |
Ending balance | $ 264,410 | $ 111,712 | $ 286,176 |
Investments - Offsetting of Ass
Investments - Offsetting of Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Asset derivatives | ||
Net Amounts of Assets/Liabilities Presented in the Consolidated Balance Sheets | $ 13,240 | $ 2,647 |
Free-standing derivatives | ||
Asset derivatives | ||
Gross Amounts | 13,239 | 2,647 |
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | 0 |
Net Amounts of Assets/Liabilities Presented in the Consolidated Balance Sheets | 13,239 | 2,647 |
Gross Amounts Not Offset in the Consolidated Balance Sheets, Financial Instruments | 7,687 | 0 |
Gross Amounts Not Offset in the Consolidated Balance Sheets, Cash Collateral Received | 6,640 | 1,868 |
Derivative Asset, Fair Value, Amount Offset Against Collateral | $ (1,088) | $ 779 |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Investment Holdings [Line Items] | ||
Investment grade rating | 93.90% | |
Limited partnership interests | $ 383,717 | $ 328,516 |
Fair value of issued securities | 5,791,676 | 7,515,318 |
FHLB funding agreements | 545,000 | 675,000 |
Governmental agencies as required by law in various states | ||
Investment Holdings [Line Items] | ||
Fair value of issued securities | 26,000 | 17,700 |
FHLB of Chicago | ||
Investment Holdings [Line Items] | ||
Fair value of issued securities | $ 594,200 | $ 740,000 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Financial Instruments Measured and Carried at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | $ 5,791,676 | $ 7,515,318 |
Mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 724,319 | 787,441 |
Other, including U.S. Treasury securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 458,868 | 833,542 |
Municipal bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 1,686,203 | 2,003,969 |
Foreign government bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 45,370 | 84,904 |
Corporate bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 1,581,424 | 2,079,510 |
Other mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 1,295,492 | 1,725,952 |
Carrying Amount | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 6,092,204 | 7,765,437 |
Separate Account (variable annuity) assets | 2,490,469 | 2,001,128 |
Investment contract and life policy reserves, embedded derivatives | 1,314 | 248 |
Other policyholder funds, embedded derivatives | 93,733 | 78,700 |
Carrying Amount | Recurring | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 5,791,676 | 7,515,318 |
Carrying Amount | Short-term investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 172,667 | 122,222 |
Carrying Amount | Mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 724,319 | 787,441 |
Carrying Amount | Other, including U.S. Treasury securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 458,868 | 833,542 |
Carrying Amount | Municipal bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 1,686,203 | 2,003,969 |
Carrying Amount | Foreign government bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 45,370 | 84,904 |
Carrying Amount | Corporate bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 1,581,424 | 2,079,510 |
Carrying Amount | Other mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 1,295,492 | 1,725,952 |
Carrying Amount | Equity securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 101,864 | 111,750 |
Carrying Amount | Other investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 25,997 | 16,147 |
Fair Value | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 6,092,204 | 7,765,437 |
Separate Account (variable annuity) assets | 2,490,469 | 2,001,128 |
Investment contract and life policy reserves, embedded derivatives | 1,314 | 248 |
Other policyholder funds, embedded derivatives | 93,733 | 78,700 |
Fair Value | Recurring | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 5,791,676 | 7,515,318 |
Fair Value | Short-term investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 172,667 | 122,222 |
Fair Value | Mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 724,319 | 787,441 |
Fair Value | Other, including U.S. Treasury securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 458,868 | 833,542 |
Fair Value | Municipal bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 1,686,203 | 2,003,969 |
Fair Value | Foreign government bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 45,370 | 84,904 |
Fair Value | Corporate bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 1,581,424 | 2,079,510 |
Fair Value | Other mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 1,295,492 | 1,725,952 |
Fair Value | Equity securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 101,864 | 111,750 |
Fair Value | Other investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 25,997 | 16,147 |
Fair Value | Level 1 | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 254,670 | 207,198 |
Separate Account (variable annuity) assets | 2,490,469 | 2,001,128 |
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: | ||
Fair Value | 32,169 | 25,572 |
Fair Value | Level 1 | Short-term investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 172,667 | 117,296 |
Fair Value | Level 1 | Mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 0 | 0 |
Fair Value | Level 1 | Other, including U.S. Treasury securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 17,699 | 13,291 |
Fair Value | Level 1 | Municipal bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 0 | 0 |
Fair Value | Level 1 | Foreign government bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 0 | 0 |
Fair Value | Level 1 | Corporate bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 14,470 | 12,281 |
Fair Value | Level 1 | Other mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 0 | 0 |
Fair Value | Level 1 | Equity securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 49,834 | 64,330 |
Fair Value | Level 1 | Other investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 0 | 0 |
Fair Value | Level 2 | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 5,542,356 | 7,309,750 |
Separate Account (variable annuity) assets | 0 | 0 |
Investment contract and life policy reserves, embedded derivatives | 1,314 | 248 |
Other policyholder funds, embedded derivatives | 0 | 0 |
Fair Value | Level 2 | Recurring | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 5,464,436 | 7,241,262 |
Fair Value | Level 2 | Short-term investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 0 | 4,926 |
Fair Value | Level 2 | Mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 711,004 | 784,224 |
Fair Value | Level 2 | Other, including U.S. Treasury securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 441,169 | 820,251 |
Fair Value | Level 2 | Municipal bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 1,641,912 | 1,956,438 |
Fair Value | Level 2 | Foreign government bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 45,370 | 84,904 |
Fair Value | Level 2 | Corporate bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 1,463,002 | 1,986,487 |
Fair Value | Level 2 | Other mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 1,161,979 | 1,608,958 |
Fair Value | Level 2 | Equity securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 51,923 | 47,415 |
Fair Value | Level 2 | Other investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 25,997 | 16,147 |
Fair Value | Level 3 | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 295,178 | 248,489 |
Separate Account (variable annuity) assets | 0 | 0 |
Investment contract and life policy reserves, embedded derivatives | 0 | 0 |
Other policyholder funds, embedded derivatives | 93,733 | 78,700 |
Fair Value | Level 3 | Recurring | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 295,071 | 248,484 |
Fair Value | Level 3 | Short-term investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 0 | 0 |
Fair Value | Level 3 | Mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 13,315 | 3,217 |
Fair Value | Level 3 | Other, including U.S. Treasury securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 0 | 0 |
Fair Value | Level 3 | Municipal bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 44,291 | 47,531 |
Fair Value | Level 3 | Foreign government bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 0 | 0 |
Fair Value | Level 3 | Corporate bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 103,952 | 80,742 |
Fair Value | Level 3 | Other mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 133,513 | 116,994 |
Fair Value | Level 3 | Equity securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 107 | 5 |
Fair Value | Level 3 | Other investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | $ 0 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Transfers Between Different Fair Value Levels (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Financial Assets | ||
Beginning balance | $ 248,489 | $ 230,257 |
Transfers into Level 3 | 90,306 | 91,259 |
Transfers out of Level 3 | (10,266) | (16,479) |
Total gains or losses | ||
Net investment gains (losses) included in net income related to financial assets | (1,067) | (484) |
Net unrealized investment gains (losses) included in OCI | 11,035 | (9,605) |
Purchases | 2,483 | 0 |
Issuances | 0 | 0 |
Sales | (608) | (6,326) |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | (45,194) | (40,133) |
Ending balance | 295,178 | 248,489 |
Financial Liabilities | ||
Beginning balance | 78,700 | 80,733 |
Transfers into Level 3 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 |
Total gains or losses | ||
Net realized (gains) losses included in net income related to financial liabilities | 12,636 | (7,518) |
Net unrealized investment gains (losses) included in OCI | 0 | 0 |
Purchases | 0 | 0 |
Issuances | 10,039 | 11,183 |
Sales | 0 | 0 |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | (7,642) | (5,698) |
Ending balance | 93,733 | 78,700 |
Municipal bonds | ||
Financial Assets | ||
Beginning balance | 47,531 | 49,328 |
Transfers into Level 3 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 |
Total gains or losses | ||
Net investment gains (losses) included in net income related to financial assets | 0 | 0 |
Net unrealized investment gains (losses) included in OCI | 474 | (1,195) |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | 0 | 0 |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | (3,714) | (602) |
Ending balance | 44,291 | 47,531 |
Corporate bonds | ||
Financial Assets | ||
Beginning balance | 80,742 | 72,979 |
Transfers into Level 3 | 33,475 | 40,488 |
Transfers out of Level 3 | (7,698) | (11,279) |
Total gains or losses | ||
Net investment gains (losses) included in net income related to financial assets | 0 | (487) |
Net unrealized investment gains (losses) included in OCI | 4,461 | (2,840) |
Purchases | 2,483 | 0 |
Issuances | 0 | 0 |
Sales | 0 | (6,135) |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | (9,511) | (11,984) |
Ending balance | 103,952 | 80,742 |
Other mortgage-backed securities | ||
Financial Assets | ||
Beginning balance | 120,211 | 107,944 |
Transfers into Level 3 | 56,766 | 50,771 |
Transfers out of Level 3 | (2,568) | (5,200) |
Total gains or losses | ||
Net investment gains (losses) included in net income related to financial assets | (1,105) | 0 |
Net unrealized investment gains (losses) included in OCI | 6,100 | (5,570) |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | (607) | (187) |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | (31,969) | (27,547) |
Ending balance | 146,828 | 120,211 |
Total | ||
Financial Assets | ||
Beginning balance | 248,484 | 230,251 |
Transfers into Level 3 | 90,241 | 91,259 |
Transfers out of Level 3 | (10,266) | (16,479) |
Total gains or losses | ||
Net investment gains (losses) included in net income related to financial assets | (1,105) | (487) |
Net unrealized investment gains (losses) included in OCI | 11,035 | (9,605) |
Purchases | 2,483 | 0 |
Issuances | 0 | 0 |
Sales | (607) | (6,322) |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | (45,194) | (40,133) |
Ending balance | 295,071 | 248,484 |
Equity securities | ||
Financial Assets | ||
Beginning balance | 5 | 6 |
Transfers into Level 3 | 65 | 0 |
Transfers out of Level 3 | 0 | 0 |
Total gains or losses | ||
Net investment gains (losses) included in net income related to financial assets | 38 | 3 |
Net unrealized investment gains (losses) included in OCI | 0 | 0 |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | (1) | (4) |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | 0 | 0 |
Ending balance | $ 107 | $ 5 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Financial Instruments Not Carried at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Level 1 | ||
Investments | ||
Other investments | $ 0 | $ 0 |
Deposit asset on reinsurance | 0 | |
Financial Liabilities | ||
Investment contract and 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 |
Short-term debt | 0 | |
Long-term debt | 0 | 0 |
Level 2 | ||
Investments | ||
Other investments | 0 | 0 |
Deposit asset on reinsurance | 0 | |
Financial Liabilities | ||
Investment contract and policy reserves, fixed annuity contracts | 0 | 0 |
Investment contract and life policy reserves, account values on life contracts | 0 | 0 |
Other policyholder funds | 495,812 | 626,325 |
Short-term debt | 0 | |
Long-term debt | 322,678 | 291,938 |
Level 3 | ||
Investments | ||
Other investments | 167,185 | 161,449 |
Deposit asset on reinsurance | 2,634,012 | |
Financial Liabilities | ||
Investment contract and policy reserves, fixed annuity contracts | 4,609,880 | 4,478,338 |
Investment contract and life policy reserves, account values on life contracts | 98,332 | 90,402 |
Other policyholder funds | 57,738 | 62,962 |
Short-term debt | 135,000 | |
Long-term debt | 0 | 0 |
Carrying Amount | ||
Investments | ||
Other investments | 163,312 | 156,725 |
Deposit asset on reinsurance | 2,346,166 | |
Financial Liabilities | ||
Investment contract and policy reserves, fixed annuity contracts | 4,675,774 | 4,555,849 |
Investment contract and life policy reserves, account values on life contracts | 93,465 | 87,229 |
Other policyholder funds | 553,550 | 689,287 |
Short-term debt | 135,000 | |
Long-term debt | 298,025 | 297,740 |
Fair Value | ||
Investments | ||
Other investments | 167,185 | 161,449 |
Deposit asset on reinsurance | 2,634,012 | |
Financial Liabilities | ||
Investment contract and policy reserves, fixed annuity contracts | 4,609,880 | 4,478,338 |
Investment contract and life policy reserves, account values on life contracts | 98,332 | 90,402 |
Other policyholder funds | 553,550 | 689,287 |
Short-term debt | 135,000 | |
Long-term debt | $ 322,678 | $ 291,938 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Percentage of investment portfolio fair value pricing services or index price | 94.10% | 90.70% |
Net investment losses included in net income related to financial assets | $ 1,067 | $ 484 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Percentage of invested assets in total investment portfolio Level 3 recurring | 4.80% | |
Net investment gain (loss) | $ (12,600) | $ 7,500 |
Derivatives - Fair Value of Der
Derivatives - Fair Value of Derivatives in Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Derivatives, included in Short-term and other investments | $ 13,240 | $ 2,647 |
Short-term and other investments | ||
Assets | ||
Derivatives, included in Short-term and other investments | 13,239 | 2,647 |
Other policyholder funds | ||
Liabilities | ||
Fixed indexed annuities - embedded derivatives, included in Other policyholder funds | 93,733 | 78,700 |
Investment contract and life policy reserves | ||
Liabilities | ||
Indexed universal life - embedded derivatives, included in Investment contract and policy reserves | $ 1,314 | $ 248 |
Derivatives - Fair Value of D_2
Derivatives - Fair Value of Derivatives Included in Consolidated Statements of Operations (Details) - Sales - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Change in fair value of derivatives: | |||
Net investment gains (losses) | $ 9,493 | $ (4,112) | $ 14,867 |
Change in fair value of embedded derivatives: | |||
Net investment gains (losses) | $ (13,576) | $ 7,931 | $ (13,410) |
Derivatives - Notional and Fair
Derivatives - Notional and Fair Value Amounts of Derivative Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Derivative [Line Items] | ||
Notional Amount | $ 318,000 | $ 278,200 |
Fair Value | 13,240 | 2,647 |
Bank of America, N.A. | ||
Derivative [Line Items] | ||
Notional Amount | 174,900 | 144,500 |
Fair Value | 8,523 | 870 |
Barclays Bank PLC | ||
Derivative [Line Items] | ||
Notional Amount | 115,300 | 28,500 |
Fair Value | 3,348 | 247 |
Citigroup Inc. | ||
Derivative [Line Items] | ||
Notional Amount | 0 | 0 |
Fair Value | 0 | 0 |
Credit Suisse International | ||
Derivative [Line Items] | ||
Notional Amount | 0 | 16,100 |
Fair Value | 0 | 55 |
Societe Generale | ||
Derivative [Line Items] | ||
Notional Amount | 27,800 | 89,100 |
Fair Value | $ 1,369 | $ 1,475 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Derivatives, Fair Value [Line Items] | ||
Expected contract term | 10 years | |
Maximum exposure | $ 0.3 | |
Other liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of collateral | $ 14.3 | $ 1.9 |
Deposit Asset on Reinsurance -
Deposit Asset on Reinsurance - Narrative (Details) - USD ($) $ in Thousands | Apr. 01, 2019 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Effects of Reinsurance [Line Items] | ||||
Reinsurance block of in-force fixed and variable annuity business | $ 2,900,000 | $ 2,900,000 | ||
Fixed annuity reserves reinsured on a coinsurance basis | $ 2,200,000 | |||
Deposit asset on reinsurance | 2,300,000 | 2,346,166 | $ 0 | |
Investment gain realized, net of tax | 106,900 | |||
Separate account asset | 2,490,469 | 2,001,128 | ||
Separate account liability | $ 2,490,469 | $ 2,001,128 | ||
Reinsurance Deposit Receivable | Third Party Reinsurer Risk | ||||
Effects of Reinsurance [Line Items] | ||||
Concentration risk, percent | 50.00% | |||
Reinsurance Contract Modified Coinsurance Basis | ||||
Effects of Reinsurance [Line Items] | ||||
Separate account asset | $ 700,000 | |||
Separate account liability | $ 700,000 | |||
Minimum | ||||
Effects of Reinsurance [Line Items] | ||||
Minimum crediting rating | 4.50% |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Line Items] | ||||
Other expense - goodwill impairment | $ 28,025 | $ 0 | $ 0 | |
Retirement | ||||
Goodwill [Line Items] | ||||
Other expense - goodwill impairment | $ 28,000 | 28,025 | ||
Benefit Consultants Group Inc. | ||||
Goodwill [Line Items] | ||||
Acquired finite-lived intangible assets | 14,100 | |||
NTA | ||||
Goodwill [Line Items] | ||||
Acquired finite-lived intangible assets | $ 160,400 |
Property and Casualty Unpaid _3
Property and Casualty Unpaid Claims and Claim Expenses - Summary of Reinsurance Reserve Balances (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||
Gross reserves, beginning of year | $ 396,714 | ||
Less: reinsurance recoverables | 99,510 | ||
Claims and claim expense payments for claims occurring during: | |||
Benefits, claims and settlement expenses | 585,068 | $ 637,560 | $ 582,306 |
Plus: reinsurance recoverables | 129,213 | 99,510 | |
Gross reserves, end of year | 442,854 | 396,714 | |
Property and Casualty segment | |||
Segment Reporting Information [Line Items] | |||
Gross reserves, beginning of year | 367,180 | 319,182 | 307,757 |
Less: reinsurance recoverables | 89,725 | 57,409 | 61,199 |
Net reserves, beginning of year | 277,455 | 261,773 | 246,558 |
Incurred claims and claim expenses: | |||
Claims occurring in the current year | 483,062 | 547,959 | 498,989 |
Decrease in estimated reserves for claims occurring in prior years | (7,500) | (300) | (2,700) |
Total claims and claim expenses incurred | 475,562 | 547,659 | 496,289 |
Claims and claim expense payments for claims occurring during: | |||
Current year | 329,475 | 369,194 | 333,385 |
Prior years | 157,072 | 162,783 | 147,689 |
Total claims and claim expense payments | 486,547 | 531,977 | 481,074 |
Net reserves, end of year | 266,470 | 277,455 | 261,773 |
Liability for unpaid claims and claims adjustment expense, net | 266,470 | 261,773 | 261,773 |
Plus: reinsurance recoverables | 120,506 | 89,725 | 57,409 |
Gross reserves, end of year | 386,976 | 367,180 | 319,182 |
Life and Annuity segments | |||
Segment Reporting Information [Line Items] | |||
Net reserves, beginning of year | 29,500 | 28,600 | |
Claims and claim expense payments for claims occurring during: | |||
Net reserves, end of year | 55,900 | 29,500 | 28,600 |
Liability for unpaid claims and claims adjustment expense, net | 29,500 | 28,600 | 28,600 |
Benefits, claims and settlement expenses | $ 109,500 | $ 89,900 | $ 86,000 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, net - Goodwill Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Roll Forward] | ||||
Beginning balance | $ 47,396 | |||
Impairment | (28,025) | $ 0 | $ 0 | |
Acquisitions | 29,708 | |||
Ending balance | 49,079 | 47,396 | ||
Property and Casualty | ||||
Goodwill [Roll Forward] | ||||
Beginning balance | 9,460 | |||
Impairment | 0 | |||
Acquisitions | 0 | |||
Ending balance | 9,460 | 9,460 | ||
Supplemental | ||||
Goodwill [Roll Forward] | ||||
Beginning balance | 0 | |||
Impairment | 0 | |||
Acquisitions | 19,621 | |||
Ending balance | 19,621 | 0 | ||
Retirement | ||||
Goodwill [Roll Forward] | ||||
Beginning balance | 28,025 | |||
Impairment | $ (28,000) | (28,025) | ||
Acquisitions | 10,087 | |||
Ending balance | 10,087 | 28,025 | ||
Life | ||||
Goodwill [Roll Forward] | ||||
Beginning balance | 9,911 | |||
Impairment | 0 | |||
Acquisitions | 0 | |||
Ending balance | $ 9,911 | $ 9,911 |
Property and Casualty Unpaid _4
Property and Casualty Unpaid Claims and Claim Expenses - Average Annual Percentage Payout Of Incurred Claims by Age (Details) | Dec. 31, 2019 |
Homeowners | |
Year One | 79.50% |
Year Two | 16.60% |
Year Three | 2.20% |
Year Four | 1.00% |
Year Five | 0.40% |
Year Six | 0.30% |
Year Seven | 0.00% |
Year Eight | 0.00% |
Year Nine | 0.00% |
Year Ten | 0.00% |
Auto liability | |
Year One | 40.80% |
Year Two | 34.90% |
Year Three | 13.80% |
Year Four | 6.10% |
Year Five | 3.00% |
Year Six | 1.00% |
Year Seven | 0.30% |
Year Eight | 0.10% |
Year Nine | 0.00% |
Year Ten | 0.00% |
Auto physical damage | |
Year One | 95.60% |
Year Two | 4.40% |
Year Three | 0.00% |
Year Four | 0.00% |
Year Five | 0.00% |
Year Six | 0.00% |
Year Seven | 0.00% |
Year Eight | 0.00% |
Year Nine | 0.00% |
Year Ten | 0.00% |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, net - Summary of Finite-Lived Intangible Assets (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
At inception | $ 174,476 |
Accumulated amortization | (8,790) |
Total | $ 165,686 |
Useful Life (in Years) | 23 years |
Business acquired | |
Finite-Lived Intangible Assets [Line Items] | |
At inception | $ 94,419 |
Accumulated amortization | $ (3,697) |
Useful Life (in Years) | 30 years |
Distribution acquired | |
Finite-Lived Intangible Assets [Line Items] | |
At inception | $ 53,996 |
Accumulated amortization | $ (1,871) |
Useful Life (in Years) | 17 years |
Agency relationships | |
Finite-Lived Intangible Assets [Line Items] | |
At inception | $ 16,981 |
Accumulated amortization | $ (1,489) |
Useful Life (in Years) | 14 years |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
At inception | $ 9,080 |
Accumulated amortization | $ (1,733) |
Useful Life (in Years) | 10 years |
Property and Casualty Unpaid _5
Property and Casualty Unpaid Claims and Claim Expenses - Incurred and Paid Claims by Accident Year on a Net Basis (Details) $ in Thousands | Dec. 31, 2019USD ($)claim | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) | Dec. 31, 2010USD ($) |
Homeowners | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | $ 1,248,333 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | 1,212,885 | |||||||||
Outstanding prior to 2010 | 32 | |||||||||
Prior years paid | 668 | |||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance | 35,480 | |||||||||
Homeowners | 2010 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 132,627 | $ 132,627 | $ 132,905 | $ 132,859 | $ 133,136 | $ 133,216 | $ 133,235 | $ 133,358 | $ 136,907 | $ 140,994 |
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 0 | |||||||||
Cumulative number of reported claims | claim | 25,150,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 132,602 | 132,602 | 132,602 | 132,599 | 132,604 | 132,523 | 132,246 | 129,790 | 124,326 | 98,190 |
Homeowners | 2011 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 148,067 | 148,079 | 148,370 | 148,414 | 148,755 | 148,860 | 150,791 | 150,334 | 150,141 | |
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 0 | |||||||||
Cumulative number of reported claims | claim | 29,531,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 148,067 | 148,069 | 148,014 | 148,026 | 147,451 | 146,908 | 145,852 | 142,846 | 123,046 | |
Homeowners | 2012 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 106,028 | 106,000 | 106,348 | 106,308 | 106,486 | 109,360 | 109,156 | 108,754 | ||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 0 | |||||||||
Cumulative number of reported claims | claim | 21,578,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 106,021 | 105,993 | 105,909 | 105,561 | 105,156 | 104,203 | 101,566 | 84,260 | ||
Homeowners | 2013 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 101,709 | 101,769 | 102,345 | 102,407 | 103,982 | 107,489 | 105,584 | |||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 0 | |||||||||
Cumulative number of reported claims | claim | 19,221,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 101,709 | 101,677 | 101,527 | 100,968 | 99,361 | 96,599 | 76,890 | |||
Homeowners | 2014 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 106,458 | 106,554 | 106,844 | 109,059 | 113,505 | 111,647 | ||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 59 | |||||||||
Cumulative number of reported claims | claim | 20,084,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 106,388 | 106,258 | 106,081 | 105,704 | 103,030 | 83,314 | ||||
Homeowners | 2015 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 115,050 | 114,053 | 114,404 | 115,134 | 111,706 | |||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 276 | |||||||||
Cumulative number of reported claims | claim | 18,714,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 114,648 | 113,321 | 111,882 | 109,303 | 90,704 | |||||
Homeowners | 2016 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 117,933 | 117,009 | 118,604 | 115,931 | ||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 280 | |||||||||
Cumulative number of reported claims | claim | 19,853,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 117,537 | 115,053 | 113,186 | 95,772 | ||||||
Homeowners | 2017 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 132,666 | 129,818 | 126,285 | |||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 2,285 | |||||||||
Cumulative number of reported claims | claim | 19,827,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 129,767 | 128,518 | 106,800 | |||||||
Homeowners | 2018 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 157,404 | 166,793 | ||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 4,170 | |||||||||
Cumulative number of reported claims | claim | 20,954,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 152,356 | 130,548 | ||||||||
Homeowners | 2019 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 130,391 | |||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 16,842 | |||||||||
Cumulative number of reported claims | claim | 16,155,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 103,790 | |||||||||
Auto liability | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 1,671,607 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | 1,468,500 | |||||||||
Outstanding prior to 2010 | 73 | |||||||||
Prior years paid | (219) | |||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance | 203,180 | |||||||||
Auto liability | 2010 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 149,481 | 149,542 | 149,425 | 149,818 | 151,653 | 152,483 | 154,222 | 156,369 | 160,058 | 157,712 |
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 0 | |||||||||
Cumulative number of reported claims | claim | 48,942,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 149,474 | 149,439 | 149,364 | 149,247 | 148,751 | 147,337 | 144,255 | 137,012 | 118,345 | 63,416 |
Auto liability | 2011 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 138,849 | 138,949 | 138,891 | 139,840 | 142,488 | 143,133 | 145,735 | 146,713 | 150,803 | |
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 94 | |||||||||
Cumulative number of reported claims | claim | 45,976,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 138,692 | 138,689 | 138,358 | 138,151 | 136,906 | 133,931 | 126,812 | 108,837 | 61,070 | |
Auto liability | 2012 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 145,515 | 145,620 | 145,847 | 147,594 | 149,346 | 150,336 | 153,815 | 156,448 | ||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 204 | |||||||||
Cumulative number of reported claims | claim | 45,984,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 145,184 | 145,121 | 144,622 | 142,916 | 138,641 | 127,185 | 109,574 | 61,279 | ||
Auto liability | 2013 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 148,135 | 147,993 | 148,111 | 150,657 | 150,720 | 152,858 | 153,860 | |||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 575 | |||||||||
Cumulative number of reported claims | claim | 47,369,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 147,409 | 146,770 | 145,291 | 139,954 | 131,214 | 108,856 | 62,224 | |||
Auto liability | 2014 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 159,355 | 159,794 | 159,937 | 158,470 | 157,249 | 155,105 | ||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 665 | |||||||||
Cumulative number of reported claims | claim | 49,386,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 157,596 | 155,758 | 149,059 | 139,463 | 117,468 | 61,329 | ||||
Auto liability | 2015 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 178,654 | 178,325 | 177,021 | 172,553 | 165,517 | |||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 1,850 | |||||||||
Cumulative number of reported claims | claim | 50,618,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 174,495 | 170,088 | 157,980 | 134,473 | 70,836 | |||||
Auto liability | 2016 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 186,568 | 184,567 | 184,440 | 180,380 | ||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 2,649 | |||||||||
Cumulative number of reported claims | claim | 51,995,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 177,834 | 166,815 | 140,901 | 73,073 | ||||||
Auto liability | 2017 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 188,625 | 188,756 | 187,983 | |||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 8,025 | |||||||||
Cumulative number of reported claims | claim | 48,906,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 166,614 | 139,531 | 70,682 | |||||||
Auto liability | 2018 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 195,284 | 200,314 | ||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 26,931 | |||||||||
Cumulative number of reported claims | claim | 47,078,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 141,537 | 77,528 | ||||||||
Auto liability | 2019 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 181,141 | |||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 64,778 | |||||||||
Cumulative number of reported claims | claim | 42,587,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 69,665 | |||||||||
Auto physical damage | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 973,319 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | 968,372 | |||||||||
Outstanding prior to 2010 | 0 | |||||||||
Prior years paid | 0 | |||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance | 4,947 | |||||||||
Auto physical damage | 2010 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 83,011 | 83,018 | 83,028 | 83,036 | 83,050 | 83,052 | 83,046 | 83,103 | 83,420 | 84,112 |
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 0 | |||||||||
Cumulative number of reported claims | claim | 81,581,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 83,009 | 83,015 | 83,028 | 83,036 | 83,051 | 83,067 | 83,087 | 83,103 | 83,120 | $ 79,329 |
Auto physical damage | 2011 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 85,090 | 85,102 | 85,108 | 85,116 | 85,143 | 85,120 | 86,023 | 85,507 | 86,205 | |
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 0 | |||||||||
Cumulative number of reported claims | claim | 80,804,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 85,090 | 85,095 | 85,108 | 85,116 | 85,127 | 85,148 | 85,181 | 85,254 | $ 83,227 | |
Auto physical damage | 2012 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 83,322 | 83,334 | 83,342 | 83,354 | 83,431 | 83,402 | 82,337 | 83,770 | ||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 0 | |||||||||
Cumulative number of reported claims | claim | 78,165,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 83,322 | 83,326 | 83,342 | 83,347 | 83,355 | 83,372 | 83,418 | $ 80,519 | ||
Auto physical damage | 2013 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 88,457 | 88,525 | 88,455 | 88,627 | 88,672 | 88,856 | 91,448 | |||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 0 | |||||||||
Cumulative number of reported claims | claim | 80,920,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 88,452 | 88,471 | 88,484 | 88,532 | 88,580 | 88,688 | $ 85,110 | |||
Auto physical damage | 2014 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 95,241 | 95,232 | 95,239 | 95,422 | 95,634 | 95,572 | ||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 0 | |||||||||
Cumulative number of reported claims | claim | 87,901,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 95,243 | 95,258 | 95,256 | 95,266 | 95,444 | $ 88,939 | ||||
Auto physical damage | 2015 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 97,612 | 97,455 | 97,624 | 97,994 | 99,291 | |||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ (18) | |||||||||
Cumulative number of reported claims | claim | 87,497,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 97,625 | 97,638 | 97,685 | 97,850 | $ 92,138 | |||||
Auto physical damage | 2016 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 109,603 | 109,348 | 109,515 | 112,430 | ||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ (17) | |||||||||
Cumulative number of reported claims | claim | 93,225,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 109,611 | 109,536 | 109,686 | $ 106,459 | ||||||
Auto physical damage | 2017 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 110,520 | 111,798 | 115,483 | |||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ (161) | |||||||||
Cumulative number of reported claims | claim | 91,270,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 110,674 | 110,817 | $ 105,156 | |||||||
Auto physical damage | 2018 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 108,886 | 109,040 | ||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ (326) | |||||||||
Cumulative number of reported claims | claim | 94,388,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 109,103 | $ 103,559 | ||||||||
Auto physical damage | 2019 | ||||||||||
Incurred claims and allocated claim adjustment expense, net of reinsurance | 111,577 | |||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ (6,829) | |||||||||
Cumulative number of reported claims | claim | 89,207,000 | |||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 106,243 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets, net - Estimated Future Amortization (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2020 | $ 14,488 |
2021 | 13,411 |
2022 | 12,433 |
2023 | 11,577 |
2024 | 10,805 |
Thereafter | 102,972 |
Total | $ 165,686 |
Property and Casualty Unpaid _6
Property and Casualty Unpaid Claims and Claim Expenses - Reconciliation of Net Incurred and Paid Claims (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Gross reserves, end of year | $ 442,854 | $ 396,714 |
Property and Casualty | ||
Short-duration Insurance Contracts, Liability for Unpaid Claims and Allocated Claim Adjustment Expense, Net | 246,499 | |
Reinsurance Recoverables, Including Reinsurance Premium Paid | 120,506 | |
Unallocated claims adjustment expenses | 19,971 | |
Total other than short duration and unallocated claims adjustment expenses | 75,849 | |
Property and Casualty | Homeowners | ||
Short-duration Insurance Contracts, Liability for Unpaid Claims and Allocated Claim Adjustment Expense, Net | 35,480 | |
Reinsurance Recoverables, Including Reinsurance Premium Paid | 12,394 | |
Property and Casualty | Auto liability | ||
Short-duration Insurance Contracts, Liability for Unpaid Claims and Allocated Claim Adjustment Expense, Net | 203,180 | |
Reinsurance Recoverables, Including Reinsurance Premium Paid | 100,866 | |
Property and Casualty | Auto physical damage | ||
Short-duration Insurance Contracts, Liability for Unpaid Claims and Allocated Claim Adjustment Expense, Net | 4,947 | |
Property and Casualty | Other short duration lines | ||
Short-duration Insurance Contracts, Liability for Unpaid Claims and Allocated Claim Adjustment Expense, Net | 2,892 | |
Reinsurance Recoverables, Including Reinsurance Premium Paid | 7,246 | |
Property and Casualty | Insurance lines other than short duration | ||
Insurance lines other than short duration | $ 55,878 |
Goodwill and Intangible Asset_7
Goodwill and Intangible Assets, net - Summary of Indefinite-Lived Intangibles (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Indefinite-lived Intangible Assets [Line Items] | |
Indefinite-lived intangible assets | $ 11,531 |
Trade names | |
Indefinite-lived Intangible Assets [Line Items] | |
Indefinite-lived intangible assets | 8,645 |
State licenses | |
Indefinite-lived Intangible Assets [Line Items] | |
Indefinite-lived intangible assets | $ 2,886 |
Property and Casualty Unpaid _7
Property and Casualty Unpaid Claims and Claim Expenses - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Insurance Loss Reserves [Abstract] | |||
Benefits, claims and settlement expenses | $ 585,068 | $ 637,560 | $ 582,306 |
Automobile liability coverage percent reserves | 80.00% | ||
Short tail coverage reserves as a percentage of total reserves | 20.00% | ||
Long tail coverage reserves as percentage of reserves | 80.00% | ||
Percentage of losses incurred | 99.00% | ||
Potential variability of property and casualty loss reserves | 6.00% | ||
Probability of other possible outcomes possible impact on net income | $ 13,000 | ||
Favorable development of total reserves for property and casualty claims occurring in prior years | $ 7,500 | $ 300 | $ 2,700 |
Reinsurance and Catastrophes -
Reinsurance and Catastrophes - Total Amounts of Reinsurance Recoverables On Unpaid Insurance Reserves (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Summary of reinsurance recoverable on unpaid insurance reserves | ||
Reinsurance Recoverables | $ 129,213 | $ 99,510 |
Reinsurance companies | ||
Summary of reinsurance recoverable on unpaid insurance reserves | ||
Reinsurance Recoverables | 19,640 | 33,754 |
State insurance facilities | ||
Summary of reinsurance recoverable on unpaid insurance reserves | ||
Reinsurance Recoverables | 100,866 | 55,971 |
Life | ||
Summary of reinsurance recoverable on unpaid insurance reserves | ||
Reinsurance Recoverables | $ 8,707 | $ 9,785 |
Reinsurance and Catastrophes _2
Reinsurance and Catastrophes - Effects of Reinsurance (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Gross Amount | |||||||||||||||
Premiums written and contract deposits, Gross Amount | $ 1,337,847 | $ 1,255,557 | $ 1,244,500 | ||||||||||||
Premiums and contract charges earned, Gross Amount | 917,610 | 841,147 | 812,099 | ||||||||||||
Benefits, claims and settlement expenses, Gross Amount | 633,874 | 769,664 | 588,621 | ||||||||||||
Ceded to Other Companies | |||||||||||||||
Premiums written and contract deposits, Ceded to Other Companies | 23,872 | 28,773 | 21,989 | ||||||||||||
Premiums and contract charges earned, Ceded to Other Companies | 30,412 | 28,837 | 22,036 | ||||||||||||
Benefits, claims and settlement expenses, Ceded to Other Companies | 56,325 | 136,601 | 10,472 | ||||||||||||
Assumed from Other Companies | |||||||||||||||
Premiums written and contract deposits, Assumed from Other Companies | 10,567 | 8,259 | 4,606 | ||||||||||||
Premiums and contract charges earned, Assumed from Other Companies | 10,756 | 5,023 | 4,640 | ||||||||||||
Benefits, claims and settlement expenses, Assumed from Other Companies | 7,519 | 4,497 | 4,157 | ||||||||||||
Net Amount | |||||||||||||||
Premiums written and contract deposits, Net Amount | 1,324,542 | 1,235,043 | 1,227,117 | ||||||||||||
Premiums and contract charges earned, Net Amount | $ 240,392 | $ 239,681 | $ 208,096 | $ 209,785 | $ 201,905 | $ 206,820 | $ 205,610 | $ 202,998 | $ 204,328 | $ 198,935 | $ 195,718 | $ 195,722 | 897,954 | 817,333 | 794,703 |
Benefits, claims and settlement expenses | $ 585,068 | $ 637,560 | $ 582,306 |
Reinsurance and Catastrophes _3
Reinsurance and Catastrophes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reinsurance Recoverable on Unpaid Insurance Reserves [Line Items] | |||
Losses incurred for catastrophe claims, carrying amount | $ 52,000 | $ 107,300 | $ 61,800 |
Percentage of coverage for catastrophe losses above retention amount, layer one | 95.00% | ||
Coverage above retention per occurrence under layer one catastrophe reinsurance | $ 25,000 | ||
Retention base amount per occurrence under layer one | 25,000 | ||
Coverage above retention per occurrence under layer two catastrophe reinsurance | 40,000 | ||
Retention base amount per occurrence under layer two | 50,000 | ||
Coverage above retention per occurrence under layer three catastrophe reinsurance | 85,000 | ||
Retention base amount per occurrence under layer three | 90,000 | ||
Reinsured amount of each loss above retention in clash event | 20,000 | ||
Amount of property recovery related to risk losses | 8,000 | ||
Amount of maximum individual life insurance risk retained | 500 | ||
Amount of maximum group life policy insurance risk retained | $ 100 | ||
Percentage of life reinsured catastrophe risk in excess specified retention per occurrence amount | 100.00% | ||
Minimum | |||
Reinsurance Recoverable on Unpaid Insurance Reserves [Line Items] | |||
Retention amount per occurrence related to catastrophe losses, layer one | $ 25,000 | ||
Liability coverages, Company reinsured each loss above a retention per occurrence | 1,000 | ||
Amount of maximum group life policy insurance risk retained | 100 | ||
Amount life catastrophe risk retention per occurrence | 1,000 | ||
Minimum | Property and Casualty | |||
Reinsurance Recoverable on Unpaid Insurance Reserves [Line Items] | |||
Retention amount of each property loss per occurrence | 1,000 | ||
Maximum | |||
Reinsurance Recoverable on Unpaid Insurance Reserves [Line Items] | |||
Retention amount per occurrence related to catastrophe losses, layer one | 175,000 | ||
Liability coverages, Company reinsured each loss above a retention per occurrence | 5,000 | ||
Amount of maximum group life policy insurance risk retained | 125 | ||
Amount life catastrophe risk retention per occurrence | 35,000 | ||
Maximum | Property and Casualty | |||
Reinsurance Recoverable on Unpaid Insurance Reserves [Line Items] | |||
Retention amount of each property loss per occurrence | $ 5,000 |
Debt - Summary of Debt (Details
Debt - Summary of Debt (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Nov. 23, 2015 |
Short-term debt | |||
Bank Credit Facility | $ 135,000,000 | $ 0 | |
Long-term debt | |||
Long-term debt | 298,025,000 | 297,740,000 | |
Total | 433,025,000 | 297,740,000 | |
4.50% Senior Notes | |||
Long-term debt | |||
Long-term debt | $ 248,025,000 | 247,740,000 | |
Effective Interest Rates | 4.50% | 4.50% | |
Principal amount | $ 250,000,000 | $ 250,000,000 | |
Unamortized discount | 426,000 | 488,000 | |
Unamortized debt issuance costs | 1,549,000 | 1,772,000 | |
Federal Home Loan Bank borrowing | |||
Long-term debt | |||
Long-term debt | $ 50,000,000 | $ 50,000,000 | |
Effective Interest Rates | 1.99% |
Income Taxes - Income Tax Asset
Income Taxes - Income Tax Assets and Liabilities Included in Other Assets and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Income tax (asset) liability | ||
Current | $ (12,184) | $ (20,793) |
Deferred | $ 160,624 | $ 103,686 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Dec. 07, 2017 | Nov. 23, 2015 | Dec. 31, 2017 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 21, 2019 | Jun. 20, 2019 |
Debt Instrument [Line Items] | |||||||||
Purchase of FHLB activity-based common stock as percentage of borrowing, required | 4.50% | ||||||||
Purchase of FHLB activity-based common stock as percentage of borrowing, percentage, authorized | 15.00% | ||||||||
Principal borrowings on senior revolving credit facility | $ 25,000,000 | $ 50,000,000 | $ 135,000,000 | $ 0 | $ 0 | ||||
FHLB advances interest rate | 1.99% | ||||||||
Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt term | 5 years | ||||||||
Borrowing capacity | $ 150,000,000 | $ 225,000,000 | |||||||
Senior revolving credit facility | $ 135,000,000 | ||||||||
Commitment fee percent | 0.15% | ||||||||
4.50% Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal amount | $ 250,000,000 | $ 250,000,000 | |||||||
Stated rate | 4.50% | 4.50% | |||||||
Debt redemption price, percentage | 100.00% | ||||||||
Debt redemption price, interest discounted at treasury yield margin | 0.35% | ||||||||
Discount percent on issuance | 0.265% | ||||||||
Effective interest percentage | 4.53% | ||||||||
October 5, 2022 | |||||||||
Debt Instrument [Line Items] | |||||||||
FHLB Advances | 25,000,000 | 25,000,000 | |||||||
December 2, 2022 | |||||||||
Debt Instrument [Line Items] | |||||||||
FHLB Advances | $ 25,000,000 | $ 25,000,000 | |||||||
Long-term debt | |||||||||
Debt Instrument [Line Items] | |||||||||
FHLB Advances | $ 50,000,000 | ||||||||
London Interbank Offered Rate (LIBOR) | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 1.15% |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets | ||
Unearned premium reserve reduction | $ 12,103 | $ 12,112 |
Compensation accruals | 8,866 | 6,866 |
Reinsurance commissions | 6,804 | |
Impaired securities | 1,245 | 1,295 |
Other comprehensive income - net funded status of benefit plans | 2,875 | 3,254 |
Discounting of unpaid claims and claim expense tax reserves | 2,530 | 2,772 |
Postretirement benefits other than pensions | 285 | 302 |
Charitable contributions carryforwards | 0 | 89 |
Net operating loss carryforwards | 3,803 | 10,969 |
Total gross deferred tax assets | 38,511 | 37,659 |
Deferred tax liabilities | ||
Other comprehensive income - net unrealized gains on securities | 74,645 | 32,897 |
Deferred policy acquisition costs | 49,326 | 60,330 |
Life insurance future policy benefit reserve | 38,210 | 9,304 |
Life insurance future policy benefit reserve (transitional rule) | 12,786 | 14,910 |
Discounting of unpaid claims and claim expense tax reserves (transitional rule) | 947 | 1,203 |
Investment related adjustments | 15,718 | 17,531 |
Intangibles | 2,021 | 2,557 |
Other, net | 5,482 | 2,613 |
Total gross deferred tax liabilities | 199,135 | 141,345 |
Net deferred tax liability | $ 160,624 | $ 103,686 |
Income Taxes - Summary of Loss
Income Taxes - Summary of Loss Carryforwards and Credits (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Income Tax Disclosure [Abstract] | |
Operating loss carryforwards | $ 12,711 |
Operating loss carryforwards | $ 5,397 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Current | $ 31,518 | $ 4,152 | $ 3,813 |
Deferred | 20,488 | (2,958) | (84,585) |
Total income tax expense (benefit) | $ 52,006 | $ 1,194 | $ (80,772) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Effective Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Expected federal tax on income | $ 49,654 | $ 4,103 | $ 31,041 |
Add (deduct) tax effects of: | |||
Tax-exempt interest | (4,159) | (3,726) | (5,335) |
Dividend received deduction | (1,392) | (412) | (4,810) |
Goodwill impairment | 5,885 | 0 | 0 |
Tax Act DTL re-measurement | 0 | 0 | (98,988) |
Employee share-based compensation | 272 | (1,134) | (3,258) |
Compensation deduction limitation | 680 | 1,754 | 326 |
Prior year adjustments | (716) | 300 | (293) |
Other, net | 1,782 | 309 | 545 |
Total income tax expense (benefit) | $ 52,006 | $ 1,194 | $ (80,772) |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance as of the beginning of the year | $ 1,734 | $ 1,790 | $ 1,594 |
Increases related to prior year tax positions | 109 | 0 | 101 |
Decreases related to prior year tax positions | 0 | (152) | 0 |
Increases related to current year tax positions | 123 | 96 | 422 |
Settlements | 0 | 0 | 0 |
Lapse of statute | 0 | 0 | (327) |
Balance as of the end of the year | $ 1,966 | $ 1,734 | $ 1,790 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Effective statutory tax rate | 21.00% | 21.00% | 35.00% |
Operating Leases - Narrative (D
Operating Leases - Narrative (Details) | Dec. 31, 2019 |
Leases [Abstract] | |
Renewal term | 25 years |
Lessee, Lease, Description [Line Items] | |
Lease terms | 4 years 6 months 3 days |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lease terms | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Lease terms | 6 years |
Operating Leases - Components o
Operating Leases - Components of Lease Cost (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 3,841 |
Short-term lease cost | 208 |
Total lease cost | $ 4,049 |
Operating Leases - Supplemental
Operating Leases - Supplemental Cash Flow Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Cash paid for amounts included in the measurement of lease liabilities | $ 3,447 |
Operating Leases - Balance Shee
Operating Leases - Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
Right of use assets, included in Other assets | $ 16,483 | $ 13,900 |
Operating lease liabilities, included in Other liabilities | $ 17,499 | |
Weighted average remaining lease term | 4 years 6 months 3 days | |
Weighted average discount rate | 3.78% |
Operating Leases - Future Minim
Operating Leases - Future Minimum Operating Lease Payments (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 4,440 |
2021 | 4,285 |
2022 | 4,156 |
2023 | 3,459 |
2024 | 1,929 |
Thereafter | 787 |
Total future minimum lease payments | 19,056 |
Less imputed interest | (1,557) |
Total | $ 17,499 |
Shareholders' Equity and Comm_3
Shareholders' Equity and Common Stock Equivalents - Narrative (Details) | 12 Months Ended | ||||||
Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / shares | Dec. 31, 2015shares | Dec. 31, 2012 | Sep. 30, 2015USD ($)$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Shares reacquired during period (in shares) | shares | 2,977,162 | 129,112 | 48,440 | ||||
Percentage of outstanding shares reacquired | 0.30% | 0.10% | |||||
Shares reacquired during period, value | $ | $ 5,100,000 | $ 1,700,000 | |||||
Share price of treasury stock acquired during period (in usd per share) | $ 25.94 | $ 39.41 | $ 34.28 | ||||
Remaining authorized repurchase amount | $ | $ 22,800,000 | ||||||
Treasury stock (in shares) | shares | 24,850,484 | 24,850,484 | |||||
Preferred stock, shares authorized (in shares) | shares | 1,000,000 | 1,000,000 | |||||
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 | |||||
Fungible share pool, grant of full value share conversion ratio | 2.5 | ||||||
Intrinsic value | 0 | ||||||
Weighted average exercise prices of vested and exercisable options (in usd per share) | 34.81 | $ 31.42 | $ 27.12 | ||||
Share price (in usd per share) | $ 43.66 | ||||||
Aggregate intrinsic value of vested options | $ | $ 3,300,000 | ||||||
Aggregate intrinsic value of options | $ | $ 5,300,000 | ||||||
Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Expiration period | 7 years | ||||||
Minimum | Employee stock option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 4 years | ||||||
Minimum | Restricted stock units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 1 year | ||||||
Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Expiration period | 10 years | ||||||
Maximum | Restricted stock units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 5 years | ||||||
2015 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Authorized repurchase amount | $ | $ 50,000,000 | ||||||
Common stock, par value (in usd per share) | $ 0.001 | ||||||
Comprehensive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Amended increase in shares reserved for issuance (in shares) | shares | 3,250,000 | ||||||
Shares available for grant (in shares) | shares | 1,187,200 |
Statutory Information and Res_3
Statutory Information and Restrictions - Reconciliations of Statutory Capital, Surplus and Net Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Insurance [Abstract] | |||||||||||||||
Statutory capital and surplus of insurance subsidiaries | $ 868,839 | $ 903,564 | $ 868,839 | $ 903,564 | |||||||||||
Increase (decrease) due to: | |||||||||||||||
Deferred policy acquisition costs | 276,668 | 298,742 | 276,668 | 298,742 | |||||||||||
Deposit asset on reinsurance | 2,346,166 | 0 | 2,346,166 | 0 | |||||||||||
Annuity reserves ceded | (2,239,717) | 0 | (2,239,717) | 0 | |||||||||||
Difference in policyholder reserves | 209,127 | 142,601 | 209,127 | 142,601 | |||||||||||
Goodwill | 49,079 | 47,396 | 49,079 | 47,396 | |||||||||||
Intangible assets, net | 177,217 | 0 | 177,217 | 0 | |||||||||||
Investment fair value adjustments on fixed maturity securities | 397,762 | 142,512 | 397,762 | 142,512 | |||||||||||
Difference in investment reserves | 102,380 | 105,430 | 102,380 | 105,430 | |||||||||||
Federal income tax liability | (178,026) | (115,667) | (178,026) | (115,667) | |||||||||||
Net funded status of benefit plans | (13,690) | (15,495) | (13,690) | (15,495) | |||||||||||
Non-admitted assets and other, net | (53,801) | 20,412 | (53,801) | 20,412 | |||||||||||
Shareholders' equity of parent company and non-insurance subsidiaries | 8,306 | 8,795 | 8,306 | 8,795 | |||||||||||
Parent company short-term and long-term debt | (383,025) | (247,740) | (383,025) | (247,740) | |||||||||||
Total shareholders' equity | 1,567,285 | 1,290,550 | $ 1,501,573 | 1,567,285 | 1,290,550 | $ 1,501,573 | |||||||||
Statutory net income of insurance subsidiaries | 62,316 | 45,977 | 82,587 | ||||||||||||
Net loss of non-insurance companies | (9,537) | (9,755) | (4,496) | ||||||||||||
Interest expense | (14,272) | (11,892) | (11,836) | ||||||||||||
Tax benefit of interest expense and other parent company current tax adjustments | 8,993 | 121 | 5,654 | ||||||||||||
Combined net income | 47,500 | 24,451 | 71,909 | ||||||||||||
Increase (decrease) due to: | |||||||||||||||
Deferred policy acquisition costs | 2,101 | 1,015 | 9,385 | ||||||||||||
Intangible asset amortization expense | (8,790) | 0 | 0 | ||||||||||||
Policyholder benefits | 117,369 | 26,318 | 30,609 | ||||||||||||
Federal income tax (expense) benefit | (23,492) | 3,020 | 84,198 | ||||||||||||
Investment reserves | 88,627 | (31,529) | (20,966) | ||||||||||||
Other adjustments, net | (38,872) | (4,932) | (5,676) | ||||||||||||
Net income | $ 33,001 | $ 25,454 | $ 93,822 | $ 32,166 | $ (20,257) | $ 12,528 | $ 5,917 | $ 20,155 | $ 125,329 | $ 26,551 | $ 2,261 | $ 15,318 | $ 184,443 | $ 18,343 | $ 169,459 |
Shareholders' Equity and Comm_4
Shareholders' Equity and Common Stock Equivalents - Outstanding Stock Units and Stock Options under Comprehensive Plan (Details) - shares | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options (in shares) | 908,557 | 774,821 | 719,015 |
RSUs related to incentive compensation (in shares) | 889,438 | 1,008,249 | 1,149,679 |
Total (in shares) | 1,851,715 | 1,839,856 | 1,955,274 |
Restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock units related to deferred compensation (in shares) | 28,526 | 32,288 | 61,677 |
Employee stock option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock units related to deferred compensation (in shares) | 25,194 | 24,498 | 24,903 |
Statutory Information and Res_4
Statutory Information and Restrictions - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Insurance [Abstract] | ||
Minimum statutory-basis capital and surplus | $ 108,100 | $ 108,500 |
Restricted net assets of HMEC's insurance subsidiaries | 26,000 | 17,700 |
Aggregate amount of dividends | 105,300 | |
Statutory capital and surplus of insurance subsidiaries | $ 868,839 | $ 903,564 |
Shareholders' Equity and Comm_5
Shareholders' Equity and Common Stock Equivalents - Stock Option Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Weighted Average Option Price per Share | |||
Weighted Average Option Price per Share, Beginning Balance (in usd per share) | $ 36.65 | ||
Weighted Average Option Price per Share, Options Granted (in usd per share) | 39.22 | ||
Weighted Average Option Price per Share, Options Vested (in usd per share) | 34.46 | ||
Weighted Average Option Price per Share, Options Exercised (in usd per share) | 26.98 | ||
Weighted Average Option Price per Share, Options Forfeited (in usd per share) | 39.97 | ||
Weighted Average Option Price per Share, Options Expired (in usd per share) | 0 | ||
Weighted Average Option Price per Share, Ending Balance (in usd per share) | $ 37.82 | $ 36.65 | |
Outstanding | |||
Options Outstanding, Beginning Balance (in shares) | 774,821 | 719,015 | |
Options Outstanding, Granted (in shares) | 282,040 | 223,208 | 222,828 |
Options Outstanding, Vested (in shares) | 0 | ||
Options Outstanding, Exercised (in shares) | (64,095) | ||
Options Outstanding, Forfeited (in shares) | (84,209) | ||
Options Outstanding, Expired (in shares) | 0 | ||
Options Outstanding, Ending Balance (in shares) | 908,557 | 774,821 | 719,015 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Exercisable [Roll Forward] | |||
Options Vested and Exercisable, Beginning Balance (in shares) | 271,116 | ||
Options Vested and Exercisable, Granted (in shares) | 0 | ||
Options Vested and Exercisable, Vested (in shares) | 161,679 | ||
Options Vested and Exercisable, Exercisable (in shares) | (64,095) | ||
Options Vested and Exercisable, Forfeited (in shares) | 0 | ||
Options Vested and Exercisable, Expired (in shares) | 0 | ||
Options Vested and Exercisable, Ending Balance (in shares) | 368,700 | 271,116 | |
Minimum | |||
Weighted Average Option Price per Share | |||
Weighted Average Option Price per Share, Ending Balance (in usd per share) | $ 42.95 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Range of Option Prices [Roll Forward] | |||
Range of Option Prices per Share, Beginning Balance (in usd per share) | 17.32 | ||
Range of Option Prices per Share, Granted (in usd per share) | 38.99 | ||
Range of Option Prices per Share, Vested (in usd per share) | 20.60 | ||
Range of Option Prices per Share, Exercised (in usd per share) | 17.32 | ||
Range of Option Prices per Share, Forfeited (in usd per share) | 31.01 | ||
Range of Option Prices per Share, Expired (in usd per share) | 0 | ||
Range of Option Prices per Share, Ending Balance (in usd per share) | 20.60 | $ 17.32 | |
Maximum | |||
Weighted Average Option Price per Share | |||
Weighted Average Option Price per Share, Ending Balance (in usd per share) | 44.75 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Range of Option Prices [Roll Forward] | |||
Range of Option Prices per Share, Beginning Balance (in usd per share) | 44.75 | ||
Range of Option Prices per Share, Granted (in usd per share) | 42.73 | ||
Range of Option Prices per Share, Vested (in usd per share) | 44.75 | ||
Range of Option Prices per Share, Exercised (in usd per share) | 42.95 | ||
Range of Option Prices per Share, Forfeited (in usd per share) | 44.75 | ||
Range of Option Prices per Share, Expired (in usd per share) | 0 | ||
Range of Option Prices per Share, Ending Balance (in usd per share) | $ 44.75 | $ 44.75 |
Shareholders' Equity and Comm_6
Shareholders' Equity and Common Stock Equivalents - Stock Option Information by Ranges of Exercise Prices (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Options (in shares) | 908,557 | 774,821 | 719,015 |
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 37.82 | $ 36.65 | |
Total Outstanding Options, Weighted Average Remaining Term | 7 years 5 months 9 days | ||
Vested and Exercisable Options (in shares) | 368,700 | 271,116 | |
Vested and Exercisable Options, Weighted Average Option Price per Share (in usd per share) | $ 34.81 | $ 31.42 | $ 27.12 |
Vested and Exercisable Options, Weighted Average Remaining Term | 6 years 1 month 9 days | ||
Minimum | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 42.95 | ||
Maximum | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 44.75 | ||
Range One | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Options (in shares) | 11,100 | ||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 22.34 | ||
Total Outstanding Options, Weighted Average Remaining Term | 4 months 9 days | ||
Vested and Exercisable Options (in shares) | 11,100 | ||
Vested and Exercisable Options, Weighted Average Option Price per Share (in usd per share) | $ 22.34 | ||
Vested and Exercisable Options, Weighted Average Remaining Term | 4 months 9 days | ||
Range One | Minimum | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 20.60 | ||
Range One | Maximum | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 22.69 | ||
Range Two | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Options (in shares) | 271,579 | ||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 30.94 | ||
Total Outstanding Options, Weighted Average Remaining Term | 5 years 7 months 24 days | ||
Vested and Exercisable Options (in shares) | 222,499 | ||
Vested and Exercisable Options, Weighted Average Option Price per Share (in usd per share) | $ 30.92 | ||
Vested and Exercisable Options, Weighted Average Remaining Term | 5 years 6 months 10 days | ||
Range Two | Minimum | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 28.88 | ||
Range Two | Maximum | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 32.35 | ||
Range Three | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Options (in shares) | 415,356 | ||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 40.14 | ||
Total Outstanding Options, Weighted Average Remaining Term | 8 years 4 months 9 days | ||
Vested and Exercisable Options (in shares) | 85,766 | ||
Vested and Exercisable Options, Weighted Average Option Price per Share (in usd per share) | $ 41.80 | ||
Vested and Exercisable Options, Weighted Average Remaining Term | 7 years 2 months 8 days | ||
Range Three | Minimum | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 38.05 | ||
Range Three | Maximum | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 41.95 | ||
Range Four | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Options (in shares) | 210,522 | ||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 42.94 | ||
Total Outstanding Options, Weighted Average Remaining Term | 8 years 3 months 19 days | ||
Vested and Exercisable Options (in shares) | 49,335 | ||
Vested and Exercisable Options, Weighted Average Option Price per Share (in usd per share) | $ 43 | ||
Vested and Exercisable Options, Weighted Average Remaining Term | 8 years 2 months 8 days |
Shareholders' Equity and Comm_7
Shareholders' Equity and Common Stock Equivalents - Restricted Stock Activity (Details) | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Total Outstanding Units | |
Beginning balance, Total Outstanding, Units (in shares) | shares | 1,008,249 |
Granted, Total Outstanding Units (in shares) | shares | 210,712 |
Adjustment for performance achievement, Total Outstanding Units (in shares) | shares | (3,789) |
Vested, Total Outstanding Units (in shares) | shares | 0 |
Forfeited, Total Outstanding Units (in shares) | shares | (34,895) |
Distributed, Total Outstanding Units (in shares) | shares | (290,839) |
Ending balance, Total Outstanding, Units (in shares) | shares | 889,438 |
Total Outstanding Units, Weighted Average Grant Date Fair Value per Unit | |
Beginning balance, Total Outstanding, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | $ 35.64 |
Granted, Total Outstanding, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | 41.52 |
Adjustment for performance achievement, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | 32.16 |
Vested, Total Outstanding, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | 0 |
Forfeited, Total Outstanding, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | 43.08 |
Distributed, Total Outstanding, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | 31.39 |
Ending balance, Total Outstanding, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | $ 31.94 |
Vested Units | |
Beginning balance, Vested, Units (in shares) | shares | 417,179 |
Granted, Vested, Units (in shares) | shares | 0 |
Adjustment for performance achievement, Units (in shares) | shares | 0 |
Vested, Vested, Units (in shares) | shares | 417,454 |
Forfeited, Vested, Units (in shares) | shares | 0 |
Distributed, Vested, Units (in shares) | shares | (290,839) |
Ending balance, Vested, Units (in shares) | shares | 543,794 |
Vested Units, Weighted Average Grant Date Fair Value per Unit | |
Beginning balance, Vested, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | $ 20.22 |
Granted, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | 0 |
Adjustment for performance achievement, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | 0 |
Vested, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | 33.93 |
Forfeited, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | 0 |
Distributed, Vested, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | 31.39 |
Ending balance, Vested, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | $ 24.77 |
Retirement Plans and Other Po_3
Retirement Plans and Other Postretirement Benefits - Narrative (Details) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019USD ($)plan | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2006USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Number of supplemental defined benefit plans frozen | plan | 2 | |||
Pension cost (credit) | $ 9.3 | $ 8.9 | $ 9.1 | |
Health reimbursement account, amount | 1.4 | $ 7.3 | ||
Health reimbursement accounts funding | 0.1 | $ 0.1 | $ 0.1 | |
Defined Benefit Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Expected amortization of gain (loss) next year | 0.3 | |||
Supplemental Defined Benefit Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Expected amortization of gain (loss) next year | $ 0.3 | |||
Qualified plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Number of retirement plans | plan | 2 | |||
Qualified plan | 401(k) plan | Defined Benefit Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Frozen supplemental defined benefit plans, vesting percentage | 100.00% | |||
Employer matching contribution as percent of employees' gross pay | 3.00% | |||
Percentage of employer match | 5.00% | |||
Vesting period for Company contributions | 5 years | |||
Nonqualified plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Number of retirement plans | plan | 3 | |||
Equity securities | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined benefit pension plan to approximate allocation | 50.00% | |||
Fixed income funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined benefit pension plan to approximate allocation | 50.00% |
Retirement Plans and Other Po_4
Retirement Plans and Other Postretirement Benefits - Contributions and Plan Assets (Details) - Pension Plan - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Contributions to employees' accounts | $ 0 | $ 0 | $ 0 | |
Total assets at the end of the year | 23,164 | 22,090 | 25,843 | $ 25,446 |
Qualified plan | 401(k) plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Contributions to employees' accounts | 8,233 | 7,655 | 7,637 | |
Total assets at the end of the year | 206,247 | 167,767 | 180,514 | |
Nonqualified plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Contributions to employees' accounts | 58 | 70 | 84 | |
Total assets at the end of the year | $ 0 | $ 0 | $ 0 |
Retirement Plans and Other Po_5
Retirement Plans and Other Postretirement Benefits - Defined Benefit Plan and Supplemental Retirement Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Benefit Plan | |||
Change in benefit obligation: | |||
Projected benefit obligation at beginning of year | $ 25,075 | $ 28,432 | $ 29,407 |
Service cost | 650 | 650 | 650 |
Interest cost | 997 | 947 | 1,091 |
Plan amendments | 0 | 0 | 0 |
Actuarial loss (gain) | 101 | (2,208) | (721) |
Benefits paid | (2,003) | (2,746) | (1,995) |
Settlements | 0 | 0 | 0 |
Projected benefit obligation at end of year | 24,820 | 25,075 | 28,432 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 22,090 | 25,843 | 25,446 |
Actual return on plan assets | 3,471 | (640) | 2,909 |
Employer contributions | 0 | 0 | 0 |
Benefits paid | (2,003) | (2,746) | (1,995) |
Expenses paid | (394) | (367) | (517) |
Settlements | 0 | 0 | 0 |
Fair value of plan assets at end of year | 23,164 | 22,090 | 25,843 |
Funded status | (1,656) | (2,985) | (2,589) |
Prepaid (accrued) benefit expense | 6,690 | 7,425 | 8,016 |
Total amount recognized in Consolidated Balance Sheets, all in Other liabilities | (1,656) | (2,985) | (2,589) |
Amounts recognized in accumulated other comprehensive income (loss) (AOCI): | |||
Prior service cost | 0 | 0 | 0 |
Net actuarial loss | (8,345) | 10,410 | 10,605 |
Total amount recognized in AOCI | (8,345) | 10,410 | 10,605 |
Information for pension plans with an accumulated benefit obligation greater than plan assets: | |||
Projected benefit obligation | 24,820 | 25,075 | 28,432 |
Accumulated benefit obligation | 24,820 | 25,075 | 28,432 |
Fair value of plan assets | 23,164 | 22,090 | 25,843 |
Supplemental Defined Benefit Plans | |||
Change in benefit obligation: | |||
Projected benefit obligation at beginning of year | 15,404 | 16,832 | 16,847 |
Service cost | 0 | 0 | 0 |
Interest cost | 620 | 566 | 631 |
Plan amendments | 0 | 0 | 0 |
Actuarial loss (gain) | 516 | (789) | 805 |
Benefits paid | (1,312) | (1,205) | (1,451) |
Settlements | 0 | 0 | 0 |
Projected benefit obligation at end of year | 15,228 | 15,404 | 16,832 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 0 | 0 | 0 |
Actual return on plan assets | 0 | 0 | 0 |
Employer contributions | 1,312 | 1,205 | 1,451 |
Benefits paid | (1,312) | (1,205) | (1,451) |
Expenses paid | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 |
Fair value of plan assets at end of year | 0 | 0 | 0 |
Funded status | (15,228) | (15,404) | (16,832) |
Prepaid (accrued) benefit expense | (9,884) | (10,320) | (10,648) |
Total amount recognized in Consolidated Balance Sheets, all in Other liabilities | (15,228) | (15,404) | (16,832) |
Amounts recognized in accumulated other comprehensive income (loss) (AOCI): | |||
Prior service cost | 0 | 0 | 0 |
Net actuarial loss | (5,345) | 5,084 | 6,184 |
Total amount recognized in AOCI | (5,345) | 5,084 | 6,184 |
Information for pension plans with an accumulated benefit obligation greater than plan assets: | |||
Projected benefit obligation | 15,228 | 15,404 | 16,832 |
Accumulated benefit obligation | 15,228 | 15,404 | 16,832 |
Fair value of plan assets | $ 0 | $ 0 | $ 0 |
Retirement Plans and Other Po_6
Retirement Plans and Other Postretirement Benefits - Components of Net Periodic Cost, Changes in Plan Assets and Benefit Obligations, and AOCI Impacts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Amortization of: | |||
Total recognized in other comprehensive income (loss) | $ (1,805) | $ (1,294) | $ (1,461) |
Defined Benefit Plan | |||
Service cost: | |||
Benefit accrual | 0 | 0 | 0 |
Other expenses | 650 | 650 | 650 |
Interest cost | 997 | 947 | 1,091 |
Expected return on plan assets | (1,222) | (1,377) | (1,493) |
Settlement loss | 0 | 0 | 0 |
Amortization of: | |||
Prior service cost | 0 | 0 | 0 |
Actuarial loss | 310 | 371 | 389 |
Net periodic pension expense | 735 | 591 | 637 |
Changes in plan assets and benefit obligations included in other comprehensive income (loss): | |||
Prior service cost | 0 | 0 | 0 |
Net actuarial loss (gain) | (1,755) | 177 | (1,619) |
Amortization of: | |||
Prior service cost | 0 | 0 | 0 |
Actuarial loss | (310) | (371) | (389) |
Total recognized in other comprehensive income (loss) | $ (2,065) | $ (194) | $ (2,008) |
Weighted average assumptions used to determine expense: | |||
Discount rate | 4.20% | 3.50% | 3.90% |
Expected return on plan assets | 5.75% | 5.90% | 6.25% |
Weighted average assumptions used to determine benefit obligations as of December 31: | |||
Discount rate | 3.10% | 4.20% | 3.50% |
Expected return on plan assets | 5.75% | 5.90% | 6.25% |
Supplemental Defined Benefit Plans | |||
Service cost: | |||
Benefit accrual | $ 0 | $ 0 | $ 0 |
Other expenses | 0 | 0 | 0 |
Interest cost | 620 | 566 | 631 |
Expected return on plan assets | 0 | 0 | 0 |
Settlement loss | 0 | 0 | 0 |
Amortization of: | |||
Prior service cost | 0 | 0 | 0 |
Actuarial loss | 256 | 310 | 258 |
Net periodic pension expense | 876 | 876 | 889 |
Changes in plan assets and benefit obligations included in other comprehensive income (loss): | |||
Prior service cost | 0 | 0 | 0 |
Net actuarial loss (gain) | 516 | (789) | 805 |
Amortization of: | |||
Prior service cost | 0 | 0 | 0 |
Actuarial loss | (256) | (310) | (258) |
Total recognized in other comprehensive income (loss) | $ 260 | $ (1,099) | $ 547 |
Weighted average assumptions used to determine expense: | |||
Discount rate | 4.20% | 3.50% | 3.90% |
Weighted average assumptions used to determine benefit obligations as of December 31: | |||
Discount rate | 3.10% | 4.20% | 3.50% |
Retirement Plans and Other Po_7
Retirement Plans and Other Postretirement Benefits - Fair Value of Plan Assets (Details) - Defined Benefit Plan - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Defined Benefit Plan Disclosure [Line Items] | ||||
Total | $ 23,164 | $ 22,090 | $ 25,843 | $ 25,446 |
Fixed income funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total | 11,116 | 11,003 | ||
Short-term investment funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total | 951 | 800 | ||
Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total | 951 | 800 | ||
Level 1 | Fixed income funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total | 0 | 0 | ||
Level 1 | Short-term investment funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total | 951 | 800 | ||
Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total | 22,213 | 21,290 | ||
Level 2 | Fixed income funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total | 11,116 | 11,003 | ||
Level 2 | Short-term investment funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total | 0 | 0 | ||
Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total | 0 | 0 | ||
Level 3 | Fixed income funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total | 0 | 0 | ||
Level 3 | Short-term investment funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total | 0 | 0 | ||
United States | Equity security funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total | 8,883 | 8,198 | ||
United States | Level 1 | Equity security funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total | 0 | 0 | ||
United States | Level 2 | Equity security funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total | 8,883 | 8,198 | ||
United States | Level 3 | Equity security funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total | 0 | 0 | ||
International | Equity security funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total | 2,214 | 2,089 | ||
International | Level 1 | Equity security funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total | 0 | 0 | ||
International | Level 2 | Equity security funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total | 2,214 | 2,089 | ||
International | Level 3 | Equity security funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total | $ 0 | $ 0 |
Retirement Plans and Other Po_8
Retirement Plans and Other Postretirement Benefits - Contributions (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Defined Benefit Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Minimum funding requirement | $ 0 |
Expected contributions (approximations) | 0 |
Supplemental Defined Benefit Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected contributions (approximations) | $ 1,282 |
Retirement Plans and Other Po_9
Retirement Plans and Other Postretirement Benefits - Estimated Future Benefit Payments (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Defined Benefit Plan | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2020 | $ 2,478 |
2021 | 2,277 |
2022 | 2,219 |
2023 | 1,987 |
2024 | 2,099 |
2025-2029 | 7,927 |
Supplemental Defined Benefit Plans | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2020 | 1,282 |
2021 | 1,265 |
2022 | 1,245 |
2023 | 1,222 |
2024 | 1,195 |
2025-2029 | $ 5,407 |
Contingencies and Commitments (
Contingencies and Commitments (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Commitments and Contingencies Disclosure [Abstract] | ||
Remaining minimum amount committed | $ 306.2 | $ 145.4 |
Supplementary Disclosure of C_3
Supplementary Disclosure of Consolidated Cash Flow Information - Summary of Cash and Restricted Cash (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Supplemental Cash Flow Elements [Abstract] | ||||
Cash | $ 25,206 | $ 11,906 | $ 7,627 | |
Restricted cash | 302 | 0 | 0 | |
Total cash and restricted cash shown in the Consolidated Statements of Cash Flows | 25,508 | 11,906 | 7,627 | $ 16,670 |
Interest | 14,104 | 12,532 | 11,555 | |
Income taxes | $ 22,946 | $ 8,679 | $ 16,259 |
Supplementary Disclosure of C_4
Supplementary Disclosure of Consolidated Cash Flow Information - Narrative (Details) - USD ($) $ in Billions | 3 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | ||
Transfer of investments and policy loans | $ 2.1 | |
Reinsurance block of in-force fixed and variable annuity business | $ 2.9 | $ 2.9 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 12 Months Ended |
Dec. 31, 2019segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 5 |
Number of operating segments | 4 |
Segment Information - Summarize
Segment Information - Summarized Financial Information by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Summarized financial information for these segments | |||||||||||||||
Insurance premiums and contract charges earned | $ 240,392 | $ 239,681 | $ 208,096 | $ 209,785 | $ 201,905 | $ 206,820 | $ 205,610 | $ 202,998 | $ 204,328 | $ 198,935 | $ 195,718 | $ 195,722 | $ 897,954 | $ 817,333 | $ 794,703 |
Net investment income | 365,064 | 376,507 | 373,630 | ||||||||||||
Net income (loss) | 33,001 | $ 25,454 | $ 93,822 | $ 32,166 | (20,257) | $ 12,528 | $ 5,917 | $ 20,155 | 125,329 | $ 26,551 | $ 2,261 | $ 15,318 | 184,443 | 18,343 | 169,459 |
Assets | 12,478,704 | 11,031,896 | 11,198,340 | 12,478,704 | 11,031,896 | 11,198,340 | |||||||||
Intersegment eliminations | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Net investment income | (1,503) | (772) | (815) | ||||||||||||
Assets | (64,072) | (41,800) | (42,482) | (64,072) | (41,800) | (42,482) | |||||||||
Property and Casualty | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Insurance premiums and contract charges earned | 683,454 | ||||||||||||||
Property and Casualty | Operating Segments | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Insurance premiums and contract charges earned | 665,734 | 648,263 | |||||||||||||
Net investment income | 41,740 | 40,104 | 36,178 | ||||||||||||
Net income (loss) | 54,359 | (14,243) | 17,790 | ||||||||||||
Assets | 1,327,099 | 1,236,362 | 1,217,394 | 1,327,099 | 1,236,362 | 1,217,394 | |||||||||
Supplemental | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Insurance premiums and contract charges earned | 65,815 | ||||||||||||||
Net investment income | 7,480 | ||||||||||||||
Net income (loss) | 17,989 | ||||||||||||||
Assets | 747,602 | 747,602 | |||||||||||||
Retirement | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Insurance premiums and contract charges earned | 29,083 | ||||||||||||||
Retirement | Operating Segments | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Insurance premiums and contract charges earned | 31,269 | 28,003 | |||||||||||||
Net investment income | 245,475 | 262,634 | 261,994 | ||||||||||||
Net income (loss) | (4,867) | 41,736 | 88,473 | ||||||||||||
Assets | 8,330,127 | 7,866,969 | 8,063,912 | 8,330,127 | 7,866,969 | 8,063,912 | |||||||||
Life | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Insurance premiums and contract charges earned | 119,602 | ||||||||||||||
Life | Operating Segments | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Insurance premiums and contract charges earned | 120,330 | 118,437 | |||||||||||||
Net investment income | 71,957 | 74,399 | 76,195 | ||||||||||||
Net income (loss) | 17,574 | 18,754 | 77,595 | ||||||||||||
Assets | 1,964,993 | 1,821,351 | 1,815,732 | 1,964,993 | 1,821,351 | 1,815,732 | |||||||||
Corporate and Other | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Net investment income | (85) | 142 | 78 | ||||||||||||
Net income (loss) | 99,388 | (27,904) | (14,399) | ||||||||||||
Assets | $ 172,955 | $ 149,014 | $ 143,784 | $ 172,955 | $ 149,014 | $ 143,784 |
Segment Information - Additiona
Segment Information - Additional Significant Financial Information by Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||
DAC unlocking and amortization expense | $ 109,181 | $ 109,889 | $ 102,185 |
Income tax expense (benefit) | 52,006 | 1,194 | (80,772) |
Property and Casualty | |||
Segment Reporting Information [Line Items] | |||
DAC unlocking and amortization expense | 79,453 | 79,073 | 76,967 |
Supplemental | |||
Segment Reporting Information [Line Items] | |||
DAC unlocking and amortization expense | 438 | ||
Income tax expense (benefit) | 5,105 | ||
Retirement | |||
Segment Reporting Information [Line Items] | |||
DAC unlocking and amortization expense | 21,446 | 23,186 | 17,759 |
Life | |||
Segment Reporting Information [Line Items] | |||
DAC unlocking and amortization expense | 7,844 | 7,630 | 7,459 |
Operating Segments | Property and Casualty | |||
Segment Reporting Information [Line Items] | |||
Income tax expense (benefit) | 13,954 | (6,622) | (3,279) |
Operating Segments | Retirement | |||
Segment Reporting Information [Line Items] | |||
Income tax expense (benefit) | 33,772 | 10,000 | (19,498) |
Operating Segments | Life | |||
Segment Reporting Information [Line Items] | |||
Income tax expense (benefit) | 4,907 | 4,979 | (51,876) |
Corporate and Other | Corporate and Other | |||
Segment Reporting Information [Line Items] | |||
Income tax expense (benefit) | $ (5,732) | $ (7,163) | $ (6,119) |
Unaudited Selected Quarterly _3
Unaudited Selected Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||
Insurance premiums and contract charges earned | $ 240,392 | $ 239,681 | $ 208,096 | $ 209,785 | $ 201,905 | $ 206,820 | $ 205,610 | $ 202,998 | $ 204,328 | $ 198,935 | $ 195,718 | $ 195,722 | $ 897,954 | $ 817,333 | $ 794,703 |
Insurance premiums written and contract deposits | 346,242 | 371,216 | 311,691 | 295,394 | 311,216 | 338,097 | 301,722 | 284,008 | 300,416 | 318,355 | 311,614 | 296,732 | |||
Total revenues | 331,376 | 334,418 | 451,478 | 313,213 | 278,535 | 311,318 | 306,257 | 295,489 | 302,993 | 289,817 | 291,436 | 287,304 | 1,430,485 | 1,191,599 | 1,171,550 |
Net income | $ 33,001 | $ 25,454 | $ 93,822 | $ 32,166 | $ (20,257) | $ 12,528 | $ 5,917 | $ 20,155 | $ 125,329 | $ 26,551 | $ 2,261 | $ 15,318 | $ 184,443 | $ 18,343 | $ 169,459 |
Basic | |||||||||||||||
Net income - basic (in usd per share) | $ 0.79 | $ 0.61 | $ 2.25 | $ 0.77 | $ (0.49) | $ 0.30 | $ 0.14 | $ 0.49 | $ 3.03 | $ 0.64 | $ 0.05 | $ 0.37 | $ 4.42 | $ 0.44 | $ 4.10 |
Shares of common stock - weighted average basic (in shares) | 41,814,000,000 | 41,785,000,000 | 41,762,000,000 | 41,610,000,000 | 41,596,000,000 | 41,683,000,000 | 41,600,000,000 | 41,497,000,000 | 41,419,000,000 | 41,433,000,000 | 41,368,000,000 | 41,135,000,000 | 41,737,876 | 41,570,492 | 41,364,546 |
Diluted | |||||||||||||||
Net income - diluted (in usd per share) | $ 0.78 | $ 0.60 | $ 2.24 | $ 0.77 | $ (0.49) | $ 0.30 | $ 0.14 | $ 0.48 | $ 3 | $ 0.64 | $ 0.05 | $ 0.37 | $ 4.40 | $ 0.44 | $ 4.08 |
Shares of common stock and equivalent shares - weighted average diluted (in shares) | 42,093,000,000 | 42,030,000,000 | 41,921,000,000 | 41,785,000,000 | 41,911,000,000 | 41,850,000,000 | 41,735,000,000 | 41,653,000,000 | 41,718,000,000 | 41,575,000,000 | 41,493,000,000 | 41,342,000,000 | 41,948,531 | 41,894,232 | 41,564,979 |
TCJA effect, earnings per share, basic (in usd per share) | $ 2.39 | ||||||||||||||
TCJA effect, earnings per share, diluted (in usd per share) | $ 2.37 |
Schedule I Summary of Investm_2
Schedule I Summary of Investments-Other Than Investments in Related Parties (Details) $ in Thousands | Dec. 31, 2019USD ($) |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | $ 6,299,955 |
Amount Shown in Balance Sheet | 6,639,233 |
Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 5,456,980 |
Fair Value | 5,791,676 |
Amount Shown in Balance Sheet | 5,791,676 |
Equity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 101,864 |
Fair Value | 101,864 |
Amount Shown in Balance Sheet | 101,864 |
U.S. Government and federally sponsored agency obligations | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 906,886 |
Fair Value | 956,104 |
Amount Shown in Balance Sheet | 956,104 |
States, municipalities and political subdivisions | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 1,545,787 |
Fair Value | 1,686,203 |
Amount Shown in Balance Sheet | 1,686,203 |
Foreign government bonds | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 42,801 |
Fair Value | 45,370 |
Amount Shown in Balance Sheet | 45,370 |
Public utilities | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 54,519 |
Fair Value | 61,748 |
Amount Shown in Balance Sheet | 61,748 |
All other corporate bonds | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 1,388,035 |
Fair Value | 1,495,426 |
Amount Shown in Balance Sheet | 1,495,426 |
Asset-backed securities | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 1,068,661 |
Fair Value | 1,079,586 |
Amount Shown in Balance Sheet | 1,079,586 |
Residential mortgage-backed securities (non-agency) | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 76,237 |
Fair Value | 75,933 |
Amount Shown in Balance Sheet | 75,933 |
Commercial mortgage-backed securities | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 352,164 |
Fair Value | 367,055 |
Amount Shown in Balance Sheet | 367,055 |
Redeemable preferred stocks | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 21,890 |
Fair Value | 24,251 |
Amount Shown in Balance Sheet | 24,251 |
Industrial, miscellaneous and all other | Equity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 13,360 |
Fair Value | 13,360 |
Amount Shown in Balance Sheet | 13,360 |
Banking & finance and insurance companies | Equity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 5,706 |
Fair Value | 5,706 |
Amount Shown in Balance Sheet | 5,706 |
Public utilities | Equity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 1,052 |
Fair Value | 1,052 |
Amount Shown in Balance Sheet | 1,052 |
Non-redeemable preferred stocks | Equity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 60,325 |
Fair Value | 60,325 |
Amount Shown in Balance Sheet | 60,325 |
Closed-end fund | Equity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 21,421 |
Fair Value | 21,421 |
Amount Shown in Balance Sheet | 21,421 |
Limited partnership interests | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 383,717 |
Amount Shown in Balance Sheet | 383,717 |
Short-term Investments | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 172,667 |
Amount Shown in Balance Sheet | 172,667 |
Policy loans | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 153,541 |
Amount Shown in Balance Sheet | 153,541 |
Derivatives | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 8,657 |
Fair Value | 13,239 |
Amount Shown in Balance Sheet | 13,239 |
Mortgage loans | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 9,771 |
Amount Shown in Balance Sheet | 9,771 |
Other | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 12,758 |
Amount Shown in Balance Sheet | $ 12,758 |
Schedule II Condensed Financi_2
Schedule II Condensed Financial Information of Registrant - Condensed Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
ASSETS | |||
Investment in subsidiaries | $ 383,717 | $ 328,516 | |
Other assets | 474,364 | 422,047 | |
Total assets | 12,478,704 | 11,031,896 | $ 11,198,340 |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Short-term debt | 135,000 | 0 | |
Long-term debt | 298,025 | 297,740 | |
Other liabilities | 384,173 | 290,358 | |
Total liabilities | 10,911,419 | 9,741,346 | |
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, 2019, 66,088,808; 2018, 65,820,369 | 66 | 66 | |
Additional paid-in capital | 480,962 | 475,109 | |
Retained earnings | 1,352,539 | 1,216,582 | |
Accumulated other comprehensive income (loss), net of taxes: | |||
Net unrealized investment gains on securities | 230,448 | 96,941 | |
Net funded status of pension benefit obligations | (10,767) | (12,185) | |
Treasury stock, at cost, 2019, 24,850,484 shares; 2018, 24,850,484 shares | (485,963) | (485,963) | |
Total shareholders' equity | 1,567,285 | 1,290,550 | $ 1,501,573 |
Total liabilities and shareholders' equity | 12,478,704 | 11,031,896 | |
Parent company | |||
ASSETS | |||
Investments and cash | 1,453 | 5,255 | |
Investment in subsidiaries | 1,901,725 | 1,473,538 | |
Other assets | 62,442 | 66,138 | |
Total assets | 1,965,620 | 1,544,931 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Short-term debt | 135,000 | 0 | |
Long-term debt | 248,025 | 247,740 | |
Other liabilities | 15,310 | 6,641 | |
Total liabilities | 398,335 | 254,381 | |
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, 2019, 66,088,808; 2018, 65,820,369 | 66 | 66 | |
Additional paid-in capital | 480,962 | 475,109 | |
Retained earnings | 1,352,539 | 1,216,582 | |
Accumulated other comprehensive income (loss), net of taxes: | |||
Net unrealized investment gains on securities | 230,448 | 96,941 | |
Net funded status of pension benefit obligations | (10,767) | (12,185) | |
Treasury stock, at cost, 2019, 24,850,484 shares; 2018, 24,850,484 shares | (485,963) | (485,963) | |
Total shareholders' equity | 1,567,285 | 1,290,550 | |
Total liabilities and shareholders' equity | $ 1,965,620 | $ 1,544,931 |
Schedule II Condensed Financi_3
Schedule II Condensed Financial Information of Registrant - Condensed Balance Sheet (Additional Information) (Details) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Condensed Financial Statements, Captions [Line Items] | |||
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | |
Preferred Stock, Shares Issued | 0 | 0 | |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 75,000,000 | 75,000,000 | |
Common Stock, Shares, Issued | 66,088,808 | 65,820,369 | |
Treasury stock (in shares) | 24,850,484 | 24,850,484 | |
Parent company | |||
Condensed Financial Statements, Captions [Line Items] | |||
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | |
Preferred Stock, Shares Issued | 0 | 0 | |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |
Common Stock, Shares Authorized | 75,000,000 | 75,000,000 | |
Common Stock, Shares, Issued | 66,088,808 | 65,820,369 | |
Treasury stock (in shares) | 24,850,484 | 24,850,484 |
Schedule II Condensed Financi_4
Schedule II Condensed Financial Information of Registrant - Condensed Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | |||||||||||||||
Net investment income | $ 365,064 | $ 376,507 | $ 373,630 | ||||||||||||
Realized investment gains | 153,340 | (12,543) | (3,406) | ||||||||||||
Total revenues | $ 331,376 | $ 334,418 | $ 451,478 | $ 313,213 | $ 278,535 | $ 311,318 | $ 306,257 | $ 295,489 | $ 302,993 | $ 289,817 | $ 291,436 | $ 287,304 | 1,430,485 | 1,191,599 | 1,171,550 |
Expenses | |||||||||||||||
Interest expense | 15,577 | 13,001 | 11,948 | ||||||||||||
Total benefits, losses and expenses | 1,194,036 | 1,172,062 | 1,082,863 | ||||||||||||
Income tax benefit | 52,006 | 1,194 | (80,772) | ||||||||||||
Net income | $ 33,001 | $ 25,454 | $ 93,822 | $ 32,166 | $ (20,257) | $ 12,528 | $ 5,917 | $ 20,155 | $ 125,329 | $ 26,551 | $ 2,261 | $ 15,318 | 184,443 | 18,343 | 169,459 |
Parent company | |||||||||||||||
Revenues | |||||||||||||||
Net investment income | (135) | 100 | 34 | ||||||||||||
Realized investment gains | 0 | 0 | 0 | ||||||||||||
Total revenues | (135) | 100 | 34 | ||||||||||||
Expenses | |||||||||||||||
Interest expense | 14,272 | 11,892 | 11,835 | ||||||||||||
Other | 12,632 | 10,898 | 5,101 | ||||||||||||
Total benefits, losses and expenses | 26,904 | 22,790 | 16,936 | ||||||||||||
Loss before income tax benefit and equity in net earnings of subsidiaries | (27,039) | (22,690) | (16,902) | ||||||||||||
Income tax benefit | (6,029) | (4,723) | (6,667) | ||||||||||||
Loss before equity in net earnings of subsidiaries | (21,010) | (17,967) | (10,235) | ||||||||||||
Equity in net earnings of subsidiaries | 205,453 | 36,310 | 179,694 | ||||||||||||
Net income | $ 184,443 | $ 18,343 | $ 169,459 |
Schedule II Condensed Financi_5
Schedule II Condensed Financial Information of Registrant - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | Dec. 07, 2017 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Cash flows from operating activities | ||||||||||||||||
Net income | $ 33,001 | $ 25,454 | $ 93,822 | $ 32,166 | $ (20,257) | $ 12,528 | $ 5,917 | $ 20,155 | $ 125,329 | $ 26,551 | $ 2,261 | $ 15,318 | $ 184,443 | $ 18,343 | $ 169,459 | |
Changes in: | ||||||||||||||||
Other operating assets and liabilities | 53,406 | (2,048) | (1,692) | |||||||||||||
Net cash provided by operating activities | 127,573 | 200,888 | 256,586 | |||||||||||||
Cash flows from investing activities | ||||||||||||||||
Acquisition of businesses | (421,516) | 0 | 0 | |||||||||||||
Net cash provided by (used in) investing activities | 55,942 | (186,499) | (228,664) | |||||||||||||
Cash flows from financing activities | ||||||||||||||||
Dividends paid to shareholders | (47,333) | (46,689) | (46,114) | |||||||||||||
Principal borrowings on senior revolving credit facility | $ 25,000 | 50,000 | 135,000 | 0 | 0 | |||||||||||
Proceeds from exercise of stock options | 1,730 | 3,627 | 4,190 | |||||||||||||
Withholding tax payments on RSUs tendered | (3,680) | (3,165) | (3,245) | |||||||||||||
Net cash used in financing activities | (169,913) | (10,110) | (36,965) | |||||||||||||
Cash at beginning of period | 11,906 | 7,627 | 11,906 | 7,627 | ||||||||||||
Cash at end of period | 25,206 | 11,906 | 7,627 | 25,206 | 11,906 | 7,627 | ||||||||||
Parent company | ||||||||||||||||
Cash flows from operating activities | ||||||||||||||||
Net income | 184,443 | 18,343 | 169,459 | |||||||||||||
Equity in net earnings of subsidiaries | (205,453) | (36,310) | (179,694) | |||||||||||||
Dividends received from subsidiaries | 363,250 | 61,000 | 56,900 | |||||||||||||
Changes in: | ||||||||||||||||
Income taxes | 3,369 | (4,939) | (7,041) | |||||||||||||
Other operating assets and liabilities | 8,310 | (1,792) | (260) | |||||||||||||
Other | 686 | 13,804 | 9,861 | |||||||||||||
Net cash provided by operating activities | 354,605 | 50,106 | 49,225 | |||||||||||||
Cash flows from investing activities | ||||||||||||||||
Net increase (decrease) in short-term investments | 3,336 | 1,621 | (2,338) | |||||||||||||
Acquisition of businesses | (444,124) | 0 | 0 | |||||||||||||
Net cash provided by (used in) investing activities | (440,788) | 1,621 | (2,338) | |||||||||||||
Cash flows from financing activities | ||||||||||||||||
Dividends paid to shareholders | (47,333) | (46,689) | (46,114) | |||||||||||||
Principal borrowings on senior revolving credit facility | 135,000 | 0 | 0 | |||||||||||||
Acquisition of treasury stock | 0 | (5,088) | (1,660) | |||||||||||||
Proceeds from exercise of stock options | 1,730 | 3,627 | 4,190 | |||||||||||||
Withholding tax payments on RSUs tendered | (3,680) | (3,165) | (3,245) | |||||||||||||
Net cash used in financing activities | 85,717 | (51,315) | (46,829) | |||||||||||||
Net increase (decrease) in cash | (466) | 412 | 58 | |||||||||||||
Cash at beginning of period | $ 538 | $ 126 | $ 68 | 538 | 126 | 68 | ||||||||||
Cash at end of period | $ 72 | $ 538 | $ 126 | $ 72 | $ 538 | $ 126 |
Schedule III and VI Supplemen_2
Schedule III and VI Supplementary Insurance Information Supplemental Information Concerning Property and Casualty Insurance Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Deferred policy acquisition costs | $ 276,668 | $ 298,742 | $ 257,826 |
Future policy benefits, claims and claim expenses | 6,677,306 | 6,107,907 | 5,921,484 |
Unearned premiums | 279,163 | 276,225 | 260,539 |
Other policy claims and benefits payable | 647,283 | 767,988 | 724,261 |
Premium revenue/ premium earned | 897,954 | 817,333 | 794,703 |
Net investment income | 365,064 | 376,507 | 373,630 |
Benefits, claims and settlement expenses | 797,854 | 843,759 | 780,941 |
Amortization of deferred policy acquisition costs | 109,181 | 109,889 | 102,185 |
Other operating expenses | 287,001 | 218,414 | 199,737 |
Property and Casualty | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Deferred policy acquisition costs | 28,616 | 30,033 | 29,191 |
Future policy benefits, claims and claim expenses | 386,976 | 367,180 | 319,182 |
Discount, if any, deducted in previous column | 0 | 0 | 0 |
Unearned premiums | 273,998 | 274,351 | 258,502 |
Other policy claims and benefits payable | 0 | 0 | 0 |
Premium revenue/ premium earned | 683,454 | 665,734 | 648,263 |
Net investment income | 41,740 | 40,104 | 36,178 |
Benefits, claims and settlement expenses | 475,563 | 547,659 | 496,289 |
Claims and claims adjustment expense incurred related to current year | 483,062 | 547,959 | 498,989 |
Claims and claims adjustment expense incurred related to prior years | (7,500) | (300) | (2,700) |
Amortization of deferred policy acquisition costs | 79,453 | 79,073 | 76,967 |
Other operating expenses | 105,489 | 101,834 | 96,488 |
Paid claims and claim adjustment expenses | 486,547 | 531,977 | 481,074 |
Premiums written | 683,101 | 681,583 | 662,760 |
Supplemental | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Deferred policy acquisition costs | 1,967 | ||
Future policy benefits, claims and claim expenses | 390,276 | ||
Unearned premiums | 3,218 | ||
Other policy claims and benefits payable | 0 | ||
Premium revenue/ premium earned | 65,815 | ||
Net investment income | 7,480 | ||
Benefits, claims and settlement expenses | 24,723 | ||
Amortization of deferred policy acquisition costs | 438 | ||
Other operating expenses | 26,476 | ||
Retirement | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Deferred policy acquisition costs | 185,294 | 209,232 | 174,661 |
Future policy benefits, claims and claim expenses | 4,698,461 | 4,573,170 | 4,466,039 |
Unearned premiums | 734 | 704 | 705 |
Other policy claims and benefits payable | 643,826 | 764,607 | 720,926 |
Premium revenue/ premium earned | 29,083 | 31,269 | 28,003 |
Net investment income | 245,475 | 262,634 | 261,994 |
Benefits, claims and settlement expenses | 173,116 | 168,732 | 159,385 |
Amortization of deferred policy acquisition costs | 21,446 | 23,186 | 17,759 |
Other operating expenses | 90,782 | 57,269 | 49,733 |
Life | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Deferred policy acquisition costs | 60,791 | 59,477 | 53,974 |
Future policy benefits, claims and claim expenses | 1,201,593 | 1,167,557 | 1,136,263 |
Unearned premiums | 1,213 | 1,170 | 1,332 |
Other policy claims and benefits payable | 3,457 | 3,381 | 3,335 |
Premium revenue/ premium earned | 119,602 | 120,330 | 118,437 |
Net investment income | 71,957 | 74,399 | 76,195 |
Benefits, claims and settlement expenses | 124,452 | 127,368 | 125,267 |
Amortization of deferred policy acquisition costs | 7,844 | 7,630 | 7,459 |
Other operating expenses | 37,820 | 36,314 | 36,550 |
Other, including consolidating eliminations | Eliminations | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Net investment income | (1,588) | (630) | (737) |
Other operating expenses | $ 26,434 | $ 22,997 | $ 16,966 |
Schedule IV Reinsurance (Detail
Schedule IV Reinsurance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Life insurance in force | |||
Gross Amount | $ 19,179,823 | $ 18,277,691 | $ 17,564,270 |
Ceded to Other Companies | 4,813,185 | 4,505,208 | 4,295,412 |
Assumed from Other Companies | 0 | 0 | 0 |
Net Amount | $ 14,366,638 | $ 13,772,483 | $ 13,268,858 |
Percentage of Amount Assumed to Net | 0.00% | 0.00% | 0.00% |
Premiums | |||
Gross Amount | $ 917,610 | $ 841,147 | $ 812,099 |
Ceded to Other Companies | 30,412 | 28,837 | 22,036 |
Assumed from Other Companies | 10,756 | 5,023 | 4,640 |
Net Amount | $ 897,954 | $ 817,333 | $ 794,703 |
Percentage of Amount Assumed to Net | 1.20% | 0.60% | 0.60% |
Property and Casualty | |||
Premiums | |||
Gross Amount | $ 689,156 | $ 682,478 | $ 658,960 |
Ceded to Other Companies | 16,457 | 21,767 | 15,337 |
Assumed from Other Companies | 10,755 | 5,023 | 4,640 |
Net Amount | $ 683,454 | $ 665,734 | $ 648,263 |
Percentage of Amount Assumed to Net | 1.60% | 0.80% | 0.70% |
Supplemental | |||
Premiums | |||
Gross Amount | $ 65,918 | ||
Ceded to Other Companies | 104 | ||
Assumed from Other Companies | 1 | ||
Net Amount | $ 65,815 | ||
Percentage of Amount Assumed to Net | 0.00% | ||
Retirement | |||
Premiums | |||
Gross Amount | $ 35,602 | $ 31,269 | $ 28,003 |
Ceded to Other Companies | 6,519 | 0 | 0 |
Assumed from Other Companies | 0 | 0 | 0 |
Net Amount | $ 29,083 | $ 31,269 | $ 28,003 |
Percentage of Amount Assumed to Net | 0.00% | 0.00% | 0.00% |
Life | |||
Premiums | |||
Gross Amount | $ 126,934 | $ 127,400 | $ 125,136 |
Ceded to Other Companies | 7,332 | 7,070 | 6,699 |
Assumed from Other Companies | 0 | 0 | 0 |
Net Amount | $ 119,602 | $ 120,330 | $ 118,437 |
Percentage of Amount Assumed to Net | 0.00% | 0.00% | 0.00% |