Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 16, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,481.4 | ||
Entity Common Stock, Shares Outstanding | 41,422,460 | ||
Documents Incorporated by Reference | Certain portions of the registrant's Proxy Statement for the 2021 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, 2020. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0000850141 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Investments | ||
Fixed maturity securities, available for sale, at fair value (amortized cost 2020, $5,788,551; 2019, $5,456,980) | $ 6,345,290 | $ 5,791,676 |
Equity securities at fair value | 121,653 | 101,864 |
Limited partnership interests | 448,996 | 383,717 |
Short-term and other investments | 346,295 | 361,976 |
Total investments | 7,262,234 | 6,639,233 |
Cash | 22,323 | 25,508 |
Deferred policy acquisition costs | 229,828 | 276,668 |
Deposit asset on reinsurance | 2,420,926 | 2,346,166 |
Intangible assets | 158,460 | 177,217 |
Goodwill | 43,454 | 49,079 |
Other assets | 443,165 | 474,364 |
Separate Account (variable annuity) assets | 2,891,423 | 2,490,469 |
Total assets | 13,471,813 | 12,478,704 |
Policy liabilities | ||
Investment contract and policy reserves | 6,445,323 | 6,234,452 |
Unpaid claims and claim expenses | 438,754 | 442,854 |
Unearned premiums | 264,489 | 279,163 |
Total policy liabilities | 7,148,566 | 6,956,469 |
Other policyholder funds | 751,296 | 647,283 |
Other liabilities | 453,126 | 384,173 |
Short-term debt | 135,000 | 135,000 |
Long-term debt | 302,323 | 298,025 |
Separate Account (variable annuity) liabilities | 2,891,423 | 2,490,469 |
Total liabilities | 11,681,734 | 10,911,419 |
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, 2020, 66,316,797; 2019, 66,088,808 | 66 | 66 |
Additional paid-in capital | 488,367 | 480,962 |
Retained earnings | 1,434,634 | 1,352,539 |
Accumulated other comprehensive income (loss), net of tax: | ||
Net unrealized investment gains on fixed maturity securities | 366,285 | 230,448 |
Net funded status of benefit plans | (11,165) | (10,767) |
Treasury stock, at cost, 2020, 24,902,579 shares; 2019, 24,850,484 shares | (488,108) | (485,963) |
Total shareholders' equity | 1,790,079 | 1,567,285 |
Total liabilities and shareholders' equity | $ 13,471,813 | $ 12,478,704 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | |||
Fixed maturities, available for sale, amortized cost | $ 5,788,551 | $ 5,456,980 | |
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 (in shares) | 0 | 0 | |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 | |
Common stock, shares issued (in shares) | 66,316,797 | 66,088,808 | |
Treasury stock (in shares) | 24,902,579 | 24,850,484 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | |||
Insurance premiums and contract charges earned | $ 930,697 | $ 897,954 | $ 817,333 |
Net investment income | 357,596 | 365,064 | 376,507 |
Net investment gains (losses) | (2,289) | 153,340 | (12,543) |
Other income | 24,437 | 14,127 | 10,302 |
Total revenues | 1,310,441 | 1,430,485 | 1,191,599 |
Benefits, losses and expenses | |||
Benefits, claims and settlement expenses | 568,891 | 585,068 | 637,560 |
Interest credited | 204,635 | 212,786 | 206,199 |
Operating expenses | 237,827 | 234,609 | 205,413 |
DAC unlocking and amortization expense | 99,909 | 109,181 | 109,889 |
Intangible asset amortization expense | 14,381 | 8,790 | 0 |
Interest expense | 15,215 | 15,577 | 13,001 |
Other expense - goodwill and intangible asset impairments | 10,000 | 28,025 | 0 |
Total benefits, losses and expenses | 1,150,858 | 1,194,036 | 1,172,062 |
Income before income taxes | 159,583 | 236,449 | 19,537 |
Income tax expense | 26,268 | 52,006 | 1,194 |
Net income | $ 133,315 | $ 184,443 | $ 18,343 |
Net income per share | |||
Basic (in usd per share) | $ 3.18 | $ 4.42 | $ 0.44 |
Diluted (in usd per share) | $ 3.17 | $ 4.40 | $ 0.44 |
Weighted average number of shares and equivalent shares | |||
Basic (in shares) | 41,881,289 | 41,737,876 | 41,570,492 |
Diluted (in shares) | 42,040,892 | 41,948,531 | 41,894,232 |
Net investment gains (losses) | |||
Total other-than-temporary impairment losses on securities | $ (5,283) | $ (1,380) | $ (1,530) |
Portion of losses recognized in other comprehensive income (loss) | 0 | 0 | 0 |
Net other-than-temporary impairment losses on securities recognized in net income | (5,283) | (1,380) | (1,530) |
Sales and other, net | 14,968 | 151,495 | 3,491 |
Change in fair value - equity securities | (167) | 7,308 | (18,323) |
Change in fair value and gains realized on settlements - derivatives | (11,807) | (4,083) | 3,819 |
Total | $ (2,289) | $ 153,340 | $ (12,543) |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Comprehensive income (loss) | |||
Net income | $ 133,315 | $ 184,443 | $ 18,343 |
Other comprehensive income (loss), net of tax: | |||
Change in net unrealized investment gains (losses) on fixed maturity securities | 135,837 | 133,507 | (188,195) |
Change in net funded status of benefit plans | (398) | 1,418 | 1,032 |
Cumulative effect of change in accounting principle | 0 | 0 | (15,041) |
Other comprehensive income (loss) | 135,439 | 134,925 | (202,204) |
Total | $ 268,754 | $ 319,368 | $ (183,861) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Cumulative effect of change in accounting principle | Common stock | Additional paid-in capital | Retained earnings | Retained earningsCumulative effect of change in accounting principle | Accumulated other comprehensive income (loss), net of tax: | Accumulated other comprehensive income (loss), net of tax:Cumulative effect of change in accounting principle | Treasury stock, at cost |
Beginning balance at Dec. 31, 2017 | $ (15,041) | $ 65 | $ 464,246 | $ 1,231,177 | $ 15,041 | $ 286,960 | $ (15,041) | $ (480,875) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
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, 2020, $1.20 per share; 2019, $1.15 per share; 2018, $1.14 per share | (47,979) | ||||||||
Change in net unrealized investment gains (losses) on fixed maturity 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 | 0 | 66 | 475,109 | 1,216,582 | 84,756 | (485,963) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
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, 2020, $1.20 per share; 2019, $1.15 per share; 2018, $1.14 per share | (48,486) | ||||||||
Change in net unrealized investment gains (losses) on fixed maturity securities | 133,507 | 133,507 | |||||||
Change in net funded status of benefit plans | 1,418 | 1,418 | |||||||
Ending balance at Dec. 31, 2019 | 1,567,285 | $ 0 | 66 | 480,962 | 1,352,539 | $ (509) | 219,681 | (485,963) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Options exercised and conversion of common stock units and restricted stock units | 1,489 | ||||||||
Share-based compensation expense | 5,916 | ||||||||
Net income | $ 133,315 | 133,315 | |||||||
Dividends, 2020, $1.20 per share; 2019, $1.15 per share; 2018, $1.14 per share | (50,711) | ||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | ||||||||
Change in net unrealized investment gains (losses) on fixed maturity securities | $ 135,837 | 135,837 | |||||||
Change in net funded status of benefit plans | (398) | (398) | |||||||
Acquisition of shares | (2,145) | ||||||||
Ending balance at Dec. 31, 2020 | $ 1,790,079 | $ 66 | $ 488,367 | $ 1,434,634 | $ 355,120 | $ (488,108) |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
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) | $ 1.20 | $ 1.15 | $ 1.14 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | |||
Net income | $ 133,315 | $ 184,443 | $ 18,343 |
Net investment (gains) losses | 2,289 | (153,340) | 12,543 |
Amortization of premiums and accretion of discounts on fixed maturity securities, net | 6,651 | 3,806 | (10,095) |
Depreciation and intangible asset amortization | 23,417 | 15,629 | 7,357 |
Share-based compensation expense | 6,660 | 7,338 | 8,346 |
Other expense - goodwill and intangible asset impairments | 10,000 | 28,025 | 0 |
Changes in: | |||
Accrued investment income | (1,553) | 46,858 | 4,449 |
Insurance liabilities | 69,889 | (96,802) | 203,370 |
Premium receivables | 7,450 | (5,031) | (10,026) |
Deferred policy acquisition costs | (2,488) | (1,274) | (783) |
Reinsurance recoverables | 1,615 | 22,006 | (21,317) |
Income tax liabilities | 8,346 | 28,726 | (3,383) |
Other operating assets and liabilities | (4,539) | 53,406 | (2,048) |
Other | (1,258) | (6,217) | (5,868) |
Net cash provided by operating activities | 259,794 | 127,573 | 200,888 |
Fixed maturity securities | |||
Purchases | (1,439,648) | (1,058,747) | (1,428,889) |
Sales | 472,913 | 805,887 | 625,527 |
Maturities, paydowns, calls and redemptions | 640,270 | 799,526 | 737,535 |
Equity securities | |||
Purchases | (37,353) | (15,583) | (13,430) |
Sales and repayments | 12,717 | 33,502 | 25,498 |
Limited partnership interests | |||
Purchases | (98,594) | (129,389) | (93,545) |
Sales | 30,877 | 91,587 | 16,997 |
Change in short-term and other investments, net | 12,061 | (49,325) | (56,192) |
Acquisition of businesses, net of cash acquired | 0 | (421,516) | 0 |
Net cash (used in) provided by investing activities | (406,757) | 55,942 | (186,499) |
Cash flows from financing activities | |||
Dividends paid to shareholders | (49,620) | (47,333) | (46,689) |
Principal borrowings on Bank Credit Facility | 0 | 135,000 | 0 |
FHLB borrowings | 4,000 | 0 | 0 |
Acquisition of treasury stock | (2,145) | 0 | (5,088) |
Proceeds from exercise of stock options | 2,402 | 1,730 | 3,627 |
Withholding tax payments on RSUs tendered | (2,299) | (3,680) | (3,165) |
Annuity contracts: variable, fixed and FHLB funding agreements | |||
Deposits | 578,940 | 637,538 | 489,097 |
Benefits, withdrawals and net transfers to Separate Account (variable annuity) assets | (378,603) | (419,001) | (473,003) |
Principal repayment on FHLB funding agreements | 0 | (305,005) | 0 |
Life policy accounts | |||
Deposits | 8,999 | 9,391 | 8,149 |
Withdrawals and surrenders | (3,910) | (3,558) | (4,910) |
Change in deposit asset on reinsurance | (21,230) | (150,434) | 0 |
Change in book overdrafts | 7,244 | (24,561) | 21,872 |
Net cash provided by (used in) financing activities | 143,778 | (169,913) | (10,110) |
Net (decrease) increase in cash | (3,185) | 13,602 | 4,279 |
Cash at beginning of year | 25,508 | 11,906 | 7,627 |
Cash at end of year | $ 22,323 | $ 25,508 | $ 11,906 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Business Horace Mann Educators Corporation is a holding company for insurance subsidiaries that market and underwrite personal lines of property and casualty insurance products (primarily personal lines automobile and property insurance), supplemental insurance products (primarily cancer, heart, hospital, supplemental disability and accident coverages), retirement products (primarily tax-qualified fixed and variable annuities) and life insurance products, primarily to K-12 teachers, administrators and other employees of public schools and their families (collectively, HMEC, the Company or Horace Mann). The Company acquired NTA Life Enterprises, LLC (NTA) on July 1, 2019. As a result, the Company’s reporting segments changed in the third quarter of 2019. A new reporting segment titled "Supplemental" was added to report on the personal lines of supplemental insurance products that are marketed and underwritten by NTA. Basis of Presentation The accompanying audited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and with the rules and regulations of the Securities and Exchange Commission (SEC). 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 Company has reclassified the presentation of certain prior period information to conform to the current year's presentation. Consolidation All intercompany transactions and balances between HMEC and its subsidiaries and affiliates have been eliminated. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The most significant critical accounting estimates include valuation of hard-to-value fixed maturity securities (including evaluation of other-than-temporary impairments), evaluation of goodwill and intangible assets for impairment, valuation of annuity and life deferred policy acquisition costs, valuation of liabilities for property and casualty unpaid claims and claim expenses and valuation of certain investment contracts and policy reserves. 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. See Note 3 - Fair Value of Financial Instruments - Investments for a detailed description of how the Company estimates fair value for its fixed maturity securities portfolio including hard-to-value securities. An adjustment for net unrealized investment gains (losses) on all fixed maturity 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 deferred policy acquisition costs (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 using 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 variable interests in variable interest entities (VIEs), including corporate securities, mortgage-backed securities and asset-backed securities. Such variable 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 accretion 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 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. For fixed maturity securities that the Company does not intend to sell or for which it is more likely than not that the Company would not be required to sell before an anticipated recovery in value, the Company separates the credit loss component of the impairment from the amount related to all other factors and reports the credit loss component in net investment gains (losses). The impairment related to all other factors (non-credit factors) is reported in other comprehensive income (OCI). The allowance is adjusted for any additional credit losses and subsequent recoveries. Upon recognizing a credit loss, the cost basis is not adjusted. Prior to the adoption of ASU 2016-13 - Measurement of Credit Losses on Financial Instruments on January 1, 2020, when OTTI was deemed to have occurred, the investment would be written-down to fair value which became the new cost basis of the investment. For fixed maturity securities where the Company records a credit loss, a determination is made as to the cause of the impairment and whether the Company expects a recovery in value. For fixed maturity securities where the Company expects a recovery in value, the constant effective yield method is utilized, and the investment is amortized to par. For fixed maturity securities the Company intends to sell or for which it is more likely than not that the Company will be required to sell before an anticipated recovery in value, the full amount of the impairment is included in net investment gains (losses). The new cost basis of the investment is the previous amortized cost basis less the impairment recognized in net investment gains (losses). The new cost basis is not adjusted for any subsequent recoveries in fair value. The Company reports accrued investment income separately from fixed maturity securities, available for sale, and has elected not to measure an allowance for credit losses for accrued investment income. Accrued investment income is written off and recognized as a net investment loss at the time the issuer of the fixed maturity security defaults or is expected to default on payments. Uncollectible available for sale fixed maturity securities are written off when the Company determines that no additional cash flows will be collected. 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 present value of cash flows below the amortized cost basis. 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 Judgment regarding whether a corporate fixed maturity security is other-than-temporarily impaired includes 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 a revenue bond for OTTI based on guarantees associated with the repayment from revenues generated by the specified revenue-generating activity associated with the purpose of the bond. Judgment regarding whether a municipal bond is other-than-temporarily impaired includes 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 monoline 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 the amortized cost basis and the present value of the expected future cash flows of the security. Present value is determined using a 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 a 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 based on 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 were as follows: ($ in thousands) December 31, 2020 2019 Property and Casualty $ 26,153 $ 28,616 Supplemental 4,270 1,967 Retirement 137,735 185,294 Life 61,670 60,791 Total $ 229,828 $ 276,668 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 risks, 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 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 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. Annually, the Company performs a gross premium valuation (GPV) on life insurance 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 block, a loss would be recognized by first writing off the DAC asset 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 DAC amortization expense for the period in which the adjustment is made. The Company recognized the following adjustments to DAC amortization expense as a result of evaluating actual experience and prospective assumptions (i.e., the impact of unlocking): ($ in thousands) Year Ended December 31, 2020 2019 2018 Increase (decrease) to DAC amortization expense: Retirement $ (1,766) $ 3,480 $ 3,948 Life (337) (267) 283 Total $ (2,103) $ 3,213 $ 4,231 DAC for annuity 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 fixed maturity securities had been realized at the reporting date. This adjustment reduced DAC by $90.5 million, $41.2 million and $17.9 million at December 31, 2020, 2019 and 2018, respectively. The after tax impact of this adjustment is included in AOCI (along with net unrealized investment gains (losses) on fixed maturity 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, 2020, 2019 and 2018. 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 $83.6 million as of December 31, 2020 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 $6.6 million in 2021, $6.2 million in 2022, $5.8 million in 2023, $5.4 million in 2024 and $5.1 million in 2025. 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 $44.7 million as of December 31, 2020 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 2021 through 2025, 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 $0.7 million as of December 31, 2020 and is being amortized based on the present value of future profits to be received. The Company estimates that it will recognize cumulative VODA amortization of $0.3 million for the years 2021 through 2025. The Company accounts for the value of agency relationships based on the present value of commission overrides retained by NTA. Agency relationships was $12.9 million as of December 31, 2020 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 $2.2 million in 2021, $1.9 million in 2022, $1.6 million in 2023, $1.4 million in 2024 and $1.2 million in 2025. 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 $5.9 million as of December 31, 2020 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 $1.2 million in 2021, $1.1 million in 2022, $0.9 million in 2023, $0.7 million in 2024 and $0.6 million in 2025. 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 intangible assets that are not subject to amortization. Annually, the Company performs a VOBA analysis on supplemental insurance policies to assess whether a loss recognition event has occurred. This initially involves comparing the historical and expected future experience on the block to the assumptions embedded in the original VOBA intangible asset. If both the experience to date and current expected experience are consistently better than the initial VOBA assumptions, the remaining value in the block is sufficient to support the VOBA intangible asset and no loss recognition is necessary. If the historical and current expected assumptions are not uniformly better than the initial VOBA assumptions, a GPV is performed 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 VOBA intangible asset, in aggregate for the supplemental insurance block, a loss would be recognized by first writing off the VOBA and then increasing the liability. Currently, a GPV is not required for the acquired supplemental block. No such costs were deemed unrecoverable during the year ended December 31, 2020. 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 amount 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 amount is not recoverable from undiscounted cash flows, the impairment is measured as the difference between the carrying amount 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 amount. If the carrying amount of an intangible asset that is not subject to amortization exceeds its fair value, an impairment loss is recognized in an amount equal to the excess. At October 1, 2020, the Company performed qualitative assessments to determine whether it was necessary to perform quantitative intangible asset impairment tests. Based on the assessments of qualitative factors, there were no events or circumstances that led to a determination that it is more likely than not that the fair value of an intangible asset is less than its carrying amount with exception to VODA and trade names intangible assets assigned to BCG, for which quantitative intangible asset impairment tests were performed that resulted in intangible asset impairment charges of $4.4 million in aggregate. 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 6 for the allocation of goodwill by reporting unit as of December 31, 2020. 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 amount. If an entity determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the entity performs a quantitative goodwill impairment test by comparing the fair value of a reporting unit to its carrying amount 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 amount exceeds its fair value, not to exceed the carrying amount of goodwill. Any amount of goodwill determined to be impaired is recognized as an expense in the period in which the impairment determination is made. At October 1, 2020, the Company performed a quantitative goodwill impairment test. Based on the assessment, there were no events or circumstances that led to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount with exception to lower than anticipated BCG wealth management sales outside of the education markets which triggered an impairment of the goodwill associated with the BCG business of the Retirement reporting unit. For the evaluation, the fair value of BCG was measured using a discounted cash flow method. The carrying amount exceeded the fair value, resulting in a $5.6 million goodwill impairment charge. During each year from 2018 through 2020, the Company completed the required annual goodwill impairment testing. With exception to the goodwill impairment charges described in Note 6, no other goodwill impairment charges were necessary as a result of such assessments. The assessment of goodwill recoverability requires significant judgment and is subject to inherent uncertainty. The use of different assumptions, within a reasonable range, could cause the fair value of a reporting unit to fall below its carrying amount. Subsequent goodwill assessments could result in impairment, particularly for any reporting unit with at-risk goodwill, due to the impact of a volatile financial market on earnings, discount rate assumptions, liquidity and market capitalization. Property and E |
Investments
Investments | 12 Months Ended |
Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Net Investment Income The components of net investment income for the following periods were as follows: ($ in thousands) Year Ended December 31, 2020 2019 2018 Fixed maturity securities $ 232,917 $ 283,228 $ 353,303 Equity securities 4,665 4,923 6,017 Limited partnership interests 20,863 25,694 15,406 Short-term and other investments 11,409 (10,122) 11,981 Investment expenses (9,542) (9,484) (10,200) Net investment income - investment portfolio 260,312 294,239 376,507 Investment income - deposit asset on reinsurance 97,284 70,825 — Total net investment income $ 357,596 $ 365,064 $ 376,507 Net Investment Gains (Losses) Net investment gains (losses) for the following periods were as follows: ($ in thousands) Year Ended December 31, 2020 2019 2018 Fixed maturity securities (1) $ 9,392 $ 141,448 $ (5,713) Equity securities 1,843 15,975 (10,649) Short-term investments and other (13,524) (4,083) 3,819 Net investment gains (losses) $ (2,289) $ 153,340 $ (12,543) (1) Net investment gains 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 $2.9 billion block of in force fixed and variable annuity business. See Notes 5 and 17 for further information. The Company, from time to time, sells invested assets subsequent to the reporting date that were considered temporarily impaired at such reporting date. Such sales are due to issuer specific events occurring subsequent to the reporting date that result in a change in the Company's intent or ability to hold an invested asset. The types of events that may result in a sale include significant changes in the economic facts and circumstances related to the invested asset, significant unforeseen changes in liquidity needs, or changes in the Company's investment strategy. Net Investment Gains (Losses) by Transaction Type The following table reconciles net investment gains (losses) pretax by transaction type: ($ in thousands) Year Ended December 31, 2020 2019 2018 Credit impairment write-downs $ — $ (1,105) $ — Change in intent write-downs (5,283) (275) (1,530) Net other-than-temporary impairment losses on securities recognized in net income (5,283) (1,380) (1,530) Sales and other, net 14,968 151,495 3,491 Change in fair value - equity securities (1) (167) 7,308 (18,323) Change in fair value and gains (losses) realized on settlements - derivatives (11,807) (4,083) 3,819 Net investment gains (losses) $ (2,289) $ 153,340 $ (12,543) (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 Unrealized Unrealized Fair December 31, 2020 Fixed maturity securities U.S. Government and federally sponsored agency obligations: (1) Mortgage-backed securities $ 605,468 $ 79,601 $ 231 $ 684,838 Other, including U.S. Treasury securities 395,042 39,144 1,033 433,153 Municipal bonds 1,612,290 215,711 504 1,827,497 Foreign government bonds 40,145 4,908 — 45,053 Corporate bonds 1,905,207 221,634 3,942 2,122,899 Other asset-backed securities 1,230,399 24,123 22,672 1,231,850 Totals $ 5,788,551 $ 585,121 $ 28,382 $ 6,345,290 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 asset-backed securities 1,282,740 20,883 8,131 1,295,492 Totals $ 5,456,980 $ 348,310 $ 13,614 $ 5,791,676 (1) Fair value includes securities issued by Federal National Mortgage Association (FNMA) of $387.1 million and $405.1 million; Federal Home Loan Mortgage Corporation (FHLMC) of $344.3 million and $283.1 million; and Government National Mortgage Association (GNMA) of $132.3 million and $147.4 million as of December 31, 2020 and 2019, respectively. The following table presents the fair value and gross unrealized losses for fixed maturity securities in an unrealized loss position at December 31, 2020 and 2019, respectively. The Company views the decrease in fair value of all of the fixed maturity securities with unrealized losses at December 31, 2020 — which was driven largely by increasing interest rates, spread widening, financial market illiquidity and/or market volatility from the date of acquisition — as temporary. As of December 31, 2020, the Company has not made the decision to sell and it is not more likely than not the Company will be required to sell the fixed maturity securities with unrealized losses before recovery in value. Therefore, it was determined that the unrealized losses on the fixed maturity securities presented in the table below were not other-than-temporarily impaired as of December 31, 2020. ($ in thousands) 12 months or less More than 12 months Total Fair Value Gross Fair Value Gross Fair Value Gross December 31, 2020 Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 4,842 $ 75 $ 2,644 $ 156 $ 7,486 $ 231 Other 95,919 1,033 — — 95,919 1,033 Municipal bonds 18,097 504 — — 18,097 504 Foreign government bonds — — — — — — Corporate bonds 126,619 3,768 10,879 174 137,498 3,942 Other asset-backed securities 316,973 17,153 409,274 5,519 726,247 22,672 Total $ 562,450 $ 22,533 $ 422,797 $ 5,849 $ 985,247 $ 28,382 Number of positions with a gross unrealized loss 308 123 431 Fair value as a percentage of total fixed maturities securities fair value 8.9 % 6.7 % 15.6 % 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 asset-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 % Fixed maturity securities with an investment grade rating represented 81.2% of the gross unrealized losses as of December 31, 2020. 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, 2020 and 2019 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 an anticipated recovery in value, for which the non-credit portions of OTTI losses were recognized in OCI: ($ in thousands) Year Ended December 31, 2020 2019 Cumulative credit loss (1) Beginning of period $ 1,529 $ 1,529 New credit losses 184 — Increases to previously recognized credit losses — — Losses related to securities sold or paid down during the period (184) — End of period $ 1,529 $ 1,529 (1) The cumulative credit loss amounts exclude OTTI losses on fixed maturity 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 an anticipated recovery in value. For the year ended December 31, 2020, there was no allowance recognized for current expected credit losses with respect to fixed maturity securities classified as available for sale. 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, 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, 2020 Amortized Fair Percent of Estimated expected maturity: Due in 1 year or less $ 255,416 $ 261,387 4.0 % Due after 1 year through 5 years 1,712,114 1,793,111 28.3 % Due after 5 years through 10 years 1,608,614 1,775,766 28.0 % Due after 10 years through 20 years 1,358,865 1,559,501 24.6 % Due after 20 years 853,542 955,525 15.1 % Total $ 5,788,551 $ 6,345,290 100.0 % Average option-adjusted duration, in years 6.4 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 as follows: ($ in thousands) Year Ended December 31, 2020 2019 (1) 2018 Fixed maturity securities Proceeds received $ 472,913 $ 805,887 $ 625,527 Gross gains realized 20,470 150,852 10,536 Gross losses realized (6,072) (7,807) (14,932) Equity securities Proceeds received $ 12,717 $ 29,863 $ 25,498 Gross gains realized 2,197 9,193 8,592 Gross losses realized (1,885) (788) (917) (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 $2.9 billion block of in force fixed and variable annuity business. See Notes 5 and 17 for further information. Net Unrealized Investment Gains (Losses) on Fixed Maturity Securities The following table reconciles the net unrealized investment gains (losses) on fixed maturity securities, net of tax, included in AOCI, before the impact on DAC: ($ in thousands) Year Ended December 31, 2020 2019 2018 Net unrealized investment gains (losses) on fixed maturity securities, net of tax Beginning of period $ 264,410 $ 111,712 $ 286,176 Change in net unrealized investment gains (losses) on fixed maturity securities 184,290 277,062 (172,350) Reclassification of net investment (gains) losses on securities to net income (8,876) (124,364) 12,927 Cumulative effect of change in accounting principle (1) — — (15,041) End of period $ 439,824 $ 264,410 $ 111,712 (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, 2020 and 2019, the carrying amount of equity method limited partnership interests totaled $449.0 million and $383.7 million, respectively. Principal factors influencing carrying amount appreciation or decline include operating performance, comparable public company earnings multiples, capitalization rates and the economic environment. The Company recognizes an impairment loss for equity method limited partnerships when evidence demonstrates that the loss is other than temporary. Evidence of a loss in value that is other than temporary may include the absence of an ability to recover the carrying amount of the investment or the inability of the investee to sustain a level of earnings that would justify the carrying amount of the investment. Investment in Entities Exceeding 10% of Shareholders' Equity At December 31, 2020 and 2019, there were no investments which exceeded 10% of total shareholders' equity in entities other than obligations of the U.S. Government and federally sponsored government agencies and authorities. Offsetting of Assets and Liabilities The Company's derivatives are subject to enforceable master netting arrangements. Collateral support agreements associated with each master netting arrangement provide that the Company will receive or pledge financial collateral in the event minimum thresholds have been reached. The following table presents the instruments that were subject to a master netting arrangement for the Company. ($ in thousands) Gross Net Amounts Gross Amounts Not Offset Gross Financial Cash Net December 31, 2020 Asset derivatives Free-standing derivatives $ 16,805 $ — $ 16,805 $ 13,671 $ 2,620 $ 514 December 31, 2019 Asset derivatives Free-standing derivatives 13,239 — 13,239 7,687 6,640 (1,088) Deposits At December 31, 2020 and 2019, fixed maturity securities with a fair value of $26.9 million and $26.0 million, respectively, were on deposit with governmental agencies as required by law in various states for which the insurance subsidiaries of HMEC conduct business. In addition, at December 31, 2020 and 2019, fixed maturity securities with a fair value of $707.3 million and $594.2 million, respectively, were on deposit with FHLB as collateral for amounts subject to funding agreements, advances and borrowings which were equal to $644.5 million and $545.0 million at the respective dates. The deposited securities are reported as 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, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | The Company is required 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 91.9% and 94.1% of the portfolio, based on fair value, was priced through pricing services or index priced as of December 31, 2020 and 2019, 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 2020. 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 requires judgment and includes: 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 including 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 financial assets and financial liabilities are carried at fair value: Financial assets • Fixed maturity securities including hard-to-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 liabilities • The fair value of derivatives embedded in IUL contracts is set equal to the fair value of the outstanding call options. • The fair value of derivatives embedded in FIA contracts is determined using the option budget method for each premium received (i.e., the option budget method is used as the future account growth rate). With this method, future excess cash flows (defined as benefits in excess of required non-forfeiture benefits) are discounted at the risk-free rate and adjusted for non-performance, to determine the fair value of the embedded derivatives. Financial Instruments Measured and Carried at Fair Value on a 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, 2020, Level 3 investments comprised approximately 5.3% of the Company's total investment portfolio at fair value. ($ in thousands) Carrying Fair Fair Value Measurements at Amount Value Level 1 Level 2 Level 3 December 31, 2020 Financial Assets Investments Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 684,838 $ 684,838 $ — $ 673,764 $ 11,074 Other, including U.S. Treasury securities 433,153 433,153 18,350 414,803 — Municipal bonds 1,827,497 1,827,497 — 1,767,907 59,590 Foreign government bonds 45,054 45,054 — 45,054 — Corporate bonds 2,122,898 2,122,898 14,876 1,952,206 155,816 Other asset-backed securities 1,231,850 1,231,850 — 1,103,567 128,283 Total fixed maturity securities 6,345,290 6,345,290 33,226 5,957,301 354,763 Equity securities 121,653 121,653 39,235 82,115 303 Short-term investments 141,770 141,770 137,679 4,091 — Other investments 36,258 36,258 — 36,258 — Totals $ 6,644,971 $ 6,644,971 $ 210,140 $ 6,079,765 $ 355,066 Separate Account (variable annuity) assets (1) $ 2,891,423 $ 2,891,423 $ 2,891,423 $ — $ — Financial Liabilities Investment contract and life policy reserves, embedded derivatives $ 2,474 $ 2,474 $ — $ 2,474 $ — Other policyholder funds, embedded derivatives $ 104,488 $ 104,488 $ — $ — $ 104,488 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 asset-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 (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. Changes in Level 3 Fair Value Measurements The Company did not have any transfers between Levels 1 and 2 during 2020 and 2019. 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 Corporate Mortgage and Asset- Backed Securities (2) Total Equity Total Beginning balance, January 1, 2020 $ 44,291 $ 103,952 $ 146,828 $ 295,071 $ 107 $ 295,178 $ 93,733 Transfers into Level 3 (3) 80,686 83,621 104,263 268,570 234 268,804 — Transfers out of Level 3 (3) (69,074) (36,620) (84,679) (190,373) — (190,373) — Total gains or losses Net investment gains (losses) included in net income related to financial assets — — (239) (239) (38) (277) — Net investment (gains) losses included in net income related to financial liabilities — — — — — — 11,499 Net unrealized investment gains (losses) included in OCI 4,252 1,427 (10,471) (4,792) — (4,792) — Purchases — 6,875 1,890 8,765 — 8,765 — Issuances — — — — — — 8,373 Sales — — 1,214 1,214 — 1,214 — Settlements — — — — — — — Paydowns, maturities and distributions (565) (3,439) (19,449) (23,453) — (23,453) (9,117) Ending balance, December 31, 2020 $ 59,590 $ 155,816 $ 139,357 $ 354,763 $ 303 $ 355,066 $ 104,488 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 investment (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 (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 asset-backed securities. (3) Transfers into and out of Level 3 during the years ended December 31, 2020 and 2019 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 out of the levels as having occurred at the end of the reporting period in which the transfers were determined. At December 31, 2020, the Company had a $0.3 million net investment loss on Level 3 financial assets. At December 31, 2019 the Company had a $1.1 million net investment loss on Level 3 financial assets. For the years ended December 31, 2020 and 2019, net investment losses of $11.5 million and $12.6 million, respectively, were included in net income that were attributable to the changes in the fair value of Level 3 financial liabilities still held. Quantitative Information about Level 3 Fair Value Measurements The following table provides quantitative information about the significant unobservable inputs for recurring fair value measurements categorized within Level 3. ($ in thousands) Financial Fair Value at Valuation Technique(s) Unobservable Inputs Range (Weighted Average) and Single Point Best Estimate (1) Municipal bonds $ 59,590 discounted cash flow I spread (2) 307 - 391 bps Corporate bonds 155,816 discounted cash flow N spread (3) 272 - 553 bps market comparable option adjusted spread 12.54% Other asset-backed securities 128,283 vendor price haircut 3.00% - 5.00% discounted cash flow constant prepayment rate 20.00% discounted cash flow T spread (4) 235 - 800 bps discounted cash flow PDI interest margin (5) 7.13% discounted cash flow SBL interest margin (6) 4.50% Government mortgage-backed securities 11,074 vendor price haircut 3.00% - 5.00% Equity securities 303 Black-Scholes equity value low - 31.00%; high - 41.00% ($ in thousands) Financial Fair Value at Valuation Technique(s) Unobservable Inputs Range (Weighted Average) and Single Point Best Estimate (1) Derivatives $ 104,488 discounted cash flow lapse rate 5.30% mortality multiplier (7) 63.00% option budget 0.90% - 2.50% non-performance adjustment (8) 5.00% (1) When a range of unobservable inputs is not readily available, the Company uses a single point best estimate. (2) "I spread" is the interpolated weighted average life point on the "on the run" (OTR) point of the curve. (3) "N spread" is the interpolated weighted average life point on the swap curve. (4) "T spread" is a specific point on the OTR curve. (5) "PDI" stands for private debt investment. (6) "SBL" stands for broadly syndicated loans. (7) Mortality multiplier is applied to the Annuity 2000 table. (8) Determined as a percentage of a risk-free rate. 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 include: benchmark yield, liquidity premium, estimated cash flows, prepayment and default speeds, spreads, weighted average life, and credit rating. Significant spread widening in isolation will adversely impact the overall valuation, while significant 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 amount, fair value and fair value hierarchy of these financial assets and financial liabilities. ($ in thousands) Carrying Fair Fair Value Measurements at Amount Value Level 1 Level 2 Level 3 December 31, 2020 Financial Assets Investments Other investments $ 168,296 $ 172,073 $ — $ — $ 172,073 Deposit asset on reinsurance 2,420,926 3,030,589 — — 3,030,589 Financial Liabilities Investment contract and policy reserves, fixed annuity contracts 4,847,648 4,963,318 — — 4,963,318 Investment contract and life policy reserves, account values on life contracts 98,719 108,360 — — 108,360 Other policyholder funds 646,809 646,809 — 590,692 56,117 Short-term debt 135,000 135,000 — — 135,000 Long-term debt 302,323 331,136 — 331,136 — 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 — 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 4 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, 2020 | |
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, 2020 2019 Assets Derivatives, reported in Short-term and other investments $ 16,805 $ 13,239 Liabilities FIA - embedded derivatives, reported in Other policyholder funds 104,488 93,733 IUL - embedded derivatives, reported in Investment contract and policy reserves 2,474 1,314 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, 2020 2019 2018 Change in fair value of derivatives: (1) Revenues Net investment gains (losses) $ 248 $ 9,493 $ (4,112) Change in fair value of embedded derivatives: Revenues Net investment gains (losses) (12,055) (13,576) 7,931 (1) Includes gains or losses recognized at option expiration or early termination and changes in fair value for open positions. 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, 2020 December 31, 2019 Credit Rating Notional Fair Notional Fair Counterparty S&P Moody's Amount Value Amount Value Bank of America, N.A. A+ Aa2 $ 205,200 $ 14,006 $ 174,900 $ 8,523 Barclays Bank PLC A A1 81,900 2,799 115,300 3,347 Citigroup Inc. BBB+ A3 — — — — Credit Suisse International A+ Aa3 — — — — Societe Generale A A1 — — 27,800 1,369 Total $ 287,100 $ 16,805 $ 318,000 $ 13,239 As of December 31, 2020 and 2019, the Company held $16.3 million and $14.3 million, respectively, of cash and financial instruments 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, 2020 | |
Reinsurance Disclosures [Abstract] | |
Deposit Asset on Reinsurance | During the second quarter of 2019, 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 in the second quarter of 2019. 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 Sheets. 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. Interest accreted on the Deposit asset on reinsurance was $97.3 million and $70.8 million for the years ended December 31, 2020 and 2019, respectively. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, net | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, net | The Company conducts goodwill impairment testing 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. At October 1, 2020, the Company performed a quantitative goodwill impairment test. Based on the assessment, there were no events or circumstances that led to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount with exception to lower than anticipated BCG wealth management sales outside of the education markets which triggered an impairment of the goodwill associated with the BCG business of the Retirement reporting unit. For the evaluation, the fair value of BCG was measured using a discounted cash flow method. The carrying amount exceeded the fair value, resulting in a $5.6 million goodwill impairment charge. In 2019, the annuity reinsurance transaction described in Note 5 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 amount exceeded the fair value, resulting in a $28.0 million goodwill impairment charge during the second quarter of 2019. In the second quarter of 2019, the Company adopted guidance to eliminate Step 2 of the goodwill impairment test and as such, the goodwill impairment charge represented the entire balance of the goodwill associated with the annuity business of the Retirement reporting unit. Goodwill impairment charges are reported as Other expense - goodwill and intangible asset impairments in the Consolidated Statements of Operations. The changes in the carrying amount of goodwill by reportable segment for the year ended December 31, 2020 were as follows: ($ in thousands) December 31, Impairments Acquisitions December 31, Property and Casualty $ 9,460 $ — $ — $ 9,460 Supplemental 19,621 — — 19,621 Retirement 10,087 (5,625) — 4,462 Life 9,911 — — 9,911 Total $ 49,079 $ (5,625) $ — $ 43,454 As of December 31, 2020, 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 $160.4 million. As of December 31, 2020 the outstanding amounts of definite-lived intangible assets subject to amortization were as follows: ($ 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 and impairments: Value of business acquired (10,835) Value of distribution acquired (8,684) Value of agency relationships (4,059) Value of customer relationships (3,202) Total (26,780) Net intangible assets subject to amortization: $ 147,696 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, 2021 $ 13,067 2022 12,070 2023 11,232 2024 10,480 2025 9,811 Thereafter 91,036 Total $ 147,696 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, 2020 were as follows: ($ in thousands) December 31, Impairments Acquisitions December 31, Trade names $ 8,645 $ (767) $ — $ 7,878 State licenses 2,886 — — 2,886 Total $ 11,531 $ (767) $ — $ 10,764 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. The Company conducts intangible asset impairment testing at least annually, or more often if events, changes or circumstances indicate that the carrying amounts may not be recoverable. See Note 1 for further description of impairment testing. At October 1, 2020, the Company performed a qualitative assessment to determine whether it was necessary to perform quantitative intangible asset impairment tests. Based on the assessment of qualitative factors, there were no events or circumstances that led to a determination that it is more likely than not that the fair value of an intangible asset is less than its carrying amount with exception to lower than anticipated BCG wealth management sales outside of the education markets which triggered a requirement to evaluate the intangible assets associated with BCG. For the evaluation, the fair value of BCG's intangible assets were measured using discounted cash flow methods. The carrying amounts for VODA and trade names exceeded the fair values resulting in a $3.6 million intangible asset impairment charge for VODA and a $0.8 million intangible asset impairment charge for trade names. Intangible asset impairment charges are reported as Other expense - goodwill and intangible asset impairments in the Consolidated Statements of Operations. |
Unpaid Claims and Claim Expense
Unpaid Claims and Claim Expenses | 12 Months Ended |
Dec. 31, 2020 | |
Insurance Loss Reserves [Abstract] | |
Unpaid Claims and Claim Expenses | The following table is a summary reconciliation of the beginning and ending Property and Casualty unpaid claims and claim expense reserves for the periods indicated. The table presents reserves on both a gross and net (after reinsurance) basis. The total net Property and Casualty insurance claims and claim expense incurred amounts are reflected in the Consolidated Statements of Operations. The end of the year gross reserve (before reinsurance) balances and the reinsurance recoverable balances are reflected on a gross basis in the Consolidated Balance Sheets. ($ in thousands) Years Ended December 31, 2020 2019 2018 Property and Casualty segment Gross reserves, beginning of year (1) $ 386,976 $ 367,180 $ 319,182 Less: reinsurance recoverables 120,506 89,725 57,409 Net reserves, beginning of year (2) 266,470 277,455 261,773 Incurred claims and claim expenses: Claims occurring in the current year 441,191 483,062 547,959 Decrease in estimated reserves for claims occurring in prior years (3) (10,200) (7,500) (300) Total claims and claim expenses incurred (4) 430,991 475,562 547,659 Claims and claim expense payments for claims occurring during: Current year 291,393 329,475 369,194 Prior years 146,796 157,072 162,783 Total claims and claim expense payments 438,189 486,547 531,977 Net reserves, end of year (2) 259,272 266,470 277,455 Plus: reinsurance recoverables 112,881 120,506 89,725 Gross reserves, end of year (1) $ 372,153 $ 386,976 $ 367,180 (1) Unpaid claims and claim expenses as reported in the Consolidated Balance Sheets also include reserves for Supplemental, Retirement and Life of $66.6 million, $55.9 million and $29.5 million as of December 31, 2020, 2019 and 2018, 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 prior years' reserve development recognized in 2020, 2019 and 2018. (4) Benefits, claims and settlement expenses as reported in the Consolidated Statements of Operations also include amounts for Supplemental, Retirement and Life of $137.9 million, $109.5 million, and $89.9 million for the years ended December 31, 2020, 2019 and 2018, 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 recognizes 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, the Company 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 was 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 74.0% as of December 31, 2020) 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 26.0% of the Company's total loss reserves as of December 31, 2020, 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 74.0% of the Company's total loss reserves as of December 31, 2020, 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 that 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 claim 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 7 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, automobile Liability, and automobile physical damage, which represents 99.0% of the Company's incurred losses for 2020. 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 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 $12.0 million of net income as of December 31, 2020. 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 $10.2 million in 2020, $7.5 million in 2019 and $0.3 million in 2018. In 2020, the favorable development was predominantly the result of favorable loss trends in property for accident years 2019 and prior including the recognition of $4.8 million of subrogation received on the 2018 Camp Fire event. In 2019, the favorable development was predominantly the result of favorable loss trends in automobile for accident years 2018 and prior. In 2018, the favorable development was predominantly the result of favorable loss trends in property for accident years 2017 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, 2020 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 80.4 % 16.2 % 2.0 % 0.7 % 0.5 % 0.2 % — — — — Automobile liability 40.9 % 34.4 % 13.8 % 6.3 % 3.1 % 1.1 % 0.3 % 0.1 % — — Automobile physical damage 95.5 % 4.5 % — — — — — — — — The following tables illustrate the incurred and paid claims development by accident year on a net basis for the lines of homeowners, automobile liability and automobile 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, 2011 to 2019 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, 2020 Total of Incurred- Cumulative Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ 150,141 $ 150,334 $ 150,791 $ 148,860 $ 148,755 $ 148,414 $ 148,370 $ 148,079 $ 148,067 $ 148,067 $ — 29,532 2012 108,754 109,156 109,360 106,486 106,308 106,348 106,000 106,028 106,032 — 21,578 2013 105,584 107,489 103,982 102,407 102,345 101,769 101,709 101,711 — 19,222 2014 111,647 113,505 109,059 106,844 106,554 106,458 106,414 — 20,084 2015 111,706 115,134 114,404 114,053 115,050 114,942 67 18,716 2016 115,931 118,604 117,009 117,933 117,940 241 19,860 2017 126,285 129,818 132,666 130,693 585 19,850 2018 166,793 157,404 158,861 1,352 21,037 2019 130,391 129,901 1,949 17,463 2020 155,721 32,267 18,229 Total $ 1,270,282 ($ 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 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ 123,046 $ 142,846 $ 145,852 $ 146,908 $ 147,451 $ 148,026 $ 148,014 $ 148,069 $ 148,067 $ 148,067 2012 84,260 101,566 104,203 105,156 105,561 105,909 105,993 106,021 106,025 2013 76,890 96,599 99,361 100,968 101,527 101,677 101,709 101,711 2014 83,314 103,030 105,704 106,081 106,258 106,388 106,419 2015 90,704 109,303 111,882 113,321 114,648 114,861 2016 95,772 113,186 115,053 117,537 117,688 2017 106,800 128,518 129,767 130,017 2018 130,548 152,356 157,004 2019 103,790 126,208 2020 106,781 Total 1,214,781 Outstanding prior to 2011 32 Prior years paid Liabilities for claims and claim adjustment expenses, net of reinsurance $ 55,533 ($ in thousands) Automobile Liability Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, As of December 31, 2020 Total of Incurred- Cumulative Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ 150,803 $ 146,713 $ 145,735 $ 143,133 $ 142,488 $ 139,840 $ 138,891 $ 138,949 $ 138,849 $ 139,530 $ 90 46,163 2012 156,448 153,815 150,336 149,346 147,594 145,847 145,620 145,515 145,946 233 46,008 2013 153,860 152,858 150,720 150,657 148,111 147,993 148,135 148,288 668 47,336 2014 155,105 157,249 158,470 159,937 159,794 159,355 159,263 62 49,347 2015 165,517 172,553 177,021 178,325 178,654 179,186 828 50,579 2016 180,380 184,440 184,567 186,568 188,079 805 52,003 2017 187,983 188,756 188,625 189,095 3,321 48,876 2018 200,314 195,284 192,866 12,931 47,684 2019 181,141 180,060 29,004 45,915 2020 136,977 51,452 30,032 Total $ 1,659,290 ($ in thousands) Automobile 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 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ 61,070 $ 108,837 $ 126,812 $ 133,931 $ 136,906 $ 138,151 $ 138,358 $ 138,689 $ 138,692 $ 138,708 2012 61,279 109,574 127,185 138,641 142,916 144,622 145,121 145,184 145,256 2013 62,224 108,856 131,214 139,954 145,291 146,770 147,409 147,443 2014 61,329 117,468 139,463 149,059 155,758 157,596 158,644 2015 70,836 134,473 157,980 170,088 174,495 176,728 2016 73,073 140,901 166,815 177,834 184,489 2017 70,682 139,531 166,614 179,782 2018 77,528 141,537 168,628 2019 69,665 129,101 2020 51,486 Total 1,480,265 Outstanding prior to 2011 724 Prior years paid Liabilities for claims and claim adjustment expenses, net of reinsurance $ 179,749 ($ in thousands) Automobile Physical Damage Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, As of December 31, 2020 Total of Incurred- Cumulative Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ 86,205 $ 85,507 $ 86,023 $ 85,120 $ 85,143 $ 85,116 $ 85,108 $ 85,102 $ 85,090 $ 85,089 $ — 80,804 2012 83,770 82,337 83,402 83,431 83,354 83,342 83,334 83,322 83,323 — 78,166 2013 91,448 88,856 88,672 88,627 88,455 88,525 88,457 88,452 — 80,920 2014 95,572 95,634 95,422 95,239 95,232 95,241 95,242 — 87,901 2015 99,291 97,994 97,624 97,455 97,612 97,608 — 87,502 2016 112,430 109,515 109,348 109,603 109,597 (18) 93,229 2017 115,483 111,798 110,520 110,569 (17) 91,290 2018 109,040 108,886 108,333 (161) 94,458 2019 111,577 110,495 (326) 92,068 2020 86,959 (6,829) 66,650 Total $ 975,667 ($ in thousands) Automobile 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 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ 83,227 $ 85,254 $ 85,181 $ 85,148 $ 85,127 $ 85,116 $ 85,108 $ 85,095 $ 85,090 $ 85,082 2012 80,519 83,418 83,372 83,355 83,347 83,342 83,326 83,322 83,318 2013 85,110 88,688 88,580 88,532 88,484 88,471 88,452 88,442 2014 88,939 95,444 95,266 95,256 95,258 95,243 95,228 2015 92,138 97,850 97,685 97,638 97,625 97,608 2016 106,459 109,686 109,536 109,611 109,589 2017 105,156 110,817 110,674 110,630 2018 103,559 109,103 108,272 2019 106,243 110,692 2020 84,105 Total 972,966 Outstanding prior to 2011 10 Prior years paid Liabilities for claims and claim adjustment expenses, net of reinsurance $ 2,711 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) Year Ended December 31, 2020 Property and Casualty segment Net reserves Homeowners $ 55,533 Automobile liability 179,749 Automobile physical damage 2,711 Other short duration lines 3,189 Total net reserves for unpaid claims and claim adjustment expense, net of reinsurance 241,182 Reinsurance recoverable on unpaid claims Homeowners 6,386 Automobile liability 99,717 Other short duration lines 6,778 Total reinsurance recoverable on unpaid claims 112,881 Insurance lines other than short duration (1) 66,601 Unallocated claims adjustment expenses 18,090 Total other than short duration and unallocated claims adjustment expenses 84,691 Gross reserves, end of year (1) $ 438,754 (1) This line includes Supplemental, Retirement and Life reserves included in the Consolidated Balance Sheet. |
Reinsurance and Catastrophes
Reinsurance and Catastrophes | 12 Months Ended |
Dec. 31, 2020 | |
Insurance [Abstract] | |
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 $84.4 million, $52.0 million and $107.3 million for the years ended December 31, 2020, 2019 and 2018, respectively. For 2020, catastrophe losses were impacted by winter storm events, wind/hail/tornado and derecho events, as well as tropical storms and hurricanes. The total amounts of reinsurance recoverable on unpaid insurance reserves classified as assets and reported in Other assets in the Consolidated Balance Sheets were as follows: ($ in thousands) December 31, 2020 2019 Reinsurance recoverables on reserves and unpaid claims Property and Casualty Reinsurance companies $ 13,164 $ 19,640 State insurance facilities 99,718 100,866 Life and health 9,568 8,707 Total $ 122,450 $ 129,213 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 Ceded to Other Companies (1) Assumed Net Year Ended December 31, 2020 Premiums written and contract deposits (2) $ 1,369,897 $ 20,388 $ 9,830 $ 1,359,339 Premiums and contract charges earned 949,525 28,757 9,929 930,697 Benefits, claims and settlement expenses 475,746 (86,184) 6,961 568,891 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 (1) Excludes the annuity reinsurance agreement accounted for using the deposit method that is discussed in Note 5. (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, 2020. Past due reinsurance recoverables as of December 31, 2020 were not material. The Company maintains catastrophe excess of loss reinsurance coverage. For 2020, 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 2020, 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 2020, 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 2020, the Company reinsured 100% of the catastrophe risk in excess of $1.0 million up to $35.0 million per occurrence, with one reinstatement. The Company's life catastrophe risk reinsurance program covers acts of terrorism and includes nuclear, biological and chemical explosions but excludes other acts of war. The Company retains all of the risk on its supplemental health product lines, including accidental death risk embedded within certain products. However, the Company’s other accidental death and dismemberment risk issued through all other policies and riders are ceded 100%. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Indebtedness and scheduled maturities consisted of the following: ($ in thousands) Effective Final December 31, 2020 2019 Short-term debt Bank Credit Facility Variable 2024 $ 135,000 $ 135,000 Long-term debt (1) 4.50% Senior Notes, Aggregate principal amount of $250,000 less unaccrued discount of $362 and $426 and unamortized debt issuance costs of $1,315 and $1,549 4.50% 2025 248,323 248,025 Federal Home Loan Bank borrowing 0.44% 2022 54,000 50,000 Total $ 437,323 $ 433,025 (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, 2020, 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, 2020. 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 0.44% as of December 31, 2020. In May 2020, the Company received a $4.0 million COVID relief advance for HMIC that matures May 17, 2021. There is no interest on this borrowing. HMIC's FHLB borrowings of $54.0 million are included in Long-term debt in the Consolidated Balance Sheets. Covenants The Company is in compliance with all of the financial covenants contained in the Senior Notes indenture and the Bank Credit Facility agreement, consisting primarily of relationships of (1) debt to capital, (2) net worth, as defined in the financial covenants, (3) insurance subsidiaries' risk-based capital and (4) securities subject to funding agreements and repurchase agreements. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | The income tax assets and liabilities included in Other assets and Other liabilities, respectively, in the Consolidated Balance Sheets were as follows: ($ in thousands) December 31, 2020 2019 Income tax (asset) liability Current $ (12,631) $ (12,184) Deferred 206,650 160,624 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, 2020 2019 Deferred tax assets Unearned premium reserve reduction $ 11,488 $ 12,103 Compensation accruals 9,487 8,866 Reinsurance commissions — 6,804 Impaired securities 2,127 1,245 Other comprehensive income - net funded status of benefit plans 2,981 2,875 Discounting of unpaid claims and claim expense tax reserves 2,548 2,530 Net operating loss carryforwards — 3,803 Postretirement benefits other than pensions 270 285 Total gross deferred tax assets 28,901 38,511 Deferred tax liabilities Other comprehensive income - net unrealized gains on securities 124,715 74,645 Deferred policy acquisition costs 36,347 49,326 Life insurance future policy benefit reserve 26,725 38,210 Life insurance future policy benefit reserve (transitional rule) 10,651 12,786 Discounting of unpaid claims and claim expense tax reserves (transitional rule) 789 947 Investment related adjustments 34,155 15,718 Intangibles 210 2,021 Other, net 1,959 5,482 Total gross deferred tax liabilities 235,551 199,135 Net deferred tax liability $ 206,650 $ 160,624 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, 2020 and 2019. The components of the provision for income tax expense (benefit) were as follows: ($ in thousands) Years Ended December 31, 2020 2019 2018 Current $ 16,880 $ 31,518 $ 4,152 Deferred 9,388 20,488 (2,958) Total income tax expense $ 26,268 $ 52,006 $ 1,194 Income tax expense for the following periods differed from the expected tax computed by applying the federal corporate tax rate of 21% for 2020, 2019 and 2018 to income before income taxes as follows: ($ in thousands) Years Ended December 31, 2020 2019 2018 Expected federal tax on income $ 33,512 $ 49,654 $ 4,103 Add (deduct) tax effects of: Tax-exempt interest (4,203) (4,159) (3,726) Dividend received deduction (1,475) (1,392) (412) Goodwill impairment 187 5,885 — CARES Act net operating loss carryback (2,792) — — Employee share-based compensation (541) 272 (1,134) Compensation deduction limitation 663 680 1,754 Prior year adjustments (219) (716) 300 Other, net 1,136 1,782 309 Income tax expense provided on income $ 26,268 $ 52,006 $ 1,194 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, 2020 2019 2018 Balance as of the beginning of the year $ 1,966 $ 1,734 $ 1,790 Increases related to prior year tax positions 205 109 — Decreases related to prior year tax positions — — (152) Increases related to current year tax positions 151 123 96 Settlements — — — Lapse of statute — — — Balance as of the end of the year $ 2,322 $ 1,966 $ 1,734 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, 2020, 2019 and 2018. |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Operating Leases | The Company has various operating lease agreements, primarily for real estate offices. Such leases have remaining lease terms of 1 year to 5 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) Years Ended December 31, 2020 2019 Operating lease cost $ 4,454 $ 3,841 Short-term lease cost 119 208 Total lease cost $ 4,573 $ 4,049 Supplemental cash flow information related to operating leases was as follows: ($ in thousands) Years Ended December 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities $ 4,453 $ 3,447 Supplemental balance sheet information related to operating leases were as follows: ($ in thousands, except lease term and discount rate) December 31, 2020 2019 Assets Right of use assets, included in Other assets $ 12,551 $ 16,483 Liabilities Operating lease liabilities, included in Other liabilities $ 13,559 $ 17,499 Weighted average remaining lease term 3.63 4.51 Weighted average discount rate 3.75 % 3.78 % Future minimum lease payments under non-cancellable operating leases as of December 31, 2020 are as follows: ($ in thousands) Year Ending December 31, 2021 $ 4,236 2022 4,128 2023 3,438 2024 1,929 2025 787 Thereafter — Total future minimum lease payments 14,518 Less imputed interest (959) Total $ 13,559 As of December 31, 2020, the Company had one additional operating lease that has not yet commenced. |
Shareholders' Equity and Share-
Shareholders' Equity and Share-Based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Shareholders' Equity and Share-Based Compensation | 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 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. During 2020, the Company repurchased 52,095 shares of its common stock, or 0.1% of the shares outstanding as of December 31, 2019, at an aggregate cost of $2.2 million, or an average price of $41.17 per share. In total and through December 31, 2020, 899,468 shares were repurchased under the Program at an average price of $32.68 per share. The repurchase of shares was funded through use of cash. As of December 31, 2020, $20.6 million remained authorized for future share repurchases under the Program. At December 31, 2020, the Company held 24,902,579 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, 2020 and 2019. 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, 2020, approximately 751,661 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, 2020 2019 2018 CSUs related to deferred compensation for Directors 23,609 28,526 32,288 CSUs related to deferred compensation for employees 20,467 25,194 24,498 Stock options 916,287 908,557 774,821 RSUs related to incentive compensation 823,393 889,438 1,008,249 Total 1,783,756 1,851,715 1,839,856 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, 2020, 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 Range of Options Outstanding Vested and December 31, 2019 $37.82 $20.60-$44.75 908,557 368,700 Granted $41.83 $41.83-$41.83 234,248 — Vested $38.59 $28.88-$42.95 — 145,788 Exercised $31.08 $20.60-$42.95 (77,291) (77,291) Forfeited $40.64 $31.01-$42.95 (106,362) — Expired $39.99 $20.60-$42.95 (42,865) — December 31, 2020 $38.99 $28.88-$42.95 916,287 437,197 Option information segregated by ranges of exercise prices were as follows: December 31, 2020 Total Outstanding Options Vested and Exercisable Options Range of Options Weighted Weighted Options Weighted Weighted $28.88-$33.41 203,207 $30.84 4.61 203,207 $30.84 4.61 $36.04-$41.95 546,108 $40.81 8.05 154,902 $40.90 6.81 $42.73-$42.95 166,972 $42.93 7.33 79,088 $42.94 7.26 Total 916,287 $38.99 7.15 437,197 $36.59 5.86 The weighted average exercise prices of vested and exercisable options as of December 31, 2019 and 2018 were $34.81 and $31.42, respectively. As of December 31, 2020, based on a closing stock price of $42.04 per share, the aggregate intrinsic (in-the-money) values of vested options and all options outstanding were $2.5 million and $2.9 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 Units Weighted Average December 31, 2019 889,438 $31.94 543,794 $24.77 Granted (1) 197,207 $42.07 — — Adjustment for performance achievement 419 $46.32 — — Vested — — 143,836 $42.56 Forfeited (61,025) $43.60 — — Distributed (2) (202,646) $34.51 (202,646) $34.51 December 31, 2020 823,393 $33.88 484,984 $27.48 (1) Includes dividends reinvested into additional RSUs. (2) Includes distributed units which were utilized to satisfy withholding taxes due on the distribution. |
Statutory Information and Divid
Statutory Information and Dividend Restrictions | 12 Months Ended |
Dec. 31, 2020 | |
Insurance [Abstract] | |
Statutory Information and Dividend Restrictions | The insurance departments of various states in which the insurance subsidiaries of HMEC are domiciled recognize as net income and surplus those amounts determined in conformity with statutory accounting principles prescribed or permitted by the insurance departments, which differ in certain respects from GAAP. HMEC has principal insurance subsidiaries domiciled in Illinois, New York and Texas. The statutory financial statements of these subsidiaries are prepared in accordance with accounting principles prescribed or permitted by the Illinois Department of Insurance, the New York Department of Insurance and the Texas Department of Insurance, as applicable. Prescribed statutory accounting principles include a variety of publications of the National Association of Insurance Commissioners (NAIC), as well as state laws, regulations and general administrative rules. In converting from statutory to GAAP, typical adjustments include DAC, certain reinsurance transactions, the inclusion of statutory non-admitted assets and the inclusion of net unrealized investment gains or losses in shareholders' equity relating to fixed maturity securities. The following table includes selected information for HMEC's insurance subsidiaries: ($ in thousands) Year Ended December 31, 2020 2019 2018 Consolidated net income, statutory basis $ 141,904 $ 62,316 $ 45,977 Consolidated capital and surplus, statutory basis (1) $ 937,274 $ 868,839 $ 903,564 (1) Subject to regulatory restrictions. 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, 2020 and 2019, the minimum statutory-basis capital and surplus required to be maintained by HMEC's insurance subsidiaries was $113.2 million and $108.1 million, respectively. At December 31, 2020 and 2019, 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 $26.9 million and $26.0 million as of December 31, 2020 and 2019, 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 2021 from all of HMEC's insurance subsidiaries without prior regulatory approval is $248.7 million, excluding the impact and timing of prior year dividends. |
Retirement Plans and Other Post
Retirement Plans and Other Postretirement Benefits | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
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 recognized for the non-qualified defined contribution, 401(k), defined benefit and supplemental retirement plans was $10.0 million, $9.3 million and $8.9 million for the years ended December 31, 2020, 2019 and 2018, respectively. Contributions to employees' accounts under the 401(k) plan and the non-qualified defined contribution plan, as well as total assets of the plans, were as follows: ($ in thousands) Year Ended December 31, 2020 2019 2018 401(k) plan Contributions to employees' accounts $ 8,187 $ 8,233 $ 7,655 Total assets at the end of the year 228,449 206,247 167,767 Non-qualified defined contribution plan Contributions to employees' accounts 68 58 70 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, 2020, 2019 and 2018 (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 December 31, December 31, 2020 2019 2018 2020 2019 2018 Change in benefit obligation: Projected benefit obligation at beginning of year $ 24,820 $ 25,075 $ 28,432 $ 15,228 $ 15,404 $ 16,832 Service cost 650 650 650 — — — Interest cost 731 997 947 453 620 566 Plan amendments — — — — — — Actuarial loss (gain) 1,021 101 (2,208) 1,318 516 (789) Benefits paid (1,538) (2,003) (2,746) (1,312) (1,312) (1,205) Settlements (1,392) — — — — — Projected benefit obligation at end of year $ 24,292 $ 24,820 $ 25,075 $ 15,687 $ 15,228 $ 15,404 Change in plan assets: Fair value of plan assets at beginning of year $ 23,164 $ 22,090 $ 25,843 $ — $ — $ — Actual return on plan assets 2,253 3,471 (640) — — — Employer contributions — — — 1,312 1,312 1,205 Benefits paid (1,538) (2,003) (2,746) (1,312) (1,312) (1,205) Expenses paid (542) (394) (367) — — — Settlements (1,392) — — — — — Fair value of plan assets at end of year $ 21,945 $ 23,164 $ 22,090 $ — $ — $ — Funded status $ (2,347) $ (1,656) $ (2,985) $ (15,687) $ (15,228) $ (15,404) Prepaid (accrued) benefit expense $ 5,485 $ 6,690 $ 7,425 $ (9,327) $ (9,884) $ (10,320) Total amount recognized in Consolidated Balance Sheets, all in Other liabilities $ (2,347) $ (1,656) $ (2,985) $ (15,687) $ (15,228) $ (15,404) Amounts recognized in accumulated other comprehensive income (loss) (AOCI): Prior service cost $ — $ — $ — $ — $ — $ — Net actuarial loss (7,833) (8,345) 10,410 (6,360) (5,345) 5,084 Total amount recognized in AOCI $ (7,833) $ (8,345) $ 10,410 $ (6,360) $ (5,345) $ 5,084 Information for pension plans with an accumulated benefit obligation greater than plan assets: Projected benefit obligation $ 24,292 $ 24,820 $ 25,075 $ 15,687 $ 15,228 $ 15,404 Accumulated benefit obligation 24,292 24,820 25,075 15,687 15,228 15,404 Fair value of plan assets 21,945 23,164 22,090 — — — The change in the Company's AOCI for the defined benefit plans for the year ended December 31, 2020 was primarily attributable to better than expected asset returns, updates to mortality assumptions and updated census dates partially offset by a decrease in the discount rate and an updated mortality projection scale. 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. ($ in thousands) Defined Benefit Plan Supplemental Year Ended December 31, Year Ended December 31, 2020 2019 2018 2020 2019 2018 Components of net periodic pension (income) expense: Service cost: Benefit accrual $ — $ — $ — $ — $ — $ — Other expenses 650 650 650 — — — Interest cost 731 997 947 453 620 566 Expected return on plan assets (966) (1,222) (1,377) — — — Settlement loss 447 — — — — — Amortization of: Prior service cost — — — — — — Actuarial loss 342 310 371 302 256 310 Net periodic pension expense $ 1,204 $ 735 $ 591 $ 755 $ 876 $ 876 Changes in plan assets and benefit obligations included in other comprehensive income (loss): Prior service cost $ — $ — $ — $ — $ — $ — Net actuarial loss (gain) 277 (1,755) 177 1,318 516 (789) Amortization of: Prior service cost — — — — — — Actuarial loss (790) (310) (371) (302) (256) (310) Total recognized in other comprehensive income (loss) $ (513) $ (2,065) $ (194) $ 1,016 $ 260 $ (1,099) Weighted average assumptions used to determine expense: Discount rate 3.10 % 4.20 % 3.50 % 3.10 % 4.20 % 3.50 % Expected return on plan assets 4.80 % 5.75 % 5.90 % * * * Annual rate of salary increase * * * * * * Weighted average assumptions used to determine benefit obligations as of December 31: Discount rate 2.08 % 3.10 % 4.20 % 2.08 % 3.10 % 4.20 % Expected return on plan assets 4.80 % 5.75 % 5.90 % * * * Annual rate of salary increase * * * * * * * Not applicable. The discount rates at December 31, 2020 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 35% equity and 65% 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 Total Level 1 Level 2 Level 3 December 31, 2020 Asset category Equity security funds (1) United States $ 4,367 $ — $ 4,367 $ — International 4,351 — 4,351 — Fixed income funds 13,059 — 13,059 — Short-term investment funds 168 168 — — Total $ 21,945 $ 168 $ 21,777 $ — 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 investments funds 951 951 — — Total $ 23,164 $ 951 $ 22,213 $ — (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, 2020 and 2019. In 2021, the Company expects amortization of net losses of $0.5 million and $0.4 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, 2020, the balance of the previously established HRAs was $1.3 million. Funding of HRAs was $0.1 million, $0.1 million and $0.1 million for the years ended December 31, 2020, 2019 and 2018, respectively. 2021 Contributions In 2021, there is no minimum funding requirement for the Company's defined benefit plan. The following table discloses that minimum funding requirement and the expected full year contributions for the Company's plans. ($ in thousands) Defined Benefit Pension Plans Defined Supplemental Minimum funding requirement for 2020 $ — $ — Expected contributions (approximations) for the year ended December 31, 2021 at the time of issuance 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, 2020. 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, 2020 were as follows: ($ in thousands) 2021 2022 2023 2024 2025 2026-2030 Pension plans Defined benefit plan $ 2,131 $ 2,185 $ 1,979 $ 2,013 $ 1,942 $ 7,099 Supplemental retirement plans 1,282 1,263 1,240 1,213 1,182 5,269 |
Contingencies and Commitments
Contingencies and Commitments | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
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 $571.9 million and $306.2 million for the years ended December 31, 2020 and 2019, respectively. |
Comprehensive Income (Loss) and
Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) | Comprehensive income (loss) represents the change in shareholders' equity during a reporting period from transactions and other events and circumstances from non-shareholder sources. For the Company, comprehensive income (loss) is equal to net income plus or minus the after tax change in net unrealized investment gains (losses) on fixed maturity securities and the after tax change in net funded status of benefit plans for the periods as shown in the Consolidated Statements of Changes in Shareholders' Equity. AOCI represents the accumulated change in shareholders' equity from these transactions and other events and circumstances from non-shareholder sources as shown in the Consolidated Balance Sheets. In the Consolidated Balance Sheets, the Company recognizes the net funded status of benefit plans as a component of AOCI, net of tax. Comprehensive Income (Loss) The components of comprehensive income (loss) were as follows: ($ in thousands) Year Ended December 31, 2020 2019 2018 Net income $ 133,315 $ 184,443 $ 18,343 Other comprehensive income (loss): Change in net unrealized investment gains (losses) on fixed maturity securities: Net unrealized investment gains (losses) on securities arising during the period 183,950 327,363 (275,094) Less: reclassification adjustment for net investment gains (losses) included in income before income tax 11,235 157,423 (16,363) Total, before tax 172,715 169,940 (258,731) Income tax expense (benefit) 36,878 36,433 (55,495) Total, net of tax 135,837 133,507 (203,236) Change in net funded status of benefit plans: Before tax (503) 1,805 1,294 Income tax expense (benefit) (105) 387 262 Total, net of tax (398) 1,418 1,032 Total comprehensive income (loss) $ 268,754 $ 319,368 $ (183,861) 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) Beginning balance, January 1, 2020 $ 230,448 $ (10,767) $ 219,681 Other comprehensive income (loss) before reclassifications 144,713 (398) 144,315 Amounts reclassified from AOCI (8,876) — (8,876) Net current period other comprehensive income (loss) 135,837 (398) 135,439 Ending balance, December 31, 2020 $ 366,285 $ (11,165) $ 355,120 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 (3) (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 (1) All amounts are net of tax. (2) The pretax amounts reclassified from AOCI, $11.2 million, $157.4 million and $(16.4) million, are included in net investment gains (losses) and the related tax expenses, $2.4 million, $33.1 million and $(3.4) million, are included in income tax expense in the Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018, respectively. (3) The Company adopted guidance on January 1, 2018 that resulted in reclassifying $15.0 million of after tax net unrealized gains on equity securities from AOCI to Retained earnings. Comparative information for elements that are not required to be reclassified in their entirety to net income in the same reporting period is located in Note 2. |
Supplemental Consolidated Cash
Supplemental Consolidated Cash and Cash Flow Information | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Consolidated Cash and Cash Flow Information | ($ in thousands) Years Ended December 31, 2020 2019 2018 Cash $ 21,774 $ 25,206 $ 11,906 Restricted cash 549 302 — Total cash and restricted cash shown in the Consolidated Statements of Cash Flows $ 22,323 $ 25,508 $ 11,906 Cash paid during the year for: Interest $ 15,476 $ 14,104 $ 12,532 Income taxes 17,301 22,946 8,679 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 $2.9 billion block of in force fixed and variable annuity business. See Note 5 for further information. Non-cash investing activities in respect to modifications or exchanges of fixed maturity securities as well as paid-in-kind activity for policy loans were insignificant for the years ended December 31, 2020, 2019 and 2018, respectively. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | The Company conducts and manages its business through five reporting segments. See Note 1 for a description of the Company's reporting segments that changed effective in the third quarter of 2019. The four operating segments, representing the major lines of insurance business, are: Property and Casualty (primarily personal lines of automobile and property insurance products), the newly created Supplemental (primarily cancer, heart, hospital, supplemental disability and accident coverages), Retirement (primarily tax-qualified fixed and variable annuities) and Life (life insurance). The Company does not allocate the impact of corporate-level transactions to these operating segments, consistent with the basis for management's evaluation of the results of those segments, but classifies those items in the fifth segment, Corporate and Other. In addition to ongoing transactions such as corporate debt service, net investment gains (losses) and certain public company expenses, such items also have included corporate debt retirement costs, when applicable. The accounting policies of the segments are the same as those described in Note 1. The Company accounts for intersegment transactions, primarily the allocation of operating and agency costs from Corporate and Other to Property and Casualty, Supplemental, Retirement and Life, on a direct cost basis. Summarized financial information for these segments is as follows: ($ in thousands) Years Ended December 31, 2020 2019 2018 Insurance premiums and contract charges earned Property and Casualty $ 650,168 $ 683,454 $ 665,734 Supplemental (1) 130,694 65,815 N/A Retirement 29,649 29,083 31,269 Life 120,186 119,602 120,330 Total $ 930,697 $ 897,954 $ 817,333 Net investment income Property and Casualty $ 42,556 $ 41,740 $ 40,104 Supplemental (1) 17,818 7,480 N/A Retirement 229,853 245,475 262,634 Life 69,799 71,957 74,399 Corporate and Other (171) (85) 142 Intersegment eliminations (2,259) (1,503) (772) Total $ 357,596 $ 365,064 $ 376,507 Net income (loss) Property and Casualty $ 76,516 $ 54,359 $ (14,243) Supplemental (1) 43,089 17,989 N/A Retirement 20,038 (4,867) 41,736 Life 10,461 17,574 18,754 Corporate and Other (16,789) 99,388 (27,904) Total $ 133,315 $ 184,443 $ 18,343 ($ in thousands) December 31, 2020 2019 2018 Assets Property and Casualty $ 1,324,923 $ 1,327,099 $ 1,236,362 Supplemental 811,457 747,602 N/A Retirement 9,198,723 8,330,127 7,866,969 Life 2,044,503 1,964,993 1,821,351 Corporate and Other 182,342 172,955 149,014 Intersegment eliminations (90,135) (64,072) (41,800) Total $ 13,471,813 $ 12,478,704 $ 11,031,896 (1) Acquired on July 1, 2019. The twelve month comparison is not meaningful. Additional significant financial information for these segments is as follows: ($ in thousands) Years Ended December 31, 2020 2019 2018 DAC amortization expense Property and Casualty $ 74,452 $ 79,453 $ 79,073 Supplemental (1) 1,287 438 N/A Retirement 16,718 21,446 23,186 Life 7,452 7,844 7,630 Total $ 99,909 $ 109,181 $ 109,889 Income tax expense (benefit) Property and Casualty $ 15,380 $ 13,954 $ (6,622) Supplemental (1) 11,972 5,105 N/A Retirement 2,105 33,772 10,000 Life 2,428 4,907 4,979 Corporate and Other (5,617) (5,732) (7,163) Total $ 26,268 $ 52,006 $ 1,194 (1) Acquired on July 1, 2019. The twelve month comparison is not meaningful. |
Unaudited Selected Quarterly Fi
Unaudited Selected Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 Insurance premiums and contract charges earned $ 233,648 $ 235,353 $ 225,431 $ 236,265 Insurance premiums written and contract deposits (2)(3) 332,559 368,853 329,169 328,758 Total revenues 352,344 337,080 314,459 306,558 Net income 47,791 36,474 30,578 18,472 Per share information Basic Net income $ 1.14 $ 0.87 $ 0.73 $ 0.44 Shares of common stock - weighted average (4) 41,962 41,916 41,879 41,827 Diluted Net income $ 1.13 $ 0.87 $ 0.73 $ 0.44 Shares of common stock and equivalent shares - weighted average (4) 42,156 42,058 41,996 42,019 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 (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 (1) NTA was acquired on July 1, 2019. (2) This measure is not based on accounting principles generally accepted in the United States of America (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 transaction accounted for under the deposit method that is discussed in Note 5. (4) Rounded to thousands. |
Schedule I Summary of Investmen
Schedule I Summary of Investments-Other Than Investments in Related Parties | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 ($ in thousands) Type of Investments Cost (1) Fair Amount Fixed maturity securities U.S. Government and federally sponsored agency obligations $ 814,204 $ 901,517 $ 901,517 States, municipalities and political subdivisions 1,612,290 1,827,497 1,827,497 Foreign government bonds 40,145 45,053 45,053 Public utilities 64,898 76,382 76,382 All other corporate bonds 1,811,755 2,015,192 2,015,192 Asset-backed securities 1,053,252 1,051,258 1,051,258 Residential mortgage-backed securities (non-agency) 53,727 53,627 53,627 Commercial mortgage-backed securities 309,726 343,439 343,439 Redeemable preferred stocks 28,554 31,325 31,325 Total fixed maturity securities 5,788,551 6,345,290 6,345,290 Equity securities Industrial, miscellaneous and all other 5,645 5,645 5,645 Banking & finance and insurance companies 1,852 1,852 1,852 Public utilities 388 388 388 Non-redeemable preferred stocks 90,709 90,709 90,709 Closed-end fund 23,059 23,059 23,059 Total equity securities 121,653 121,653 121,653 Limited partnership interests 448,996 XXX 448,996 Short-term investments 141,770 XXX 141,770 Policy loans 150,118 XXX 150,118 Derivatives 9,638 $ 16,805 16,805 Mortgage loans 18,150 XXX 18,150 Other 19,452 XXX 19,452 Total investments $ 6,698,328 XXX $ 7,262,234 (1) Bonds at original cost reduced by repayments and adjusted for amortization of premiums or accretion 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, 2020 | |
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, 2020 and 2019 ($ in thousands, except share data) December 31, 2020 2019 ASSETS Investments and cash $ 4,146 $ 1,453 Investment in subsidiaries 2,120,982 1,901,725 Other assets 58,852 62,442 Total assets $ 2,183,980 $ 1,965,620 LIABILITIES AND SHAREHOLDERS' EQUITY Short-term debt $ 135,000 $ 135,000 Long-term debt 248,323 248,025 Other liabilities 10,578 15,310 Total liabilities 393,901 398,335 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, 2020, 66,316,797; 2019, 66,088,808 66 66 Additional paid-in capital 488,367 480,962 Retained earnings 1,434,634 1,352,539 Accumulated other comprehensive income (loss), net of taxes: Net unrealized investment gains on fixed maturity securities 366,285 230,448 Net funded status of benefit plans (11,165) (10,767) Treasury stock, at cost, 2020, 24,902,579 shares; 2019, 24,850,484 shares (488,108) (485,963) Total shareholders' equity 1,790,079 1,567,285 Total liabilities and shareholders' equity $ 2,183,980 $ 1,965,620 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, 2020 2019 2018 Revenues Net investment income $ (174) $ (135) $ 100 Realized investment gains — — — Total revenues (174) (135) 100 Expenses Interest expense 14,771 14,272 11,892 Other 5,750 12,632 10,898 Total expenses 20,521 26,904 22,790 Loss before income tax benefit and equity in net earnings of subsidiaries (20,695) (27,039) (22,690) Income tax benefit (5,307) (6,029) (4,723) Loss before equity in net earnings of subsidiaries (15,388) (21,010) (17,967) Equity in net earnings of subsidiaries 148,703 205,453 36,310 Net income $ 133,315 $ 184,443 $ 18,343 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, 2020 2019 2018 Cash flows from operating activities Net Income $ 133,315 $ 184,443 $ 18,343 Equity in net income of subsidiaries (148,703) (205,453) (36,310) Dividends received from subsidiaries 167,000 363,250 61,000 Changes in: Income taxes 1,956 3,369 (4,939) Operating assets and liabilities (5,894) 8,310 (1,792) Other 1,681 686 13,804 Net cash provided by operating activities 149,355 354,605 50,106 Cash flows from investing activities Purchase of equity securities 1,000 — — Net increase (decrease) in short-term investments (1,456) 3,336 1,621 Capital contributions to subsidiaries (97,000) — — Acquisition of businesses — (444,124) — Net cash provided by (used in) investing activities (97,456) (440,788) 1,621 Cash flows from financing activities Dividends paid to shareholders (49,620) (47,333) (46,689) Principal borrowings on senior revolving credit facility — 135,000 — Acquisition of treasury stock (2,145) — (5,088) Proceeds from exercise of stock options 2,402 1,730 3,627 Withholding tax payments on RSUs tendered (2,299) (3,680) (3,165) Net cash (used in) provided by financing activities (51,662) 85,717 (51,315) Net increase (decrease) in cash 237 (466) 412 Cash at beginning of period 72 538 126 Cash at end of period $ 309 $ 72 $ 538 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, 2020 | |
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 Schedule B C D E F G H I J K Schedule B C D E F G H I J K Deferred Future policy Discount, Unearned Other Premium Net investment Benefits, Claims and claim Amortization Other Paid claims and claim adjustment expenses Premiums written Segment Current Prior Year Ended December 31, 2020 Property and Casualty $ 26,153 $ 372,154 $ — $ 259,356 $ — $ 650,168 $ 42,556 $ 430,991 $ 441,191 $ (10,200) $ 74,452 $ 97,716 $ 438,189 $ 635,525 Supplemental 4,270 392,362 xxx 3,084 41,514 130,694 17,818 43,166 xxx xxx 1,287 51,686 xxx xxx Retirement 137,735 4,874,167 xxx 716 706,297 29,649 229,853 164,807 xxx xxx 16,718 72,093 xxx xxx Life 61,670 1,245,394 xxx 1,333 3,485 120,186 69,799 134,562 xxx xxx 7,452 35,292 xxx xxx Other, including consolidating eliminations N/A N/A xxx N/A N/A N/A (2,430) N/A xxx xxx N/A 20,636 xxx xxx Total $ 229,828 $ 6,884,077 xxx $ 264,489 $ 751,296 $ 930,697 $ 357,596 $ 773,526 xxx xxx $ 99,909 $ 277,423 xxx xxx 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 N/A - Not applicable. See accompanying Report of Independent Registered Public Accounting Firm. |
Schedule IV Reinsurance
Schedule IV Reinsurance | 12 Months Ended |
Dec. 31, 2020 | |
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 Ceded to Assumed Net Percentage Year Ended December 31, 2020 Life insurance in force $ 19,821,228 $ 4,619,083 $ — $ 15,202,145 — Premiums Property and Casualty $ 652,884 $ 12,635 $ 9,919 $ 650,168 1.5 % Supplemental 130,936 252 10 130,694 — Retirement 37,977 8,328 — 29,649 — Life 127,728 7,542 — 120,186 — Total premiums $ 949,525 $ 28,757 $ 9,929 $ 930,697 1.1 % 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 % Note: Premiums above include insurance premiums earned and contract charges earned. See accompanying Report of Independent Registered Public Accounting Firm. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying audited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and with the rules and regulations of the Securities and Exchange Commission (SEC). 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 Company has reclassified the presentation of certain prior period information to conform to the current year's presentation. |
Consolidation | Consolidation All intercompany transactions and balances between HMEC and its subsidiaries and affiliates have been eliminated. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The most significant critical accounting estimates include valuation of hard-to-value fixed maturity securities (including evaluation of other-than-temporary impairments), evaluation of goodwill and intangible assets for impairment, valuation of annuity and life deferred policy acquisition costs, valuation of liabilities for property and casualty unpaid claims and claim expenses and valuation of certain investment contracts and policy reserves. |
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. See Note 3 - Fair Value of Financial Instruments - Investments for a detailed description of how the Company estimates fair value for its fixed maturity securities portfolio including hard-to-value securities. An adjustment for net unrealized investment gains (losses) on all fixed maturity 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 deferred policy acquisition costs (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 using 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 variable interests in variable interest entities (VIEs), including corporate securities, mortgage-backed securities and asset-backed securities. Such variable 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 accretion 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 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. For fixed maturity securities that the Company does not intend to sell or for which it is more likely than not that the Company would not be required to sell before an anticipated recovery in value, the Company separates the credit loss component of the impairment from the amount related to all other factors and reports the credit loss component in net investment gains (losses). The impairment related to all other factors (non-credit factors) is reported in other comprehensive income (OCI). The allowance is adjusted for any additional credit losses and subsequent recoveries. Upon recognizing a credit loss, the cost basis is not adjusted. Prior to the adoption of ASU 2016-13 - Measurement of Credit Losses on Financial Instruments on January 1, 2020, when OTTI was deemed to have occurred, the investment would be written-down to fair value which became the new cost basis of the investment. For fixed maturity securities where the Company records a credit loss, a determination is made as to the cause of the impairment and whether the Company expects a recovery in value. For fixed maturity securities where the Company expects a recovery in value, the constant effective yield method is utilized, and the investment is amortized to par. For fixed maturity securities the Company intends to sell or for which it is more likely than not that the Company will be required to sell before an anticipated recovery in value, the full amount of the impairment is included in net investment gains (losses). The new cost basis of the investment is the previous amortized cost basis less the impairment recognized in net investment gains (losses). The new cost basis is not adjusted for any subsequent recoveries in fair value. The Company reports accrued investment income separately from fixed maturity securities, available for sale, and has elected not to measure an allowance for credit losses for accrued investment income. Accrued investment income is written off and recognized as a net investment loss at the time the issuer of the fixed maturity security defaults or is expected to default on payments. Uncollectible available for sale fixed maturity securities are written off when the Company determines that no additional cash flows will be collected. 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 present value of cash flows below the amortized cost basis. 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 Judgment regarding whether a corporate fixed maturity security is other-than-temporarily impaired includes 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 a revenue bond for OTTI based on guarantees associated with the repayment from revenues generated by the specified revenue-generating activity associated with the purpose of the bond. Judgment regarding whether a municipal bond is other-than-temporarily impaired includes 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 monoline 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 the amortized cost basis and the present value of the expected future cash flows of the security. Present value is determined using a 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 a 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 based on 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 |
Deferred Policy Acquisition Costs | Deferred Policy Acquisition Costs The Company's deferred policy acquisition costs (DAC) by reporting segment were as follows: ($ in thousands) December 31, 2020 2019 Property and Casualty $ 26,153 $ 28,616 Supplemental 4,270 1,967 Retirement 137,735 185,294 Life 61,670 60,791 Total $ 229,828 $ 276,668 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 risks, 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 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 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. Annually, the Company performs a gross premium valuation (GPV) on life insurance 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 block, a loss would be recognized by first writing off the DAC asset 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 DAC amortization expense for the period in which the adjustment is made. The Company recognized the following adjustments to DAC amortization expense as a result of evaluating actual experience and prospective assumptions (i.e., the impact of unlocking): ($ in thousands) Year Ended December 31, 2020 2019 2018 Increase (decrease) to DAC amortization expense: Retirement $ (1,766) $ 3,480 $ 3,948 Life (337) (267) 283 Total $ (2,103) $ 3,213 $ 4,231 DAC for annuity 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 fixed maturity securities had been realized at the reporting date. This adjustment reduced DAC by $90.5 million, $41.2 million and $17.9 million at December 31, 2020, 2019 and 2018, respectively. The after tax impact of this adjustment is included in AOCI (along with net unrealized investment gains (losses) on fixed maturity 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, 2020, 2019 and 2018. |
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 6 for the allocation of goodwill by reporting unit as of December 31, 2020. 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 amount. If an entity determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the entity performs a quantitative goodwill impairment test by comparing the fair value of a reporting unit to its carrying amount 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 amount exceeds its fair value, not to exceed the carrying amount of goodwill. Any amount of goodwill determined to be impaired is recognized as an expense in the period in which the impairment determination is made. |
Property and Equipment | Property and Equipment Property and equipment is 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 useful lives of real property range 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, 2020 2019 Property and equipment $ 131,269 $ 166,583 Less: accumulated depreciation 66,552 106,458 Total $ 64,717 $ 60,125 |
Separate Account (Variable Annuity) Assets and Liabilities | Separate Account (Variable Annuity) Assets and Liabilities Separate Account assets represent variable annuity contractholder funds invested in various mutual funds. The Separate Account assets comprise actively traded mutual funds that have daily quoted net asset values that are readily determinable for identical assets that the Company can access. Net asset values for the actively traded mutual funds in which the Separate Account assets are invested are obtained daily from the fund managers. Separate Account liabilities are equal to the estimated fair value of Separate Account assets. The investment income, gains and losses of these accounts accrue directly to the contractholders and are not included in the results of operations of the Company. The activity of the Separate Accounts is not reflected in the Consolidated Statements of Operations except for (1) contract charges earned, (2) the activity related to contract guarantees, which are benefits on existing variable annuity contracts, and (3) the impact of financial market performance on the amortization of DAC. The Company's contract charges earned include fees charged to the Separate Accounts, including mortality charges, risk charges, policy administration fees, investment management fees and surrender charges. |
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, 2020 2019 Investment contract reserves $ 4,847,649 $ 4,675,774 Policy reserves 1,597,674 1,558,678 Total $ 6,445,323 $ 6,234,452 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 relatively low exposure to GMDB risk as shown below. ($ in thousands) December 31, 2020 2019 GMDB reserve $ 77 $ 126 Aggregate in-the-money death benefits under the GMDB provision 26,710 29,367 Variable annuity contract value distribution based on GMDB feature: No guarantee 26 % 28 % Return of premium guarantee 69 % 67 % 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 Products | Reserves for Fixed Indexed Annuities and Indexed Universal Life Products 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 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 3 for more information regarding the determination of fair value for derivatives embedded in FIA and IUL 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 the 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. |
Reinsurance | Reinsurance The Company enters into reinsurance arrangements pursuant to which it cedes certain insurance risks to unaffiliated reinsurers. Cessions under reinsurance agreements do not discharge the Company's obligations as the primary insurer. The accounting for reinsurance arrangements depends on whether the arrangement provides indemnification against loss or liability relating to insurance risk in accordance with GAAP. If the Company determines that a reinsurance agreement exposes the reinsurer to a reasonable possibility of a significant loss from insurance risk, the ceded unearned premiums and reinsurance balances recoverable on paid and unpaid losses and settlement expenses are reported separately as assets, instead of being netted with the related liabilities, since reinsurance does not relieve the Company of its legal liability to its policyholders. See Note 8 for further details. |
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 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 annuity 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 12. 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, 2020, 2019 and 2018, the Company recognized $1.1 million, $1.2 million, and $1.2 million, respectively, of stock option expense as a result of stock options that vested during the respective periods. For the years ended December 31, 2020, 2019 and 2018, the Company recognized $4.8 million, $5.2 million and $6.6 million, respectively, in RSU expense as a result of the performance and/or vesting of RSUs during the respective periods. In 2020, 2019 and 2018, 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, 2020 2019 2018 Number of stock options granted 234,248 282,040 223,208 Weighted average grant date fair value of stock options granted $ 6.02 $ 6.26 $ 7.16 Weighted average assumptions: Risk-free interest rate 0.8 % 2.5 % 2.6 % Expected dividend yield 2.7 % 2.9 % 2.6 % Expected life, in years 5.1 5.0 4.8 Expected volatility (based on historical volatility) 22.8 % 21.9 % 21.5 % The weighted average fair value of nonvested stock options outstanding on December 31, 2020 was $6.31. Total unrecognized compensation expense relating to the nonvested stock options outstanding as of December 31, 2020 was approximately $2.1 million. This amount will be recognized as expense over the remainder of the vesting period, which is scheduled to be 2021 through 2024. Expense is recognized on a straight-line basis over the vesting period for the entire award. Forfeitures of unvested amounts due to terminations and/or early retirements are recognized as a reduction to the related expenses. |
Income Taxes | Income Taxes The Company uses the asset and liability method for calculating deferred federal income taxes. Income tax provisions are generally based on income reported for financial statement purposes. The provisions for federal income taxes for the years ended December 31, 2020, 2019 and 2018 included amounts currently payable and deferred income taxes resulting from the cumulative differences in the Company's assets and liabilities, determined on a tax return versus financial statement basis. Deferred tax assets and liabilities include provisions for net unrealized investment gains (losses) on fixed maturity securities as well as the net funded status of benefit plans with the changes for each period included in the respective components of AOCI within shareholders' equity. |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed based on the weighted average number of common shares outstanding plus the weighted average number of fully vested RSUs and common stock units (CSUs) payable as shares of HMEC common stock. Diluted earnings per share is computed based on the weighted average number of common shares and common stock equivalents outstanding, to the extent dilutive. The Company's common stock equivalents relate to outstanding common stock options, deferred compensation CSUs and incentive compensation RSUs, which are described in Note 12. The computations of net income per share on both basic and diluted bases, including reconciliations of the numerators and denominators, were as follows: ($ in thousands) Year Ended December 31, 2020 2019 2018 Basic: Net income for the period $ 133,315 $ 184,443 $ 18,343 Weighted average number of common shares during the period (in thousands) 41,881 41,738 41,570 Net income per share - basic $ 3.18 $ 4.42 $ 0.44 Diluted: Net income for the period $ 133,315 $ 184,443 $ 18,343 Weighted average number of common shares during the period (in thousands) 41,881 41,738 41,570 Weighted average number of common equivalent shares to reflect the dilutive effect of common stock equivalent securities (in thousands): Stock options 44 79 100 CSUs related to deferred compensation for employees — — 25 RSUs related to incentive compensation 116 132 199 Total common and common equivalent shares adjusted to calculate diluted earnings per share (in thousands) 42,041 41,949 41,894 Net income per share - diluted $ 3.17 $ 4.40 $ 0.44 Options to purchase 713,080 shares of common stock at $38.05 to $42.95 per share were granted in 2017, 2018, 2019 and 2020 but were not included in the computation of 2020 diluted earnings per share because of their anti-dilutive effect. These options, which expire in 2027, 2028, 2029 and 2030, were still outstanding at December 31, 2020. |
Statements of Cash Flows | Consolidated Statements of Cash FlowsFor purposes of the Consolidated Statements of Cash Flows, cash constitutes cash on deposit at banks as well as restricted cash. |
Adoption of New Accounting Standards and Future Adoption of New Accounting Standards | Adoption of New Accounting Standards Measurement of Credit Losses on Financial Instruments In June 2016 , the FASB issued guidance which revised the credit loss recognition criteria for certain financial assets measured at amortized cost, including reinsurance recoverables. The new guidance replaced 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 was effective for reporting periods beginning after December 15, 2019, and for most affected instruments was adopted using a modified retrospective approach, with a cumulative effect adjustment recorded to beginning retained earnings. The Company’s implementation activities are complete and the impacts relate to the Company’s commercial mortgage loan portfolio, agent advances, 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 $0.5 million. Future Adoption of New Accounting Standards 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, 2022, 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. |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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 were as follows: ($ in thousands) December 31, 2020 2019 Property and Casualty $ 26,153 $ 28,616 Supplemental 4,270 1,967 Retirement 137,735 185,294 Life 61,670 60,791 Total $ 229,828 $ 276,668 |
Adjustment to amortization expenses | The Company recognized the following adjustments to DAC amortization expense as a result of evaluating actual experience and prospective assumptions (i.e., the impact of unlocking): ($ in thousands) Year Ended December 31, 2020 2019 2018 Increase (decrease) to DAC amortization expense: Retirement $ (1,766) $ 3,480 $ 3,948 Life (337) (267) 283 Total $ (2,103) $ 3,213 $ 4,231 |
Property and equipment | The following amounts are included in Other assets in the Consolidated Balance Sheets: ($ in thousands) December 31, 2020 2019 Property and equipment $ 131,269 $ 166,583 Less: accumulated depreciation 66,552 106,458 Total $ 64,717 $ 60,125 |
Investment contract and life policy reserves | This table summarizes the Company's investment contract and policy reserves. ($ in thousands) December 31, 2020 2019 Investment contract reserves $ 4,847,649 $ 4,675,774 Policy reserves 1,597,674 1,558,678 Total $ 6,445,323 $ 6,234,452 |
Summary of guaranteed minimum death benefit | The Company regularly monitors the GMDB reserve considering fluctuations in financial markets. The Company has relatively low exposure to GMDB risk as shown below. ($ in thousands) December 31, 2020 2019 GMDB reserve $ 77 $ 126 Aggregate in-the-money death benefits under the GMDB provision 26,710 29,367 Variable annuity contract value distribution based on GMDB feature: No guarantee 26 % 28 % Return of premium guarantee 69 % 67 % Guarantee of premium roll-up at an annual rate of 3% or 5% 5 % 5 % Total 100 % 100 % |
Schedule of FHLB funding agreements | As of December 31, 2020, scheduled maturity dates for outstanding FHLB funding agreements were as follows: ($ in thousands) Amount Effective Interest Rate Maturity Date $50,000 0.324% January 15, 2021 25,000 0.297% February 12, 2021 8,000 0.000% May 17, 2021 20,000 0.486% November 15, 2023 100,000 0.306% December 15, 2023 50,000 0.514% January 12, 2024 125,000 0.570% September 11, 2025 12,500 0.670% June 26, 2025 200,000 0.270% January 16, 2026 Total $590,500 |
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, 2020 2019 2018 Number of stock options granted 234,248 282,040 223,208 Weighted average grant date fair value of stock options granted $ 6.02 $ 6.26 $ 7.16 Weighted average assumptions: Risk-free interest rate 0.8 % 2.5 % 2.6 % Expected dividend yield 2.7 % 2.9 % 2.6 % Expected life, in years 5.1 5.0 4.8 Expected volatility (based on historical volatility) 22.8 % 21.9 % 21.5 % |
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, 2020 2019 2018 Basic: Net income for the period $ 133,315 $ 184,443 $ 18,343 Weighted average number of common shares during the period (in thousands) 41,881 41,738 41,570 Net income per share - basic $ 3.18 $ 4.42 $ 0.44 Diluted: Net income for the period $ 133,315 $ 184,443 $ 18,343 Weighted average number of common shares during the period (in thousands) 41,881 41,738 41,570 Weighted average number of common equivalent shares to reflect the dilutive effect of common stock equivalent securities (in thousands): Stock options 44 79 100 CSUs related to deferred compensation for employees — — 25 RSUs related to incentive compensation 116 132 199 Total common and common equivalent shares adjusted to calculate diluted earnings per share (in thousands) 42,041 41,949 41,894 Net income per share - diluted $ 3.17 $ 4.40 $ 0.44 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Components of net investment income | The components of net investment income for the following periods were as follows: ($ in thousands) Year Ended December 31, 2020 2019 2018 Fixed maturity securities $ 232,917 $ 283,228 $ 353,303 Equity securities 4,665 4,923 6,017 Limited partnership interests 20,863 25,694 15,406 Short-term and other investments 11,409 (10,122) 11,981 Investment expenses (9,542) (9,484) (10,200) Net investment income - investment portfolio 260,312 294,239 376,507 Investment income - deposit asset on reinsurance 97,284 70,825 — Total net investment income $ 357,596 $ 365,064 $ 376,507 |
Summary of realized investment gains (losses) | Net investment gains (losses) for the following periods were as follows: ($ in thousands) Year Ended December 31, 2020 2019 2018 Fixed maturity securities (1) $ 9,392 $ 141,448 $ (5,713) Equity securities 1,843 15,975 (10,649) Short-term investments and other (13,524) (4,083) 3,819 Net investment gains (losses) $ (2,289) $ 153,340 $ (12,543) (1) Net investment gains 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 $2.9 billion block of in force fixed and variable annuity business. See Notes 5 and 17 for further information. The following table reconciles net investment gains (losses) pretax by transaction type: ($ in thousands) Year Ended December 31, 2020 2019 2018 Credit impairment write-downs $ — $ (1,105) $ — Change in intent write-downs (5,283) (275) (1,530) Net other-than-temporary impairment losses on securities recognized in net income (5,283) (1,380) (1,530) Sales and other, net 14,968 151,495 3,491 Change in fair value - equity securities (1) (167) 7,308 (18,323) Change in fair value and gains (losses) realized on settlements - derivatives (11,807) (4,083) 3,819 Net investment gains (losses) $ (2,289) $ 153,340 $ (12,543) (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 Unrealized Unrealized Fair December 31, 2020 Fixed maturity securities U.S. Government and federally sponsored agency obligations: (1) Mortgage-backed securities $ 605,468 $ 79,601 $ 231 $ 684,838 Other, including U.S. Treasury securities 395,042 39,144 1,033 433,153 Municipal bonds 1,612,290 215,711 504 1,827,497 Foreign government bonds 40,145 4,908 — 45,053 Corporate bonds 1,905,207 221,634 3,942 2,122,899 Other asset-backed securities 1,230,399 24,123 22,672 1,231,850 Totals $ 5,788,551 $ 585,121 $ 28,382 $ 6,345,290 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 asset-backed securities 1,282,740 20,883 8,131 1,295,492 Totals $ 5,456,980 $ 348,310 $ 13,614 $ 5,791,676 (1) Fair value includes securities issued by Federal National Mortgage Association (FNMA) of $387.1 million and $405.1 million; Federal Home Loan Mortgage Corporation (FHLMC) of $344.3 million and $283.1 million; and Government National Mortgage Association (GNMA) of $132.3 million and $147.4 million as of December 31, 2020 and 2019, respectively. |
Summary of fair value and gross unrealized losses of fixed maturity securities and equity securities in an unrealized loss position | Therefore, it was determined that the unrealized losses on the fixed maturity securities presented in the table below were not other-than-temporarily impaired as of December 31, 2020. ($ in thousands) 12 months or less More than 12 months Total Fair Value Gross Fair Value Gross Fair Value Gross December 31, 2020 Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 4,842 $ 75 $ 2,644 $ 156 $ 7,486 $ 231 Other 95,919 1,033 — — 95,919 1,033 Municipal bonds 18,097 504 — — 18,097 504 Foreign government bonds — — — — — — Corporate bonds 126,619 3,768 10,879 174 137,498 3,942 Other asset-backed securities 316,973 17,153 409,274 5,519 726,247 22,672 Total $ 562,450 $ 22,533 $ 422,797 $ 5,849 $ 985,247 $ 28,382 Number of positions with a gross unrealized loss 308 123 431 Fair value as a percentage of total fixed maturities securities fair value 8.9 % 6.7 % 15.6 % 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 asset-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 % |
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, 2020 and 2019 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 an anticipated recovery in value, for which the non-credit portions of OTTI losses were recognized in OCI: ($ in thousands) Year Ended December 31, 2020 2019 Cumulative credit loss (1) Beginning of period $ 1,529 $ 1,529 New credit losses 184 — Increases to previously recognized credit losses — — Losses related to securities sold or paid down during the period (184) — End of period $ 1,529 $ 1,529 (1) The cumulative credit loss amounts exclude OTTI losses on fixed maturity 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 an anticipated recovery in value. |
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, 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, 2020 Amortized Fair Percent of Estimated expected maturity: Due in 1 year or less $ 255,416 $ 261,387 4.0 % Due after 1 year through 5 years 1,712,114 1,793,111 28.3 % Due after 5 years through 10 years 1,608,614 1,775,766 28.0 % Due after 10 years through 20 years 1,358,865 1,559,501 24.6 % Due after 20 years 853,542 955,525 15.1 % Total $ 5,788,551 $ 6,345,290 100.0 % Average option-adjusted duration, in years 6.4 |
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 as follows: ($ in thousands) Year Ended December 31, 2020 2019 (1) 2018 Fixed maturity securities Proceeds received $ 472,913 $ 805,887 $ 625,527 Gross gains realized 20,470 150,852 10,536 Gross losses realized (6,072) (7,807) (14,932) Equity securities Proceeds received $ 12,717 $ 29,863 $ 25,498 Gross gains realized 2,197 9,193 8,592 Gross losses realized (1,885) (788) (917) (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 $2.9 billion block of in force fixed and variable annuity business. See Notes 5 and 17 for further information. |
Reconciliation of net unrealized investment gains (losses) on fixed maturity securities and equity securities | The following table reconciles the net unrealized investment gains (losses) on fixed maturity securities, net of tax, included in AOCI, before the impact on DAC: ($ in thousands) Year Ended December 31, 2020 2019 2018 Net unrealized investment gains (losses) on fixed maturity securities, net of tax Beginning of period $ 264,410 $ 111,712 $ 286,176 Change in net unrealized investment gains (losses) on fixed maturity securities 184,290 277,062 (172,350) Reclassification of net investment (gains) losses on securities to net income (8,876) (124,364) 12,927 Cumulative effect of change in accounting principle (1) — — (15,041) End of period $ 439,824 $ 264,410 $ 111,712 (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 Net Amounts Gross Amounts Not Offset Gross Financial Cash Net December 31, 2020 Asset derivatives Free-standing derivatives $ 16,805 $ — $ 16,805 $ 13,671 $ 2,620 $ 514 December 31, 2019 Asset derivatives Free-standing derivatives 13,239 — 13,239 7,687 6,640 (1,088) |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020, Level 3 investments comprised approximately 5.3% of the Company's total investment portfolio at fair value. ($ in thousands) Carrying Fair Fair Value Measurements at Amount Value Level 1 Level 2 Level 3 December 31, 2020 Financial Assets Investments Fixed maturity securities U.S. Government and federally sponsored agency obligations: Mortgage-backed securities $ 684,838 $ 684,838 $ — $ 673,764 $ 11,074 Other, including U.S. Treasury securities 433,153 433,153 18,350 414,803 — Municipal bonds 1,827,497 1,827,497 — 1,767,907 59,590 Foreign government bonds 45,054 45,054 — 45,054 — Corporate bonds 2,122,898 2,122,898 14,876 1,952,206 155,816 Other asset-backed securities 1,231,850 1,231,850 — 1,103,567 128,283 Total fixed maturity securities 6,345,290 6,345,290 33,226 5,957,301 354,763 Equity securities 121,653 121,653 39,235 82,115 303 Short-term investments 141,770 141,770 137,679 4,091 — Other investments 36,258 36,258 — 36,258 — Totals $ 6,644,971 $ 6,644,971 $ 210,140 $ 6,079,765 $ 355,066 Separate Account (variable annuity) assets (1) $ 2,891,423 $ 2,891,423 $ 2,891,423 $ — $ — Financial Liabilities Investment contract and life policy reserves, embedded derivatives $ 2,474 $ 2,474 $ — $ 2,474 $ — Other policyholder funds, embedded derivatives $ 104,488 $ 104,488 $ — $ — $ 104,488 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 asset-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 (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 Corporate Mortgage and Asset- Backed Securities (2) Total Equity Total Beginning balance, January 1, 2020 $ 44,291 $ 103,952 $ 146,828 $ 295,071 $ 107 $ 295,178 $ 93,733 Transfers into Level 3 (3) 80,686 83,621 104,263 268,570 234 268,804 — Transfers out of Level 3 (3) (69,074) (36,620) (84,679) (190,373) — (190,373) — Total gains or losses Net investment gains (losses) included in net income related to financial assets — — (239) (239) (38) (277) — Net investment (gains) losses included in net income related to financial liabilities — — — — — — 11,499 Net unrealized investment gains (losses) included in OCI 4,252 1,427 (10,471) (4,792) — (4,792) — Purchases — 6,875 1,890 8,765 — 8,765 — Issuances — — — — — — 8,373 Sales — — 1,214 1,214 — 1,214 — Settlements — — — — — — — Paydowns, maturities and distributions (565) (3,439) (19,449) (23,453) — (23,453) (9,117) Ending balance, December 31, 2020 $ 59,590 $ 155,816 $ 139,357 $ 354,763 $ 303 $ 355,066 $ 104,488 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 investment (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 (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 asset-backed securities. (3) Transfers into and out of Level 3 during the years ended December 31, 2020 and 2019 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 out of the levels as having occurred at the end of the reporting period in which the transfers were determined. |
Fair value measurement inputs and valuation techniques | The following table provides quantitative information about the significant unobservable inputs for recurring fair value measurements categorized within Level 3. ($ in thousands) Financial Fair Value at Valuation Technique(s) Unobservable Inputs Range (Weighted Average) and Single Point Best Estimate (1) Municipal bonds $ 59,590 discounted cash flow I spread (2) 307 - 391 bps Corporate bonds 155,816 discounted cash flow N spread (3) 272 - 553 bps market comparable option adjusted spread 12.54% Other asset-backed securities 128,283 vendor price haircut 3.00% - 5.00% discounted cash flow constant prepayment rate 20.00% discounted cash flow T spread (4) 235 - 800 bps discounted cash flow PDI interest margin (5) 7.13% discounted cash flow SBL interest margin (6) 4.50% Government mortgage-backed securities 11,074 vendor price haircut 3.00% - 5.00% Equity securities 303 Black-Scholes equity value low - 31.00%; high - 41.00% ($ in thousands) Financial Fair Value at Valuation Technique(s) Unobservable Inputs Range (Weighted Average) and Single Point Best Estimate (1) Derivatives $ 104,488 discounted cash flow lapse rate 5.30% mortality multiplier (7) 63.00% option budget 0.90% - 2.50% non-performance adjustment (8) 5.00% (1) When a range of unobservable inputs is not readily available, the Company uses a single point best estimate. (2) "I spread" is the interpolated weighted average life point on the "on the run" (OTR) point of the curve. (3) "N spread" is the interpolated weighted average life point on the swap curve. (4) "T spread" is a specific point on the OTR curve. (5) "PDI" stands for private debt investment. (6) "SBL" stands for broadly syndicated loans. (7) Mortality multiplier is applied to the Annuity 2000 table. (8) Determined as a percentage of a risk-free rate. |
Summary of fair value assets and liabilities measured on nonrecurring basis | The following table presents the carrying amount, fair value and fair value hierarchy of these financial assets and financial liabilities. ($ in thousands) Carrying Fair Fair Value Measurements at Amount Value Level 1 Level 2 Level 3 December 31, 2020 Financial Assets Investments Other investments $ 168,296 $ 172,073 $ — $ — $ 172,073 Deposit asset on reinsurance 2,420,926 3,030,589 — — 3,030,589 Financial Liabilities Investment contract and policy reserves, fixed annuity contracts 4,847,648 4,963,318 — — 4,963,318 Investment contract and life policy reserves, account values on life contracts 98,719 108,360 — — 108,360 Other policyholder funds 646,809 646,809 — 590,692 56,117 Short-term debt 135,000 135,000 — — 135,000 Long-term debt 302,323 331,136 — 331,136 — 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 — |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 2019 Assets Derivatives, reported in Short-term and other investments $ 16,805 $ 13,239 Liabilities FIA - embedded derivatives, reported in Other policyholder funds 104,488 93,733 IUL - embedded derivatives, reported in Investment contract and policy reserves 2,474 1,314 |
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, 2020 2019 2018 Change in fair value of derivatives: (1) Revenues Net investment gains (losses) $ 248 $ 9,493 $ (4,112) Change in fair value of embedded derivatives: Revenues Net investment gains (losses) (12,055) (13,576) 7,931 (1) Includes gains or losses recognized at option expiration or early termination and changes in fair value for open positions. |
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, 2020 December 31, 2019 Credit Rating Notional Fair Notional Fair Counterparty S&P Moody's Amount Value Amount Value Bank of America, N.A. A+ Aa2 $ 205,200 $ 14,006 $ 174,900 $ 8,523 Barclays Bank PLC A A1 81,900 2,799 115,300 3,347 Citigroup Inc. BBB+ A3 — — — — Credit Suisse International A+ Aa3 — — — — Societe Generale A A1 — — 27,800 1,369 Total $ 287,100 $ 16,805 $ 318,000 $ 13,239 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 were as follows: ($ in thousands) December 31, Impairments Acquisitions December 31, Property and Casualty $ 9,460 $ — $ — $ 9,460 Supplemental 19,621 — — 19,621 Retirement 10,087 (5,625) — 4,462 Life 9,911 — — 9,911 Total $ 49,079 $ (5,625) $ — $ 43,454 |
Summary of finite-lived intangible assets | As of December 31, 2020 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 and impairments: Value of business acquired (10,835) Value of distribution acquired (8,684) Value of agency relationships (4,059) Value of customer relationships (3,202) Total (26,780) Net intangible assets subject to amortization: $ 147,696 |
Future amortization expense | Estimated future amortization of the Company's definite-lived intangible assets were as follows: ($ in thousands) Year Ending December 31, 2021 $ 13,067 2022 12,070 2023 11,232 2024 10,480 2025 9,811 Thereafter 91,036 Total $ 147,696 |
Summary of indefinite-lived intangible assets | Indefinite-lived intangible assets (not subject to amortization) as of December 31, 2020 were as follows: ($ in thousands) December 31, Impairments Acquisitions December 31, Trade names $ 8,645 $ (767) $ — $ 7,878 State licenses 2,886 — — 2,886 Total $ 11,531 $ (767) $ — $ 10,764 |
Unpaid Claims and Claim Expen_2
Unpaid Claims and Claim Expenses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 2019 2018 Property and Casualty segment Gross reserves, beginning of year (1) $ 386,976 $ 367,180 $ 319,182 Less: reinsurance recoverables 120,506 89,725 57,409 Net reserves, beginning of year (2) 266,470 277,455 261,773 Incurred claims and claim expenses: Claims occurring in the current year 441,191 483,062 547,959 Decrease in estimated reserves for claims occurring in prior years (3) (10,200) (7,500) (300) Total claims and claim expenses incurred (4) 430,991 475,562 547,659 Claims and claim expense payments for claims occurring during: Current year 291,393 329,475 369,194 Prior years 146,796 157,072 162,783 Total claims and claim expense payments 438,189 486,547 531,977 Net reserves, end of year (2) 259,272 266,470 277,455 Plus: reinsurance recoverables 112,881 120,506 89,725 Gross reserves, end of year (1) $ 372,153 $ 386,976 $ 367,180 (1) Unpaid claims and claim expenses as reported in the Consolidated Balance Sheets also include reserves for Supplemental, Retirement and Life of $66.6 million, $55.9 million and $29.5 million as of December 31, 2020, 2019 and 2018, 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 prior years' reserve development recognized in 2020, 2019 and 2018. (4) Benefits, claims and settlement expenses as reported in the Consolidated Statements of Operations also include amounts for Supplemental, Retirement and Life of $137.9 million, $109.5 million, and $89.9 million for the years ended December 31, 2020, 2019 and 2018, respectively, in addition to Property and Casualty amounts. |
Schedule of average annual percentage payout of incurred claims by age, also referred to as a history of claims duration | Below is the average annual percentage payout of incurred claims by age, also referred to as a history of claims duration: Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Homeowners 80.4 % 16.2 % 2.0 % 0.7 % 0.5 % 0.2 % — — — — Automobile liability 40.9 % 34.4 % 13.8 % 6.3 % 3.1 % 1.1 % 0.3 % 0.1 % — — Automobile physical damage 95.5 % 4.5 % — — — — — — — — |
Schedule of short-duration insurance contracts, claims development | The following tables illustrate the incurred and paid claims development by accident year on a net basis for the lines of homeowners, automobile liability and automobile physical damage. Conditions and trends that have affected the development of these reserves in the past will not necessarily reoccur in the future. It may not be appropriate to use this cumulative history in the projection of future performance. The information about incurred and paid claims development for the years ended December 31, 2011 to 2019 is presented as unaudited supplementary information. ($ in thousands) Homeowners Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, As of December 31, 2020 Total of Incurred- Cumulative Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ 150,141 $ 150,334 $ 150,791 $ 148,860 $ 148,755 $ 148,414 $ 148,370 $ 148,079 $ 148,067 $ 148,067 $ — 29,532 2012 108,754 109,156 109,360 106,486 106,308 106,348 106,000 106,028 106,032 — 21,578 2013 105,584 107,489 103,982 102,407 102,345 101,769 101,709 101,711 — 19,222 2014 111,647 113,505 109,059 106,844 106,554 106,458 106,414 — 20,084 2015 111,706 115,134 114,404 114,053 115,050 114,942 67 18,716 2016 115,931 118,604 117,009 117,933 117,940 241 19,860 2017 126,285 129,818 132,666 130,693 585 19,850 2018 166,793 157,404 158,861 1,352 21,037 2019 130,391 129,901 1,949 17,463 2020 155,721 32,267 18,229 Total $ 1,270,282 ($ 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 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ 123,046 $ 142,846 $ 145,852 $ 146,908 $ 147,451 $ 148,026 $ 148,014 $ 148,069 $ 148,067 $ 148,067 2012 84,260 101,566 104,203 105,156 105,561 105,909 105,993 106,021 106,025 2013 76,890 96,599 99,361 100,968 101,527 101,677 101,709 101,711 2014 83,314 103,030 105,704 106,081 106,258 106,388 106,419 2015 90,704 109,303 111,882 113,321 114,648 114,861 2016 95,772 113,186 115,053 117,537 117,688 2017 106,800 128,518 129,767 130,017 2018 130,548 152,356 157,004 2019 103,790 126,208 2020 106,781 Total 1,214,781 Outstanding prior to 2011 32 Prior years paid Liabilities for claims and claim adjustment expenses, net of reinsurance $ 55,533 ($ in thousands) Automobile Liability Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, As of December 31, 2020 Total of Incurred- Cumulative Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ 150,803 $ 146,713 $ 145,735 $ 143,133 $ 142,488 $ 139,840 $ 138,891 $ 138,949 $ 138,849 $ 139,530 $ 90 46,163 2012 156,448 153,815 150,336 149,346 147,594 145,847 145,620 145,515 145,946 233 46,008 2013 153,860 152,858 150,720 150,657 148,111 147,993 148,135 148,288 668 47,336 2014 155,105 157,249 158,470 159,937 159,794 159,355 159,263 62 49,347 2015 165,517 172,553 177,021 178,325 178,654 179,186 828 50,579 2016 180,380 184,440 184,567 186,568 188,079 805 52,003 2017 187,983 188,756 188,625 189,095 3,321 48,876 2018 200,314 195,284 192,866 12,931 47,684 2019 181,141 180,060 29,004 45,915 2020 136,977 51,452 30,032 Total $ 1,659,290 ($ in thousands) Automobile 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 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ 61,070 $ 108,837 $ 126,812 $ 133,931 $ 136,906 $ 138,151 $ 138,358 $ 138,689 $ 138,692 $ 138,708 2012 61,279 109,574 127,185 138,641 142,916 144,622 145,121 145,184 145,256 2013 62,224 108,856 131,214 139,954 145,291 146,770 147,409 147,443 2014 61,329 117,468 139,463 149,059 155,758 157,596 158,644 2015 70,836 134,473 157,980 170,088 174,495 176,728 2016 73,073 140,901 166,815 177,834 184,489 2017 70,682 139,531 166,614 179,782 2018 77,528 141,537 168,628 2019 69,665 129,101 2020 51,486 Total 1,480,265 Outstanding prior to 2011 724 Prior years paid Liabilities for claims and claim adjustment expenses, net of reinsurance $ 179,749 ($ in thousands) Automobile Physical Damage Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance Years Ended December 31, As of December 31, 2020 Total of Incurred- Cumulative Accident Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ 86,205 $ 85,507 $ 86,023 $ 85,120 $ 85,143 $ 85,116 $ 85,108 $ 85,102 $ 85,090 $ 85,089 $ — 80,804 2012 83,770 82,337 83,402 83,431 83,354 83,342 83,334 83,322 83,323 — 78,166 2013 91,448 88,856 88,672 88,627 88,455 88,525 88,457 88,452 — 80,920 2014 95,572 95,634 95,422 95,239 95,232 95,241 95,242 — 87,901 2015 99,291 97,994 97,624 97,455 97,612 97,608 — 87,502 2016 112,430 109,515 109,348 109,603 109,597 (18) 93,229 2017 115,483 111,798 110,520 110,569 (17) 91,290 2018 109,040 108,886 108,333 (161) 94,458 2019 111,577 110,495 (326) 92,068 2020 86,959 (6,829) 66,650 Total $ 975,667 ($ in thousands) Automobile 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 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ 83,227 $ 85,254 $ 85,181 $ 85,148 $ 85,127 $ 85,116 $ 85,108 $ 85,095 $ 85,090 $ 85,082 2012 80,519 83,418 83,372 83,355 83,347 83,342 83,326 83,322 83,318 2013 85,110 88,688 88,580 88,532 88,484 88,471 88,452 88,442 2014 88,939 95,444 95,266 95,256 95,258 95,243 95,228 2015 92,138 97,850 97,685 97,638 97,625 97,608 2016 106,459 109,686 109,536 109,611 109,589 2017 105,156 110,817 110,674 110,630 2018 103,559 109,103 108,272 2019 106,243 110,692 2020 84,105 Total 972,966 Outstanding prior to 2011 10 Prior years paid Liabilities for claims and claim adjustment expenses, net of reinsurance $ 2,711 |
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) Year Ended December 31, 2020 Property and Casualty segment Net reserves Homeowners $ 55,533 Automobile liability 179,749 Automobile physical damage 2,711 Other short duration lines 3,189 Total net reserves for unpaid claims and claim adjustment expense, net of reinsurance 241,182 Reinsurance recoverable on unpaid claims Homeowners 6,386 Automobile liability 99,717 Other short duration lines 6,778 Total reinsurance recoverable on unpaid claims 112,881 Insurance lines other than short duration (1) 66,601 Unallocated claims adjustment expenses 18,090 Total other than short duration and unallocated claims adjustment expenses 84,691 Gross reserves, end of year (1) $ 438,754 (1) This line includes Supplemental, Retirement and Life reserves included in the Consolidated Balance Sheet. |
Reinsurance and Catastrophes (T
Reinsurance and Catastrophes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 2019 Reinsurance recoverables on reserves and unpaid claims Property and Casualty Reinsurance companies $ 13,164 $ 19,640 State insurance facilities 99,718 100,866 Life and health 9,568 8,707 Total $ 122,450 $ 129,213 |
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 Ceded to Other Companies (1) Assumed Net Year Ended December 31, 2020 Premiums written and contract deposits (2) $ 1,369,897 $ 20,388 $ 9,830 $ 1,359,339 Premiums and contract charges earned 949,525 28,757 9,929 930,697 Benefits, claims and settlement expenses 475,746 (86,184) 6,961 568,891 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 (1) Excludes the annuity reinsurance agreement accounted for using the deposit method that is discussed in Note 5. (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, 2020 | |
Debt Disclosure [Abstract] | |
Summary of indebtedness outstanding | Indebtedness and scheduled maturities consisted of the following: ($ in thousands) Effective Final December 31, 2020 2019 Short-term debt Bank Credit Facility Variable 2024 $ 135,000 $ 135,000 Long-term debt (1) 4.50% Senior Notes, Aggregate principal amount of $250,000 less unaccrued discount of $362 and $426 and unamortized debt issuance costs of $1,315 and $1,549 4.50% 2025 248,323 248,025 Federal Home Loan Bank borrowing 0.44% 2022 54,000 50,000 Total $ 437,323 $ 433,025 (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, 2020 | |
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, 2020 2019 Income tax (asset) liability Current $ (12,631) $ (12,184) Deferred 206,650 160,624 |
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, 2020 2019 Deferred tax assets Unearned premium reserve reduction $ 11,488 $ 12,103 Compensation accruals 9,487 8,866 Reinsurance commissions — 6,804 Impaired securities 2,127 1,245 Other comprehensive income - net funded status of benefit plans 2,981 2,875 Discounting of unpaid claims and claim expense tax reserves 2,548 2,530 Net operating loss carryforwards — 3,803 Postretirement benefits other than pensions 270 285 Total gross deferred tax assets 28,901 38,511 Deferred tax liabilities Other comprehensive income - net unrealized gains on securities 124,715 74,645 Deferred policy acquisition costs 36,347 49,326 Life insurance future policy benefit reserve 26,725 38,210 Life insurance future policy benefit reserve (transitional rule) 10,651 12,786 Discounting of unpaid claims and claim expense tax reserves (transitional rule) 789 947 Investment related adjustments 34,155 15,718 Intangibles 210 2,021 Other, net 1,959 5,482 Total gross deferred tax liabilities 235,551 199,135 Net deferred tax liability $ 206,650 $ 160,624 |
Income taxes expenses | The components of the provision for income tax expense (benefit) were as follows: ($ in thousands) Years Ended December 31, 2020 2019 2018 Current $ 16,880 $ 31,518 $ 4,152 Deferred 9,388 20,488 (2,958) Total income tax expense $ 26,268 $ 52,006 $ 1,194 |
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 2020, 2019 and 2018 to income before income taxes as follows: ($ in thousands) Years Ended December 31, 2020 2019 2018 Expected federal tax on income $ 33,512 $ 49,654 $ 4,103 Add (deduct) tax effects of: Tax-exempt interest (4,203) (4,159) (3,726) Dividend received deduction (1,475) (1,392) (412) Goodwill impairment 187 5,885 — CARES Act net operating loss carryback (2,792) — — Employee share-based compensation (541) 272 (1,134) Compensation deduction limitation 663 680 1,754 Prior year adjustments (219) (716) 300 Other, net 1,136 1,782 309 Income tax expense provided on income $ 26,268 $ 52,006 $ 1,194 |
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, 2020 2019 2018 Balance as of the beginning of the year $ 1,966 $ 1,734 $ 1,790 Increases related to prior year tax positions 205 109 — Decreases related to prior year tax positions — — (152) Increases related to current year tax positions 151 123 96 Settlements — — — Lapse of statute — — — Balance as of the end of the year $ 2,322 $ 1,966 $ 1,734 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of components lease expense | The components of lease expense were as follows: ($ in thousands) Years Ended December 31, 2020 2019 Operating lease cost $ 4,454 $ 3,841 Short-term lease cost 119 208 Total lease cost $ 4,573 $ 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) Years Ended December 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities $ 4,453 $ 3,447 ($ in thousands) Years Ended December 31, 2020 2019 2018 Cash $ 21,774 $ 25,206 $ 11,906 Restricted cash 549 302 — Total cash and restricted cash shown in the Consolidated Statements of Cash Flows $ 22,323 $ 25,508 $ 11,906 Cash paid during the year for: Interest $ 15,476 $ 14,104 $ 12,532 Income taxes 17,301 22,946 8,679 |
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, 2020 2019 Assets Right of use assets, included in Other assets $ 12,551 $ 16,483 Liabilities Operating lease liabilities, included in Other liabilities $ 13,559 $ 17,499 Weighted average remaining lease term 3.63 4.51 Weighted average discount rate 3.75 % 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, 2020 are as follows: ($ in thousands) Year Ending December 31, 2021 $ 4,236 2022 4,128 2023 3,438 2024 1,929 2025 787 Thereafter — Total future minimum lease payments 14,518 Less imputed interest (959) Total $ 13,559 |
Shareholders' Equity and Shar_2
Shareholders' Equity and Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 2019 2018 CSUs related to deferred compensation for Directors 23,609 28,526 32,288 CSUs related to deferred compensation for employees 20,467 25,194 24,498 Stock options 916,287 908,557 774,821 RSUs related to incentive compensation 823,393 889,438 1,008,249 Total 1,783,756 1,851,715 1,839,856 |
Summary of changes in outstanding options | Changes in outstanding options were as follows: Weighted Average Range of Options Outstanding Vested and December 31, 2019 $37.82 $20.60-$44.75 908,557 368,700 Granted $41.83 $41.83-$41.83 234,248 — Vested $38.59 $28.88-$42.95 — 145,788 Exercised $31.08 $20.60-$42.95 (77,291) (77,291) Forfeited $40.64 $31.01-$42.95 (106,362) — Expired $39.99 $20.60-$42.95 (42,865) — December 31, 2020 $38.99 $28.88-$42.95 916,287 437,197 |
Summary of options outstanding segregated by ranges of exercise prices | Option information segregated by ranges of exercise prices were as follows: December 31, 2020 Total Outstanding Options Vested and Exercisable Options Range of Options Weighted Weighted Options Weighted Weighted $28.88-$33.41 203,207 $30.84 4.61 203,207 $30.84 4.61 $36.04-$41.95 546,108 $40.81 8.05 154,902 $40.90 6.81 $42.73-$42.95 166,972 $42.93 7.33 79,088 $42.94 7.26 Total 916,287 $38.99 7.15 437,197 $36.59 5.86 |
Summary of changes in outstanding restricted common stock units | Changes in outstanding RSUs were as follows: Total Outstanding Units Vested Units Units Weighted Average Units Weighted Average December 31, 2019 889,438 $31.94 543,794 $24.77 Granted (1) 197,207 $42.07 — — Adjustment for performance achievement 419 $46.32 — — Vested — — 143,836 $42.56 Forfeited (61,025) $43.60 — — Distributed (2) (202,646) $34.51 (202,646) $34.51 December 31, 2020 823,393 $33.88 484,984 $27.48 (1) Includes dividends reinvested into additional RSUs. (2) Includes distributed units which were utilized to satisfy withholding taxes due on the distribution. |
Statutory Information and Div_2
Statutory Information and Dividend Restrictions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Insurance [Abstract] | |
Statutory surplus and subsidiary dividend restrictions | The following table includes selected information for HMEC's insurance subsidiaries: ($ in thousands) Year Ended December 31, 2020 2019 2018 Consolidated net income, statutory basis $ 141,904 $ 62,316 $ 45,977 Consolidated capital and surplus, statutory basis (1) $ 937,274 $ 868,839 $ 903,564 (1) Subject to regulatory restrictions. |
Retirement Plans and Other Po_2
Retirement Plans and Other Postretirement Benefits (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 2019 2018 401(k) plan Contributions to employees' accounts $ 8,187 $ 8,233 $ 7,655 Total assets at the end of the year 228,449 206,247 167,767 Non-qualified defined contribution plan Contributions to employees' accounts 68 58 70 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, 2020, 2019 and 2018 (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 December 31, December 31, 2020 2019 2018 2020 2019 2018 Change in benefit obligation: Projected benefit obligation at beginning of year $ 24,820 $ 25,075 $ 28,432 $ 15,228 $ 15,404 $ 16,832 Service cost 650 650 650 — — — Interest cost 731 997 947 453 620 566 Plan amendments — — — — — — Actuarial loss (gain) 1,021 101 (2,208) 1,318 516 (789) Benefits paid (1,538) (2,003) (2,746) (1,312) (1,312) (1,205) Settlements (1,392) — — — — — Projected benefit obligation at end of year $ 24,292 $ 24,820 $ 25,075 $ 15,687 $ 15,228 $ 15,404 Change in plan assets: Fair value of plan assets at beginning of year $ 23,164 $ 22,090 $ 25,843 $ — $ — $ — Actual return on plan assets 2,253 3,471 (640) — — — Employer contributions — — — 1,312 1,312 1,205 Benefits paid (1,538) (2,003) (2,746) (1,312) (1,312) (1,205) Expenses paid (542) (394) (367) — — — Settlements (1,392) — — — — — Fair value of plan assets at end of year $ 21,945 $ 23,164 $ 22,090 $ — $ — $ — Funded status $ (2,347) $ (1,656) $ (2,985) $ (15,687) $ (15,228) $ (15,404) Prepaid (accrued) benefit expense $ 5,485 $ 6,690 $ 7,425 $ (9,327) $ (9,884) $ (10,320) Total amount recognized in Consolidated Balance Sheets, all in Other liabilities $ (2,347) $ (1,656) $ (2,985) $ (15,687) $ (15,228) $ (15,404) Amounts recognized in accumulated other comprehensive income (loss) (AOCI): Prior service cost $ — $ — $ — $ — $ — $ — Net actuarial loss (7,833) (8,345) 10,410 (6,360) (5,345) 5,084 Total amount recognized in AOCI $ (7,833) $ (8,345) $ 10,410 $ (6,360) $ (5,345) $ 5,084 Information for pension plans with an accumulated benefit obligation greater than plan assets: Projected benefit obligation $ 24,292 $ 24,820 $ 25,075 $ 15,687 $ 15,228 $ 15,404 Accumulated benefit obligation 24,292 24,820 25,075 15,687 15,228 15,404 Fair value of plan assets 21,945 23,164 22,090 — — — |
Defined benefit plan and the supplemental defined benefit plans | ($ in thousands) Defined Benefit Plan Supplemental Year Ended December 31, Year Ended December 31, 2020 2019 2018 2020 2019 2018 Components of net periodic pension (income) expense: Service cost: Benefit accrual $ — $ — $ — $ — $ — $ — Other expenses 650 650 650 — — — Interest cost 731 997 947 453 620 566 Expected return on plan assets (966) (1,222) (1,377) — — — Settlement loss 447 — — — — — Amortization of: Prior service cost — — — — — — Actuarial loss 342 310 371 302 256 310 Net periodic pension expense $ 1,204 $ 735 $ 591 $ 755 $ 876 $ 876 Changes in plan assets and benefit obligations included in other comprehensive income (loss): Prior service cost $ — $ — $ — $ — $ — $ — Net actuarial loss (gain) 277 (1,755) 177 1,318 516 (789) Amortization of: Prior service cost — — — — — — Actuarial loss (790) (310) (371) (302) (256) (310) Total recognized in other comprehensive income (loss) $ (513) $ (2,065) $ (194) $ 1,016 $ 260 $ (1,099) Weighted average assumptions used to determine expense: Discount rate 3.10 % 4.20 % 3.50 % 3.10 % 4.20 % 3.50 % Expected return on plan assets 4.80 % 5.75 % 5.90 % * * * Annual rate of salary increase * * * * * * Weighted average assumptions used to determine benefit obligations as of December 31: Discount rate 2.08 % 3.10 % 4.20 % 2.08 % 3.10 % 4.20 % Expected return on plan assets 4.80 % 5.75 % 5.90 % * * * 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 Total Level 1 Level 2 Level 3 December 31, 2020 Asset category Equity security funds (1) United States $ 4,367 $ — $ 4,367 $ — International 4,351 — 4,351 — Fixed income funds 13,059 — 13,059 — Short-term investment funds 168 168 — — Total $ 21,945 $ 168 $ 21,777 $ — 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 investments funds 951 951 — — Total $ 23,164 $ 951 $ 22,213 $ — (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 Supplemental Minimum funding requirement for 2020 $ — $ — Expected contributions (approximations) for the year ended December 31, 2021 at the time of issuance 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, 2020. |
Estimated future benefit payments | Estimated future benefit payments as of December 31, 2020 were as follows: ($ in thousands) 2021 2022 2023 2024 2025 2026-2030 Pension plans Defined benefit plan $ 2,131 $ 2,185 $ 1,979 $ 2,013 $ 1,942 $ 7,099 Supplemental retirement plans 1,282 1,263 1,240 1,213 1,182 5,269 |
Comprehensive Income (Loss) a_2
Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Components of comprehensive income | The components of comprehensive income (loss) were as follows: ($ in thousands) Year Ended December 31, 2020 2019 2018 Net income $ 133,315 $ 184,443 $ 18,343 Other comprehensive income (loss): Change in net unrealized investment gains (losses) on fixed maturity securities: Net unrealized investment gains (losses) on securities arising during the period 183,950 327,363 (275,094) Less: reclassification adjustment for net investment gains (losses) included in income before income tax 11,235 157,423 (16,363) Total, before tax 172,715 169,940 (258,731) Income tax expense (benefit) 36,878 36,433 (55,495) Total, net of tax 135,837 133,507 (203,236) Change in net funded status of benefit plans: Before tax (503) 1,805 1,294 Income tax expense (benefit) (105) 387 262 Total, net of tax (398) 1,418 1,032 Total comprehensive income (loss) $ 268,754 $ 319,368 $ (183,861) |
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) Beginning balance, January 1, 2020 $ 230,448 $ (10,767) $ 219,681 Other comprehensive income (loss) before reclassifications 144,713 (398) 144,315 Amounts reclassified from AOCI (8,876) — (8,876) Net current period other comprehensive income (loss) 135,837 (398) 135,439 Ending balance, December 31, 2020 $ 366,285 $ (11,165) $ 355,120 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 (3) (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 (1) All amounts are net of tax. (2) The pretax amounts reclassified from AOCI, $11.2 million, $157.4 million and $(16.4) million, are included in net investment gains (losses) and the related tax expenses, $2.4 million, $33.1 million and $(3.4) million, are included in income tax expense in the Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018, respectively. (3) The Company adopted guidance on January 1, 2018 that resulted in reclassifying $15.0 million of after tax net unrealized gains on equity securities from AOCI to Retained earnings. |
Supplemental Consolidated Cas_2
Supplemental Consolidated Cash and Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Reconciliation of net income to net cash provided by operating activities | Supplemental cash flow information related to operating leases was as follows: ($ in thousands) Years Ended December 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities $ 4,453 $ 3,447 ($ in thousands) Years Ended December 31, 2020 2019 2018 Cash $ 21,774 $ 25,206 $ 11,906 Restricted cash 549 302 — Total cash and restricted cash shown in the Consolidated Statements of Cash Flows $ 22,323 $ 25,508 $ 11,906 Cash paid during the year for: Interest $ 15,476 $ 14,104 $ 12,532 Income taxes 17,301 22,946 8,679 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Summarized financial information for these segments | Summarized financial information for these segments is as follows: ($ in thousands) Years Ended December 31, 2020 2019 2018 Insurance premiums and contract charges earned Property and Casualty $ 650,168 $ 683,454 $ 665,734 Supplemental (1) 130,694 65,815 N/A Retirement 29,649 29,083 31,269 Life 120,186 119,602 120,330 Total $ 930,697 $ 897,954 $ 817,333 Net investment income Property and Casualty $ 42,556 $ 41,740 $ 40,104 Supplemental (1) 17,818 7,480 N/A Retirement 229,853 245,475 262,634 Life 69,799 71,957 74,399 Corporate and Other (171) (85) 142 Intersegment eliminations (2,259) (1,503) (772) Total $ 357,596 $ 365,064 $ 376,507 Net income (loss) Property and Casualty $ 76,516 $ 54,359 $ (14,243) Supplemental (1) 43,089 17,989 N/A Retirement 20,038 (4,867) 41,736 Life 10,461 17,574 18,754 Corporate and Other (16,789) 99,388 (27,904) Total $ 133,315 $ 184,443 $ 18,343 |
Additional significant financial information for these segments | ($ in thousands) December 31, 2020 2019 2018 Assets Property and Casualty $ 1,324,923 $ 1,327,099 $ 1,236,362 Supplemental 811,457 747,602 N/A Retirement 9,198,723 8,330,127 7,866,969 Life 2,044,503 1,964,993 1,821,351 Corporate and Other 182,342 172,955 149,014 Intersegment eliminations (90,135) (64,072) (41,800) Total $ 13,471,813 $ 12,478,704 $ 11,031,896 (1) Acquired on July 1, 2019. The twelve month comparison is not meaningful. Additional significant financial information for these segments is as follows: ($ in thousands) Years Ended December 31, 2020 2019 2018 DAC amortization expense Property and Casualty $ 74,452 $ 79,453 $ 79,073 Supplemental (1) 1,287 438 N/A Retirement 16,718 21,446 23,186 Life 7,452 7,844 7,630 Total $ 99,909 $ 109,181 $ 109,889 Income tax expense (benefit) Property and Casualty $ 15,380 $ 13,954 $ (6,622) Supplemental (1) 11,972 5,105 N/A Retirement 2,105 33,772 10,000 Life 2,428 4,907 4,979 Corporate and Other (5,617) (5,732) (7,163) Total $ 26,268 $ 52,006 $ 1,194 (1) Acquired on July 1, 2019. The twelve month comparison is not meaningful. |
Unaudited Selected Quarterly _2
Unaudited Selected Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 Insurance premiums and contract charges earned $ 233,648 $ 235,353 $ 225,431 $ 236,265 Insurance premiums written and contract deposits (2)(3) 332,559 368,853 329,169 328,758 Total revenues 352,344 337,080 314,459 306,558 Net income 47,791 36,474 30,578 18,472 Per share information Basic Net income $ 1.14 $ 0.87 $ 0.73 $ 0.44 Shares of common stock - weighted average (4) 41,962 41,916 41,879 41,827 Diluted Net income $ 1.13 $ 0.87 $ 0.73 $ 0.44 Shares of common stock and equivalent shares - weighted average (4) 42,156 42,058 41,996 42,019 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 (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 (1) NTA was acquired on July 1, 2019. (2) This measure is not based on accounting principles generally accepted in the United States of America (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 transaction accounted for under the deposit method that is discussed in Note 5. (4) Rounded to thousands. |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policies - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 01, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2020 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
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 | |||||
Percentage of reversion to mean approach utilized to amortized policy acquisition costs | 8.00% | |||||
Deferred policy acquisition costs, corridor around the mean | 2.00% | |||||
Amortization in 2021 | $ 13,067 | |||||
Amortization in 2022 | 12,070 | |||||
Amortization in 2023 | 11,232 | |||||
Amortization in 2024 | 10,480 | |||||
Amortization in 2025 | 9,811 | |||||
Goodwill impairment | $ 5,625 | |||||
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% | |||||
FHLB advances | $ 590,500 | |||||
Share-based compensation expense | $ 4,800 | $ 5,200 | $ 6,600 | |||
Weighted average fair value of nonvested options outstanding (in usd per share) | $ 6.31 | |||||
Unrecognized share-based compensation expense, nonvested options | $ 2,100 | |||||
Antidilutive securities exclude from EPS computation (in shares) | 713,080 | 713,080 | 713,080 | 713,080 | ||
Minimum exercise price (in usd per share) | $ 38.05 | $ 38.05 | $ 38.05 | $ 38.05 | ||
Maximum exercise price (in usd per share) | $ 42.95 | $ 42.95 | $ 42.95 | $ 42.95 | ||
Stockholders' equity | $ 1,790,079 | $ 1,567,285 | $ 1,290,550 | |||
Cumulative effect of change in accounting principle | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Stockholders' equity | 0 | 0 | $ (15,041) | |||
Retained earnings | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Stockholders' equity | 1,434,634 | 1,352,539 | 1,216,582 | 1,231,177 | ||
Retained earnings | Cumulative effect of change in accounting principle | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Stockholders' equity | (509) | $ 15,041 | $ (500) | |||
Employee stock option | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Share-based compensation expense | 1,100 | 1,200 | 1,200 | |||
Restricted stock units | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Unrecognized share-based compensation expense, equity instruments other than options | 6,500 | |||||
HMLIC and NTA | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Proceeds from FHLB funding agreements | $ 95,500 | |||||
Minimum | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Purchase of FHLB activity-based common stock as percentage of borrowing, required | 2.00% | |||||
Real estate property | Minimum | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Property, plant and equipment, useful life | 20 years | |||||
Real estate property | Maximum | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Property, plant and equipment, useful life | 45 years | |||||
Lease hold improvements and other property and equipment | Minimum | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Property, plant and equipment, useful life | 3 years | |||||
Lease hold improvements and other property and equipment | Maximum | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Property, plant and equipment, useful life | 10 years | |||||
Benefit Consultants Group Inc. | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Impairment charges of intangible assets | $ 4,400 | |||||
Goodwill impairment | $ 5,600 | |||||
Value of business acquired | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Value of business acquired | $ 83,600 | |||||
Amortization in 2021 | 6,600 | |||||
Amortization in 2022 | 6,200 | |||||
Amortization in 2023 | 5,800 | |||||
Amortization in 2024 | 5,400 | |||||
Amortization in 2025 | 5,100 | |||||
Value of distribution acquired | NTA | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Amortization in 2021 | 2,900 | |||||
Amortization in 2022 | 2,900 | |||||
Amortization in 2023 | 2,900 | |||||
Amortization in 2024 | 2,900 | |||||
Amortization in 2025 | 2,900 | |||||
Value of distribution acquired | 44,700 | |||||
Value of distribution acquired | Benefit Consultants Group Inc. | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Amortization in 2022 | 300 | |||||
Amortization in 2023 | 300 | |||||
Amortization in 2024 | 300 | |||||
Amortization in 2025 | 300 | |||||
Value of distribution acquired | 700 | |||||
Value of agency relationships | NTA | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Amortization in 2021 | 2,200 | |||||
Amortization in 2022 | 1,900 | |||||
Amortization in 2023 | 1,600 | |||||
Amortization in 2024 | 1,400 | |||||
Amortization in 2025 | 1,200 | |||||
Value of agency relationship | 12,900 | |||||
Value of customer relationships | Benefit Consultants Group Inc. | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Amortization in 2021 | 1,200 | |||||
Amortization in 2022 | 1,100 | |||||
Amortization in 2023 | 900 | |||||
Amortization in 2024 | 700 | |||||
Amortization in 2025 | 600 | |||||
Value of customer relationship | 5,900 | |||||
Interest sensitive life contracts | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Deferred policy acquisition costs, impact of unrealized investment gains (losses) | $ 90,500 | $ 41,200 | $ 17,900 |
Basis of Presentation and Sig_5
Basis of Presentation and Significant Accounting Policies - Deferred Policy Acquisition Costs (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Deferred policy acquisition costs | $ 229,828 | $ 276,668 |
Property and Casualty | ||
Segment Reporting Information [Line Items] | ||
Deferred policy acquisition costs | 26,153 | 28,616 |
Supplemental | ||
Segment Reporting Information [Line Items] | ||
Deferred policy acquisition costs | 4,270 | 1,967 |
Retirement | ||
Segment Reporting Information [Line Items] | ||
Deferred policy acquisition costs | 137,735 | 185,294 |
Life | ||
Segment Reporting Information [Line Items] | ||
Deferred policy acquisition costs | $ 61,670 | $ 60,791 |
Basis of Presentation and Sig_6
Basis of Presentation and Significant Accounting Policies - Adjustments to Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Increase (decrease) to DAC amortization expense: | |||
Total | $ (2,103) | $ 3,213 | $ 4,231 |
Retirement | |||
Increase (decrease) to DAC amortization expense: | |||
Total | (1,766) | 3,480 | 3,948 |
Life | |||
Increase (decrease) to DAC amortization expense: | |||
Total | $ (337) | $ (267) | $ 283 |
Basis of Presentation and Sig_7
Basis of Presentation and Significant Accounting Policies - Property and Equipment Included in Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Property and Equipment | ||
Property and equipment | $ 131,269 | $ 166,583 |
Less: accumulated depreciation | 66,552 | 106,458 |
Total | $ 64,717 | $ 60,125 |
Basis of Presentation and Sig_8
Basis of Presentation and Significant Accounting Policies - Investment Contract and Life Policy Reserves (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Investment contract reserves | $ 4,847,649 | $ 4,675,774 |
Policy reserves | 1,597,674 | 1,558,678 |
Total | $ 6,445,323 | $ 6,234,452 |
Basis of Presentation and Sig_9
Basis of Presentation and Significant Accounting Policies - Guaranteed Minimum Death Benefit (Details) - Guarantee Minimum Death Benefit - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Net Amount at Risk by Product and Guarantee [Line Items] | ||
GMDB reserve | $ 77 | $ 126 |
Aggregate in-the-money death benefits under the GMDB provision | $ 26,710 | $ 29,367 |
Variable annuity contract value distribution based on GMDB feature: | ||
No guarantee | 26.00% | 28.00% |
Return of premium guarantee | 69.00% | 67.00% |
Guarantee of premium roll-up at an annual rate of 3% or 5% | 5.00% | 5.00% |
Total | 100.00% | 100.00% |
Minimum | ||
Variable annuity contract value distribution based on GMDB feature: | ||
Guarantee of premium roll-up at an annual rate of 3% or 5% | 3.00% | |
Maximum | ||
Variable annuity contract value distribution based on GMDB feature: | ||
Guarantee of premium roll-up at an annual rate of 3% or 5% | 5.00% |
Basis of Presentation and Si_10
Basis of Presentation and Significant Accounting Policies - Schedule of Maturity Dates For FHLB Funding Agreements (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
FHLB advances | $ 590,500 |
Maturing On January 15, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
FHLB advances | $ 50,000 |
FHLB interest rate | 0.324% |
Maturing On February 12 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
FHLB advances | $ 25,000 |
FHLB interest rate | 0.297% |
Maturing On May 17 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
FHLB advances | $ 8,000 |
FHLB interest rate | 0.00% |
Maturing On November 15, 2023 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
FHLB advances | $ 20,000 |
FHLB interest rate | 0.486% |
Maturing On December 15, 2023 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
FHLB advances | $ 100,000 |
FHLB interest rate | 0.306% |
Maturing On January 12, 2024 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
FHLB advances | $ 50,000 |
FHLB interest rate | 0.514% |
Maturing On June 26 2025 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
FHLB advances | $ 125,000 |
FHLB interest rate | 0.57% |
Maturing On September 11 2025 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
FHLB advances | $ 12,500 |
FHLB interest rate | 0.67% |
Maturing On January 16, 2026 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
FHLB advances | $ 200,000 |
FHLB interest rate | 0.27% |
Basis of Presentation and Si_11
Basis of Presentation and Significant Accounting Policies - Fair Value Assumptions for Stock Option Pricing (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of stock options granted (in shares) | 234,248 | 282,040 | 223,208 |
Weighted average grant date fair value of stock options granted (in usd per share) | $ 6.02 | $ 6.26 | $ 7.16 |
Weighted average assumptions: | |||
Risk-free interest rate | 0.80% | 2.50% | 2.60% |
Expected dividend yield | 2.70% | 2.90% | 2.60% |
Expected life, in years | 5 years 1 month 6 days | 5 years | 4 years 9 months 18 days |
Expected volatility (based on historical volatility) | 22.80% | 21.90% | 21.50% |
Basis of Presentation and Si_12
Basis of Presentation and 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, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | 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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Basic: | |||||||||||||||
Net income | $ 47,791 | $ 36,474 | $ 30,578 | $ 18,472 | $ 33,001 | $ 25,454 | $ 93,822 | $ 32,166 | $ (20,257) | $ 12,528 | $ 5,917 | $ 20,155 | $ 133,315 | $ 184,443 | $ 18,343 |
Weighted average number of common shares during the period (in shares) | 41,962,000 | 41,916,000 | 41,879,000 | 41,827,000 | 41,814,000 | 41,785,000 | 41,762,000 | 41,610,000 | 41,596,000 | 41,683,000 | 41,600,000 | 41,497,000 | 41,881,289 | 41,737,876 | 41,570,492 |
Net income per share - basic (in usd per share) | $ 1.14 | $ 0.87 | $ 0.73 | $ 0.44 | $ 0.79 | $ 0.61 | $ 2.25 | $ 0.77 | $ (0.49) | $ 0.30 | $ 0.14 | $ 0.49 | $ 3.18 | $ 4.42 | $ 0.44 |
Diluted: | |||||||||||||||
Net income | $ 47,791 | $ 36,474 | $ 30,578 | $ 18,472 | $ 33,001 | $ 25,454 | $ 93,822 | $ 32,166 | $ (20,257) | $ 12,528 | $ 5,917 | $ 20,155 | $ 133,315 | $ 184,443 | $ 18,343 |
Weighted average number of common shares during the period (in shares) | 41,962,000 | 41,916,000 | 41,879,000 | 41,827,000 | 41,814,000 | 41,785,000 | 41,762,000 | 41,610,000 | 41,596,000 | 41,683,000 | 41,600,000 | 41,497,000 | 41,881,289 | 41,737,876 | 41,570,492 |
Weighted average number of common equivalent shares to reflect the dilutive effect of common stock equivalent securities | |||||||||||||||
Stock options (in shares) | 44,000 | 79,000 | 100,000 | ||||||||||||
CSUs related to deferred compensation for employees (in shares) | 0 | 0 | 25,000 | ||||||||||||
RSUs related to incentive compensation (in shares) | 116,000 | 132,000 | 199,000 | ||||||||||||
Total common and common equivalent shares adjusted to calculate diluted earnings per share (in shares) | 42,156,000 | 42,058,000 | 41,996,000 | 42,019,000 | 42,093,000 | 42,030,000 | 41,921,000 | 41,785,000 | 41,911,000 | 41,850,000 | 41,735,000 | 41,653,000 | 42,040,892 | 41,948,531 | 41,894,232 |
Net income per share - diluted (in usd per share) | $ 1.13 | $ 0.87 | $ 0.73 | $ 0.44 | $ 0.78 | $ 0.60 | $ 2.24 | $ 0.77 | $ (0.49) | $ 0.30 | $ 0.14 | $ 0.48 | $ 3.17 | $ 4.40 | $ 0.44 |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net Investment Income [Line Items] | |||
Total net investment income | $ 357,596 | $ 365,064 | $ 376,507 |
Investment Portfolio | |||
Net Investment Income [Line Items] | |||
Investment expenses | (9,542) | (9,484) | (10,200) |
Total net investment income | 260,312 | 294,239 | 376,507 |
Deposit Asset On Reinsurance | |||
Net Investment Income [Line Items] | |||
Total net investment income | 97,284 | 70,825 | 0 |
Fixed maturity securities | Investment Portfolio | |||
Net Investment Income [Line Items] | |||
Investment income | 232,917 | 283,228 | 353,303 |
Equity securities | Investment Portfolio | |||
Net Investment Income [Line Items] | |||
Investment income | 4,665 | 4,923 | 6,017 |
Limited partnership interests | Investment Portfolio | |||
Net Investment Income [Line Items] | |||
Investment income | 20,863 | 25,694 | 15,406 |
Short-term and other investments | Investment Portfolio | |||
Net Investment Income [Line Items] | |||
Investment income | $ 11,409 | $ (10,122) | $ 11,981 |
Investments - Realized Investme
Investments - Realized Investment Gains (Losses) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2019 | |
Gain (Loss) on Securities [Line Items] | ||||
Net investment gains (losses) | $ (2,289) | $ 153,340 | $ (12,543) | |
Investment gain realized on transfer | 135,300 | |||
Reinsurance block of in-force fixed and variable annuity business | $ 2,900,000 | |||
Fixed maturity securities | ||||
Gain (Loss) on Securities [Line Items] | ||||
Net investment gains (losses) | 9,392 | 141,448 | (5,713) | |
Equity securities | ||||
Gain (Loss) on Securities [Line Items] | ||||
Net investment gains (losses) | 1,843 | 15,975 | (10,649) | |
Short-term and other investments | ||||
Gain (Loss) on Securities [Line Items] | ||||
Net investment gains (losses) | $ (13,524) | $ (4,083) | $ 3,819 |
Investments - Net Investment Ga
Investments - Net Investment Gains (Losses) By Transaction Type (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |||
Credit impairment write-downs | $ 0 | $ (1,105) | $ 0 |
Change in intent write-downs | (5,283) | (275) | (1,530) |
Net other-than-temporary impairment losses on securities recognized in net income | (5,283) | (1,380) | (1,530) |
Sales and other, net | 14,968 | 151,495 | 3,491 |
Change in fair value - equity securities | (167) | 7,308 | (18,323) |
Change in fair value and gains realized on settlements - derivatives | (11,807) | (4,083) | 3,819 |
Total | $ (2,289) | $ 153,340 | $ (12,543) |
Investments - Fixed Maturities
Investments - Fixed Maturities and Equity Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 5,788,551 | $ 5,456,980 |
Fair Value | 6,345,290 | 5,791,676 |
FNMA | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 387,100 | 405,100 |
FHLMC | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 344,300 | 283,100 |
GNMA | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 132,300 | 147,400 |
Fixed maturity securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 5,788,551 | 5,456,980 |
Unrealized Gains | 585,121 | 348,310 |
Unrealized Losses | 28,382 | 13,614 |
Fair Value | 6,345,290 | 5,791,676 |
Mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 605,468 | 684,543 |
Unrealized Gains | 79,601 | 41,263 |
Unrealized Losses | 231 | 1,487 |
Fair Value | 684,838 | 724,319 |
Other, including U.S. Treasury securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 395,042 | 436,665 |
Unrealized Gains | 39,144 | 22,824 |
Unrealized Losses | 1,033 | 621 |
Fair Value | 433,153 | 458,868 |
Municipal bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,612,290 | 1,545,787 |
Unrealized Gains | 215,711 | 141,996 |
Unrealized Losses | 504 | 1,580 |
Fair Value | 1,827,497 | 1,686,203 |
Foreign government bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 40,145 | 42,801 |
Unrealized Gains | 4,908 | 2,569 |
Unrealized Losses | 0 | 0 |
Fair Value | 45,053 | 45,370 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,905,207 | 1,464,444 |
Unrealized Gains | 221,634 | 118,775 |
Unrealized Losses | 3,942 | 1,795 |
Fair Value | 2,122,899 | 1,581,424 |
Other asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,230,399 | 1,282,740 |
Unrealized Gains | 24,123 | 20,883 |
Unrealized Losses | 22,672 | 8,131 |
Fair Value | $ 1,231,850 | $ 1,295,492 |
Investments - Gross Unrealized
Investments - Gross Unrealized Losses of Fixed Maturities and Equity Securities in Unrealized Loss Position (Details) $ in Thousands | Dec. 31, 2020USD ($)security | Dec. 31, 2019USD ($)security |
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | $ 562,450 | $ 478,866 |
Fixed maturity securities, Fair Value, More than 12 Months | 422,797 | 472,720 |
Fixed maturity securities, Fair Value, Total | 985,247 | 951,586 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 22,533 | 5,734 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 5,849 | 7,880 |
Fixed maturity securities, Gross Unrealized Losses, Total | $ 28,382 | $ 13,614 |
Number of positions with a gross unrealized loss, 12 Months or Less | security | 308 | 330 |
Number of position with a gross unrealized loss, more than 12 months | security | 123 | 137 |
Number of position with a gross unrealized loss, Total | security | 431 | 467 |
Fair value as a percentage of total fixed maturities and equity securities fair value, 12 Months or Less | 8.90% | 8.30% |
Fair value as a percentage of total fixed maturities and equity securities fair value, more than 12 months | 6.70% | 8.20% |
Fair value as a percentage of total fixed maturities and equity securities fair value, Total | 15.60% | 16.50% |
Mortgage-backed securities | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | $ 4,842 | $ 72,422 |
Fixed maturity securities, Fair Value, More than 12 Months | 2,644 | 2,620 |
Fixed maturity securities, Fair Value, Total | 7,486 | 75,042 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 75 | 1,282 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 156 | 205 |
Fixed maturity securities, Gross Unrealized Losses, Total | 231 | 1,487 |
Other | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 95,919 | 38,341 |
Fixed maturity securities, Fair Value, More than 12 Months | 0 | 1,527 |
Fixed maturity securities, Fair Value, Total | 95,919 | 39,868 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 1,033 | 619 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 0 | 2 |
Fixed maturity securities, Gross Unrealized Losses, Total | 1,033 | 621 |
Municipal bonds | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 18,097 | 91,195 |
Fixed maturity securities, Fair Value, More than 12 Months | 0 | 9,160 |
Fixed maturity securities, Fair Value, Total | 18,097 | 100,355 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 504 | 977 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 0 | 603 |
Fixed maturity securities, Gross Unrealized Losses, Total | 504 | 1,580 |
Foreign government bonds | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 0 | 0 |
Fixed maturity securities, Fair Value, More than 12 Months | 0 | 0 |
Fixed maturity securities, Fair Value, Total | 0 | 0 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 0 | 0 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 0 | 0 |
Fixed maturity securities, Gross Unrealized Losses, Total | 0 | 0 |
Corporate bonds | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 126,619 | 58,198 |
Fixed maturity securities, Fair Value, More than 12 Months | 10,879 | 16,622 |
Fixed maturity securities, Fair Value, Total | 137,498 | 74,820 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 3,768 | 886 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 174 | 909 |
Fixed maturity securities, Gross Unrealized Losses, Total | 3,942 | 1,795 |
Other asset-backed securities | ||
Fixed maturity securities, Fair Value | ||
Fixed maturity securities, Fair Value, 12 Months or Less | 316,973 | 218,710 |
Fixed maturity securities, Fair Value, More than 12 Months | 409,274 | 442,791 |
Fixed maturity securities, Fair Value, Total | 726,247 | 661,501 |
Fixed maturity securities, Gross Unrealized Losses | ||
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less | 17,153 | 1,970 |
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months | 5,519 | 6,161 |
Fixed maturity securities, Gross Unrealized Losses, Total | $ 22,672 | $ 8,131 |
Investments - Credit Losses (De
Investments - Credit Losses (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cumulative credit loss | ||
Beginning of period | $ 1,529,000 | $ 1,529,000 |
New credit losses | 184,000 | 0 |
Increases to previously recognized credit losses | 0 | 0 |
Losses related to securities sold or paid down during the period | (184,000) | 0 |
End of period | 1,529,000 | $ 1,529,000 |
Available-for-sale securities, allowance for credit losses | $ 0 |
Investments - Maturities of Fix
Investments - Maturities of Fixed Maturities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Amortized Cost | ||
Due in 1 year or less | $ 255,416 | |
Due after 1 year through 5 years | 1,712,114 | |
Due after 5 years through 10 years | 1,608,614 | |
Due after 10 years through 20 years | 1,358,865 | |
Due after 20 years | 853,542 | |
Amortized Cost | 5,788,551 | $ 5,456,980 |
Fair Value | ||
Due in 1 year or less | 261,387 | |
Due after 1 year through 5 years | 1,793,111 | |
Due after 5 years through 10 years | 1,775,766 | |
Due after 10 years through 20 years | 1,559,501 | |
Due after 20 years | 955,525 | |
Total | $ 6,345,290 | $ 5,791,676 |
Percent of Total Fair Value | ||
Due in 1 year or less | 4.00% | |
Due after 1 year through 5 years | 28.30% | |
Due after 5 years through 10 years | 28.00% | |
Due after 10 years through 20 years | 24.60% | |
Due after 20 years | 15.10% | |
Total | 100.00% | |
Average option-adjusted duration, in years | 6 years 4 months 24 days |
Investments - Sales of Fixed Ma
Investments - Sales of Fixed Maturities and Equity Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Proceeds received | $ 472,913 | $ 805,887 | $ 625,527 | |
Gross gains realized | 20,470 | 150,852 | 10,536 | |
Gross losses realized | (6,072) | (7,807) | (14,932) | |
Proceeds received | 12,717 | 29,863 | 25,498 | |
Gross gains realized | 2,197 | 9,193 | 8,592 | |
Gross losses realized | (1,885) | $ (788) | $ (917) | |
Investment gain realized on transfer | $ 135,300 | |||
Reinsurance block of in-force fixed and variable annuity business | $ 2,900,000 |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ 1,567,285 | $ 1,290,550 | |
Ending balance | 1,790,079 | 1,567,285 | $ 1,290,550 |
Cumulative effect of change in accounting principle | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 0 | 0 | (15,041) |
Ending balance | 0 | 0 | |
Net unrealized investment gains (losses) on securities | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 230,448 | 96,941 | 300,177 |
Ending balance | 366,285 | 230,448 | 96,941 |
Net unrealized investment gains (losses) on securities | Cumulative effect of change in accounting principle | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (15,041) | ||
Net unrealized investment gains (losses) on securities | Fixed maturity securities | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 264,410 | 111,712 | 286,176 |
Change in net unrealized investment gains (losses) on fixed maturity securities | 184,290 | 277,062 | (172,350) |
Reclassification of net investment (gains) losses on securities to net income | (8,876) | (124,364) | 12,927 |
Ending balance | $ 439,824 | $ 264,410 | $ 111,712 |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Investment Holdings [Line Items] | ||
Investment grade rating | 81.20% | |
Limited partnership interests | $ 448,996 | $ 383,717 |
Fair value of issued securities | 6,345,290 | 5,791,676 |
FHLB funding agreements | 644,500 | 545,000 |
FHLB of Chicago | ||
Investment Holdings [Line Items] | ||
Fair value of issued securities | 707,300 | 594,200 |
Governmental agencies as required by law in various states | ||
Investment Holdings [Line Items] | ||
Fair value of issued securities | $ 26,900 | $ 26,000 |
Investments - Offsetting of Ass
Investments - Offsetting of Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Asset derivatives | ||
Net Amounts of Assets/ Liabilities Presented in the Consolidated Balance Sheets | $ 16,805 | $ 13,239 |
Free-standing derivatives | ||
Asset derivatives | ||
Gross Amounts | 16,805 | 13,239 |
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | 0 |
Net Amounts of Assets/ Liabilities Presented in the Consolidated Balance Sheets | 16,805 | 13,239 |
Gross Amounts Not Offset in the Consolidated Balance Sheets, Financial Instruments | 13,671 | 7,687 |
Gross Amounts Not Offset in the Consolidated Balance Sheets, Cash Collateral Received | 2,620 | 6,640 |
Net Amount | $ 514 | $ (1,088) |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Narrative (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)security | Dec. 31, 2019USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Percentage of investment portfolio fair value pricing services or index price | 91.90% | 94.10% |
Net investment losses included in net income related to financial assets | $ | $ 277 | $ 1,067 |
Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Number of hard-to-value fixed maturity securities | security | 100 | |
Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Number of hard-to-value fixed maturity securities | security | 150 | |
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 | 5.30% | |
Net investment gain (loss) | $ | $ (11,500) | $ (12,600) |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Financial Instruments Measured and Carried at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | $ 6,345,290 | $ 5,791,676 |
Mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 684,838 | 724,319 |
Other, including U.S. Treasury securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 433,153 | 458,868 |
Municipal bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 1,827,497 | 1,686,203 |
Foreign government bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 45,053 | 45,370 |
Corporate bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 2,122,899 | 1,581,424 |
Other asset-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 1,231,850 | 1,295,492 |
Level 3 | Mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 11,074 | |
Level 3 | Municipal bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 59,590 | |
Level 3 | Corporate bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 155,816 | |
Level 3 | Other asset-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 128,283 | |
Carrying Value | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 6,644,971 | 6,092,204 |
Separate account (variable annuity) assets | 2,891,423 | 2,490,469 |
Investment contract and life policy reserves, embedded derivatives | 2,474 | 1,314 |
Other policyholder funds, embedded derivatives | 104,488 | 93,733 |
Carrying Value | Short-term investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 141,770 | 172,667 |
Carrying Value | Recurring | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 6,345,290 | 5,791,676 |
Carrying Value | Mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 684,838 | 724,319 |
Carrying Value | Other, including U.S. Treasury securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 433,153 | 458,868 |
Carrying Value | Municipal bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 1,827,497 | 1,686,203 |
Carrying Value | Foreign government bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 45,054 | 45,370 |
Carrying Value | Corporate bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 2,122,898 | 1,581,424 |
Carrying Value | Other asset-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 1,231,850 | 1,295,492 |
Carrying Value | Equity securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 121,653 | 101,864 |
Carrying Value | Other investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 36,258 | 25,997 |
Fair Value | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 6,644,971 | 6,092,204 |
Separate account (variable annuity) assets | 2,891,423 | 2,490,469 |
Investment contract and life policy reserves, embedded derivatives | 2,474 | 1,314 |
Other policyholder funds, embedded derivatives | 104,488 | 93,733 |
Fair Value | Short-term investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 141,770 | 172,667 |
Fair Value | Recurring | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 6,345,290 | 5,791,676 |
Fair Value | Mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 684,838 | 724,319 |
Fair Value | Other, including U.S. Treasury securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 433,153 | 458,868 |
Fair Value | Municipal bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 1,827,497 | 1,686,203 |
Fair Value | Foreign government bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 45,054 | 45,370 |
Fair Value | Corporate bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 2,122,898 | 1,581,424 |
Fair Value | Other asset-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 1,231,850 | 1,295,492 |
Fair Value | Equity securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 121,653 | 101,864 |
Fair Value | Other investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 36,258 | 25,997 |
Fair Value | Level 1 | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 210,140 | 254,670 |
Separate account (variable annuity) assets | 2,891,423 | 2,490,469 |
Investment contract and life policy reserves, embedded derivatives | 0 | 0 |
Other policyholder funds, embedded derivatives | 0 | 0 |
Fair Value | Level 1 | Short-term investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 137,679 | 172,667 |
Fair Value | Level 1 | Recurring | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 33,226 | 32,169 |
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 | 18,350 | 17,699 |
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 | 14,876 | 14,470 |
Fair Value | Level 1 | Other asset-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 | 39,235 | 49,834 |
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 | 6,079,765 | 5,542,356 |
Separate account (variable annuity) assets | 0 | 0 |
Investment contract and life policy reserves, embedded derivatives | 2,474 | 1,314 |
Other policyholder funds, embedded derivatives | 0 | 0 |
Fair Value | Level 2 | Short-term investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 4,091 | 0 |
Fair Value | Level 2 | Recurring | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 5,957,301 | 5,464,436 |
Fair Value | Level 2 | Mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 673,764 | 711,004 |
Fair Value | Level 2 | Other, including U.S. Treasury securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 414,803 | 441,169 |
Fair Value | Level 2 | Municipal bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 1,767,907 | 1,641,912 |
Fair Value | Level 2 | Foreign government bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 45,054 | 45,370 |
Fair Value | Level 2 | Corporate bonds | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 1,952,206 | 1,463,002 |
Fair Value | Level 2 | Other asset-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 1,103,567 | 1,161,979 |
Fair Value | Level 2 | Equity securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 82,115 | 51,923 |
Fair Value | Level 2 | Other investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 36,258 | 25,997 |
Fair Value | Level 3 | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 355,066 | 295,178 |
Separate account (variable annuity) assets | 0 | 0 |
Investment contract and life policy reserves, embedded derivatives | 0 | 0 |
Other policyholder funds, embedded derivatives | 104,488 | 93,733 |
Fair Value | Level 3 | Short-term investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 0 | 0 |
Fair Value | Level 3 | Recurring | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 354,763 | 295,071 |
Fair Value | Level 3 | Mortgage-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 11,074 | 13,315 |
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 | 59,590 | 44,291 |
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 | 155,816 | 103,952 |
Fair Value | Level 3 | Other asset-backed securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 128,283 | 133,513 |
Fair Value | Level 3 | Equity securities | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | 303 | 107 |
Fair Value | Level 3 | Other investments | ||
U.S. Government and federally sponsored agency obligations: | ||
Fair Value | $ 0 | $ 0 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Transfers Between Different Fair Value Levels (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Financial Assets | ||
Beginning balance | $ 295,178 | $ 248,489 |
Transfers into Level 3 | 268,804 | 90,306 |
Transfers out of Level 3 | (190,373) | (10,266) |
Total gains or losses | ||
Net investment gains (losses) included in net income related to financial assets | (277) | (1,067) |
Net unrealized investment gains (losses) included in OCI | (4,792) | 11,035 |
Purchases | 8,765 | 2,483 |
Issuances | 0 | 0 |
Sales | 1,214 | (608) |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | (23,453) | (45,194) |
Ending balance | 355,066 | 295,178 |
Financial Liabilities | ||
Beginning balance | 93,733 | 78,700 |
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 liabilities | 11,499 | 12,636 |
Net unrealized investment gains (losses) included in OCI | 0 | 0 |
Purchases | 0 | 0 |
Issuances | 8,373 | 10,039 |
Sales | 0 | 0 |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | (9,117) | (7,642) |
Ending balance | 104,488 | 93,733 |
Municipal bonds | ||
Financial Assets | ||
Beginning balance | 44,291 | 47,531 |
Transfers into Level 3 | 80,686 | 0 |
Transfers out of Level 3 | (69,074) | 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 | 4,252 | 474 |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | 0 | 0 |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | (565) | (3,714) |
Ending balance | 59,590 | 44,291 |
Corporate bonds | ||
Financial Assets | ||
Beginning balance | 103,952 | 80,742 |
Transfers into Level 3 | 83,621 | 33,475 |
Transfers out of Level 3 | (36,620) | (7,698) |
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 | 1,427 | 4,461 |
Purchases | 6,875 | 2,483 |
Issuances | 0 | 0 |
Sales | 0 | 0 |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | (3,439) | (9,511) |
Ending balance | 155,816 | 103,952 |
Other asset-backed securities | ||
Financial Assets | ||
Beginning balance | 146,828 | 120,211 |
Transfers into Level 3 | 104,263 | 56,766 |
Transfers out of Level 3 | (84,679) | (2,568) |
Total gains or losses | ||
Net investment gains (losses) included in net income related to financial assets | (239) | (1,105) |
Net unrealized investment gains (losses) included in OCI | (10,471) | 6,100 |
Purchases | 1,890 | 0 |
Issuances | 0 | 0 |
Sales | 1,214 | (607) |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | (19,449) | (31,969) |
Ending balance | 139,357 | 146,828 |
Total | ||
Financial Assets | ||
Beginning balance | 295,071 | 248,484 |
Transfers into Level 3 | 268,570 | 90,241 |
Transfers out of Level 3 | (190,373) | (10,266) |
Total gains or losses | ||
Net investment gains (losses) included in net income related to financial assets | (239) | (1,105) |
Net unrealized investment gains (losses) included in OCI | (4,792) | 11,035 |
Purchases | 8,765 | 2,483 |
Issuances | 0 | 0 |
Sales | 1,214 | (607) |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | (23,453) | (45,194) |
Ending balance | 354,763 | 295,071 |
Equity securities | ||
Financial Assets | ||
Beginning balance | 107 | 5 |
Transfers into Level 3 | 234 | 65 |
Transfers out of Level 3 | 0 | 0 |
Total gains or losses | ||
Net investment gains (losses) included in net income related to financial assets | (38) | 38 |
Net unrealized investment gains (losses) included in OCI | 0 | 0 |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | 0 | (1) |
Settlements | 0 | 0 |
Paydowns, maturities and distributions | 0 | 0 |
Ending balance | $ 303 | $ 107 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Quantitative Information about Level 3 Fair Value Measurements (Details) $ in Thousands | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | $ 6,345,290 | $ 5,791,676 |
Equity securities at fair value | 121,653 | 101,864 |
Fair Value, Inputs, Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Equity securities at fair value | 303 | |
Derivatives embedded in fixed indexed annuity products | $ 104,488 | |
Weighted Average | discounted cash flow | Fair Value, Inputs, Level 3 | lapse rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivatives embedded in fixed indexed annuity products, measurement input | 0.0530 | |
Weighted Average | discounted cash flow | Fair Value, Inputs, Level 3 | Mortality multiplier | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivatives embedded in fixed indexed annuity products, measurement input | 0.6300 | |
Weighted Average | discounted cash flow | Fair Value, Inputs, Level 3 | non-performance adjustment | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivatives embedded in fixed indexed annuity products, measurement input | 0.0500 | |
Minimum | discounted cash flow | Fair Value, Inputs, Level 3 | option budget | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivatives embedded in fixed indexed annuity products, measurement input | 0.0090 | |
Minimum | Black-Scholes | Fair Value, Inputs, Level 3 | equity value | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Equity securities, measurement input | 0.3100 | |
Maximum | discounted cash flow | Fair Value, Inputs, Level 3 | option budget | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivatives embedded in fixed indexed annuity products, measurement input | 0.0250 | |
Maximum | Black-Scholes | Fair Value, Inputs, Level 3 | equity value | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Equity securities, measurement input | 0.4100 | |
Municipal bonds | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | $ 1,827,497 | 1,686,203 |
Municipal bonds | Fair Value, Inputs, Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | $ 59,590 | |
Municipal bonds | Minimum | discounted cash flow | Fair Value, Inputs, Level 3 | I spread | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Debt securities, measurement input | 0.0307 | |
Municipal bonds | Maximum | discounted cash flow | Fair Value, Inputs, Level 3 | I spread | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Debt securities, measurement input | 0.0391 | |
Corporate bonds | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | $ 2,122,899 | 1,581,424 |
Corporate bonds | Fair Value, Inputs, Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | $ 155,816 | |
Corporate bonds | Weighted Average | market comparable | Fair Value, Inputs, Level 3 | option adjusted spread | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Debt securities, measurement input | 0.1254 | |
Corporate bonds | Minimum | discounted cash flow | Fair Value, Inputs, Level 3 | N spread | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Debt securities, measurement input | 0.0272 | |
Corporate bonds | Maximum | discounted cash flow | Fair Value, Inputs, Level 3 | N spread | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Debt securities, measurement input | 0.0553 | |
Other asset-backed securities | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | $ 1,231,850 | 1,295,492 |
Other asset-backed securities | Fair Value, Inputs, Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | $ 128,283 | |
Other asset-backed securities | Weighted Average | discounted cash flow | Fair Value, Inputs, Level 3 | constant prepayment rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Debt securities, measurement input | 0.2000 | |
Other asset-backed securities | Weighted Average | discounted cash flow | Fair Value, Inputs, Level 3 | P D I interest margin | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Debt securities, measurement input | 0.0713 | |
Other asset-backed securities | Weighted Average | discounted cash flow | Fair Value, Inputs, Level 3 | S B L interest margin | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Debt securities, measurement input | 0.0450 | |
Other asset-backed securities | Minimum | discounted cash flow | Fair Value, Inputs, Level 3 | T spread | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Debt securities, measurement input | 0.0235 | |
Other asset-backed securities | Minimum | vendor price | Fair Value, Inputs, Level 3 | haircut | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Debt securities, measurement input | 0.0300 | |
Other asset-backed securities | Maximum | discounted cash flow | Fair Value, Inputs, Level 3 | T spread | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Debt securities, measurement input | 0.0800 | |
Other asset-backed securities | Maximum | vendor price | Fair Value, Inputs, Level 3 | haircut | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Debt securities, measurement input | 0.0500 | |
Government mortgage-backed securities | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | $ 684,838 | $ 724,319 |
Government mortgage-backed securities | Fair Value, Inputs, Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | $ 11,074 | |
Government mortgage-backed securities | Minimum | vendor price | Fair Value, Inputs, Level 3 | haircut | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Debt securities, measurement input | 0.0300 | |
Government mortgage-backed securities | Maximum | vendor price | Fair Value, Inputs, Level 3 | haircut | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Debt securities, measurement input | 0.0500 |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments - Financial Instruments Not Carried at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Level 1 | ||
Investments | ||
Other investments | $ 0 | $ 0 |
Deposit asset on reinsurance | 0 | 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 | 0 |
Long-term debt | 0 | 0 |
Level 2 | ||
Investments | ||
Other investments | 0 | 0 |
Deposit asset on reinsurance | 0 | 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 | 590,692 | 495,812 |
Short-term debt | 0 | 0 |
Long-term debt | 331,136 | 322,678 |
Level 3 | ||
Investments | ||
Other investments | 172,073 | 167,185 |
Deposit asset on reinsurance | 3,030,589 | 2,634,012 |
Financial Liabilities | ||
Investment contract and policy reserves, fixed annuity contracts | 4,963,318 | 4,609,880 |
Investment contract and life policy reserves, account values on life contracts | 108,360 | 98,332 |
Other policyholder funds | 56,117 | 57,738 |
Short-term debt | 135,000 | 135,000 |
Long-term debt | 0 | 0 |
Carrying Value | ||
Investments | ||
Other investments | 168,296 | 163,312 |
Deposit asset on reinsurance | 2,420,926 | 2,346,166 |
Financial Liabilities | ||
Investment contract and policy reserves, fixed annuity contracts | 4,847,648 | 4,675,774 |
Investment contract and life policy reserves, account values on life contracts | 98,719 | 93,465 |
Other policyholder funds | 646,809 | 553,550 |
Short-term debt | 135,000 | 135,000 |
Long-term debt | 302,323 | 298,025 |
Fair Value | ||
Investments | ||
Other investments | 172,073 | 167,185 |
Deposit asset on reinsurance | 3,030,589 | 2,634,012 |
Financial Liabilities | ||
Investment contract and policy reserves, fixed annuity contracts | 4,963,318 | 4,609,880 |
Investment contract and life policy reserves, account values on life contracts | 108,360 | 98,332 |
Other policyholder funds | 646,809 | 553,550 |
Short-term debt | 135,000 | 135,000 |
Long-term debt | $ 331,136 | $ 322,678 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
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 | $ 16.3 | $ 14.3 |
Call option | ||
Derivatives, Fair Value [Line Items] | ||
Derivative term of contract | 1 year |
Derivatives - Fair Value of Der
Derivatives - Fair Value of Derivatives in Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Derivatives, reported in Short-term and other investments | $ 16,805 | $ 13,239 |
Derivatives, reported in Short-term and other investments | ||
Assets | ||
Derivatives, reported in Short-term and other investments | 16,805 | 13,239 |
FIA - embedded derivatives, reported in Other policyholder funds | ||
Liabilities | ||
FIA - embedded derivatives, reported in Other policyholder funds | 104,488 | 93,733 |
IUL - embedded derivatives, reported in Investment contract and policy reserves | ||
Liabilities | ||
IUL - embedded derivatives, reported in Investment contract and policy reserves | $ 2,474 | $ 1,314 |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Change in fair value of derivatives: | |||
Net investment gains (losses) | $ 248 | $ 9,493 | $ (4,112) |
Change in fair value of embedded derivatives: | |||
Net investment gains (losses) | $ (12,055) | $ (13,576) | $ 7,931 |
Derivatives - Notional and Fair
Derivatives - Notional and Fair Value Amounts of Derivative Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Derivative [Line Items] | ||
Notional amount | $ 287,100 | $ 318,000 |
Fair value | 16,805 | 13,239 |
Bank of America, N.A. | ||
Derivative [Line Items] | ||
Notional amount | 205,200 | 174,900 |
Fair value | 14,006 | 8,523 |
Barclays Bank PLC | ||
Derivative [Line Items] | ||
Notional amount | 81,900 | 115,300 |
Fair value | 2,799 | 3,347 |
Citigroup Inc. | ||
Derivative [Line Items] | ||
Notional amount | 0 | 0 |
Fair value | 0 | 0 |
Credit Suisse International | ||
Derivative [Line Items] | ||
Notional amount | 0 | 0 |
Fair value | 0 | 0 |
Societe Generale | ||
Derivative [Line Items] | ||
Notional amount | 0 | 27,800 |
Fair value | $ 0 | $ 1,369 |
Deposit Asset on Reinsurance -
Deposit Asset on Reinsurance - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Apr. 01, 2019 | |
Effects of Reinsurance [Line Items] | ||||
Reinsurance block of in-force fixed and variable annuity business | $ 2,900,000 | |||
Fixed annuity reserves reinsured on a coinsurance basis | $ 2,200,000 | |||
Deposit asset on reinsurance | $ 2,420,926 | $ 2,346,166 | 2,300,000 | |
Investment gain realized, net of tax | $ 106,900 | |||
Separate account asset | 2,891,423 | 2,490,469 | ||
Separate account liability | 2,891,423 | 2,490,469 | ||
Interest accrued on reinsurance deposit | $ 97,300 | $ 70,800 | ||
Reinsurance Contract Modified Coinsurance Basis | ||||
Effects of Reinsurance [Line Items] | ||||
Separate account asset | 700,000 | |||
Separate account liability | $ 700,000 | |||
Reinsurance Deposit Receivable | Third Party Reinsurer Risk | ||||
Effects of Reinsurance [Line Items] | ||||
Concentration risk, percent | 50.00% | |||
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 | Oct. 01, 2020 | Jun. 30, 2019 | Dec. 31, 2020 |
Goodwill [Line Items] | |||
Goodwill impairment | $ 5,625 | ||
Impairment of infinite lived intangible assets | 767 | ||
Trade names | |||
Goodwill [Line Items] | |||
Impairment of infinite lived intangible assets | 767 | ||
Benefit Consultants Group Inc. | |||
Goodwill [Line Items] | |||
Goodwill impairment | $ 5,600 | ||
Acquired finite-lived intangible assets | 14,100 | ||
Benefit Consultants Group Inc. | Trade names | |||
Goodwill [Line Items] | |||
Impairment of infinite lived intangible assets | 800 | ||
Benefit Consultants Group Inc. | Value of business acquired | |||
Goodwill [Line Items] | |||
Impairment of finite lived intangible assets | 3,600 | ||
NTA | |||
Goodwill [Line Items] | |||
Acquired finite-lived intangible assets | 160,400 | ||
Retirement | |||
Goodwill [Line Items] | |||
Goodwill impairment | $ 28,000 | $ 5,625 | |
Retirement | Benefit Consultants Group Inc. | |||
Goodwill [Line Items] | |||
Goodwill impairment | $ 5,600 |
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, 2020 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 49,079 | |
Impairments | (5,625) | |
Acquisitions | 0 | |
Ending balance | 43,454 | |
Property and Casualty | ||
Goodwill [Roll Forward] | ||
Beginning balance | 9,460 | |
Impairments | 0 | |
Acquisitions | 0 | |
Ending balance | 9,460 | |
Supplemental | ||
Goodwill [Roll Forward] | ||
Beginning balance | 19,621 | |
Impairments | 0 | |
Acquisitions | 0 | |
Ending balance | 19,621 | |
Retirement | ||
Goodwill [Roll Forward] | ||
Beginning balance | 10,087 | |
Impairments | $ (28,000) | (5,625) |
Acquisitions | 0 | |
Ending balance | 4,462 | |
Life | ||
Goodwill [Roll Forward] | ||
Beginning balance | 9,911 | |
Impairments | 0 | |
Acquisitions | 0 | |
Ending balance | $ 9,911 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, net - Summary of Finite-Lived Intangible Assets (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life (in years) | 23 years |
At inception: | $ 174,476 |
Accumulated amortization and impairments: | (26,780) |
Total | $ 147,696 |
Value of business acquired | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life (in years) | 30 years |
At inception: | $ 94,419 |
Accumulated amortization and impairments: | $ (10,835) |
Value of distribution acquired | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life (in years) | 17 years |
At inception: | $ 53,996 |
Accumulated amortization and impairments: | $ (8,684) |
Value of agency relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life (in years) | 14 years |
At inception: | $ 16,981 |
Accumulated amortization and impairments: | $ (4,059) |
Value of customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life (in years) | 10 years |
At inception: | $ 9,080 |
Accumulated amortization and impairments: | $ (3,202) |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets, net - Estimated Future Amortization (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2021 | $ 13,067 |
2022 | 12,070 |
2023 | 11,232 |
2024 | 10,480 |
2025 | 9,811 |
Thereafter | 91,036 |
Total | $ 147,696 |
Goodwill and Intangible Asset_7
Goodwill and Intangible Assets, net - Summary of Indefinite-Lived Intangibles (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Indefinite-lived Intangible Assets [Roll Forward] | |
Beginning balance | $ 11,531 |
Impairments | (767) |
Acquisitions | 0 |
Ending balance | 10,764 |
Trade names | |
Indefinite-lived Intangible Assets [Roll Forward] | |
Beginning balance | 8,645 |
Impairments | (767) |
Acquisitions | 0 |
Ending balance | 7,878 |
State licenses | |
Indefinite-lived Intangible Assets [Roll Forward] | |
Beginning balance | 2,886 |
Impairments | 0 |
Acquisitions | 0 |
Ending balance | $ 2,886 |
Unpaid Claims and Claim Expen_3
Unpaid Claims and Claim Expenses - Summary of Reinsurance Reserve Balances (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | |||
Gross reserves, beginning of year | $ 442,854 | ||
Less: reinsurance recoverables | 129,213 | ||
Claims and claim expense payments for claims occurring during: | |||
Plus: reinsurance recoverables | 122,450 | $ 129,213 | |
Gross reserves, end of year | 438,754 | 442,854 | |
Benefits, claims and settlement expenses | 568,891 | 585,068 | $ 637,560 |
Property and Casualty segment | |||
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | |||
Gross reserves, beginning of year | 386,976 | 367,180 | 319,182 |
Less: reinsurance recoverables | 120,506 | 89,725 | 57,409 |
Net reserves, beginning of year | 266,470 | 277,455 | 261,773 |
Incurred claims and claim expenses: | |||
Claims occurring in the current year | 441,191 | 483,062 | 547,959 |
Decrease in estimated reserves for claims occurring in prior years | (10,200) | (7,500) | (300) |
Total claims and claim expenses incurred | 430,991 | 475,562 | 547,659 |
Claims and claim expense payments for claims occurring during: | |||
Current year | 291,393 | 329,475 | 369,194 |
Prior years | 146,796 | 157,072 | 162,783 |
Total claims and claim expense payments | 438,189 | 486,547 | 531,977 |
Net reserves, end of year | 259,272 | 266,470 | 277,455 |
Plus: reinsurance recoverables | 112,881 | 120,506 | 89,725 |
Gross reserves, end of year | 372,153 | 386,976 | 367,180 |
Life and Annuity segments | |||
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | |||
Net reserves, beginning of year | 55,900 | 29,500 | |
Claims and claim expense payments for claims occurring during: | |||
Net reserves, end of year | 66,600 | 55,900 | 29,500 |
Benefits, claims and settlement expenses | $ 137,900 | $ 109,500 | $ 89,900 |
Unpaid Claims and Claim Expen_4
Unpaid Claims and Claim Expenses - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
Automobile liability coverage percent reserves | 74.00% | ||
Short tail coverage reserves as a percentage of total reserves | 26.00% | ||
Long tail coverage reserves as percentage of reserves | 74.00% | ||
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 | $ 12 | ||
Favorable development of total reserves for property and casualty claims occurring in prior years | 10.2 | $ 7.5 | $ 0.3 |
2018 Camp Fire In California | |||
Segment Reporting Information [Line Items] | |||
Favorable development of total reserves for property and casualty claims occurring in prior years | $ 4.8 |
Unpaid Claims and Claim Expen_5
Unpaid Claims and Claim Expenses - Average Annual Percentage Payout Of Incurred Claims by Age (Details) | Dec. 31, 2020 |
Homeowners | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Year One | 80.40% |
Year Two | 16.20% |
Year Three | 2.00% |
Year Four | 0.70% |
Year Five | 0.50% |
Year Six | 0.20% |
Year Seven | 0.00% |
Year Eight | 0.00% |
Year Nine | 0.00% |
Year Ten | 0.00% |
Automobile liability | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Year One | 40.90% |
Year Two | 34.40% |
Year Three | 13.80% |
Year Four | 6.30% |
Year Five | 3.10% |
Year Six | 1.10% |
Year Seven | 0.30% |
Year Eight | 0.10% |
Year Nine | 0.00% |
Year Ten | 0.00% |
Automobile physical damage | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Year One | 95.50% |
Year Two | 4.50% |
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% |
Unpaid Claims and Claim Expen_6
Unpaid Claims and Claim Expenses - Incurred and Paid Claims by Accident Year on a Net Basis (Details) $ in Thousands | Dec. 31, 2020USD ($)claim | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) |
Homeowners | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 1,270,282 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 1,214,781 | |||||||||
Outstanding prior to 2011 | 32 | |||||||||
Prior years paid | ||||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance | 55,533 | |||||||||
Homeowners | 2011 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 148,067 | $ 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 | 29,532,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 148,067 | 148,067 | 148,069 | 148,014 | 148,026 | 147,451 | 146,908 | 145,852 | 142,846 | 123,046 |
Homeowners | 2012 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 106,032 | 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 | $ 106,025 | 106,021 | 105,993 | 105,909 | 105,561 | 105,156 | 104,203 | 101,566 | 84,260 | |
Homeowners | 2013 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 101,711 | 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 | 19,222,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 101,711 | 101,709 | 101,677 | 101,527 | 100,968 | 99,361 | 96,599 | 76,890 | ||
Homeowners | 2014 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 106,414 | 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 | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 20,084,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 106,419 | 106,388 | 106,258 | 106,081 | 105,704 | 103,030 | 83,314 | |||
Homeowners | 2015 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 114,942 | 115,050 | 114,053 | 114,404 | 115,134 | 111,706 | ||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 67 | |||||||||
Cumulative Number of Reported Claims | claim | 18,716,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 114,861 | 114,648 | 113,321 | 111,882 | 109,303 | 90,704 | ||||
Homeowners | 2016 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 117,940 | 117,933 | 117,009 | 118,604 | 115,931 | |||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 241 | |||||||||
Cumulative Number of Reported Claims | claim | 19,860,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 117,688 | 117,537 | 115,053 | 113,186 | 95,772 | |||||
Homeowners | 2017 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 130,693 | 132,666 | 129,818 | 126,285 | ||||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 585 | |||||||||
Cumulative Number of Reported Claims | claim | 19,850,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 130,017 | 129,767 | 128,518 | 106,800 | ||||||
Homeowners | 2018 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 158,861 | 157,404 | 166,793 | |||||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 1,352 | |||||||||
Cumulative Number of Reported Claims | claim | 21,037,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 157,004 | 152,356 | 130,548 | |||||||
Homeowners | 2019 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 129,901 | 130,391 | ||||||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 1,949 | |||||||||
Cumulative Number of Reported Claims | claim | 17,463,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 126,208 | 103,790 | ||||||||
Homeowners | 2020 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 155,721 | |||||||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 32,267 | |||||||||
Cumulative Number of Reported Claims | claim | 18,229,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 106,781 | |||||||||
Automobile liability | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 1,659,290 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 1,480,265 | |||||||||
Outstanding prior to 2011 | 724 | |||||||||
Prior years paid | ||||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance | 179,749 | |||||||||
Automobile liability | 2011 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 139,530 | 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 | $ 90 | |||||||||
Cumulative Number of Reported Claims | claim | 46,163,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 138,708 | 138,692 | 138,689 | 138,358 | 138,151 | 136,906 | 133,931 | 126,812 | 108,837 | 61,070 |
Automobile liability | 2012 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 145,946 | 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 | $ 233 | |||||||||
Cumulative Number of Reported Claims | claim | 46,008,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 145,256 | 145,184 | 145,121 | 144,622 | 142,916 | 138,641 | 127,185 | 109,574 | 61,279 | |
Automobile liability | 2013 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 148,288 | 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 | $ 668 | |||||||||
Cumulative Number of Reported Claims | claim | 47,336,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 147,443 | 147,409 | 146,770 | 145,291 | 139,954 | 131,214 | 108,856 | 62,224 | ||
Automobile liability | 2014 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 159,263 | 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 | $ 62 | |||||||||
Cumulative Number of Reported Claims | claim | 49,347,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 158,644 | 157,596 | 155,758 | 149,059 | 139,463 | 117,468 | 61,329 | |||
Automobile liability | 2015 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 179,186 | 178,654 | 178,325 | 177,021 | 172,553 | 165,517 | ||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 828 | |||||||||
Cumulative Number of Reported Claims | claim | 50,579,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 176,728 | 174,495 | 170,088 | 157,980 | 134,473 | 70,836 | ||||
Automobile liability | 2016 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 188,079 | 186,568 | 184,567 | 184,440 | 180,380 | |||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 805 | |||||||||
Cumulative Number of Reported Claims | claim | 52,003,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 184,489 | 177,834 | 166,815 | 140,901 | 73,073 | |||||
Automobile liability | 2017 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 189,095 | 188,625 | 188,756 | 187,983 | ||||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 3,321 | |||||||||
Cumulative Number of Reported Claims | claim | 48,876,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 179,782 | 166,614 | 139,531 | 70,682 | ||||||
Automobile liability | 2018 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 192,866 | 195,284 | 200,314 | |||||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 12,931 | |||||||||
Cumulative Number of Reported Claims | claim | 47,684,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 168,628 | 141,537 | 77,528 | |||||||
Automobile liability | 2019 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 180,060 | 181,141 | ||||||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 29,004 | |||||||||
Cumulative Number of Reported Claims | claim | 45,915,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 129,101 | 69,665 | ||||||||
Automobile liability | 2020 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 136,977 | |||||||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 51,452 | |||||||||
Cumulative Number of Reported Claims | claim | 30,032,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 51,486 | |||||||||
Automobile physical damage | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 975,667 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 972,966 | |||||||||
Outstanding prior to 2011 | 10 | |||||||||
Prior years paid | ||||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance | 2,711 | |||||||||
Automobile physical damage | 2011 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 85,089 | 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 | $ 85,082 | 85,090 | 85,095 | 85,108 | 85,116 | 85,127 | 85,148 | 85,181 | 85,254 | $ 83,227 |
Automobile physical damage | 2012 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 83,323 | 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 | 78,166,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 83,318 | 83,322 | 83,326 | 83,342 | 83,347 | 83,355 | 83,372 | 83,418 | $ 80,519 | |
Automobile physical damage | 2013 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 88,452 | 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 | $ 88,442 | 88,452 | 88,471 | 88,484 | 88,532 | 88,580 | 88,688 | $ 85,110 | ||
Automobile physical damage | 2014 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 95,242 | 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 | $ 95,228 | 95,243 | 95,258 | 95,256 | 95,266 | 95,444 | $ 88,939 | |||
Automobile physical damage | 2015 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 97,608 | 97,612 | 97,455 | 97,624 | 97,994 | 99,291 | ||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 87,502,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 97,608 | 97,625 | 97,638 | 97,685 | 97,850 | $ 92,138 | ||||
Automobile physical damage | 2016 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 109,597 | 109,603 | 109,348 | 109,515 | 112,430 | |||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ (18) | |||||||||
Cumulative Number of Reported Claims | claim | 93,229,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 109,589 | 109,611 | 109,536 | 109,686 | $ 106,459 | |||||
Automobile physical damage | 2017 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 110,569 | 110,520 | 111,798 | 115,483 | ||||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ (17) | |||||||||
Cumulative Number of Reported Claims | claim | 91,290,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 110,630 | 110,674 | 110,817 | $ 105,156 | ||||||
Automobile physical damage | 2018 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 108,333 | 108,886 | 109,040 | |||||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ (161) | |||||||||
Cumulative Number of Reported Claims | claim | 94,458,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 108,272 | 109,103 | $ 103,559 | |||||||
Automobile physical damage | 2019 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 110,495 | 111,577 | ||||||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ (326) | |||||||||
Cumulative Number of Reported Claims | claim | 92,068,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 110,692 | $ 106,243 | ||||||||
Automobile physical damage | 2020 | ||||||||||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | 86,959 | |||||||||
Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims | $ (6,829) | |||||||||
Cumulative Number of Reported Claims | claim | 66,650,000 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | $ 84,105 |
Unpaid Claims and Claim Expen_7
Unpaid Claims and Claim Expenses - Reconciliation of Net Incurred and Paid Claims (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||
Gross reserves, end of year | $ 438,754 | $ 442,854 |
Property and Casualty segment | ||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||
Liabilities for claims and claim adjustment expenses, net of reinsurance | 241,182 | |
Reinsurance recoverables, including reinsurance premium paid | 112,881 | |
Unallocated claims adjustment expenses | 18,090 | |
Total other than short duration and unallocated claims adjustment expenses | 84,691 | |
Property and Casualty segment | Homeowners | ||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||
Liabilities for claims and claim adjustment expenses, net of reinsurance | 55,533 | |
Reinsurance recoverables, including reinsurance premium paid | 6,386 | |
Property and Casualty segment | Automobile liability | ||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||
Liabilities for claims and claim adjustment expenses, net of reinsurance | 179,749 | |
Reinsurance recoverables, including reinsurance premium paid | 99,717 | |
Property and Casualty segment | Automobile physical damage | ||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||
Liabilities for claims and claim adjustment expenses, net of reinsurance | 2,711 | |
Property and Casualty segment | Other short duration lines | ||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||
Liabilities for claims and claim adjustment expenses, net of reinsurance | 3,189 | |
Reinsurance recoverables, including reinsurance premium paid | 6,778 | |
Property and Casualty segment | Insurance lines other than short duration | ||
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | ||
Insurance lines other than short duration | $ 66,601 |
Reinsurance and Catastrophes -
Reinsurance and Catastrophes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reinsurance Recoverable on Unpaid Insurance Reserves [Line Items] | |||
Losses incurred for catastrophe claims, carrying amount | $ 84,400 | $ 52,000 | $ 107,300 |
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 | ||
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 group life policy insurance risk retained | 100 | ||
Amount life catastrophe risk retention per occurrence | 1,000 | ||
Minimum | Property and Casualty segment | |||
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 group life policy insurance risk retained | 125 | ||
Amount life catastrophe risk retention per occurrence | 35,000 | ||
Maximum | Property and Casualty segment | |||
Reinsurance Recoverable on Unpaid Insurance Reserves [Line Items] | |||
Retention amount of each property loss per occurrence | $ 5,000 |
Reinsurance and Catastrophes _2
Reinsurance and Catastrophes - Total Amounts of Reinsurance Recoverables On Unpaid Insurance Reserves (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Summary of reinsurance recoverable on unpaid insurance reserves | ||
Reinsurance recoverables | $ 122,450 | $ 129,213 |
Reinsurance companies | ||
Summary of reinsurance recoverable on unpaid insurance reserves | ||
Reinsurance recoverables | 13,164 | 19,640 |
State insurance facilities | ||
Summary of reinsurance recoverable on unpaid insurance reserves | ||
Reinsurance recoverables | 99,718 | 100,866 |
Life | ||
Summary of reinsurance recoverable on unpaid insurance reserves | ||
Reinsurance recoverables | $ 9,568 | $ 8,707 |
Reinsurance and Catastrophes _3
Reinsurance and Catastrophes - Effects of Reinsurance (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | 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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Gross Amount | |||||||||||||||
Premiums written and contract deposits, Gross Amount | $ 1,369,897 | $ 1,337,847 | $ 1,255,557 | ||||||||||||
Premiums and contract charges earned, Gross Amount | 949,525 | 917,610 | 841,147 | ||||||||||||
Benefits, claims and settlement expenses, Gross Amount | 475,746 | 633,874 | 769,664 | ||||||||||||
Ceded to Other Companies | |||||||||||||||
Premiums written and contract deposits, Ceded to Other Companies | 20,388 | 23,872 | 28,773 | ||||||||||||
Premiums and contract charges earned, Ceded to Other Companies | 28,757 | 30,412 | 28,837 | ||||||||||||
Benefits, claims and settlement expenses, Ceded to Other Companies | (86,184) | 56,325 | 136,601 | ||||||||||||
Assumed from Other Companies | |||||||||||||||
Premiums written and contract deposits, Assumed from Other Companies | 9,830 | 10,567 | 8,259 | ||||||||||||
Premiums and contract charges earned, Assumed from Other Companies | 9,929 | 10,756 | 5,023 | ||||||||||||
Benefits, claims and settlement expenses, Assumed from Other Companies | 6,961 | 7,519 | 4,497 | ||||||||||||
Net Amount | |||||||||||||||
Premiums written and contract deposits, Net Amount | $ 332,559 | $ 368,853 | $ 329,169 | $ 328,758 | $ 346,242 | $ 371,216 | $ 311,691 | $ 295,394 | $ 311,216 | $ 338,097 | $ 301,722 | $ 284,008 | 1,359,339 | 1,324,542 | 1,235,043 |
Premiums and contract charges earned, Net Amount | $ 233,648 | $ 235,353 | $ 225,431 | $ 236,265 | $ 240,392 | $ 239,681 | $ 208,096 | $ 209,785 | $ 201,905 | $ 206,820 | $ 205,610 | $ 202,998 | 930,697 | 897,954 | 817,333 |
Benefits, claims and settlement expenses | $ 568,891 | $ 585,068 | $ 637,560 |
Debt - Summary of Debt (Details
Debt - Summary of Debt (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Nov. 23, 2015 |
Short-term debt | |||
Bank Credit Facility | $ 135,000,000 | $ 135,000,000 | |
Long-term debt | |||
Long-term debt | 302,323,000 | 298,025,000 | |
Total | 437,323,000 | 433,025,000 | |
4.50% Senior Notes | |||
Long-term debt | |||
Long-term debt | $ 248,323,000 | $ 248,025,000 | |
Effective Interest Rates | 4.50% | 4.50% | 4.50% |
Principal amount | $ 250,000,000 | $ 250,000,000 | $ 250,000,000 |
Unamortized discount | 426,000 | 362,000 | |
Unamortized debt issuance costs | 1,549,000 | 1,315,000 | |
Federal Home Loan Bank borrowing | |||
Long-term debt | |||
Long-term debt | $ 54,000,000 | $ 50,000,000 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Nov. 23, 2015 | Dec. 31, 2017 | Dec. 31, 2020 | Dec. 31, 2019 | May 31, 2020 | 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 Bank Credit Facility | $ 50,000,000 | ||||||
FHLB advances interest rate | 0.44% | ||||||
Proceeds from COVID relief advance | $ 4,000,000 | ||||||
Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Purchase of FHLB activity-based common stock as percentage of borrowing, required | 2.00% | ||||||
Long-term debt | |||||||
Debt Instrument [Line Items] | |||||||
FHLB advances | $ 54,000,000 | ||||||
October 5, 2022 | |||||||
Debt Instrument [Line Items] | |||||||
FHLB advances | 25,000,000 | ||||||
December 2, 2022 | |||||||
Debt Instrument [Line Items] | |||||||
FHLB advances | $ 25,000,000 | ||||||
4.50% Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | $ 250,000,000 | $ 250,000,000 | $ 250,000,000 | ||||
Stated rate | 4.50% | 4.50% | 4.50% | ||||
Discount percent on issuance | 0.265% | ||||||
Effective interest percentage | 4.53% | ||||||
Debt redemption price, percentage | 100.00% | ||||||
Debt redemption price, interest discounted at treasury yield margin | 0.35% | ||||||
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% | ||||||
London Interbank Offered Rate (LIBOR) | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 1.15% |
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, 2020 | Dec. 31, 2019 |
Income tax (asset) liability | ||
Current | $ (12,631) | $ (12,184) |
Deferred | $ 206,650 | $ 160,624 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets | ||
Unearned premium reserve reduction | $ 11,488 | $ 12,103 |
Compensation accruals | 9,487 | 8,866 |
Reinsurance commissions | 0 | 6,804 |
Impaired securities | 2,127 | 1,245 |
Other comprehensive income - net funded status of benefit plans | 2,981 | 2,875 |
Discounting of unpaid claims and claim expense tax reserves | 2,548 | 2,530 |
Net operating loss carryforwards | 0 | 3,803 |
Postretirement benefits other than pensions | 270 | 285 |
Total gross deferred tax assets | 28,901 | 38,511 |
Deferred tax liabilities | ||
Other comprehensive income - net unrealized gains on securities | 124,715 | 74,645 |
Deferred policy acquisition costs | 36,347 | 49,326 |
Life insurance future policy benefit reserve | 26,725 | 38,210 |
Life insurance future policy benefit reserve (transitional rule) | 10,651 | 12,786 |
Discounting of unpaid claims and claim expense tax reserves (transitional rule) | 789 | 947 |
Investment related adjustments | 34,155 | 15,718 |
Intangibles | 210 | 2,021 |
Other, net | 1,959 | 5,482 |
Total gross deferred tax liabilities | 235,551 | 199,135 |
Net deferred tax liability | $ 206,650 | $ 160,624 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Current | $ 16,880 | $ 31,518 | $ 4,152 |
Deferred | 9,388 | 20,488 | (2,958) |
Total income tax expense | $ 26,268 | $ 52,006 | $ 1,194 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Effective Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Expected federal tax on income | $ 33,512 | $ 49,654 | $ 4,103 |
Add (deduct) tax effects of: | |||
Tax-exempt interest | (4,203) | (4,159) | (3,726) |
Dividend received deduction | (1,475) | (1,392) | (412) |
Goodwill impairment | 187 | 5,885 | 0 |
CARES Act net operating loss carryback | (2,792) | 0 | 0 |
Employee share-based compensation | (541) | 272 | (1,134) |
Compensation deduction limitation | 663 | 680 | 1,754 |
Prior year adjustments | (219) | (716) | 300 |
Other, net | 1,136 | 1,782 | 309 |
Total income tax expense | $ 26,268 | $ 52,006 | $ 1,194 |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance as of the beginning of the year | $ 1,966 | $ 1,734 | $ 1,790 |
Increases related to prior year tax positions | 205 | 109 | 0 |
Decreases related to prior year tax positions | 0 | 0 | (152) |
Increases related to current year tax positions | 151 | 123 | 96 |
Settlements | 0 | 0 | 0 |
Lapse of statute | 0 | 0 | 0 |
Balance as of the end of the year | $ 2,322 | $ 1,966 | $ 1,734 |
Operating Leases - Narrative (D
Operating Leases - Narrative (Details) | Dec. 31, 2020lease |
Leases [Abstract] | |
Renewal term | 25 years |
Lessee, Lease, Description [Line Items] | |
Renewal term | 25 years |
Number of operating lease not yet commenced | 1 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 5 years |
Operating Leases - Components o
Operating Leases - Components of Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 4,454 | $ 3,841 |
Short-term lease cost | 119 | 208 |
Total lease cost | $ 4,573 | $ 4,049 |
Operating Leases - Supplemental
Operating Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 4,453 | $ 3,447 |
Operating Leases - Balance Shee
Operating Leases - Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Right of use assets, included in Other assets | $ 12,551 | $ 16,483 |
Operating lease liabilities, included in Other liabilities | $ 13,559 | $ 17,499 |
Weighted average remaining lease term | 3 years 7 months 17 days | 4 years 6 months 3 days |
Weighted average discount rate | 3.75% | 3.78% |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilities | us-gaap:OtherLiabilities |
Operating Leases - Future Minim
Operating Leases - Future Minimum Operating Lease Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
2021 | $ 4,236 | |
2022 | 4,128 | |
2023 | 3,438 | |
2024 | 1,929 | |
2025 | 787 | |
Thereafter | 0 | |
Total future minimum lease payments | 14,518 | |
Less imputed interest | (959) | |
Total | $ 13,559 | $ 17,499 |
Shareholders' Equity and Shar_3
Shareholders' Equity and Share-Based Compensation - Narrative (Details) | 12 Months Ended | ||||||
Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018$ / sharesshares | Dec. 31, 2017USD ($)$ / 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 | 899,468 | 52,095 | 129,112 | ||||
Percentage of outstanding shares reacquired | 0.10% | 0.30% | |||||
Shares reacquired during period, value | $ | $ 2,200,000 | $ 5,100,000 | |||||
Share price of treasury stock acquired during period (in usd per share) | $ 32.68 | $ 41.17 | $ 39.41 | ||||
Remaining authorized repurchase amount | $ | $ 20,600,000 | ||||||
Treasury stock (in shares) | shares | 24,902,579 | 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) | 36.59 | $ 34.81 | $ 31.42 | ||||
Share price (in usd per share) | $ 42.04 | ||||||
Aggregate intrinsic value of vested options | $ | $ 2,500,000 | ||||||
Aggregate intrinsic value of options | $ | $ 2,900,000 | ||||||
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 | 751,661 |
Shareholders' Equity and Shar_4
Shareholders' Equity and Share-Based Compensation - Outstanding Stock Units and Stock Options under Comprehensive Plan (Details) - shares | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options (in shares) | 916,287 | 908,557 | 774,821 |
RSUs related to incentive compensation (in shares) | 823,393 | 889,438 | 1,008,249 |
Total (in shares) | 1,783,756 | 1,851,715 | 1,839,856 |
Restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock units related to deferred compensation (in shares) | 23,609 | 28,526 | 32,288 |
Employee stock option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock units related to deferred compensation (in shares) | 20,467 | 25,194 | 24,498 |
Shareholders' Equity and Shar_5
Shareholders' Equity and Share-Based Compensation - Stock Option Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Weighted Average Option Price per Share | |||
Weighted Average Option Price per Share, Beginning Balance (in usd per share) | $ 37.82 | ||
Weighted Average Option Price per Share, Options Granted (in usd per share) | 41.83 | ||
Weighted Average Option Price per Share, Options Vested (in usd per share) | 38.59 | ||
Weighted Average Option Price per Share, Options Exercised (in usd per share) | 31.08 | ||
Weighted Average Option Price per Share, Options Forfeited (in usd per share) | 40.64 | ||
Weighted Average Option Price per Share, Options Expired (in usd per share) | 39.99 | ||
Weighted Average Option Price per Share, Ending Balance (in usd per share) | $ 38.99 | $ 37.82 | |
Outstanding | |||
Options Outstanding, Beginning Balance (in shares) | 908,557 | 774,821 | |
Options Outstanding, Granted (in shares) | 234,248 | 282,040 | 223,208 |
Options Outstanding, Vested (in shares) | 0 | ||
Options Outstanding, Exercised (in shares) | (77,291) | ||
Options Outstanding, Forfeited (in shares) | (106,362) | ||
Options Outstanding, Expired (in shares) | (42,865) | ||
Options Outstanding, Ending Balance (in shares) | 916,287 | 908,557 | 774,821 |
Vested and Exercisable | |||
Options Vested and Exercisable, Beginning Balance (in shares) | 368,700 | ||
Options Vested and Exercisable, Granted (in shares) | 0 | ||
Options Vested and Exercisable, Vested (in shares) | 145,788 | ||
Options Vested and Exercisable, Exercisable (in shares) | (77,291) | ||
Options Vested and Exercisable, Forfeited (in shares) | 0 | ||
Options Vested and Exercisable, Expired (in shares) | 0 | ||
Options Vested and Exercisable, Ending Balance (in shares) | 437,197 | 368,700 | |
Minimum | |||
Range of Option Prices per Share | |||
Range of Option Prices per Share, Beginning Balance (in usd per share) | $ 20.60 | ||
Range of Option Prices per Share, Granted (in usd per share) | 41.83 | ||
Range of Option Prices per Share, Vested (in usd per share) | 28.88 | ||
Range of Option Prices per Share, Exercised (in usd per share) | 20.60 | ||
Range of Option Prices per Share, Forfeited (in usd per share) | 31.01 | ||
Range of Option Prices per Share, Expired (in usd per share) | 20.60 | ||
Range of Option Prices per Share, Ending Balance (in usd per share) | 28.88 | $ 20.60 | |
Maximum | |||
Range of Option Prices per Share | |||
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) | 41.83 | ||
Range of Option Prices per Share, Vested (in usd per share) | 42.95 | ||
Range of Option Prices per Share, Exercised (in usd per share) | 42.95 | ||
Range of Option Prices per Share, Forfeited (in usd per share) | 42.95 | ||
Range of Option Prices per Share, Expired (in usd per share) | 42.95 | ||
Range of Option Prices per Share, Ending Balance (in usd per share) | $ 42.95 | $ 44.75 |
Shareholders' Equity and Shar_6
Shareholders' Equity and Share-Based Compensation - Stock Option Information by Ranges of Exercise Prices (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Options (in shares) | 916,287 | 908,557 | 774,821 |
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 38.99 | $ 37.82 | |
Total Outstanding Options, Weighted Average Remaining Term | 7 years 1 month 24 days | ||
Vested and Exercisable Options (in shares) | 437,197 | 368,700 | |
Vested and Exercisable Options, Weighted Average Option Price per Share (in usd per share) | $ 36.59 | $ 34.81 | $ 31.42 |
Vested and Exercisable Options, Weighted Average Remaining Term | 5 years 10 months 9 days | ||
Range One | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Options (in shares) | 203,207 | ||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 30.84 | ||
Total Outstanding Options, Weighted Average Remaining Term | 4 years 7 months 9 days | ||
Vested and Exercisable Options (in shares) | 203,207 | ||
Vested and Exercisable Options, Weighted Average Option Price per Share (in usd per share) | $ 30.84 | ||
Vested and Exercisable Options, Weighted Average Remaining Term | 4 years 7 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) | $ 28.88 | ||
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) | $ 33.41 | ||
Range Two | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Options (in shares) | 546,108 | ||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 40.81 | ||
Total Outstanding Options, Weighted Average Remaining Term | 8 years 18 days | ||
Vested and Exercisable Options (in shares) | 154,902 | ||
Vested and Exercisable Options, Weighted Average Option Price per Share (in usd per share) | $ 40.90 | ||
Vested and Exercisable Options, Weighted Average Remaining Term | 6 years 9 months 21 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) | $ 36.04 | ||
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) | $ 41.95 | ||
Range Three | |||
Summary of options outstanding segregated by ranges of exercise prices | |||
Total Outstanding Options, Options (in shares) | 166,972 | ||
Total Outstanding Options, Weighted Average Option Price per Share (in usd per share) | $ 42.93 | ||
Total Outstanding Options, Weighted Average Remaining Term | 7 years 3 months 29 days | ||
Vested and Exercisable Options (in shares) | 79,088 | ||
Vested and Exercisable Options, Weighted Average Option Price per Share (in usd per share) | $ 42.94 | ||
Vested and Exercisable Options, Weighted Average Remaining Term | 7 years 3 months 3 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) | $ 42.73 | ||
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) | $ 42.95 |
Shareholders' Equity and Shar_7
Shareholders' Equity and Share-Based Compensation - Restricted Stock Activity (Details) | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Total Outstanding Units | |
Beginning balance, Total Outstanding, Units (in shares) | shares | 889,438 |
Granted, Total Outstanding Units (in shares) | shares | 197,207 |
Adjustment for performance achievement, Total Outstanding Units (in shares) | shares | 419 |
Vested, Total Outstanding Units (in shares) | shares | 0 |
Forfeited, Total Outstanding Units (in shares) | shares | (61,025) |
Distributed, Total Outstanding Units (in shares) | shares | (202,646) |
Ending balance, Total Outstanding, Units (in shares) | shares | 823,393 |
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 | $ 31.94 |
Granted, Total Outstanding, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | 42.07 |
Adjustment for performance achievement, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | 46.32 |
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 | 43.60 |
Distributed, Total Outstanding, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | 34.51 |
Ending balance, Total Outstanding, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | $ 33.88 |
Vested Units | |
Beginning balance, Vested, Units (in shares) | shares | 543,794 |
Granted, Vested, Units (in shares) | shares | 0 |
Adjustment for performance achievement, Units (in shares) | shares | 0 |
Vested, Vested, Units (in shares) | shares | 143,836 |
Forfeited, Vested, Units (in shares) | shares | 0 |
Distributed, Vested, Units (in shares) | shares | (202,646) |
Ending balance, Vested, Units (in shares) | shares | 484,984 |
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 | $ 24.77 |
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 | 42.56 |
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 | 34.51 |
Ending balance, Vested, Weighted Average Grant Date Fair Value per Unit (in usd per share) | $ / shares | $ 27.48 |
Statutory Information and Div_3
Statutory Information and Dividend Restrictions -Reconciliations of Statutory Capital, Surplus and Net Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Insurance [Abstract] | |||
Consolidated net income, statutory basis | $ 141,904 | $ 62,316 | $ 45,977 |
Consolidated capital and surplus, statutory basis | $ 937,274 | $ 868,839 | $ 903,564 |
Statutory Information and Div_4
Statutory Information and Dividend Restrictions - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Insurance [Abstract] | ||
Minimum statutory-basis capital and surplus | $ 113.2 | $ 108.1 |
Restricted net assets of HMEC's insurance subsidiaries | 26.9 | $ 26 |
Aggregate amount of dividends | $ 248.7 |
Retirement Plans and Other Po_3
Retirement Plans and Other Postretirement Benefits - Narrative (Details) $ in Millions | 12 Months Ended | |||
Dec. 31, 2020USD ($)plan | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2006USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Number of supplemental defined benefit plans frozen | plan | 2 | |||
Pension cost (credit) | $ 10 | $ 9.3 | $ 8.9 | |
Health reimbursement account, amount | 1.3 | $ 7.3 | ||
Health reimbursement accounts funding | $ 0.1 | $ 0.1 | $ 0.1 | |
Equity securities | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined benefit pension plan to approximate allocation | 35.00% | |||
Fixed income funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined benefit pension plan to approximate allocation | 65.00% | |||
Defined Benefit Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Expected amortization of gain (loss) next year | $ 0.5 | |||
Supplemental Defined Benefit Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Expected amortization of gain (loss) next year | $ 0.4 | |||
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 |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Contributions to employees' accounts | $ 0 | $ 0 | $ 0 | |
Total assets at the end of the year | 21,945 | 23,164 | 22,090 | $ 25,843 |
Qualified Plan | 401(k) plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Contributions to employees' accounts | 8,187 | 8,233 | 7,655 | |
Total assets at the end of the year | 228,449 | 206,247 | 167,767 | |
Nonqualified Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Contributions to employees' accounts | 68 | 58 | 70 | |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Defined Benefit Plan | |||
Change in benefit obligation: | |||
Projected benefit obligation at beginning of year | $ 24,820 | $ 25,075 | $ 28,432 |
Service cost | 650 | 650 | 650 |
Interest cost | 731 | 997 | 947 |
Plan amendments | 0 | 0 | 0 |
Actuarial loss (gain) | 1,021 | 101 | (2,208) |
Benefits paid | (1,538) | (2,003) | (2,746) |
Settlements | (1,392) | 0 | 0 |
Projected benefit obligation at end of year | 24,292 | 24,820 | 25,075 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 23,164 | 22,090 | 25,843 |
Actual return on plan assets | 2,253 | 3,471 | (640) |
Employer contributions | 0 | 0 | 0 |
Benefits paid | (1,538) | (2,003) | (2,746) |
Expenses paid | (542) | (394) | (367) |
Settlements | (1,392) | 0 | 0 |
Fair value of plan assets at end of year | 21,945 | 23,164 | 22,090 |
Funded status | (2,347) | (1,656) | (2,985) |
Prepaid (accrued) benefit expense | 5,485 | 6,690 | 7,425 |
Total amount recognized in Consolidated Balance Sheets, all in Other liabilities | (2,347) | (1,656) | (2,985) |
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss) [Abstract] | |||
Prior service cost | 0 | 0 | 0 |
Net actuarial loss | (7,833) | (8,345) | 10,410 |
Total amount recognized in AOCI | (7,833) | (8,345) | 10,410 |
Information for pension plans with an accumulated benefit obligation greater than plan assets: | |||
Projected benefit obligation | 24,292 | 24,820 | 25,075 |
Accumulated benefit obligation | 24,292 | 24,820 | 25,075 |
Fair value of plan assets | 21,945 | 23,164 | 22,090 |
Supplemental Defined Benefit Plans | |||
Change in benefit obligation: | |||
Projected benefit obligation at beginning of year | 15,228 | 15,404 | 16,832 |
Service cost | 0 | 0 | 0 |
Interest cost | 453 | 620 | 566 |
Plan amendments | 0 | 0 | 0 |
Actuarial loss (gain) | 1,318 | 516 | (789) |
Benefits paid | (1,312) | (1,312) | (1,205) |
Settlements | 0 | 0 | 0 |
Projected benefit obligation at end of year | 15,687 | 15,228 | 15,404 |
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 | 1,312 | 1,205 |
Benefits paid | (1,312) | (1,312) | (1,205) |
Expenses paid | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 |
Fair value of plan assets at end of year | 0 | 0 | 0 |
Funded status | (15,687) | (15,228) | (15,404) |
Prepaid (accrued) benefit expense | (9,327) | (9,884) | (10,320) |
Total amount recognized in Consolidated Balance Sheets, all in Other liabilities | (15,687) | (15,228) | (15,404) |
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss) [Abstract] | |||
Prior service cost | 0 | 0 | 0 |
Net actuarial loss | (6,360) | (5,345) | 5,084 |
Total amount recognized in AOCI | (6,360) | (5,345) | 5,084 |
Information for pension plans with an accumulated benefit obligation greater than plan assets: | |||
Projected benefit obligation | 15,687 | 15,228 | 15,404 |
Accumulated benefit obligation | 15,687 | 15,228 | 15,404 |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Defined Benefit Plan | |||
Service cost: | |||
Benefit accrual | $ 0 | $ 0 | $ 0 |
Other expenses | 650 | 650 | 650 |
Interest cost | 731 | 997 | 947 |
Expected return on plan assets | (966) | (1,222) | (1,377) |
Settlement loss | 447 | 0 | 0 |
Amortization of: | |||
Prior service cost | 0 | 0 | 0 |
Actuarial loss | 342 | 310 | 371 |
Net periodic pension expense | 1,204 | 735 | 591 |
Changes in plan assets and benefit obligations included in other comprehensive income (loss): | |||
Prior service cost | 0 | 0 | 0 |
Net actuarial loss (gain) | 277 | (1,755) | 177 |
Amortization of: | |||
Prior service cost | 0 | 0 | 0 |
Actuarial loss | (790) | (310) | (371) |
Total recognized in other comprehensive income (loss) | $ (513) | $ (2,065) | $ (194) |
Weighted average assumptions used to determine expense: | |||
Discount rate | 3.10% | 4.20% | 3.50% |
Expected return on plan assets | 4.80% | 5.75% | 5.90% |
Weighted average assumptions used to determine benefit obligations as of December 31: | |||
Discount rate | 2.08% | 3.10% | 4.20% |
Expected return on plan assets | 4.80% | 5.75% | 5.90% |
Supplemental Defined Benefit Plans | |||
Service cost: | |||
Benefit accrual | $ 0 | $ 0 | $ 0 |
Other expenses | 0 | 0 | 0 |
Interest cost | 453 | 620 | 566 |
Expected return on plan assets | 0 | 0 | 0 |
Settlement loss | 0 | 0 | 0 |
Amortization of: | |||
Prior service cost | 0 | 0 | 0 |
Actuarial loss | 302 | 256 | 310 |
Net periodic pension expense | 755 | 876 | 876 |
Changes in plan assets and benefit obligations included in other comprehensive income (loss): | |||
Prior service cost | 0 | 0 | 0 |
Net actuarial loss (gain) | 1,318 | 516 | (789) |
Amortization of: | |||
Prior service cost | 0 | 0 | 0 |
Actuarial loss | (302) | (256) | (310) |
Total recognized in other comprehensive income (loss) | $ 1,016 | $ 260 | $ (1,099) |
Weighted average assumptions used to determine expense: | |||
Discount rate | 3.10% | 4.20% | 3.50% |
Weighted average assumptions used to determine benefit obligations as of December 31: | |||
Discount rate | 2.08% | 3.10% | 4.20% |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Defined Benefit Plan Disclosure [Line Items] | ||||
Plan assets amount | $ 21,945 | $ 23,164 | $ 22,090 | $ 25,843 |
Equity security funds, United States | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Plan assets amount | 4,367 | 8,883 | ||
Equity security funds, International | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Plan assets amount | 4,351 | 2,214 | ||
Fixed income funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Plan assets amount | 13,059 | 11,116 | ||
Short-term investment funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Plan assets amount | 168 | 951 | ||
Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Plan assets amount | 168 | 951 | ||
Level 1 | Equity security funds, United States | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Plan assets amount | 0 | 0 | ||
Level 1 | Equity security funds, International | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Plan assets amount | 0 | 0 | ||
Level 1 | Fixed income funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Plan assets amount | 0 | 0 | ||
Level 1 | Short-term investment funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Plan assets amount | 168 | 951 | ||
Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Plan assets amount | 21,777 | 22,213 | ||
Level 2 | Equity security funds, United States | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Plan assets amount | 4,367 | 8,883 | ||
Level 2 | Equity security funds, International | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Plan assets amount | 4,351 | 2,214 | ||
Level 2 | Fixed income funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Plan assets amount | 13,059 | 11,116 | ||
Level 2 | Short-term investment funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Plan assets amount | 0 | 0 | ||
Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Plan assets amount | 0 | 0 | ||
Level 3 | Equity security funds, United States | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Plan assets amount | 0 | 0 | ||
Level 3 | Equity security funds, International | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Plan assets amount | 0 | 0 | ||
Level 3 | Fixed income funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Plan assets amount | 0 | 0 | ||
Level 3 | Short-term investment funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Plan assets amount | $ 0 | $ 0 |
Retirement Plans and Other Po_8
Retirement Plans and Other Postretirement Benefits - Contributions (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
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] | |
Minimum funding requirement | 0 |
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, 2020USD ($) |
Defined Benefit Plan | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2021 | $ 2,131 |
2022 | 2,185 |
2023 | 1,979 |
2024 | 2,013 |
2025 | 1,942 |
2026-2030 | 7,099 |
Supplemental Defined Benefit Plans | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2021 | 1,282 |
2022 | 1,263 |
2023 | 1,240 |
2024 | 1,213 |
2025 | 1,182 |
2026-2030 | $ 5,269 |
Contingencies and Commitments (
Contingencies and Commitments (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Remaining minimum amount committed | $ 571.9 | $ 306.2 |
Comprehensive Income (Loss) a_3
Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) - Components of Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | 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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | |||||||||||||||
Net income | $ 47,791 | $ 36,474 | $ 30,578 | $ 18,472 | $ 33,001 | $ 25,454 | $ 93,822 | $ 32,166 | $ (20,257) | $ 12,528 | $ 5,917 | $ 20,155 | $ 133,315 | $ 184,443 | $ 18,343 |
Change in net unrealized investment gains (losses) on fixed maturity securities: | |||||||||||||||
Net unrealized investment gains (losses) on securities arising during the period | 183,950 | 327,363 | (275,094) | ||||||||||||
Less: reclassification adjustment for net investment gains (losses) included in income before income tax | 11,235 | 157,423 | (16,363) | ||||||||||||
Total, before tax | 172,715 | 169,940 | (258,731) | ||||||||||||
Income tax expense (benefit) | 36,878 | 36,433 | (55,495) | ||||||||||||
Total, net of tax | 135,837 | 133,507 | (203,236) | ||||||||||||
Change in net funded status of benefit plans: | |||||||||||||||
Before tax | (503) | 1,805 | 1,294 | ||||||||||||
Income tax expense (benefit) | (105) | 387 | 262 | ||||||||||||
Total, net of tax | (398) | 1,418 | 1,032 | ||||||||||||
Total | $ 268,754 | $ 319,368 | $ (183,861) |
Comprehensive Income (Loss) a_4
Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ 1,567,285 | $ 1,290,550 | |
Other comprehensive income (loss) before reclassifications | 144,315 | 259,289 | $ (200,090) |
Amounts reclassified from AOCI | (8,876) | (124,364) | 12,927 |
Net current period other comprehensive income (loss) | 135,439 | 134,925 | (202,204) |
Ending balance | 1,790,079 | 1,567,285 | 1,290,550 |
Reclassification adjustment for net investment gains (losses) included in income before income tax | 11,235 | 157,423 | (16,363) |
Other tax expense (benefit) | 2,400 | 33,100 | (3,400) |
Cumulative effect of change in accounting principle | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 0 | 0 | (15,041) |
Ending balance | 0 | 0 | |
Net unrealized investment gains (losses) on securities | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 230,448 | 96,941 | 300,177 |
Other comprehensive income (loss) before reclassifications | 144,713 | 257,871 | (201,122) |
Amounts reclassified from AOCI | (8,876) | (124,364) | 12,927 |
Net current period other comprehensive income (loss) | 135,837 | 133,507 | (203,236) |
Ending balance | 366,285 | 230,448 | 96,941 |
Net unrealized investment gains (losses) on securities | Cumulative effect of change in accounting principle | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (15,041) | ||
Net Funded Status of Benefit Plans | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (10,767) | (12,185) | (13,217) |
Other comprehensive income (loss) before reclassifications | (398) | 1,418 | 1,032 |
Amounts reclassified from AOCI | 0 | 0 | 0 |
Net current period other comprehensive income (loss) | (398) | 1,418 | 1,032 |
Ending balance | (11,165) | (10,767) | (12,185) |
Net Funded Status of Benefit Plans | Cumulative effect of change in accounting principle | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 0 | ||
Total | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 219,681 | 84,756 | 286,960 |
Ending balance | $ 355,120 | $ 219,681 | 84,756 |
Total | Cumulative effect of change in accounting principle | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ (15,041) |
Supplemental Consolidated Cas_3
Supplemental Consolidated Cash and Cash Flow Information - Summary of Cash and Restricted Cash (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Supplemental Cash Flow Elements [Abstract] | ||||
Cash | $ 21,774 | $ 25,206 | $ 11,906 | |
Restricted cash | 549 | 302 | 0 | |
Total cash and restricted cash shown in the Consolidated Statements of Cash Flows | 22,323 | 25,508 | 11,906 | $ 7,627 |
Interest | 15,476 | 14,104 | 12,532 | |
Income taxes | $ 17,301 | $ 22,946 | $ 8,679 |
Supplemental Consolidated Cas_4
Supplemental Consolidated Cash and Cash Flow Information - Narrative (Details) $ in Billions | 3 Months Ended |
Jun. 30, 2019USD ($) | |
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 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 12 Months Ended |
Dec. 31, 2020segment | |
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, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | 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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Summarized financial information for these segments | |||||||||||||||
Insurance premiums and contract charges earned | $ 233,648 | $ 235,353 | $ 225,431 | $ 236,265 | $ 240,392 | $ 239,681 | $ 208,096 | $ 209,785 | $ 201,905 | $ 206,820 | $ 205,610 | $ 202,998 | $ 930,697 | $ 897,954 | $ 817,333 |
Net investment income | 357,596 | 365,064 | 376,507 | ||||||||||||
Net income | 47,791 | $ 36,474 | $ 30,578 | $ 18,472 | 33,001 | $ 25,454 | $ 93,822 | $ 32,166 | (20,257) | $ 12,528 | $ 5,917 | $ 20,155 | 133,315 | 184,443 | 18,343 |
Assets | 13,471,813 | 12,478,704 | 11,031,896 | 13,471,813 | 12,478,704 | 11,031,896 | |||||||||
Intersegment eliminations | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Net investment income | (2,259) | (1,503) | (772) | ||||||||||||
Assets | (90,135) | (64,072) | (41,800) | (90,135) | (64,072) | (41,800) | |||||||||
Property and Casualty | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Insurance premiums and contract charges earned | 650,168 | ||||||||||||||
Property and Casualty | Operating Segments | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Insurance premiums and contract charges earned | 683,454 | 665,734 | |||||||||||||
Net investment income | 42,556 | 41,740 | 40,104 | ||||||||||||
Net income | 76,516 | 54,359 | (14,243) | ||||||||||||
Assets | 1,324,923 | 1,327,099 | 1,236,362 | 1,324,923 | 1,327,099 | 1,236,362 | |||||||||
Supplemental | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Insurance premiums and contract charges earned | 130,694 | 65,815 | |||||||||||||
Net investment income | 17,818 | 7,480 | |||||||||||||
Net income | 43,089 | 17,989 | |||||||||||||
Assets | 811,457 | 747,602 | 811,457 | 747,602 | |||||||||||
Retirement | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Insurance premiums and contract charges earned | 29,649 | ||||||||||||||
Retirement | Operating Segments | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Insurance premiums and contract charges earned | 29,083 | 31,269 | |||||||||||||
Net investment income | 229,853 | 245,475 | 262,634 | ||||||||||||
Net income | 20,038 | (4,867) | 41,736 | ||||||||||||
Assets | 9,198,723 | 8,330,127 | 7,866,969 | 9,198,723 | 8,330,127 | 7,866,969 | |||||||||
Life | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Insurance premiums and contract charges earned | 120,186 | ||||||||||||||
Life | Operating Segments | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Insurance premiums and contract charges earned | 119,602 | 120,330 | |||||||||||||
Net investment income | 69,799 | 71,957 | 74,399 | ||||||||||||
Net income | 10,461 | 17,574 | 18,754 | ||||||||||||
Assets | 2,044,503 | 1,964,993 | 1,821,351 | 2,044,503 | 1,964,993 | 1,821,351 | |||||||||
Corporate and Other | |||||||||||||||
Summarized financial information for these segments | |||||||||||||||
Net investment income | (171) | (85) | 142 | ||||||||||||
Net income | (16,789) | 99,388 | (27,904) | ||||||||||||
Assets | $ 182,342 | $ 172,955 | $ 149,014 | $ 182,342 | $ 172,955 | $ 149,014 |
Segment Information - Additiona
Segment Information - Additional Significant Financial Information by Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
DAC unlocking and amortization expense | $ 99,909 | $ 109,181 | $ 109,889 |
Income tax benefit | 26,268 | 52,006 | 1,194 |
Property and Casualty | |||
Segment Reporting Information [Line Items] | |||
DAC unlocking and amortization expense | 74,452 | 79,453 | 79,073 |
Property and Casualty | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Income tax benefit | 15,380 | 13,954 | (6,622) |
Supplemental | |||
Segment Reporting Information [Line Items] | |||
DAC unlocking and amortization expense | 1,287 | 438 | |
Income tax benefit | 11,972 | 5,105 | |
Retirement | |||
Segment Reporting Information [Line Items] | |||
DAC unlocking and amortization expense | 16,718 | 21,446 | 23,186 |
Retirement | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Income tax benefit | 2,105 | 33,772 | 10,000 |
Life | |||
Segment Reporting Information [Line Items] | |||
DAC unlocking and amortization expense | 7,452 | 7,844 | 7,630 |
Life | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Income tax benefit | 2,428 | 4,907 | 4,979 |
Corporate and Other | Corporate and Other | |||
Segment Reporting Information [Line Items] | |||
Income tax benefit | $ (5,617) | $ (5,732) | $ (7,163) |
Unaudited Selected Quarterly _3
Unaudited Selected Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | 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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||
Insurance premiums and contract charges earned | $ 233,648 | $ 235,353 | $ 225,431 | $ 236,265 | $ 240,392 | $ 239,681 | $ 208,096 | $ 209,785 | $ 201,905 | $ 206,820 | $ 205,610 | $ 202,998 | $ 930,697 | $ 897,954 | $ 817,333 |
Insurance premiums written and contract deposits | 332,559 | 368,853 | 329,169 | 328,758 | 346,242 | 371,216 | 311,691 | 295,394 | 311,216 | 338,097 | 301,722 | 284,008 | 1,359,339 | 1,324,542 | 1,235,043 |
Total revenues | 352,344 | 337,080 | 314,459 | 306,558 | 331,376 | 334,418 | 451,478 | 313,213 | 278,535 | 311,318 | 306,257 | 295,489 | 1,310,441 | 1,430,485 | 1,191,599 |
Net income | $ 47,791 | $ 36,474 | $ 30,578 | $ 18,472 | $ 33,001 | $ 25,454 | $ 93,822 | $ 32,166 | $ (20,257) | $ 12,528 | $ 5,917 | $ 20,155 | $ 133,315 | $ 184,443 | $ 18,343 |
Basic | |||||||||||||||
Net income - basic (in usd per share) | $ 1.14 | $ 0.87 | $ 0.73 | $ 0.44 | $ 0.79 | $ 0.61 | $ 2.25 | $ 0.77 | $ (0.49) | $ 0.30 | $ 0.14 | $ 0.49 | $ 3.18 | $ 4.42 | $ 0.44 |
Shares of common stock - weighted average basic (in shares) | 41,962,000 | 41,916,000 | 41,879,000 | 41,827,000 | 41,814,000 | 41,785,000 | 41,762,000 | 41,610,000 | 41,596,000 | 41,683,000 | 41,600,000 | 41,497,000 | 41,881,289 | 41,737,876 | 41,570,492 |
Diluted | |||||||||||||||
Net income - diluted (in usd per share) | $ 1.13 | $ 0.87 | $ 0.73 | $ 0.44 | $ 0.78 | $ 0.60 | $ 2.24 | $ 0.77 | $ (0.49) | $ 0.30 | $ 0.14 | $ 0.48 | $ 3.17 | $ 4.40 | $ 0.44 |
Shares of common stock and equivalent shares - weighted average diluted (in shares) | 42,156,000 | 42,058,000 | 41,996,000 | 42,019,000 | 42,093,000 | 42,030,000 | 41,921,000 | 41,785,000 | 41,911,000 | 41,850,000 | 41,735,000 | 41,653,000 | 42,040,892 | 41,948,531 | 41,894,232 |
Schedule I Summary of Investm_2
Schedule I Summary of Investments-Other Than Investments in Related Parties (Details) $ in Thousands | Dec. 31, 2020USD ($) |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | $ 6,698,328 |
Amount Shown in Balance Sheet | 7,262,234 |
Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 5,788,551 |
Fair Value | 6,345,290 |
Amount Shown in Balance Sheet | 6,345,290 |
Equity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 121,653 |
Fair Value | 121,653 |
Amount Shown in Balance Sheet | 121,653 |
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 | 814,204 |
Fair Value | 901,517 |
Amount Shown in Balance Sheet | 901,517 |
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 | 1,612,290 |
Fair Value | 1,827,497 |
Amount Shown in Balance Sheet | 1,827,497 |
Foreign government bonds | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 40,145 |
Fair Value | 45,053 |
Amount Shown in Balance Sheet | 45,053 |
Public utilities | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 64,898 |
Fair Value | 76,382 |
Amount Shown in Balance Sheet | 76,382 |
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 | 1,811,755 |
Fair Value | 2,015,192 |
Amount Shown in Balance Sheet | 2,015,192 |
Asset-backed securities | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 1,053,252 |
Fair Value | 1,051,258 |
Amount Shown in Balance Sheet | 1,051,258 |
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 | 53,727 |
Fair Value | 53,627 |
Amount Shown in Balance Sheet | 53,627 |
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 | 309,726 |
Fair Value | 343,439 |
Amount Shown in Balance Sheet | 343,439 |
Redeemable preferred stocks | Fixed maturity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 28,554 |
Fair Value | 31,325 |
Amount Shown in Balance Sheet | 31,325 |
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 | 5,645 |
Fair Value | 5,645 |
Amount Shown in Balance Sheet | 5,645 |
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 | 1,852 |
Fair Value | 1,852 |
Amount Shown in Balance Sheet | 1,852 |
Public utilities | Equity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 388 |
Fair Value | 388 |
Amount Shown in Balance Sheet | 388 |
Non-redeemable preferred stocks | Equity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 90,709 |
Fair Value | 90,709 |
Amount Shown in Balance Sheet | 90,709 |
Closed-end fund | Equity securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 23,059 |
Fair Value | 23,059 |
Amount Shown in Balance Sheet | 23,059 |
Limited partnership interests | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 448,996 |
Amount Shown in Balance Sheet | 448,996 |
Short-term Investments | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 141,770 |
Amount Shown in Balance Sheet | 141,770 |
Policy loans | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 150,118 |
Amount Shown in Balance Sheet | 150,118 |
Derivatives | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 9,638 |
Fair Value | 16,805 |
Amount Shown in Balance Sheet | 16,805 |
Mortgage loans | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 18,150 |
Amount Shown in Balance Sheet | 18,150 |
Other | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Cost | 19,452 |
Amount Shown in Balance Sheet | $ 19,452 |
Schedule II Condensed Financi_2
Schedule II Condensed Financial Information of Registrant - Condensed Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
ASSETS | |||
Investment in subsidiaries | $ 448,996 | $ 383,717 | |
Other assets | 443,165 | 474,364 | |
Total assets | 13,471,813 | 12,478,704 | $ 11,031,896 |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Short-term debt | 135,000 | 135,000 | |
Long-term debt | 302,323 | 298,025 | |
Other liabilities | 453,126 | 384,173 | |
Total liabilities | 11,681,734 | 10,911,419 | |
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, 2020, 66,316,797; 2019, 66,088,808 | 66 | 66 | |
Additional paid-in capital | 488,367 | 480,962 | |
Retained earnings | 1,434,634 | 1,352,539 | |
Accumulated other comprehensive income (loss), net of taxes: | |||
Net unrealized investment gains on fixed maturity securities | 366,285 | 230,448 | |
Net funded status of benefit plans | (11,165) | (10,767) | |
Treasury stock, at cost, 2020, 24,902,579 shares; 2019, 24,850,484 shares | (488,108) | (485,963) | |
Total shareholders' equity | 1,790,079 | 1,567,285 | $ 1,290,550 |
Total liabilities and shareholders' equity | 13,471,813 | 12,478,704 | |
Parent company | |||
ASSETS | |||
Investments and cash | 4,146 | 1,453 | |
Investment in subsidiaries | 2,120,982 | 1,901,725 | |
Other assets | 58,852 | 62,442 | |
Total assets | 2,183,980 | 1,965,620 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Short-term debt | 135,000 | 135,000 | |
Long-term debt | 248,323 | 248,025 | |
Other liabilities | 10,578 | 15,310 | |
Total liabilities | 393,901 | 398,335 | |
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, 2020, 66,316,797; 2019, 66,088,808 | 66 | 66 | |
Additional paid-in capital | 488,367 | 480,962 | |
Retained earnings | 1,434,634 | 1,352,539 | |
Accumulated other comprehensive income (loss), net of taxes: | |||
Net unrealized investment gains on fixed maturity securities | 366,285 | 230,448 | |
Net funded status of benefit plans | (11,165) | (10,767) | |
Treasury stock, at cost, 2020, 24,902,579 shares; 2019, 24,850,484 shares | (488,108) | (485,963) | |
Total shareholders' equity | 1,790,079 | 1,567,285 | |
Total liabilities and shareholders' equity | $ 2,183,980 | $ 1,965,620 |
Schedule II Condensed Financi_3
Schedule II Condensed Financial Information of Registrant - Condensed Balance Sheet (Additional Information) (Details) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
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 (in shares) | 0 | 0 | |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 | |
Common stock, shares issued (in shares) | 66,316,797 | 66,088,808 | |
Treasury stock (in shares) | 24,902,579 | 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 (in shares) | 0 | 0 | |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 | |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 | |
Common stock, shares issued (in shares) | 66,316,797 | 66,088,808 | |
Treasury stock (in shares) | 24,902,579 | 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, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | 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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | |||||||||||||||
Net investment income | $ 357,596 | $ 365,064 | $ 376,507 | ||||||||||||
Net investment gains (losses) | (2,289) | 153,340 | (12,543) | ||||||||||||
Total revenues | $ 352,344 | $ 337,080 | $ 314,459 | $ 306,558 | $ 331,376 | $ 334,418 | $ 451,478 | $ 313,213 | $ 278,535 | $ 311,318 | $ 306,257 | $ 295,489 | 1,310,441 | 1,430,485 | 1,191,599 |
Expenses | |||||||||||||||
Interest expense | 15,215 | 15,577 | 13,001 | ||||||||||||
Total benefits, losses and expenses | 1,150,858 | 1,194,036 | 1,172,062 | ||||||||||||
Income tax benefit | 26,268 | 52,006 | 1,194 | ||||||||||||
Net income | $ 47,791 | $ 36,474 | $ 30,578 | $ 18,472 | $ 33,001 | $ 25,454 | $ 93,822 | $ 32,166 | $ (20,257) | $ 12,528 | $ 5,917 | $ 20,155 | 133,315 | 184,443 | 18,343 |
Parent company | |||||||||||||||
Revenues | |||||||||||||||
Net investment income | (174) | (135) | 100 | ||||||||||||
Net investment gains (losses) | 0 | 0 | 0 | ||||||||||||
Total revenues | (174) | (135) | 100 | ||||||||||||
Expenses | |||||||||||||||
Interest expense | 14,771 | 14,272 | 11,892 | ||||||||||||
Other | 5,750 | 12,632 | 10,898 | ||||||||||||
Total benefits, losses and expenses | 20,521 | 26,904 | 22,790 | ||||||||||||
Loss before income tax benefit and equity in net earnings of subsidiaries | (20,695) | (27,039) | (22,690) | ||||||||||||
Income tax benefit | (5,307) | (6,029) | (4,723) | ||||||||||||
Loss before equity in net earnings of subsidiaries | (15,388) | (21,010) | (17,967) | ||||||||||||
Equity in net earnings of subsidiaries | 148,703 | 205,453 | 36,310 | ||||||||||||
Net income | $ 133,315 | $ 184,443 | $ 18,343 |
Schedule II Condensed Financi_5
Schedule II Condensed Financial Information of Registrant - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | 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 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | ||||||||||||||||
Net income | $ 47,791 | $ 36,474 | $ 30,578 | $ 18,472 | $ 33,001 | $ 25,454 | $ 93,822 | $ 32,166 | $ (20,257) | $ 12,528 | $ 5,917 | $ 20,155 | $ 133,315 | $ 184,443 | $ 18,343 | |
Changes in: | ||||||||||||||||
Other operating assets and liabilities | (4,539) | 53,406 | (2,048) | |||||||||||||
Net cash provided by operating activities | 259,794 | 127,573 | 200,888 | |||||||||||||
Cash flows from investing activities | ||||||||||||||||
Purchase of equity securities | (37,353) | (15,583) | (13,430) | |||||||||||||
Change in short-term and other investments, net | 12,061 | (49,325) | (56,192) | |||||||||||||
Acquisition of businesses | 0 | (421,516) | 0 | |||||||||||||
Net cash (used in) provided by investing activities | (406,757) | 55,942 | (186,499) | |||||||||||||
Cash flows from financing activities | ||||||||||||||||
Dividends paid to shareholders | (49,620) | (47,333) | (46,689) | |||||||||||||
Principal borrowings on Bank Credit Facility | $ 50,000 | |||||||||||||||
Proceeds from exercise of stock options | 2,402 | 1,730 | 3,627 | |||||||||||||
Withholding tax payments on RSUs tendered | (2,299) | (3,680) | (3,165) | |||||||||||||
Net cash provided by (used in) financing activities | 143,778 | (169,913) | (10,110) | |||||||||||||
Cash at beginning of period | 25,206 | 11,906 | 25,206 | 11,906 | ||||||||||||
Cash at end of period | 21,774 | 25,206 | 11,906 | 21,774 | 25,206 | 11,906 | ||||||||||
Parent company | ||||||||||||||||
Cash flows from operating activities | ||||||||||||||||
Net income | 133,315 | 184,443 | 18,343 | |||||||||||||
Equity in net earnings of subsidiaries | (148,703) | (205,453) | (36,310) | |||||||||||||
Dividends received from subsidiaries | 167,000 | 363,250 | 61,000 | |||||||||||||
Changes in: | ||||||||||||||||
Income taxes | 1,956 | 3,369 | (4,939) | |||||||||||||
Other operating assets and liabilities | (5,894) | 8,310 | (1,792) | |||||||||||||
Other | 1,681 | 686 | 13,804 | |||||||||||||
Net cash provided by operating activities | 149,355 | 354,605 | 50,106 | |||||||||||||
Cash flows from investing activities | ||||||||||||||||
Purchase of equity securities | 1,000 | 0 | 0 | |||||||||||||
Change in short-term and other investments, net | (1,456) | 3,336 | 1,621 | |||||||||||||
Capital contributions to subsidiaries | (97,000) | 0 | 0 | |||||||||||||
Acquisition of businesses | 0 | (444,124) | 0 | |||||||||||||
Net cash (used in) provided by investing activities | (97,456) | (440,788) | 1,621 | |||||||||||||
Cash flows from financing activities | ||||||||||||||||
Dividends paid to shareholders | (49,620) | (47,333) | (46,689) | |||||||||||||
Principal borrowings on Bank Credit Facility | 0 | 135,000 | 0 | |||||||||||||
Acquisition of treasury stock | (2,145) | 0 | (5,088) | |||||||||||||
Proceeds from exercise of stock options | 2,402 | 1,730 | 3,627 | |||||||||||||
Withholding tax payments on RSUs tendered | (2,299) | (3,680) | (3,165) | |||||||||||||
Net cash provided by (used in) financing activities | (51,662) | 85,717 | (51,315) | |||||||||||||
Net increase (decrease) in cash | 237 | (466) | 412 | |||||||||||||
Cash at beginning of period | $ 72 | $ 538 | $ 126 | 72 | 538 | 126 | ||||||||||
Cash at end of period | $ 309 | $ 72 | $ 538 | $ 126 | $ 309 | $ 72 | $ 538 |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Deferred policy acquisition costs | $ 229,828 | $ 276,668 | $ 298,742 |
Future policy benefits, claims and claim expenses | 6,884,077 | 6,677,306 | 6,107,907 |
Unearned premiums | 264,489 | 279,163 | 276,225 |
Other policy claims and benefits payable | 751,296 | 647,283 | 767,988 |
Premium revenue/ premium earned | 930,697 | 897,954 | 817,333 |
Net investment income | 357,596 | 365,064 | 376,507 |
Benefits, claims and settlement expenses | 773,526 | 797,854 | 843,759 |
Amortization of deferred policy acquisition costs | 99,909 | 109,181 | 109,889 |
Other operating expenses | 277,423 | 287,001 | 218,414 |
Property and Casualty | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Deferred policy acquisition costs | 26,153 | 28,616 | 30,033 |
Future policy benefits, claims and claim expenses | 372,154 | 386,976 | 367,180 |
Discount, if any, deducted in previous column | 0 | 0 | 0 |
Unearned premiums | 259,356 | 273,998 | 274,351 |
Other policy claims and benefits payable | 0 | 0 | 0 |
Premium revenue/ premium earned | 650,168 | 683,454 | 665,734 |
Net investment income | 42,556 | 41,740 | 40,104 |
Benefits, claims and settlement expenses | 430,991 | 475,563 | 547,659 |
Claims and claims adjustment expense incurred related to current year | 441,191 | 483,062 | 547,959 |
Claims and claims adjustment expense incurred related to prior years | (10,200) | (7,500) | (300) |
Amortization of deferred policy acquisition costs | 74,452 | 79,453 | 79,073 |
Other operating expenses | 97,716 | 105,489 | 101,834 |
Paid claims and claim adjustment expenses | 438,189 | 486,547 | 531,977 |
Premiums written | 635,525 | 683,101 | 681,583 |
Supplemental | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Deferred policy acquisition costs | 4,270 | 1,967 | |
Future policy benefits, claims and claim expenses | 392,362 | 390,276 | |
Unearned premiums | 3,084 | 3,218 | |
Other policy claims and benefits payable | 41,514 | 0 | |
Premium revenue/ premium earned | 130,694 | 65,815 | |
Net investment income | 17,818 | 7,480 | |
Benefits, claims and settlement expenses | 43,166 | 24,723 | |
Amortization of deferred policy acquisition costs | 1,287 | 438 | |
Other operating expenses | 51,686 | 26,476 | |
Retirement | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Deferred policy acquisition costs | 137,735 | 185,294 | 209,232 |
Future policy benefits, claims and claim expenses | 4,874,167 | 4,698,461 | 4,573,170 |
Unearned premiums | 716 | 734 | 704 |
Other policy claims and benefits payable | 706,297 | 643,826 | 764,607 |
Premium revenue/ premium earned | 29,649 | 29,083 | 31,269 |
Net investment income | 229,853 | 245,475 | 262,634 |
Benefits, claims and settlement expenses | 164,807 | 173,116 | 168,732 |
Amortization of deferred policy acquisition costs | 16,718 | 21,446 | 23,186 |
Other operating expenses | 72,093 | 90,782 | 57,269 |
Life | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Deferred policy acquisition costs | 61,670 | 60,791 | 59,477 |
Future policy benefits, claims and claim expenses | 1,245,394 | 1,201,593 | 1,167,557 |
Unearned premiums | 1,333 | 1,213 | 1,170 |
Other policy claims and benefits payable | 3,485 | 3,457 | 3,381 |
Premium revenue/ premium earned | 120,186 | 119,602 | 120,330 |
Net investment income | 69,799 | 71,957 | 74,399 |
Benefits, claims and settlement expenses | 134,562 | 124,452 | 127,368 |
Amortization of deferred policy acquisition costs | 7,452 | 7,844 | 7,630 |
Other operating expenses | 35,292 | 37,820 | 36,314 |
Other, including consolidating eliminations | Eliminations | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Net investment income | (2,430) | (1,588) | (630) |
Other operating expenses | $ 20,636 | $ 26,434 | $ 22,997 |
Schedule IV Reinsurance (Detail
Schedule IV Reinsurance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Life insurance in force | |||
Gross Amount | $ 19,821,228 | $ 19,179,823 | $ 18,277,691 |
Ceded to Other Companies | 4,619,083 | 4,813,185 | 4,505,208 |
Assumed from Other Companies | 0 | 0 | 0 |
Net Amount | $ 15,202,145 | $ 14,366,638 | $ 13,772,483 |
Percentage of Amount Assumed to Net | 0.00% | 0.00% | 0.00% |
Premiums | |||
Gross Amount | $ 949,525 | $ 917,610 | $ 841,147 |
Ceded to Other Companies | 28,757 | 30,412 | 28,837 |
Assumed from Other Companies | 9,929 | 10,756 | 5,023 |
Net Amount | $ 930,697 | $ 897,954 | $ 817,333 |
Percentage of Amount Assumed to Net | 1.10% | 1.20% | 0.60% |
Property and Casualty | |||
Premiums | |||
Gross Amount | $ 652,884 | $ 689,156 | $ 682,478 |
Ceded to Other Companies | 12,635 | 16,457 | 21,767 |
Assumed from Other Companies | 9,919 | 10,755 | 5,023 |
Net Amount | $ 650,168 | $ 683,454 | $ 665,734 |
Percentage of Amount Assumed to Net | 1.50% | 1.60% | 0.80% |
Supplemental | |||
Premiums | |||
Gross Amount | $ 130,936 | $ 65,918 | |
Ceded to Other Companies | 252 | 104 | |
Assumed from Other Companies | 10 | 1 | |
Net Amount | $ 130,694 | $ 65,815 | |
Percentage of Amount Assumed to Net | 0.00% | 0.00% | |
Retirement | |||
Premiums | |||
Gross Amount | $ 37,977 | $ 35,602 | $ 31,269 |
Ceded to Other Companies | 8,328 | 6,519 | 0 |
Assumed from Other Companies | 0 | 0 | 0 |
Net Amount | $ 29,649 | $ 29,083 | $ 31,269 |
Percentage of Amount Assumed to Net | 0.00% | 0.00% | 0.00% |
Life | |||
Premiums | |||
Gross Amount | $ 127,728 | $ 126,934 | $ 127,400 |
Ceded to Other Companies | 7,542 | 7,332 | 7,070 |
Assumed from Other Companies | 0 | 0 | 0 |
Net Amount | $ 120,186 | $ 119,602 | $ 120,330 |
Percentage of Amount Assumed to Net | 0.00% | 0.00% | 0.00% |