Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 |
Document and Entity Information [Abstract] | ' |
Entity Registrant Name | 'HCC INSURANCE HOLDINGS INC/DE/ |
Entity Central Index Key | '0000888919 |
Document Type | '10-Q |
Document Period End Date | 30-Sep-14 |
Amendment Flag | 'false |
Document Fiscal Year Focus | '2014 |
Document Fiscal Period Focus | 'Q3 |
Current Fiscal Year End Date | '--12-31 |
Entity Well-known Seasoned Issuer | 'Yes |
Entity Voluntary Filers | 'No |
Entity Current Reporting Status | 'Yes |
Entity Filer Category | 'Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 96.8 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Investments | ' | ' |
Fixed maturity securities - available for sale, at fair value (amortized cost: 2014 - $6,339,054 and 2013 - $5,921,487) | $6,576,541 | $6,022,473 |
Equity securities - available for sale, at fair value (cost: 2014 - $280,663 and 2013 - $464,388) | 286,194 | 517,466 |
Short-term investments, at cost (approximates fair value) | 250,867 | 178,753 |
Total investments | 7,113,602 | 6,718,692 |
Cash | 70,817 | 58,301 |
Restricted cash and securities | 131,516 | 125,777 |
Premium, claims and other receivables | 650,751 | 580,107 |
Reinsurance recoverables | 1,194,034 | 1,277,257 |
Ceded unearned premium | 330,224 | 305,438 |
Ceded life and annuity benefits | 50,114 | 56,491 |
Deferred policy acquisition costs | 230,350 | 201,698 |
Goodwill | 899,148 | 895,200 |
Other assets | 147,419 | 125,559 |
Total assets | 10,817,975 | 10,344,520 |
LIABILITIES | ' | ' |
Loss and loss adjustment expense payable | 3,776,924 | 3,902,132 |
Life and annuity policy benefits | 50,114 | 56,491 |
Reinsurance, premium and claims payable | 375,299 | 332,985 |
Unearned premium | 1,263,307 | 1,134,849 |
Deferred ceding commissions | 97,276 | 89,528 |
Notes payable | 744,213 | 654,098 |
Accounts payable and accrued liabilities | 620,177 | 500,007 |
Total liabilities | 6,927,310 | 6,670,090 |
SHAREHOLDERS' EQUITY | ' | ' |
Common stock, $1.00 par value; 250,000 shares authorized (shares issued: 2014 - 126,371 and 2013 - 125,577; outstanding: 2014 - 98,162 and 2013 - 100,336) | 126,371 | 125,577 |
Additional paid-in capital | 1,103,774 | 1,073,105 |
Retained earnings | 3,356,841 | 3,085,501 |
Accumulated other comprehensive income | 170,632 | 118,651 |
Treasury stock, at cost (shares: 2014 - 28,209 and 2013 - 25,241) | -866,953 | -728,404 |
Total shareholders' equity | 3,890,665 | 3,674,430 |
Total liabilities and shareholders' equity | $10,817,975 | $10,344,520 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Per Share data, unless otherwise specified | ||
Investments | ' | ' |
Fixed maturity securities, available for sale, amortized cost | $6,339,054 | $5,921,487 |
Equity securities, available for sale, cost | $280,663 | $464,388 |
SHAREHOLDERS' EQUITY | ' | ' |
Common stock, par value | $1 | $1 |
Common stock, shares authorized | 250,000 | 250,000 |
Common stock, shares issued | 126,371 | 125,577 |
Common stock, shares outstanding | 98,162 | 100,336 |
Treasury stock | 28,209 | 25,241 |
Consolidated_Statement_of_Earn
Consolidated Statement of Earnings (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
REVENUE | ' | ' | ' | ' |
Net earned premium | $586,935 | $556,668 | $1,721,795 | $1,679,210 |
Net investment income | 54,236 | 54,208 | 167,480 | 165,641 |
Other operating income | 9,483 | 7,679 | 28,732 | 24,308 |
Net realized investment gain | 39,384 | 17,922 | 64,535 | 31,115 |
Total revenue | 690,038 | 636,477 | 1,982,542 | 1,900,274 |
EXPENSE | ' | ' | ' | ' |
Loss and loss adjustment expense, net | 311,937 | 320,376 | 960,875 | 992,547 |
Policy acquisition costs, net | 76,210 | 65,642 | 218,221 | 203,387 |
Other operating expense | 90,344 | 103,785 | 285,299 | 268,357 |
Interest expense | 6,890 | 6,574 | 20,874 | 19,656 |
Total expense | 485,381 | 496,377 | 1,485,269 | 1,483,947 |
Earnings before income taxes | 204,657 | 140,100 | 497,273 | 416,327 |
Income tax expense | 64,390 | 41,925 | 151,959 | 124,140 |
Net earnings | $140,267 | $98,175 | $345,314 | $292,187 |
Earnings per common share | ' | ' | ' | ' |
Basic | $1.41 | $0.98 | $3.45 | $2.91 |
Diluted | $1.41 | $0.98 | $3.45 | $2.90 |
Consolidated_Statement_of_Comp
Consolidated Statement of Comprehensive Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Statement of Income and Comprehensive Income [Abstract] | ' | ' | ' | ' |
Net earnings | $140,267 | $98,175 | $345,314 | $292,187 |
Investment gains (losses): | ' | ' | ' | ' |
Investment gains (losses) during the period | -26,336 | 14,948 | 153,489 | -232,481 |
Income tax charge (benefit) | -9,467 | 4,917 | 54,351 | -82,526 |
Investments gains (losses), net of tax | -16,869 | 10,031 | 99,138 | -149,955 |
Less reclassification adjustments to: | ' | ' | ' | ' |
Net realized investment gain | 39,384 | 17,922 | 64,535 | 31,115 |
Income tax expense | 13,784 | 6,272 | 22,587 | 10,890 |
Total reclassifications included in net earnings, net of tax | 25,600 | 11,650 | 41,948 | 20,225 |
Net unrealized investment gains (losses) | -42,469 | -1,619 | 57,190 | -170,180 |
Foreign currency translation adjustment | -7,059 | 5,410 | -5,368 | 4,265 |
Income tax charge (benefit) | 262 | -92 | -159 | -646 |
Foreign currency translation adjustment, net of tax | -7,321 | 5,502 | -5,209 | 4,911 |
Other comprehensive income (loss) | -49,790 | 3,883 | 51,981 | -165,269 |
Comprehensive income | $90,477 | $102,058 | $397,295 | $126,918 |
Consolidated_Statement_of_Chan
Consolidated Statement of Changes in Shareholders' Equity (USD $) | Total | Common stock [Member] | Additional paid-in capital [Member] | Retained earnings [Member] | Accumulated other comprehensive income [Member] | Treasury stock [Member] |
In Thousands | ||||||
Balance at Dec. 31, 2013 | $3,674,430 | $125,577 | $1,073,105 | $3,085,501 | $118,651 | ($728,404) |
Net earnings | 345,314 | ' | ' | 345,314 | ' | ' |
Other comprehensive income | 51,981 | ' | ' | ' | 51,981 | ' |
Issuance of 363 shares for exercise of options, including tax effect | 12,638 | 363 | 12,275 | ' | ' | ' |
Issuance of 92 shares for employee stock purchase plan | 3,439 | 92 | 3,347 | ' | ' | ' |
Purchase of 2,968 common shares | -138,549 | ' | ' | ' | ' | -138,549 |
Stock-based compensation | 15,386 | 339 | 15,047 | ' | ' | ' |
Cash dividends declared, $0.745 per share | -73,974 | ' | ' | -73,974 | ' | ' |
Balance at Sep. 30, 2014 | $3,890,665 | $126,371 | $1,103,774 | $3,356,841 | $170,632 | ($866,953) |
Consolidated_Statement_of_Chan1
Consolidated Statement of Changes in Shareholders' Equity (Parenthetical) (USD $) | 9 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 |
Issuance of shares for exercise of options | 363 |
Issuance of shares for employee stock purchase plan | 92 |
Purchase of common shares | 2,968 |
Cash dividends declared | $0.75 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Operating activities | ' | ' |
Net earnings | $345,314 | $292,187 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ' | ' |
Change in premium, claims and other receivables | -56,631 | -52,395 |
Change in reinsurance recoverables | 60,074 | -138,103 |
Change in ceded unearned premium | -25,071 | -44,809 |
Change in loss and loss adjustment expense payable | -95,341 | 241,126 |
Change in unearned premium | 129,226 | 95,395 |
Change in reinsurance, premium and claims payable | 44,117 | 21,516 |
Change in accounts payable and accrued liabilities | -43,608 | -145,740 |
Stock-based compensation expense | 18,718 | 10,100 |
Depreciation and amortization expense | 12,476 | 13,962 |
Gain on investments | -64,535 | -31,115 |
Other, net | 35,625 | 9,288 |
Cash provided by operating activities | 360,364 | 271,412 |
Investing activities | ' | ' |
Sales of available for sale fixed maturity securities | 314,424 | 337,895 |
Sales of equity securities | 436,126 | 95,989 |
Sales of other investments | 0 | 23,719 |
Maturity or call of available for sale fixed maturity securities | 413,290 | 488,817 |
Cost of available for sale fixed maturity securities acquired | -1,159,975 | -1,109,233 |
Cost of equity securities acquired | -191,639 | -226,601 |
Change in short-term investments | -79,714 | 134,515 |
Payments for purchase of businesses, net of cash received | -7,003 | -8,214 |
Proceeds from sale of subsidiaries | 16,589 | 1,327 |
Other, net | -5,051 | -6,575 |
Cash used by investing activities | -262,953 | -268,361 |
Financing activities | ' | ' |
Advances on line of credit | 195,000 | 130,000 |
Payments on line of credit | -105,000 | -60,000 |
Sale of common stock | 16,077 | 8,725 |
Purchase of common stock | -126,226 | -47,869 |
Dividends paid | -67,564 | -49,773 |
Other, net | 2,818 | -487 |
Cash used by financing activities | -84,895 | -19,404 |
Net increase (decrease) in cash | 12,516 | -16,353 |
Cash at beginning of year | 58,301 | 71,390 |
Cash at end of period | $70,817 | $55,037 |
General_Information
General Information | 9 Months Ended |
Sep. 30, 2014 | |
General Information [Abstract] | ' |
General Information | ' |
(1) General Information | |
HCC Insurance Holdings, Inc. (HCC) and its subsidiaries (collectively we, us or our) include domestic and foreign property and casualty and life insurance companies and underwriting agencies with offices in the United States, the United Kingdom, Spain and Ireland. We underwrite a variety of largely non-correlated specialty insurance products, including property and casualty, accident and health, surety and credit product lines, in approximately 180 countries. We market our products through a network of independent agents and brokers, through managing general agents owned by the company, and directly to consumers. In addition, we assume insurance written by other insurance companies. | |
Basis of Presentation | |
Our unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) and include the accounts of HCC and its subsidiaries. We have made all adjustments that, in our opinion, are necessary for a fair statement of results of the interim periods, and all such adjustments are of a normal recurring nature. All significant intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2013. The consolidated balance sheet at December 31, 2013 was derived from the audited financial statements but does not include all disclosures required by GAAP. | |
Management must make estimates and assumptions that affect amounts reported in our consolidated financial statements and in disclosures of contingent assets and liabilities. Ultimate results could differ from those estimates. | |
Goodwill | |
We conducted our 2014 goodwill impairment test as of June 30, 2014, which is consistent with the timeframe for our annual assessment in prior years. Based on our latest assessment, the fair value of each reporting unit exceeded its carrying amount. | |
Recent Accounting Guidance | |
A new accounting standard issued in 2014 will change the manner in which most companies recognize revenue. The standard requires that revenue reflect the transfer of goods or services to customers based on the consideration/payment the company expects to be entitled to in exchange for those goods or services; however, the standard does not change the accounting for insurance contracts or investment income. The new standard also requires enhanced disclosures about revenue. This accounting guidance is effective in the first quarter of 2017 and may be applied on a full retrospective or modified retrospective approach. We are currently assessing the impact the implementation of this standard will have on our consolidated financial statements. | |
Acquisition | |
On September 29, 2014, we executed a definitive purchase agreement to acquire all of the capital stock of Producers Ag Insurance Group, Inc. (ProAg) for $110.0 million cash, subject to a net worth adjustment at closing as described in the purchase agreement. The transaction is expected to close in early 2015 following the necessary regulatory approvals. ProAg writes multi-peril crop, crop hail, named peril and livestock insurance. |
General_Information_Details_Te
General Information (Details Textuals) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 |
countries | |
General Information [Abstract] | ' |
Number of countries in which The Company underwrites non-correlated specialty insurance products | 180 |
Amount of cash expected to be paid to acquire an entity | $110 |
Investments
Investments | 9 Months Ended | |||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||
Investment [Abstract] | ' | |||||||||||||||||||||
Investments | ' | |||||||||||||||||||||
(2) Investments | ||||||||||||||||||||||
The cost or amortized cost, gross unrealized gain or loss, and fair value of our fixed maturity and equity securities, all of which are classified as available for sale, were as follows: | ||||||||||||||||||||||
Cost or | Gross | Gross | ||||||||||||||||||||
amortized | unrealized | unrealized | ||||||||||||||||||||
cost | gain | loss | Fair value | |||||||||||||||||||
30-Sep-14 | ||||||||||||||||||||||
U.S. government and government agency securities | $ | 66,347 | $ | 1,063 | $ | -263 | $ | 67,147 | ||||||||||||||
Fixed maturity securities of states, municipalities | ||||||||||||||||||||||
and political subdivisions | 919,617 | 59,857 | -497 | 978,977 | ||||||||||||||||||
Special purpose revenue bonds of states, municipalities | ||||||||||||||||||||||
and political subdivisions | 2,272,817 | 134,571 | -3,119 | 2,404,269 | ||||||||||||||||||
Corporate securities | 1,234,819 | 37,584 | -9,535 | 1,262,868 | ||||||||||||||||||
Residential mortgage-backed securities | 827,975 | 16,893 | -9,770 | 835,098 | ||||||||||||||||||
Commercial mortgage-backed securities | 603,859 | 16,567 | -5,405 | 615,021 | ||||||||||||||||||
Asset-backed securities | 329,358 | 365 | -1,752 | 327,971 | ||||||||||||||||||
Foreign government securities | 84,262 | 1,932 | -1,004 | 85,190 | ||||||||||||||||||
Total fixed maturity securities | $ | 6,339,054 | $ | 268,832 | $ | -31,345 | $ | 6,576,541 | ||||||||||||||
Equity securities | $ | 280,663 | $ | 16,731 | $ | -11,200 | $ | 286,194 | ||||||||||||||
31-Dec-13 | ||||||||||||||||||||||
U.S. government and government agency securities | $ | 91,047 | $ | 2,157 | $ | -495 | $ | 92,709 | ||||||||||||||
Fixed maturity securities of states, municipalities | ||||||||||||||||||||||
and political subdivisions | 941,580 | 50,885 | -5,979 | 986,486 | ||||||||||||||||||
Special purpose revenue bonds of states, municipalities | ||||||||||||||||||||||
and political subdivisions | 2,240,412 | 71,541 | -46,758 | 2,265,195 | ||||||||||||||||||
Corporate securities | 1,195,387 | 40,860 | -11,009 | 1,225,238 | ||||||||||||||||||
Residential mortgage-backed securities | 622,766 | 15,289 | -19,936 | 618,119 | ||||||||||||||||||
Commercial mortgage-backed securities | 502,069 | 16,155 | -13,336 | 504,888 | ||||||||||||||||||
Asset-backed securities | 183,660 | 319 | -1,587 | 182,392 | ||||||||||||||||||
Foreign government securities | 144,566 | 3,237 | -357 | 147,446 | ||||||||||||||||||
Total fixed maturity securities | $ | 5,921,487 | $ | 200,443 | $ | -99,457 | $ | 6,022,473 | ||||||||||||||
Equity securities | $ | 464,388 | $ | 58,842 | $ | -5,764 | $ | 517,466 | ||||||||||||||
Substantially all of our fixed maturity securities are investment grade. The following tables display the gross unrealized losses and fair value of all available for sale securities that were in a continuous unrealized loss position for the periods indicated. | ||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||||||||||||
Fair value | losses | Fair value | losses | Fair value | losses | |||||||||||||||||
30-Sep-14 | ||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||
U.S. government and government agency | ||||||||||||||||||||||
securities | $ | 15,675 | $ | -30 | $ | 11,129 | $ | -233 | $ | 26,804 | $ | -263 | ||||||||||
Fixed maturity securities of states, | ||||||||||||||||||||||
municipalities and political subdivisions | 12,500 | -81 | 29,505 | -416 | 42,005 | -497 | ||||||||||||||||
Special purpose revenue bonds of states, | ||||||||||||||||||||||
municipalities and political subdivisions | 26,622 | -104 | 176,961 | -3,015 | 203,583 | -3,119 | ||||||||||||||||
Corporate securities | 357,022 | -4,672 | 96,757 | -4,863 | 453,779 | -9,535 | ||||||||||||||||
Residential mortgage-backed securities | 179,700 | -917 | 253,192 | -8,853 | 432,892 | -9,770 | ||||||||||||||||
Commercial mortgage-backed securities | 110,383 | -840 | 144,183 | -4,565 | 254,566 | -5,405 | ||||||||||||||||
Asset-backed securities | 148,445 | -863 | 51,313 | -889 | 199,758 | -1,752 | ||||||||||||||||
Foreign government securities | 29,089 | -924 | 7,162 | -80 | 36,251 | -1,004 | ||||||||||||||||
Equity securities | 123,984 | -10,217 | 4,406 | -983 | 128,390 | -11,200 | ||||||||||||||||
Total | $ | 1,003,420 | $ | -18,648 | $ | 774,608 | $ | -23,897 | $ | 1,778,028 | $ | -42,545 | ||||||||||
December 31, 2013 | ||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||
U.S. government and government agency | ||||||||||||||||||||||
securities | $ | 23,717 | $ | -495 | $ | - | $ | - | $ | 23,717 | $ | -495 | ||||||||||
Fixed maturity securities of states, | ||||||||||||||||||||||
municipalities and political subdivisions | 136,160 | -5,277 | 8,997 | -702 | 145,157 | -5,979 | ||||||||||||||||
Special purpose revenue bonds of states, | ||||||||||||||||||||||
municipalities and political subdivisions | 684,560 | -35,832 | 83,228 | -10,926 | 767,788 | -46,758 | ||||||||||||||||
Corporate securities | 277,853 | -8,202 | 35,437 | -2,807 | 313,290 | -11,009 | ||||||||||||||||
Residential mortgage-backed securities | 306,874 | -15,861 | 31,687 | -4,075 | 338,561 | -19,936 | ||||||||||||||||
Commercial mortgage-backed securities | 203,347 | -12,611 | 4,915 | -725 | 208,262 | -13,336 | ||||||||||||||||
Asset-backed securities | 126,922 | -1,587 | - | - | 126,922 | -1,587 | ||||||||||||||||
Foreign government securities | 78,182 | -357 | - | - | 78,182 | -357 | ||||||||||||||||
Equity securities | 75,620 | -5,437 | 7,016 | -327 | 82,636 | -5,764 | ||||||||||||||||
Total | $ | 1,913,235 | $ | -85,659 | $ | 171,280 | $ | -19,562 | $ | 2,084,515 | $ | -105,221 | ||||||||||
At September 30, 2014, we held approximately 2,860 fixed maturity and equity securities, of which 28% included at least one lot in an unrealized loss position. A security has an impairment loss when its fair value is less than its cost or amortized cost at the balance sheet date. We evaluate our securities for possible other-than-temporary impairment losses at each quarter end. Our reviews cover all impaired securities where the loss exceeds $1.0 million and the loss either exceeds 10% of cost or the security had been in a loss position for longer than twelve consecutive months. We do not consider the $42.5 million of gross unrealized losses in our portfolio at September 30, 2014 to be other-than-temporary impairments as these losses relate to non-credit factors, such as interest rate changes and market conditions. We recognized no other-than-temporary impairment losses in the first nine months of 2014 and 2013. | ||||||||||||||||||||||
The amortized cost and fair value of our fixed maturity securities at September 30, 2014, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The weighted-average life of our mortgage-backed and asset-backed securities was 5.6 years at September 30, 2014. | ||||||||||||||||||||||
Cost or amortized cost | Fair value | |||||||||||||||||||||
Due in 1 year or less | $ | 176,344 | $ | 179,920 | ||||||||||||||||||
Due after 1 year through 5 years | 1,066,029 | 1,101,193 | ||||||||||||||||||||
Due after 5 years through 10 years | 1,353,043 | 1,429,453 | ||||||||||||||||||||
Due after 10 years through 15 years | 944,332 | 1,001,521 | ||||||||||||||||||||
Due after 15 years | 1,038,114 | 1,086,364 | ||||||||||||||||||||
Securities with contractual maturities | 4,577,862 | 4,798,451 | ||||||||||||||||||||
Mortgage-backed and asset-backed securities | 1,761,192 | 1,778,090 | ||||||||||||||||||||
Total fixed maturity securities | $ | 6,339,054 | $ | 6,576,541 | ||||||||||||||||||
Realized pretax gains (losses) on the sale of investments included the following: | ||||||||||||||||||||||
Nine months ended September 30, | Three months ended September 30, | |||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Gains | ||||||||||||||||||||||
Fixed maturity securities | $ | 7,634 | $ | 15,848 | $ | 1,484 | $ | 11,709 | ||||||||||||||
Equity securities | 68,590 | 12,932 | 42,727 | 6,943 | ||||||||||||||||||
Other investments | - | 5,345 | - | - | ||||||||||||||||||
Total gains | 76,224 | 34,125 | 44,211 | 18,652 | ||||||||||||||||||
Losses | ||||||||||||||||||||||
Fixed maturity securities | -4,889 | -994 | -1,201 | - | ||||||||||||||||||
Equity securities | -6,800 | -2,016 | -3,626 | -730 | ||||||||||||||||||
Total losses | -11,689 | -3,010 | -4,827 | -730 | ||||||||||||||||||
Net | ||||||||||||||||||||||
Fixed maturity securities | 2,745 | 14,854 | 283 | 11,709 | ||||||||||||||||||
Equity securities | 61,790 | 10,916 | 39,101 | 6,213 | ||||||||||||||||||
Other investments | - | 5,345 | - | - | ||||||||||||||||||
Net realized investment gain | $ | 64,535 | $ | 31,115 | $ | 39,384 | $ | 17,922 |
Investments_Tables
Investments (Tables) | 9 Months Ended | |||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||
Investment [Abstract] | ' | |||||||||||||||||||||
Fixed Maturity & Equity Securities Available For Sale | ' | |||||||||||||||||||||
Cost or | Gross | Gross | ||||||||||||||||||||
amortized | unrealized | unrealized | ||||||||||||||||||||
cost | gain | loss | Fair value | |||||||||||||||||||
30-Sep-14 | ||||||||||||||||||||||
U.S. government and government agency securities | $ | 66,347 | $ | 1,063 | $ | -263 | $ | 67,147 | ||||||||||||||
Fixed maturity securities of states, municipalities | ||||||||||||||||||||||
and political subdivisions | 919,617 | 59,857 | -497 | 978,977 | ||||||||||||||||||
Special purpose revenue bonds of states, municipalities | ||||||||||||||||||||||
and political subdivisions | 2,272,817 | 134,571 | -3,119 | 2,404,269 | ||||||||||||||||||
Corporate securities | 1,234,819 | 37,584 | -9,535 | 1,262,868 | ||||||||||||||||||
Residential mortgage-backed securities | 827,975 | 16,893 | -9,770 | 835,098 | ||||||||||||||||||
Commercial mortgage-backed securities | 603,859 | 16,567 | -5,405 | 615,021 | ||||||||||||||||||
Asset-backed securities | 329,358 | 365 | -1,752 | 327,971 | ||||||||||||||||||
Foreign government securities | 84,262 | 1,932 | -1,004 | 85,190 | ||||||||||||||||||
Total fixed maturity securities | $ | 6,339,054 | $ | 268,832 | $ | -31,345 | $ | 6,576,541 | ||||||||||||||
Equity securities | $ | 280,663 | $ | 16,731 | $ | -11,200 | $ | 286,194 | ||||||||||||||
31-Dec-13 | ||||||||||||||||||||||
U.S. government and government agency securities | $ | 91,047 | $ | 2,157 | $ | -495 | $ | 92,709 | ||||||||||||||
Fixed maturity securities of states, municipalities | ||||||||||||||||||||||
and political subdivisions | 941,580 | 50,885 | -5,979 | 986,486 | ||||||||||||||||||
Special purpose revenue bonds of states, municipalities | ||||||||||||||||||||||
and political subdivisions | 2,240,412 | 71,541 | -46,758 | 2,265,195 | ||||||||||||||||||
Corporate securities | 1,195,387 | 40,860 | -11,009 | 1,225,238 | ||||||||||||||||||
Residential mortgage-backed securities | 622,766 | 15,289 | -19,936 | 618,119 | ||||||||||||||||||
Commercial mortgage-backed securities | 502,069 | 16,155 | -13,336 | 504,888 | ||||||||||||||||||
Asset-backed securities | 183,660 | 319 | -1,587 | 182,392 | ||||||||||||||||||
Foreign government securities | 144,566 | 3,237 | -357 | 147,446 | ||||||||||||||||||
Total fixed maturity securities | $ | 5,921,487 | $ | 200,443 | $ | -99,457 | $ | 6,022,473 | ||||||||||||||
Equity securities | $ | 464,388 | $ | 58,842 | $ | -5,764 | $ | 517,466 | ||||||||||||||
Gross unrealized losses and fair value of all available for sale securities that were in a continuous loss position | ' | |||||||||||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||||||||||||
Fair value | losses | Fair value | losses | Fair value | losses | |||||||||||||||||
30-Sep-14 | ||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||
U.S. government and government agency | ||||||||||||||||||||||
securities | $ | 15,675 | $ | -30 | $ | 11,129 | $ | -233 | $ | 26,804 | $ | -263 | ||||||||||
Fixed maturity securities of states, | ||||||||||||||||||||||
municipalities and political subdivisions | 12,500 | -81 | 29,505 | -416 | 42,005 | -497 | ||||||||||||||||
Special purpose revenue bonds of states, | ||||||||||||||||||||||
municipalities and political subdivisions | 26,622 | -104 | 176,961 | -3,015 | 203,583 | -3,119 | ||||||||||||||||
Corporate securities | 357,022 | -4,672 | 96,757 | -4,863 | 453,779 | -9,535 | ||||||||||||||||
Residential mortgage-backed securities | 179,700 | -917 | 253,192 | -8,853 | 432,892 | -9,770 | ||||||||||||||||
Commercial mortgage-backed securities | 110,383 | -840 | 144,183 | -4,565 | 254,566 | -5,405 | ||||||||||||||||
Asset-backed securities | 148,445 | -863 | 51,313 | -889 | 199,758 | -1,752 | ||||||||||||||||
Foreign government securities | 29,089 | -924 | 7,162 | -80 | 36,251 | -1,004 | ||||||||||||||||
Equity securities | 123,984 | -10,217 | 4,406 | -983 | 128,390 | -11,200 | ||||||||||||||||
Total | $ | 1,003,420 | $ | -18,648 | $ | 774,608 | $ | -23,897 | $ | 1,778,028 | $ | -42,545 | ||||||||||
December 31, 2013 | ||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||
U.S. government and government agency | ||||||||||||||||||||||
securities | $ | 23,717 | $ | -495 | $ | - | $ | - | $ | 23,717 | $ | -495 | ||||||||||
Fixed maturity securities of states, | ||||||||||||||||||||||
municipalities and political subdivisions | 136,160 | -5,277 | 8,997 | -702 | 145,157 | -5,979 | ||||||||||||||||
Special purpose revenue bonds of states, | ||||||||||||||||||||||
municipalities and political subdivisions | 684,560 | -35,832 | 83,228 | -10,926 | 767,788 | -46,758 | ||||||||||||||||
Corporate securities | 277,853 | -8,202 | 35,437 | -2,807 | 313,290 | -11,009 | ||||||||||||||||
Residential mortgage-backed securities | 306,874 | -15,861 | 31,687 | -4,075 | 338,561 | -19,936 | ||||||||||||||||
Commercial mortgage-backed securities | 203,347 | -12,611 | 4,915 | -725 | 208,262 | -13,336 | ||||||||||||||||
Asset-backed securities | 126,922 | -1,587 | - | - | 126,922 | -1,587 | ||||||||||||||||
Foreign government securities | 78,182 | -357 | - | - | 78,182 | -357 | ||||||||||||||||
Equity securities | 75,620 | -5,437 | 7,016 | -327 | 82,636 | -5,764 | ||||||||||||||||
Total | $ | 1,913,235 | $ | -85,659 | $ | 171,280 | $ | -19,562 | $ | 2,084,515 | $ | -105,221 | ||||||||||
Amortized cost and fair value of fixed maturity securities investments classified by contractual maturity date | ' | |||||||||||||||||||||
Cost or amortized cost | Fair value | |||||||||||||||||||||
Due in 1 year or less | $ | 176,344 | $ | 179,920 | ||||||||||||||||||
Due after 1 year through 5 years | 1,066,029 | 1,101,193 | ||||||||||||||||||||
Due after 5 years through 10 years | 1,353,043 | 1,429,453 | ||||||||||||||||||||
Due after 10 years through 15 years | 944,332 | 1,001,521 | ||||||||||||||||||||
Due after 15 years | 1,038,114 | 1,086,364 | ||||||||||||||||||||
Securities with contractual maturities | 4,577,862 | 4,798,451 | ||||||||||||||||||||
Mortgage-backed and asset-backed securities | 1,761,192 | 1,778,090 | ||||||||||||||||||||
Total fixed maturity securities | $ | 6,339,054 | $ | 6,576,541 | ||||||||||||||||||
Realized pretax gains (losses) on the sale of investments | ' | |||||||||||||||||||||
Nine months ended September 30, | Three months ended September 30, | |||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Gains | ||||||||||||||||||||||
Fixed maturity securities | $ | 7,634 | $ | 15,848 | $ | 1,484 | $ | 11,709 | ||||||||||||||
Equity securities | 68,590 | 12,932 | 42,727 | 6,943 | ||||||||||||||||||
Other investments | - | 5,345 | - | - | ||||||||||||||||||
Total gains | 76,224 | 34,125 | 44,211 | 18,652 | ||||||||||||||||||
Losses | ||||||||||||||||||||||
Fixed maturity securities | -4,889 | -994 | -1,201 | - | ||||||||||||||||||
Equity securities | -6,800 | -2,016 | -3,626 | -730 | ||||||||||||||||||
Total losses | -11,689 | -3,010 | -4,827 | -730 | ||||||||||||||||||
Net | ||||||||||||||||||||||
Fixed maturity securities | 2,745 | 14,854 | 283 | 11,709 | ||||||||||||||||||
Equity securities | 61,790 | 10,916 | 39,101 | 6,213 | ||||||||||||||||||
Other investments | - | 5,345 | - | - | ||||||||||||||||||
Net realized investment gain | $ | 64,535 | $ | 31,115 | $ | 39,384 | $ | 17,922 |
Investments_Details
Investments (Details) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Fixed Maturity & Equity Securities Available for Sale | ' | ' |
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis | $6,339,054 | $5,921,487 |
Gross unrealized gain | 268,832 | 200,443 |
Gross unrealized loss | -31,345 | -99,457 |
Fixed maturity securities - available for sale | 6,576,541 | 6,022,473 |
Available for sale equity securities | ' | ' |
Available-for-sale Equity Securities, Amortized Cost Basis | 280,663 | 464,388 |
Gross unrealized gain | 16,731 | 58,842 |
Gross unrealized loss | -11,200 | -5,764 |
Available-for-sale Securities, Equity Securities | 286,194 | 517,466 |
US Government and Government Agency Securities [Member] | ' | ' |
Fixed Maturity & Equity Securities Available for Sale | ' | ' |
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis | 66,347 | 91,047 |
Gross unrealized gain | 1,063 | 2,157 |
Gross unrealized loss | -263 | -495 |
Fixed maturity securities - available for sale | 67,147 | 92,709 |
Fixed Maturity Securities of States, Municipalities and Political Subdivisions Securities [Member] | ' | ' |
Fixed Maturity & Equity Securities Available for Sale | ' | ' |
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis | 919,617 | 941,580 |
Gross unrealized gain | 59,857 | 50,885 |
Gross unrealized loss | -497 | -5,979 |
Fixed maturity securities - available for sale | 978,977 | 986,486 |
Special Purpose Revenue Bonds Of States Municipalities And Political Subdivisions [Member] | ' | ' |
Fixed Maturity & Equity Securities Available for Sale | ' | ' |
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis | 2,272,817 | 2,240,412 |
Gross unrealized gain | 134,571 | 71,541 |
Gross unrealized loss | -3,119 | -46,758 |
Fixed maturity securities - available for sale | 2,404,269 | 2,265,195 |
Corporate Securities [Member] | ' | ' |
Fixed Maturity & Equity Securities Available for Sale | ' | ' |
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis | 1,234,819 | 1,195,387 |
Gross unrealized gain | 37,584 | 40,860 |
Gross unrealized loss | -9,535 | -11,009 |
Fixed maturity securities - available for sale | 1,262,868 | 1,225,238 |
Residential Mortgage Backed Securities [Member] | ' | ' |
Fixed Maturity & Equity Securities Available for Sale | ' | ' |
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis | 827,975 | 622,766 |
Gross unrealized gain | 16,893 | 15,289 |
Gross unrealized loss | -9,770 | -19,936 |
Fixed maturity securities - available for sale | 835,098 | 618,119 |
Commercial Mortgage Backed Securities [Member] | ' | ' |
Fixed Maturity & Equity Securities Available for Sale | ' | ' |
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis | 603,859 | 502,069 |
Gross unrealized gain | 16,567 | 16,155 |
Gross unrealized loss | -5,405 | -13,336 |
Fixed maturity securities - available for sale | 615,021 | 504,888 |
Asset-backed Securities [Member] | ' | ' |
Fixed Maturity & Equity Securities Available for Sale | ' | ' |
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis | 329,358 | 183,660 |
Gross unrealized gain | 365 | 319 |
Gross unrealized loss | -1,752 | -1,587 |
Fixed maturity securities - available for sale | 327,971 | 182,392 |
Foreign Government Securities [Member] | ' | ' |
Fixed Maturity & Equity Securities Available for Sale | ' | ' |
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis | 84,262 | 144,566 |
Gross unrealized gain | 1,932 | 3,237 |
Gross unrealized loss | -1,004 | -357 |
Fixed maturity securities - available for sale | $85,190 | $147,446 |
Investments_Details_1
Investments (Details 1) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Gross unrealized losses and fair value of all available for sale securities that were in a continuous loss position | ' | ' |
Less than 12 months, Fair value | $1,003,420 | $1,913,235 |
Less than 12 months, Unrealized losses | -18,648 | -85,659 |
12 months or more, Fair value | 774,608 | 171,280 |
12 months or more, Unrealized losses | -23,897 | -19,562 |
Total, Fair value | 1,778,028 | 2,084,515 |
Total, Unrealized losses | -42,545 | -105,221 |
US Government and Government Agency Securities [Member] | ' | ' |
Gross unrealized losses and fair value of all available for sale securities that were in a continuous loss position | ' | ' |
Less than 12 months, Fair value | 15,675 | 23,717 |
Less than 12 months, Unrealized losses | -30 | -495 |
12 months or more, Fair value | 11,129 | 0 |
12 months or more, Unrealized losses | -233 | 0 |
Total, Fair value | 26,804 | 23,717 |
Total, Unrealized losses | -263 | -495 |
Fixed Maturity Securities of States, Municipalities and Political Subdivisions Securities [Member] | ' | ' |
Gross unrealized losses and fair value of all available for sale securities that were in a continuous loss position | ' | ' |
Less than 12 months, Fair value | 12,500 | 136,160 |
Less than 12 months, Unrealized losses | -81 | -5,277 |
12 months or more, Fair value | 29,505 | 8,997 |
12 months or more, Unrealized losses | -416 | -702 |
Total, Fair value | 42,005 | 145,157 |
Total, Unrealized losses | -497 | -5,979 |
Special Purpose Revenue Bonds Of States Municipalities And Political Subdivisions [Member] | ' | ' |
Gross unrealized losses and fair value of all available for sale securities that were in a continuous loss position | ' | ' |
Less than 12 months, Fair value | 26,622 | 684,560 |
Less than 12 months, Unrealized losses | -104 | -35,832 |
12 months or more, Fair value | 176,961 | 83,228 |
12 months or more, Unrealized losses | -3,015 | -10,926 |
Total, Fair value | 203,583 | 767,788 |
Total, Unrealized losses | -3,119 | -46,758 |
Corporate Securities [Member] | ' | ' |
Gross unrealized losses and fair value of all available for sale securities that were in a continuous loss position | ' | ' |
Less than 12 months, Fair value | 357,022 | 277,853 |
Less than 12 months, Unrealized losses | -4,672 | -8,202 |
12 months or more, Fair value | 96,757 | 35,437 |
12 months or more, Unrealized losses | -4,863 | -2,807 |
Total, Fair value | 453,779 | 313,290 |
Total, Unrealized losses | -9,535 | -11,009 |
Residential Mortgage Backed Securities [Member] | ' | ' |
Gross unrealized losses and fair value of all available for sale securities that were in a continuous loss position | ' | ' |
Less than 12 months, Fair value | 179,700 | 306,874 |
Less than 12 months, Unrealized losses | -917 | -15,861 |
12 months or more, Fair value | 253,192 | 31,687 |
12 months or more, Unrealized losses | -8,853 | -4,075 |
Total, Fair value | 432,892 | 338,561 |
Total, Unrealized losses | -9,770 | -19,936 |
Commercial Mortgage Backed Securities [Member] | ' | ' |
Gross unrealized losses and fair value of all available for sale securities that were in a continuous loss position | ' | ' |
Less than 12 months, Fair value | 110,383 | 203,347 |
Less than 12 months, Unrealized losses | -840 | -12,611 |
12 months or more, Fair value | 144,183 | 4,915 |
12 months or more, Unrealized losses | -4,565 | -725 |
Total, Fair value | 254,566 | 208,262 |
Total, Unrealized losses | -5,405 | -13,336 |
Asset-backed Securities [Member] | ' | ' |
Gross unrealized losses and fair value of all available for sale securities that were in a continuous loss position | ' | ' |
Less than 12 months, Fair value | 148,445 | 126,922 |
Less than 12 months, Unrealized losses | -863 | -1,587 |
12 months or more, Fair value | 51,313 | 0 |
12 months or more, Unrealized losses | -889 | 0 |
Total, Fair value | 199,758 | 126,922 |
Total, Unrealized losses | -1,752 | -1,587 |
Foreign Government Securities [Member] | ' | ' |
Gross unrealized losses and fair value of all available for sale securities that were in a continuous loss position | ' | ' |
Less than 12 months, Fair value | 29,089 | 78,182 |
Less than 12 months, Unrealized losses | -924 | -357 |
12 months or more, Fair value | 7,162 | 0 |
12 months or more, Unrealized losses | -80 | 0 |
Total, Fair value | 36,251 | 78,182 |
Total, Unrealized losses | -1,004 | -357 |
Equity Securities [Member] | ' | ' |
Gross unrealized losses and fair value of all available for sale securities that were in a continuous loss position | ' | ' |
Less than 12 months, Fair value | 123,984 | 75,620 |
Less than 12 months, Unrealized losses | -10,217 | -5,437 |
12 months or more, Fair value | 4,406 | 7,016 |
12 months or more, Unrealized losses | -983 | -327 |
Total, Fair value | 128,390 | 82,636 |
Total, Unrealized losses | ($11,200) | ($5,764) |
Investments_Details_3
Investments (Details 3) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Amortized cost and fair value of fixed maturity securities investments classified by contractual maturity date | ' | ' |
Due in 1 year or less, Available for sale, Cost or amortized cost | $176,344 | ' |
Due after 1 year through 5 years, Available for sale, Cost or amortized cost | 1,066,029 | ' |
Due after 5 years through 10 years, Available for sale, Cost or amortized cost | 1,353,043 | ' |
Due after 10 years through 15 years, Available for sale, Cost or amortized cost | 944,332 | ' |
Due after 15 years, Available for sale, Cost or amortized cost | 1,038,114 | ' |
Securities with contractual maturities, Available for sale, Cost or amortized cost | 4,577,862 | ' |
Mortgage-backed and asset-backed securities, Available for sale, Cost or amortized cost | 1,761,192 | ' |
Available-for-sale fixed maturity Securities, Amortized Cost Basis | 6,339,054 | 5,921,487 |
Due in 1 year or less, Available for sale, Fair value | 179,920 | ' |
Due after 1 year through 5 years, Available for sale, Fair value | 1,101,193 | ' |
Due after 5 years through 10 years, Available for sale, Fair value | 1,429,453 | ' |
Due after 10 years through 15 years, Available for sale, Fair value | 1,001,521 | ' |
Due after 15 years, Available for sale, Fair value | 1,086,364 | ' |
Securities with contractual maturities, Available for sale, Fair value | 4,798,451 | ' |
Mortgage-backed and asset-backed securities, Available for sale, Fair value | 1,778,090 | ' |
Available-for-sale Securities, Fixed Maturity Securities, Fair value | $6,576,541 | $6,022,473 |
Investments_Details_5
Investments (Details 5) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Realized pretax gains (losses) on the sale of investments | ' | ' | ' | ' |
Gains | $44,211 | $18,652 | $76,224 | $34,125 |
Losses | -4,827 | -730 | -11,689 | -3,010 |
Net realized investment gain | 39,384 | 17,922 | 64,535 | 31,115 |
Fixed Maturity Securities [Member] | ' | ' | ' | ' |
Realized pretax gains (losses) on the sale of investments | ' | ' | ' | ' |
Gains | 1,484 | 11,709 | 7,634 | 15,848 |
Losses | -1,201 | 0 | -4,889 | -994 |
Net realized investment gain | 283 | 11,709 | 2,745 | 14,854 |
Equity Securities [Member] | ' | ' | ' | ' |
Realized pretax gains (losses) on the sale of investments | ' | ' | ' | ' |
Gains | 42,727 | 6,943 | 68,590 | 12,932 |
Losses | -3,626 | -730 | -6,800 | -2,016 |
Net realized investment gain | 39,101 | 6,213 | 61,790 | 10,916 |
Others [Member] | ' | ' | ' | ' |
Realized pretax gains (losses) on the sale of investments | ' | ' | ' | ' |
Gains | 0 | 0 | 0 | 5,345 |
Losses | 0 | 0 | 0 | 0 |
Net realized investment gain | $0 | $0 | $0 | $5,345 |
Investments_Details_Textuals
Investments (Details Textuals) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Investment [Abstract] | ' | ' |
Condition for categorizing the impaired securities | $1,000,000 | ' |
Condition for categorizing the impaired securities, percentage | 10.00% | ' |
Weighted-average life of mortgage-backed and asset-backed securities, Years | 5.6 | ' |
Number of fixed maturity and equity securities held | 2,860 | ' |
Percentage of securities in unrealized loss position | 28.00% | ' |
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses | ($42,545,000) | ($105,221,000) |
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Fair Value Measurements [Abstract] | ' | ||||||||||||||
Fair Value Measurements | ' | ||||||||||||||
(3) Fair Value Measurements | |||||||||||||||
Our financial instruments include assets and liabilities carried at fair value, as well as assets and liabilities carried at cost or amortized cost but disclosed at fair value in our financial statements. In determining fair value, we generally apply the market approach, which uses prices and other relevant data based on market transactions involving identical or comparable assets and liabilities. We classify our financial instruments into the following three-level hierarchy: | |||||||||||||||
• Level 1 – Inputs are based on quoted prices in active markets for identical instruments. | |||||||||||||||
• Level 2 – Inputs are based on observable market data (other than quoted prices), or are derived from or corroborated by observable market data. | |||||||||||||||
• Level 3 – Inputs are unobservable and not corroborated by market data. | |||||||||||||||
Our Level 1 investments consist of U.S. Treasuries, money market funds and equity securities traded in an active exchange market. We use unadjusted quoted prices for identical instruments to measure fair value. | |||||||||||||||
Our Level 2 investments include most of our fixed maturity securities, which consist of U.S. government agency securities, municipal bonds (including those held as restricted securities), corporate debt securities, bank loans, mortgage-backed and asset-backed securities (including collateralized loan obligations), and deposits supporting our Lloyd’s syndicate business. Level 2 also includes certificates of deposit and other interest-bearing deposits at banks, which we report as short-term investments. We measure fair value for the majority of our Level 2 investments using matrix pricing and observable market data, including benchmark securities or yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, bids, offers, default rates, loss severity and other economic measures. We measure fair value for our structured securities using observable market data in cash flow models. | |||||||||||||||
We are responsible for the prices used in our fair value measurements. We use independent pricing services to assist us in determining fair value for 99% of our Level 2 investments. The pricing services provide a single price or quote per security. We use data provided by our third party investment managers and Lloyd’s of London to value the remaining Level 2 investments. To validate that these quoted prices are reasonable estimates of fair value, we perform various quantitative and qualitative procedures, including: 1) evaluation of the underlying methodologies, 2) analysis of recent sales activity, 3) analytical review of our fair values against current market prices and 4) comparison of the pricing services’ fair value to other pricing services’ fair value for the same investment. No markets for our investments were judged to be inactive at period end. Based on these procedures, we did not adjust the prices or quotes provided by our independent pricing services, third party investment managers or Lloyd’s of London as of September 30, 2014 or December 31, 2013. | |||||||||||||||
Our Level 2 financial instruments also include our notes payable. We determine the fair value of our 6.30% Senior Notes based on quoted prices in an inactive market. The fair value of borrowings under our Revolving Loan Facility approximates the carrying amount because interest is based on 30-day LIBOR plus a margin. | |||||||||||||||
Our Level 3 securities include certain fixed maturity securities and an insurance contract that we account for as a derivative and classify in other assets. Our Level 3 category also includes liabilities for future earnout payments due to former owners of businesses we acquired, which are classified within accounts payable and accrued liabilities. We determine fair value of the derivative and the earnout payments based on internally developed models that use assumptions or other data that are not readily observable from objective sources. Fixed maturity securities classified as Level 3 at December 31, 2013 included special purpose revenue bond auction rate securities, which had interest rates that reset at periodic intervals. These securities were thinly traded and observable market data was not readily available. We determined the fair value of these securities using prices quoted by a broker. | |||||||||||||||
The following tables present the fair value of our financial instruments that were carried or disclosed at fair value. Unless indicated, these items were carried at fair value on our consolidated balance sheets. | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
30-Sep-14 | |||||||||||||||
Fixed maturity securities | |||||||||||||||
U.S. government and government agency securities | $ | 59,796 | $ | 7,351 | $ | - | $ | 67,147 | |||||||
Fixed maturity securities of states, municipalities | |||||||||||||||
and political subdivisions | - | 978,977 | - | 978,977 | |||||||||||
Special purpose revenue bonds of states, municipalities | |||||||||||||||
and political subdivisions | - | 2,404,269 | - | 2,404,269 | |||||||||||
Corporate securities | - | 1,262,719 | 149 | 1,262,868 | |||||||||||
Residential mortgage-backed securities | - | 835,098 | - | 835,098 | |||||||||||
Commercial mortgage-backed securities | - | 615,021 | - | 615,021 | |||||||||||
Asset-backed securities | - | 327,971 | - | 327,971 | |||||||||||
Foreign government securities | - | 85,190 | - | 85,190 | |||||||||||
Total fixed maturity securities | 59,796 | 6,516,596 | 149 | 6,576,541 | |||||||||||
Equity securities | 286,194 | - | - | 286,194 | |||||||||||
Short-term investments* | 107,702 | 143,165 | - | 250,867 | |||||||||||
Restricted cash and securities | - | 2,348 | - | 2,348 | |||||||||||
Premium, claims and other receivables | - | 59,736 | - | 59,736 | |||||||||||
Other assets | 19 | - | 1,201 | 1,220 | |||||||||||
Total assets measured at fair value | $ | 453,711 | $ | 6,721,845 | $ | 1,350 | $ | 7,176,906 | |||||||
Notes payable* | $ | - | $ | 793,162 | $ | - | $ | 793,162 | |||||||
Accounts payable and accrued liabilities - earnout liabilities | - | 2,348 | 9,039 | 11,387 | |||||||||||
Total liabilities measured at fair value | $ | - | $ | 795,510 | $ | 9,039 | $ | 804,549 | |||||||
__________ | |||||||||||||||
* Carried at cost or amortized cost on consolidated balance sheet. | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
31-Dec-13 | |||||||||||||||
Fixed maturity securities | |||||||||||||||
U.S. government and government agency securities | $ | 84,032 | $ | 8,677 | $ | - | $ | 92,709 | |||||||
Fixed maturity securities of states, municipalities | |||||||||||||||
and political subdivisions | - | 986,486 | - | 986,486 | |||||||||||
Special purpose revenue bonds of states, municipalities | |||||||||||||||
and political subdivisions | - | 2,255,928 | 9,267 | 2,265,195 | |||||||||||
Corporate securities | - | 1,225,088 | 150 | 1,225,238 | |||||||||||
Residential mortgage-backed securities | - | 618,119 | - | 618,119 | |||||||||||
Commercial mortgage-backed securities | - | 504,888 | - | 504,888 | |||||||||||
Asset-backed securities | - | 182,392 | - | 182,392 | |||||||||||
Foreign government securities | - | 147,446 | - | 147,446 | |||||||||||
Total fixed maturity securities | 84,032 | 5,929,024 | 9,417 | 6,022,473 | |||||||||||
Equity securities | 517,466 | - | - | 517,466 | |||||||||||
Short-term investments* | 68,958 | 109,795 | - | 178,753 | |||||||||||
Restricted cash and securities | - | 1,853 | - | 1,853 | |||||||||||
Premium, claims and other receivables | - | 66,515 | - | 66,515 | |||||||||||
Other assets | 20 | - | 941 | 961 | |||||||||||
Total assets measured at fair value | $ | 670,476 | $ | 6,107,187 | $ | 10,358 | $ | 6,788,021 | |||||||
Notes payable* | $ | - | $ | 707,656 | $ | - | $ | 707,656 | |||||||
Accounts payable and accrued liabilities - earnout liability | - | 1,853 | 7,259 | 9,112 | |||||||||||
Total liabilities measured at fair value | $ | - | $ | 709,509 | $ | 7,259 | $ | 716,768 | |||||||
__________ | |||||||||||||||
*Carried at cost or amortized cost on consolidated balance sheet. | |||||||||||||||
In the first quarter of 2013, we purchased $9.4 million of special purpose revenue bond auction rate securities, which we continued to hold and classify in Level 3 at December 31, 2013. We sold these securities in the first quarter of 2014. There were no transfers between Level 1, Level 2 or Level 3 in the first nine months of 2014 and 2013. |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Fair Value Measurements [Abstract] | ' | ||||||||||||||
Assets and liabilities at fair value | ' | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
30-Sep-14 | |||||||||||||||
Fixed maturity securities | |||||||||||||||
U.S. government and government agency securities | $ | 59,796 | $ | 7,351 | $ | - | $ | 67,147 | |||||||
Fixed maturity securities of states, municipalities | |||||||||||||||
and political subdivisions | - | 978,977 | - | 978,977 | |||||||||||
Special purpose revenue bonds of states, municipalities | |||||||||||||||
and political subdivisions | - | 2,404,269 | - | 2,404,269 | |||||||||||
Corporate securities | - | 1,262,719 | 149 | 1,262,868 | |||||||||||
Residential mortgage-backed securities | - | 835,098 | - | 835,098 | |||||||||||
Commercial mortgage-backed securities | - | 615,021 | - | 615,021 | |||||||||||
Asset-backed securities | - | 327,971 | - | 327,971 | |||||||||||
Foreign government securities | - | 85,190 | - | 85,190 | |||||||||||
Total fixed maturity securities | 59,796 | 6,516,596 | 149 | 6,576,541 | |||||||||||
Equity securities | 286,194 | - | - | 286,194 | |||||||||||
Short-term investments* | 107,702 | 143,165 | - | 250,867 | |||||||||||
Restricted cash and securities | - | 2,348 | - | 2,348 | |||||||||||
Premium, claims and other receivables | - | 59,736 | - | 59,736 | |||||||||||
Other assets | 19 | - | 1,201 | 1,220 | |||||||||||
Total assets measured at fair value | $ | 453,711 | $ | 6,721,845 | $ | 1,350 | $ | 7,176,906 | |||||||
Notes payable* | $ | - | $ | 793,162 | $ | - | $ | 793,162 | |||||||
Accounts payable and accrued liabilities - earnout liabilities | - | 2,348 | 9,039 | 11,387 | |||||||||||
Total liabilities measured at fair value | $ | - | $ | 795,510 | $ | 9,039 | $ | 804,549 | |||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
31-Dec-13 | |||||||||||||||
Fixed maturity securities | |||||||||||||||
U.S. government and government agency securities | $ | 84,032 | $ | 8,677 | $ | - | $ | 92,709 | |||||||
Fixed maturity securities of states, municipalities | |||||||||||||||
and political subdivisions | - | 986,486 | - | 986,486 | |||||||||||
Special purpose revenue bonds of states, municipalities | |||||||||||||||
and political subdivisions | - | 2,255,928 | 9,267 | 2,265,195 | |||||||||||
Corporate securities | - | 1,225,088 | 150 | 1,225,238 | |||||||||||
Residential mortgage-backed securities | - | 618,119 | - | 618,119 | |||||||||||
Commercial mortgage-backed securities | - | 504,888 | - | 504,888 | |||||||||||
Asset-backed securities | - | 182,392 | - | 182,392 | |||||||||||
Foreign government securities | - | 147,446 | - | 147,446 | |||||||||||
Total fixed maturity securities | 84,032 | 5,929,024 | 9,417 | 6,022,473 | |||||||||||
Equity securities | 517,466 | - | - | 517,466 | |||||||||||
Short-term investments* | 68,958 | 109,795 | - | 178,753 | |||||||||||
Restricted cash and securities | - | 1,853 | - | 1,853 | |||||||||||
Premium, claims and other receivables | - | 66,515 | - | 66,515 | |||||||||||
Other assets | 20 | - | 941 | 961 | |||||||||||
Total assets measured at fair value | $ | 670,476 | $ | 6,107,187 | $ | 10,358 | $ | 6,788,021 | |||||||
Notes payable* | $ | - | $ | 707,656 | $ | - | $ | 707,656 | |||||||
Accounts payable and accrued liabilities - earnout liability | - | 1,853 | 7,259 | 9,112 | |||||||||||
Total liabilities measured at fair value | $ | - | $ | 709,509 | $ | 7,259 | $ | 716,768 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Available for sale | ' | ' |
Fixed maturity securities - available for sale | $6,576,541 | $6,022,473 |
Equity securities - available for sale, at fair value | 286,194 | 517,466 |
Short-term investments* | 250,867 | 178,753 |
Restricted cash and securities | 2,348 | 1,853 |
Premium, claims and other receivables | 59,736 | 66,515 |
Other assets | 1,220 | 961 |
Total assets measured at fair value | 7,176,906 | 6,788,021 |
Notes payable | 793,162 | 707,656 |
Accounts payable and accrued liabilities - earnout liabilities | 11,387 | 9,112 |
Total liabilities measured at fair value | 804,549 | 716,768 |
Fair Value, Inputs, Level 1 [Member] | ' | ' |
Available for sale | ' | ' |
Fixed maturity securities - available for sale | 59,796 | 84,032 |
Equity securities - available for sale, at fair value | 286,194 | 517,466 |
Short-term investments* | 107,702 | 68,958 |
Other assets | 19 | 20 |
Total assets measured at fair value | 453,711 | 670,476 |
Fair Value, Inputs, Level 2 [Member] | ' | ' |
Available for sale | ' | ' |
Fixed maturity securities - available for sale | 6,516,596 | 5,929,024 |
Short-term investments* | 143,165 | 109,795 |
Restricted cash and securities | 2,348 | 1,853 |
Premium, claims and other receivables | 59,736 | 66,515 |
Total assets measured at fair value | 6,721,845 | 6,107,187 |
Notes payable | 793,162 | 707,656 |
Accounts payable and accrued liabilities - earnout liabilities | 2,348 | 1,853 |
Total liabilities measured at fair value | 795,510 | 709,509 |
Fair Value, Inputs, Level 3 [Member] | ' | ' |
Available for sale | ' | ' |
Fixed maturity securities - available for sale | 149 | 9,417 |
Other assets | 1,201 | 941 |
Total assets measured at fair value | 1,350 | 10,358 |
Accounts payable and accrued liabilities - earnout liabilities | 9,039 | 7,259 |
Total liabilities measured at fair value | 9,039 | 7,259 |
US Government and Government Agency Securities [Member] | ' | ' |
Available for sale | ' | ' |
Fixed maturity securities - available for sale | 67,147 | 92,709 |
US Government and Government Agency Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' |
Available for sale | ' | ' |
Fixed maturity securities - available for sale | 59,796 | 84,032 |
US Government and Government Agency Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' |
Available for sale | ' | ' |
Fixed maturity securities - available for sale | 7,351 | 8,677 |
Fixed Maturity Securities of States, Municipalities and Political Subdivisions Securities [Member] | ' | ' |
Available for sale | ' | ' |
Fixed maturity securities - available for sale | 978,977 | 986,486 |
Fixed Maturity Securities of States, Municipalities and Political Subdivisions Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' |
Available for sale | ' | ' |
Fixed maturity securities - available for sale | 978,977 | 986,486 |
Special Purpose Revenue Bonds Of States Municipalities And Political Subdivisions [Member] | ' | ' |
Available for sale | ' | ' |
Fixed maturity securities - available for sale | 2,404,269 | 2,265,195 |
Special Purpose Revenue Bonds Of States Municipalities And Political Subdivisions [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' |
Available for sale | ' | ' |
Fixed maturity securities - available for sale | 2,404,269 | 2,255,928 |
Special Purpose Revenue Bonds Of States Municipalities And Political Subdivisions [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' |
Available for sale | ' | ' |
Fixed maturity securities - available for sale | ' | 9,267 |
Corporate Securities [Member] | ' | ' |
Available for sale | ' | ' |
Fixed maturity securities - available for sale | 1,262,868 | 1,225,238 |
Corporate Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' |
Available for sale | ' | ' |
Fixed maturity securities - available for sale | 1,262,719 | 1,225,088 |
Corporate Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' |
Available for sale | ' | ' |
Fixed maturity securities - available for sale | 149 | 150 |
Residential Mortgage Backed Securities [Member] | ' | ' |
Available for sale | ' | ' |
Fixed maturity securities - available for sale | 835,098 | 618,119 |
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' |
Available for sale | ' | ' |
Fixed maturity securities - available for sale | 835,098 | 618,119 |
Commercial Mortgage Backed Securities [Member] | ' | ' |
Available for sale | ' | ' |
Fixed maturity securities - available for sale | 615,021 | 504,888 |
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' |
Available for sale | ' | ' |
Fixed maturity securities - available for sale | 615,021 | 504,888 |
Asset-backed Securities [Member] | ' | ' |
Available for sale | ' | ' |
Fixed maturity securities - available for sale | 327,971 | 182,392 |
Asset-backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' |
Available for sale | ' | ' |
Fixed maturity securities - available for sale | 327,971 | 182,392 |
Foreign Government Securities [Member] | ' | ' |
Available for sale | ' | ' |
Fixed maturity securities - available for sale | 85,190 | 147,446 |
Foreign Government Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' |
Available for sale | ' | ' |
Fixed maturity securities - available for sale | $85,190 | $147,446 |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details Textuals) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Fair Value, Inputs, Level 3 [Member] | ||
Fixed Maturity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Independent pricing services to assist in determining fair value | 99.00% | ' |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases | ' | $9.40 |
Reinsurance
Reinsurance | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Reinsurance [Abstract] | ' | |||||||||||||
Reinsurance | ' | |||||||||||||
(4) Reinsurance | ||||||||||||||
In the normal course of business, our insurance companies cede a portion of their premium to reinsurers through treaty and facultative reinsurance agreements. Although reinsurance does not discharge the direct insurer from liability to its policyholder, our insurance companies participate in such agreements in order to limit their loss exposure, protect them against catastrophic losses and diversify their business. The following tables present the effect of such reinsurance transactions on our premium, loss and loss adjustment expense and policy acquisition costs. | ||||||||||||||
Nine months ended September 30, | Three months ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Direct written premium | $ | 2,033,094 | $ | 1,911,619 | $ | 663,343 | $ | 616,938 | ||||||
Reinsurance assumed | 277,171 | 296,942 | 67,471 | 61,975 | ||||||||||
Reinsurance ceded | -487,875 | -478,609 | -145,620 | -157,179 | ||||||||||
Net written premium | $ | 1,822,390 | $ | 1,729,952 | $ | 585,194 | $ | 521,734 | ||||||
Direct earned premium | $ | 1,952,997 | $ | 1,860,093 | $ | 664,002 | $ | 622,464 | ||||||
Reinsurance assumed | 231,599 | 252,902 | 79,258 | 81,594 | ||||||||||
Reinsurance ceded | -462,801 | -433,785 | -156,325 | -147,390 | ||||||||||
Net earned premium | $ | 1,721,795 | $ | 1,679,210 | $ | 586,935 | $ | 556,668 | ||||||
Direct loss and loss adjustment expense | $ | 1,139,471 | $ | 1,210,862 | $ | 413,560 | $ | 517,382 | ||||||
Reinsurance assumed | 80,267 | 119,315 | 16,993 | 8,607 | ||||||||||
Reinsurance ceded | -258,863 | -337,630 | -118,616 | -205,613 | ||||||||||
Net loss and loss adjustment expense | $ | 960,875 | $ | 992,547 | $ | 311,937 | $ | 320,376 | ||||||
Policy acquisition costs | $ | 331,985 | $ | 309,285 | $ | 116,775 | $ | 105,254 | ||||||
Ceding commissions | -113,764 | -105,898 | -40,565 | -39,612 | ||||||||||
Net policy acquisition costs | $ | 218,221 | $ | 203,387 | $ | 76,210 | $ | 65,642 | ||||||
The table below shows the components of our reinsurance recoverables in our consolidated balance sheets. | ||||||||||||||
September 30, | December 31, | |||||||||||||
2014 | 2013 | |||||||||||||
Reinsurance recoverable on paid losses | $ | 108,186 | $ | 156,026 | ||||||||||
Reinsurance recoverable on outstanding losses | 454,046 | 459,134 | ||||||||||||
Reinsurance recoverable on incurred but not reported losses | 633,302 | 663,597 | ||||||||||||
Reserve for uncollectible reinsurance | -1,500 | -1,500 | ||||||||||||
Total reinsurance recoverables | $ | 1,194,034 | $ | 1,277,257 | ||||||||||
Reinsurers not authorized by the respective states of domicile of our U.S. domiciled insurance companies are required to collateralize reinsurance obligations due to us. The table below shows letters of credit and cash that are available to us as collateral, as well as amounts we owe reinsurers that can be offset against amounts due to us. | ||||||||||||||
September 30, | December 31, | |||||||||||||
2014 | 2013 | |||||||||||||
Payables to reinsurers | $ | 195,643 | $ | 208,850 | ||||||||||
Letters of credit | 83,320 | 100,529 | ||||||||||||
Funds held in trust | 133,282 | 88,310 | ||||||||||||
Total credits | $ | 412,245 | $ | 397,689 |
Reinsurance_Tables
Reinsurance (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Reinsurance [Abstract] | ' | |||||||||||||
Effect of reinsurance transactions on our premium, loss and loss adjustment expense and policy acquisition costs | ' | |||||||||||||
Nine months ended September 30, | Three months ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Direct written premium | $ | 2,033,094 | $ | 1,911,619 | $ | 663,343 | $ | 616,938 | ||||||
Reinsurance assumed | 277,171 | 296,942 | 67,471 | 61,975 | ||||||||||
Reinsurance ceded | -487,875 | -478,609 | -145,620 | -157,179 | ||||||||||
Net written premium | $ | 1,822,390 | $ | 1,729,952 | $ | 585,194 | $ | 521,734 | ||||||
Direct earned premium | $ | 1,952,997 | $ | 1,860,093 | $ | 664,002 | $ | 622,464 | ||||||
Reinsurance assumed | 231,599 | 252,902 | 79,258 | 81,594 | ||||||||||
Reinsurance ceded | -462,801 | -433,785 | -156,325 | -147,390 | ||||||||||
Net earned premium | $ | 1,721,795 | $ | 1,679,210 | $ | 586,935 | $ | 556,668 | ||||||
Direct loss and loss adjustment expense | $ | 1,139,471 | $ | 1,210,862 | $ | 413,560 | $ | 517,382 | ||||||
Reinsurance assumed | 80,267 | 119,315 | 16,993 | 8,607 | ||||||||||
Reinsurance ceded | -258,863 | -337,630 | -118,616 | -205,613 | ||||||||||
Net loss and loss adjustment expense | $ | 960,875 | $ | 992,547 | $ | 311,937 | $ | 320,376 | ||||||
Policy acquisition costs | $ | 331,985 | $ | 309,285 | $ | 116,775 | $ | 105,254 | ||||||
Ceding commissions | -113,764 | -105,898 | -40,565 | -39,612 | ||||||||||
Net policy acquisition costs | $ | 218,221 | $ | 203,387 | $ | 76,210 | $ | 65,642 | ||||||
Components of our reinsurance recoverables | ' | |||||||||||||
September 30, | December 31, | |||||||||||||
2014 | 2013 | |||||||||||||
Reinsurance recoverable on paid losses | $ | 108,186 | $ | 156,026 | ||||||||||
Reinsurance recoverable on outstanding losses | 454,046 | 459,134 | ||||||||||||
Reinsurance recoverable on incurred but not reported losses | 633,302 | 663,597 | ||||||||||||
Reserve for uncollectible reinsurance | -1,500 | -1,500 | ||||||||||||
Total reinsurance recoverables | $ | 1,194,034 | $ | 1,277,257 | ||||||||||
Amounts of letters of credit and cash available to us as collateral, plus other potential offsets | ' | |||||||||||||
September 30, | December 31, | |||||||||||||
2014 | 2013 | |||||||||||||
Payables to reinsurers | $ | 195,643 | $ | 208,850 | ||||||||||
Letters of credit | 83,320 | 100,529 | ||||||||||||
Funds held in trust | 133,282 | 88,310 | ||||||||||||
Total credits | $ | 412,245 | $ | 397,689 |
Reinsurance_Details
Reinsurance (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Effect of reinsurance transactions on our premium, loss and loss adjustment expense and policy acquisition costs | ' | ' | ' | ' |
Direct written premium | $663,343 | $616,938 | $2,033,094 | $1,911,619 |
Reinsurance assumed | 67,471 | 61,975 | 277,171 | 296,942 |
Reinsurance ceded | -145,620 | -157,179 | -487,875 | -478,609 |
Net written premium | 585,194 | 521,734 | 1,822,390 | 1,729,952 |
Direct earned premium | 664,002 | 622,464 | 1,952,997 | 1,860,093 |
Reinsurance assumed | 79,258 | 81,594 | 231,599 | 252,902 |
Reinsurance ceded | -156,325 | -147,390 | -462,801 | -433,785 |
Net earned premium | 586,935 | 556,668 | 1,721,795 | 1,679,210 |
Direct loss and loss adjustment expense | 413,560 | 517,382 | 1,139,471 | 1,210,862 |
Reinsurance assumed | 16,993 | 8,607 | 80,267 | 119,315 |
Reinsurance ceded | -118,616 | -205,613 | -258,863 | -337,630 |
Net loss and loss adjustment expense | 311,937 | 320,376 | 960,875 | 992,547 |
Policy acquisition costs | 116,775 | 105,254 | 331,985 | 309,285 |
Ceding commissions | -40,565 | -39,612 | -113,764 | -105,898 |
Net policy acquisition costs | $76,210 | $65,642 | $218,221 | $203,387 |
Reinsurance_Details_1
Reinsurance (Details 1) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Components of reinsurance recoverables | ' | ' |
Reinsurance recoverable on paid losses | $108,186 | $156,026 |
Reinsurance recoverable on outstanding losses | 454,046 | 459,134 |
Reinsurance recoverable on incurred but not reported losses | 633,302 | 663,597 |
Reserve for uncollectible reinsurance | -1,500 | -1,500 |
Total reinsurance recoverables | $1,194,034 | $1,277,257 |
Reinsurance_Details_4
Reinsurance (Details 4) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Amounts of letters of credit and cash available to us as collateral, plus other potential offsets | ' | ' |
Payables to reinsurers | $195,643 | $208,850 |
Letters of credit | 83,320 | 100,529 |
Funds held in trust | 133,282 | 88,310 |
Total credits | $412,245 | $397,689 |
Liability_for_Unpaid_Loss_and_
Liability for Unpaid Loss and Loss Adjustment Expense | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Liability for Unpaid Loss and Loss Adjustment Expense | ' | ||||||||||||||
Liability For Future Policy Benefits And Unpaid Claims Disclosure TextBlock | ' | ||||||||||||||
(5) Liability for Unpaid Loss and Loss Adjustment Expense | |||||||||||||||
The table below provides a reconciliation of our liability for loss and loss adjustment expense payable (referred to as reserves). | |||||||||||||||
Nine months ended September 30, | Three months ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Reserves at beginning of period | $ | 3,902,132 | $ | 3,767,850 | $ | 3,841,497 | $ | 3,814,684 | |||||||
Less reinsurance recoverables on reserves | 1,122,731 | 1,018,047 | 1,081,249 | 1,003,663 | |||||||||||
Net reserves at beginning of period | 2,779,401 | 2,749,803 | 2,760,248 | 2,811,021 | |||||||||||
Net loss and loss adjustment expense | 960,875 | 992,547 | 311,937 | 320,376 | |||||||||||
Net loss and loss adjustment expense payments | -1,024,673 | -884,022 | -350,603 | -297,696 | |||||||||||
Foreign currency adjustment | -26,027 | -2,296 | -32,006 | 22,331 | |||||||||||
Net reserves at end of period | 2,689,576 | 2,856,032 | 2,689,576 | 2,856,032 | |||||||||||
Plus reinsurance recoverables on reserves | 1,087,348 | 1,165,815 | 1,087,348 | 1,165,815 | |||||||||||
Reserves at end of period | $ | 3,776,924 | $ | 4,021,847 | $ | 3,776,924 | $ | 4,021,847 | |||||||
The table below details our loss and loss adjustment expense on a consolidated basis, as well as the net (favorable) adverse loss development by segment. | |||||||||||||||
Nine months ended September 30, | Three months ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Net (favorable) adverse loss development | |||||||||||||||
U.S. Property & Casualty | $ | -40,307 | $ | -40,754 | $ | -40,307 | $ | -40,754 | |||||||
Professional Liability | -978 | -26,284 | -978 | -26,284 | |||||||||||
U.S. Surety & Credit | - | -9,492 | - | - | |||||||||||
International | 15,685 | 36,896 | 15,685 | 39,196 | |||||||||||
Exited Lines | -5,051 | - | -5,051 | - | |||||||||||
Total net favorable loss development | -30,651 | -39,634 | -30,651 | -27,842 | |||||||||||
Accident year catastrophe losses | 15,886 | 48,055 | 5,531 | 18,134 | |||||||||||
All other net loss and loss adjustment expense | 975,640 | 984,126 | 337,057 | 330,084 | |||||||||||
Net loss and loss adjustment expense | $ | 960,875 | $ | 992,547 | $ | 311,937 | $ | 320,376 | |||||||
In the third quarter of 2014 and 2013, we conducted our annual review of the reserves in our U.S. Property & Casualty, Professional Liability and International segments. Based on these annual reviews, we recognized net favorable loss development of $30.7 million and $27.8 million, respectively. These amounts included favorable development of $5.1 million and $5.0 million, respectively from the release of prior years’ catastrophe reserves. In the second quarter of 2013, we conducted a limited review of our U.S. Surety & Credit reserves and recognized favorable development of $9.5 million. We also released $2.3 million of prior years’ catastrophe reserves in the International segment. The primary drivers of development in the respective periods by segment are described below. | |||||||||||||||
U.S. Property & Casualty | |||||||||||||||
In the third quarter of 2014, net favorable loss development of $40.3 million was due to better than expected loss experience, primarily in underwriting years 2012 and prior, compared to the same review conducted in the third quarter of 2013. The majority of the development related to our liability business ($20.7 million), our aviation business ($6.6 million) and a run-off assumed quota share contract ($5.0 million). | |||||||||||||||
In 2013, net favorable development of $40.8 million was due to better than expected loss experience, primarily in underwriting years 2011 and prior, compared to the same review in the third quarter of 2012. This amount included $17.0 million of favorable development related to the run-off assumed quota share contract, which we wrote from 2003 – 2008, for which expected ultimate losses have continued to decline over the past three years. | |||||||||||||||
Professional Liability | |||||||||||||||
In the third quarter of 2014, we recognized minimal loss development based on our annual review of reserves. | |||||||||||||||
In 2013, net favorable development of $26.3 million was due to better than expected loss experience, compared to the same review conducted in the third quarter of 2012. This development included reserve releases related to underwriting years prior to 2007 as well as 2009 and 2010 (totaling $64.2 million), partially offset by reserve strengthening of $37.9 million in underwriting years 2007 and 2008, which were impacted by the worldwide financial crisis. | |||||||||||||||
U.S. Surety & Credit | |||||||||||||||
We recognized no loss development in 2014. | |||||||||||||||
In the second quarter of 2013, we recognized favorable development of $9.5 million. Our review of reserves at that time indicated better experience than our actuarial expectations compared to the prior year review conducted in the fourth quarter of 2012. As a result, we recognized favorable development of $3.7 million and $5.8 million for our surety and credit lines of business, respectively, related to the 2010 and prior underwriting years. | |||||||||||||||
International | |||||||||||||||
In the third quarter of 2014, the segment’s $15.7 million net adverse loss development related to $43.5 million of adverse development for the surety & credit line of business, partially offset by $23.2 million of net favorable loss development in various lines of business and a $4.6 million reduction of prior years’ catastrophe reserves. We increased our reserves on a specific class of Spanish surety bonds to reflect our revised estimates of our liability under these bonds in light of our settlement of a large majority of the outstanding claims during the third quarter of 2014. The favorable development primarily related to our energy, property treaty and liability lines of business, which had better than expected loss experience in underwriting years 2013 and prior, compared to our review conducted in the same quarter of 2013. The net favorable development related to catastrophe reserves was primarily due to reserve releases for the 2013 European floods ($6.0 million), partially offset by reserve increases for the 2011 Denmark storms ($1.5 million). | |||||||||||||||
In the third quarter of 2013, net adverse development of $39.2 million was due to $70.3 million of adverse development in the surety & credit line of business, partially offset by net favorable development in several other lines of business, primarily energy and liability. For surety & credit, we increased our reserves on the Spanish surety bonds discussed above. The increase was made to reflect our revised estimates of our liability under these bonds in light of an adverse Spanish Supreme Court ruling published in September 2013 against an unaffiliated insurance company with respect to a surety bond similar to ours. We recognized net favorable development in our energy ($10.1 million) and U.K. professional liability ($16.1 million) products based on better than expected loss experience, primarily in underwriting years 2011 and prior. In addition, we recognized $3.4 million of favorable development from the release of 2012 catastrophe reserves for Superstorm Sandy, due to lower than expected losses. | |||||||||||||||
In the second quarter of 2013, we recognized $2.3 million of favorable development on prior years’ catastrophe reserves, due to settlement of the remaining claims related to the 2010 New Zealand earthquake. |
Liability_for_Unpaid_Loss_and_1
Liability for Unpaid Loss and Loss Adjustment Expense (Tables) | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Liability for Unpaid Loss and Loss Adjustment Expense | ' | ||||||||||||||
Rollforward of Liability for Unpaid Loss and Loss Adjustment Expense | ' | ||||||||||||||
Nine months ended September 30, | Three months ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Reserves at beginning of period | $ | 3,902,132 | $ | 3,767,850 | $ | 3,841,497 | $ | 3,814,684 | |||||||
Less reinsurance recoverables on reserves | 1,122,731 | 1,018,047 | 1,081,249 | 1,003,663 | |||||||||||
Net reserves at beginning of period | 2,779,401 | 2,749,803 | 2,760,248 | 2,811,021 | |||||||||||
Net loss and loss adjustment expense | 960,875 | 992,547 | 311,937 | 320,376 | |||||||||||
Net loss and loss adjustment expense payments | -1,024,673 | -884,022 | -350,603 | -297,696 | |||||||||||
Foreign currency adjustment | -26,027 | -2,296 | -32,006 | 22,331 | |||||||||||
Net reserves at end of period | 2,689,576 | 2,856,032 | 2,689,576 | 2,856,032 | |||||||||||
Plus reinsurance recoverables on reserves | 1,087,348 | 1,165,815 | 1,087,348 | 1,165,815 | |||||||||||
Reserves at end of period | $ | 3,776,924 | $ | 4,021,847 | $ | 3,776,924 | $ | 4,021,847 | |||||||
Details of Loss and Loss Adjustment Expense | ' | ||||||||||||||
Nine months ended September 30, | Three months ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Net (favorable) adverse loss development | |||||||||||||||
U.S. Property & Casualty | $ | -40,307 | $ | -40,754 | $ | -40,307 | $ | -40,754 | |||||||
Professional Liability | -978 | -26,284 | -978 | -26,284 | |||||||||||
U.S. Surety & Credit | - | -9,492 | - | - | |||||||||||
International | 15,685 | 36,896 | 15,685 | 39,196 | |||||||||||
Exited Lines | -5,051 | - | -5,051 | - | |||||||||||
Total net favorable loss development | -30,651 | -39,634 | -30,651 | -27,842 | |||||||||||
Accident year catastrophe losses | 15,886 | 48,055 | 5,531 | 18,134 | |||||||||||
All other net loss and loss adjustment expense | 975,640 | 984,126 | 337,057 | 330,084 | |||||||||||
Net loss and loss adjustment expense | $ | 960,875 | $ | 992,547 | $ | 311,937 | $ | 320,376 |
Liability_for_Unpaid_Loss_and_2
Liability for Unpaid Loss and Loss Adjustment Expense (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
LiabilityForUnpaidClaimsAndClaimsAdjustmentExpenseNetAbstract | ' | ' | ' | ' |
Reserves at beginning of period | $3,841,497 | $3,814,684 | $3,902,132 | $3,767,850 |
Less reinsurance recoverables on reserves | 1,081,249 | 1,003,663 | 1,122,731 | 1,018,047 |
Net reserves at beginning of period | 2,760,248 | 2,811,021 | 2,779,401 | 2,749,803 |
Net loss and loss adjustment expense: | ' | ' | ' | ' |
Net loss and loss adjustment expense | 311,937 | 320,376 | 960,875 | 992,547 |
Net loss and loss adjustment expense payments for claims occurring during: | ' | ' | ' | ' |
Net loss and loss adjustment expense payments | -350,603 | -297,696 | -1,024,673 | -884,022 |
Foreign currency adjustment | -32,006 | 22,331 | -26,027 | -2,296 |
Net reserves at end of period | 2,689,576 | 2,856,032 | 2,689,576 | 2,856,032 |
Plus reinsurance recoverables on reserves | 1,087,348 | 1,165,815 | 1,087,348 | 1,165,815 |
Reserves at end of period | $3,776,924 | $4,021,847 | $3,776,924 | $4,021,847 |
Liability_for_Unpaid_Loss_and_3
Liability for Unpaid Loss and Loss Adjustment Expense (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | ($30,651) | ($27,842) | ' | ($30,651) | ($39,634) |
Accident year catastrophe losses | 5,531 | 18,134 | ' | 15,886 | 48,055 |
All other net loss and loss adjustment expense | 337,057 | 330,084 | ' | 975,640 | 984,126 |
Loss and loss adjustment expense, net | 311,937 | 320,376 | ' | 960,875 | 992,547 |
U.S. Property & Casualty [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | -40,307 | -40,754 | ' | -40,307 | -40,754 |
Loss and loss adjustment expense, net | 13,054 | 13,666 | ' | 106,442 | 121,060 |
Professional Liability [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | -978 | -26,284 | ' | -978 | -26,284 |
Loss and loss adjustment expense, net | 50,851 | 30,100 | ' | 154,172 | 141,921 |
Accident & Health [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | 0 | 0 | ' | 0 | 0 |
Loss and loss adjustment expense, net | 178,202 | 163,143 | ' | 519,497 | 483,709 |
U.S. Surety & Credit [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | 0 | 0 | -9,500 | 0 | -9,492 |
Loss and loss adjustment expense, net | 14,550 | 13,436 | ' | 43,108 | 32,287 |
International [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | 15,685 | 39,196 | ' | 15,685 | 36,896 |
Loss and loss adjustment expense, net | 60,429 | 99,221 | ' | 142,809 | 204,137 |
Exited Lines [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | ($5,051) | $0 | ' | ($5,051) | $0 |
Liability_for_Unpaid_Loss_and_4
Liability for Unpaid Loss and Loss Adjustment Expense (Details Textuals1) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Segment LOB Event Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | ($30,651) | ($27,842) | ' | ($30,651) | ($39,634) |
U.S. Property & Casualty [Member] | ' | ' | ' | ' | ' |
Segment LOB Event Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | -40,307 | -40,754 | ' | -40,307 | -40,754 |
Professional Liability [Member] | ' | ' | ' | ' | ' |
Segment LOB Event Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | -978 | -26,284 | ' | -978 | -26,284 |
Accident & Health [Member] | ' | ' | ' | ' | ' |
Segment LOB Event Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | 0 | 0 | ' | 0 | 0 |
U.S. Surety & Credit [Member] | ' | ' | ' | ' | ' |
Segment LOB Event Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | 0 | 0 | -9,500 | 0 | -9,492 |
International [Member] | ' | ' | ' | ' | ' |
Segment LOB Event Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | 15,685 | 39,196 | ' | 15,685 | 36,896 |
Exited Lines [Member] | ' | ' | ' | ' | ' |
Segment LOB Event Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | -5,051 | 0 | ' | -5,051 | 0 |
Aviation [Member] | U.S. Property & Casualty [Member] | ' | ' | ' | ' | ' |
Segment LOB Event Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | -6,600 | ' | ' | ' | ' |
Surety [Member] | U.S. Surety & Credit [Member] | ' | ' | ' | ' | ' |
Segment LOB Event Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | ' | ' | -3,700 | ' | ' |
Credit LOB [Member] | U.S. Surety & Credit [Member] | ' | ' | ' | ' | ' |
Segment LOB Event Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | ' | ' | -5,800 | ' | ' |
Energy [Member] | International [Member] | ' | ' | ' | ' | ' |
Segment LOB Event Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | ' | -10,100 | ' | ' | ' |
Liability LOB [Member] | U.S. Property & Casualty [Member] | ' | ' | ' | ' | ' |
Segment LOB Event Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | -20,700 | ' | ' | ' | ' |
Liability LOB [Member] | International [Member] | ' | ' | ' | ' | ' |
Segment LOB Event Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | ' | -16,100 | ' | ' | ' |
Surety & Credit [Member] | International [Member] | ' | ' | ' | ' | ' |
Segment LOB Event Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | 43,500 | 70,300 | ' | 43,500 | 70,300 |
D&O prior to 2007 and 2009 and 2010 | Professional Liability [Member] | ' | ' | ' | ' | ' |
Segment LOB Event Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | ' | -64,200 | ' | ' | ' |
D&O 2007 and 2008 | Professional Liability [Member] | ' | ' | ' | ' | ' |
Segment LOB Event Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | ' | 37,900 | ' | ' | ' |
International segment - release of 2010 catastrophe reserves for New Zealand earthquake | International [Member] | ' | ' | ' | ' | ' |
Segment LOB Event Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | ' | ' | -2,300 | ' | ' |
Superstorm Sandy [Member] | International [Member] | ' | ' | ' | ' | ' |
Segment LOB Event Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | ' | -3,400 | ' | ' | ' |
Quota Share Contract Member [Member] | U.S. Property & Casualty [Member] | ' | ' | ' | ' | ' |
Segment LOB Event Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | -5,000 | -17,000 | ' | ' | ' |
Prior Year Catastrophe Reserve Releases [Member] | ' | ' | ' | ' | ' |
Segment LOB Event Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | -5,100 | -5,000 | ' | ' | ' |
Prior Year Catastrophe Reserve Releases [Member] | International [Member] | ' | ' | ' | ' | ' |
Segment LOB Event Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | -4,600 | ' | ' | ' | ' |
International segment - release of 2013 catastrophe reserves for European floods | International [Member] | ' | ' | ' | ' | ' |
Segment LOB Event Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | -6,000 | ' | ' | ' | ' |
International segment - release of 2011 catastrophe reserves for Denmark storms | International [Member] | ' | ' | ' | ' | ' |
Segment LOB Event Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | 1,500 | ' | ' | ' | ' |
International segment - Various LOB [Member] | International [Member] | ' | ' | ' | ' | ' |
Segment LOB Event Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total net (favorable) adverse loss development | ($23,200) | ' | ' | ' | ' |
Notes_Payable
Notes Payable | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Notes Payable [Abstract] | ' | ||||||||
Notes Payable | ' | ||||||||
(6) Notes Payable | |||||||||
Our notes payable consisted of the following: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
6.30% Senior Notes | $ | 299,213 | $ | 299,098 | |||||
Revolving Loan Facility | 445,000 | 355,000 | |||||||
Total notes payable | $ | 744,213 | $ | 654,098 | |||||
On April 30, 2014, we entered into an agreement to modify our $600.0 million Revolving Loan Facility (Facility). The amended agreement increased the borrowing capacity under the Facility to $825.0 million and extended the term by two years to April 30, 2019, among other changes. The weighted-average interest rate on borrowings under the Facility at September 30, 2014 was 1.4%. The borrowings and letters of credit issued under the Facility reduced our available borrowing capacity on the Facility to $374.1 million at September 30, 2014. | |||||||||
There were no other material changes to the Facility or to the terms and conditions of our Senior Notes or Standby Letter of Credit Facility (Standby Facility) from those described in Note 7, “Notes Payable” to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2013. | |||||||||
We were in compliance with debt covenants related to our 6.30% Senior Notes, the Facility and the Standby Facility at September 30, 2014. |
Notes_Payable_Tables
Notes Payable (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Notes Payable [Abstract] | ' | ||||||||
Notes Payable | ' | ||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
6.30% Senior Notes | $ | 299,213 | $ | 299,098 | |||||
Revolving Loan Facility | 445,000 | 355,000 | |||||||
Total notes payable | $ | 744,213 | $ | 654,098 |
Notes_Payable_Details
Notes Payable (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Notes Payable [Line Items] | ' | ' |
Notes payable | $744,213 | $654,098 |
6.3% Senior Notes [Member] | ' | ' |
Notes Payable [Line Items] | ' | ' |
Notes payable | 299,213 | 299,098 |
Revolving Loan Facility [Member] | ' | ' |
Notes Payable [Line Items] | ' | ' |
Notes payable | $445,000 | $355,000 |
Notes_Payable_Detail_Textuals
Notes Payable (Detail Textuals) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Notes Payable [Abstract] | ' | ' |
Interest rate of senior notes | 6.30% | ' |
Borrowing capacity under line of credit facility | $825 | $600 |
Borrowing rate under revolving loan facility | 1.40% | ' |
Remaining borrowing capacity under Revolving Loan Facility as reduced by outstanding letters of credit | $374.10 | ' |
Line of credit facility expiration date | 30-Apr-19 | ' |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Accumulated Other Comprehensive Income [Abstract] | ' | |||||||||||||
Accumulated Other Comprehensive Income [Text Block] | ' | |||||||||||||
(7) Accumulated Other Comprehensive Income | ||||||||||||||
The components of accumulated other comprehensive income in our consolidated balance sheets were as follows: | ||||||||||||||
Foreign | Accumulated | |||||||||||||
Net unrealized | currency | other | ||||||||||||
investment | translation | comprehensive | ||||||||||||
gains | adjustment | income | ||||||||||||
Nine months ended September 30, 2014 | ||||||||||||||
Balance at December 31, 2013 | $ | 99,960 | $ | 18,691 | $ | 118,651 | ||||||||
Other comprehensive income (loss) | 57,190 | -5,209 | 51,981 | |||||||||||
Balance at September 30, 2014 | $ | 157,150 | $ | 13,482 | $ | 170,632 | ||||||||
Three months ended September 30, 2014 | ||||||||||||||
Balance at June 30, 2014 | $ | 199,619 | $ | 20,803 | $ | 220,422 | ||||||||
Other comprehensive loss | -42,469 | -7,321 | -49,790 | |||||||||||
Balance at September 30, 2014 | $ | 157,150 | $ | 13,482 | $ | 170,632 |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Accumulated Other Comprehensive Income [Abstract] | ' | |||||||||||||
Schedule of Accumulated Other Comprehensive Income [Table Text Block] | ' | |||||||||||||
Foreign | Accumulated | |||||||||||||
Net unrealized | currency | other | ||||||||||||
investment | translation | comprehensive | ||||||||||||
gains | adjustment | income | ||||||||||||
Nine months ended September 30, 2014 | ||||||||||||||
Balance at December 31, 2013 | $ | 99,960 | $ | 18,691 | $ | 118,651 | ||||||||
Other comprehensive income (loss) | 57,190 | -5,209 | 51,981 | |||||||||||
Balance at September 30, 2014 | $ | 157,150 | $ | 13,482 | $ | 170,632 | ||||||||
Three months ended September 30, 2014 | ||||||||||||||
Balance at June 30, 2014 | $ | 199,619 | $ | 20,803 | $ | 220,422 | ||||||||
Other comprehensive loss | -42,469 | -7,321 | -49,790 | |||||||||||
Balance at September 30, 2014 | $ | 157,150 | $ | 13,482 | $ | 170,632 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Accumulated Other Comprehensive Income, Net of Tax, Beginning Balance | $220,422 | ' | $118,651 | ' |
Other comprehensive income | -49,790 | 3,883 | 51,981 | -165,269 |
Accumulated Other Comprehensive Income, Net of Tax, Ending Balance | 170,632 | ' | 170,632 | ' |
Accumulated Net Unrealized Investment Gain [Member] | ' | ' | ' | ' |
Accumulated Other Comprehensive Income, Net of Tax, Beginning Balance | 199,619 | ' | 99,960 | ' |
Other comprehensive income | -42,469 | ' | 57,190 | ' |
Accumulated Other Comprehensive Income, Net of Tax, Ending Balance | 157,150 | ' | 157,150 | ' |
Accumulated Translation Adjustment [Member] | ' | ' | ' | ' |
Accumulated Other Comprehensive Income, Net of Tax, Beginning Balance | 20,803 | ' | 18,691 | ' |
Other comprehensive income | -7,321 | ' | -5,209 | ' |
Accumulated Other Comprehensive Income, Net of Tax, Ending Balance | $13,482 | ' | $13,482 | ' |
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||
Earnings Per Share | ' | ||||||||||||||
(8) Earnings Per Share | |||||||||||||||
The following table details the numerator and denominator used in our earnings per share calculations. | |||||||||||||||
Nine months ended September 30, | Three months ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Net earnings | $ | 345,314 | $ | 292,187 | $ | 140,267 | $ | 98,175 | |||||||
Less: net earnings attributable to unvested restricted stock | -5,610 | -4,754 | -2,328 | -1,527 | |||||||||||
Net earnings available to common stock | $ | 339,704 | $ | 287,433 | $ | 137,939 | $ | 96,648 | |||||||
Weighted-average common shares outstanding | 98,340 | 98,881 | 97,909 | 98,723 | |||||||||||
Dilutive effect of outstanding securities (determined using | |||||||||||||||
treasury stock method) | 238 | 254 | 225 | 270 | |||||||||||
Weighted-average common shares and potential | |||||||||||||||
common shares outstanding | 98,578 | 99,135 | 98,134 | 98,993 | |||||||||||
Earnings per common share | |||||||||||||||
Basic | $ | 3.45 | $ | 2.91 | $ | 1.41 | $ | 0.98 | |||||||
Diluted | $ | 3.45 | $ | 2.9 | $ | 1.41 | $ | 0.98 |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||
Earnings per share | ' | ||||||||||||||
Nine months ended September 30, | Three months ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Net earnings | $ | 345,314 | $ | 292,187 | $ | 140,267 | $ | 98,175 | |||||||
Less: net earnings attributable to unvested restricted stock | -5,610 | -4,754 | -2,328 | -1,527 | |||||||||||
Net earnings available to common stock | $ | 339,704 | $ | 287,433 | $ | 137,939 | $ | 96,648 | |||||||
Weighted-average common shares outstanding | 98,340 | 98,881 | 97,909 | 98,723 | |||||||||||
Dilutive effect of outstanding securities (determined using | |||||||||||||||
treasury stock method) | 238 | 254 | 225 | 270 | |||||||||||
Weighted-average common shares and potential | |||||||||||||||
common shares outstanding | 98,578 | 99,135 | 98,134 | 98,993 | |||||||||||
Earnings per common share | |||||||||||||||
Basic | $ | 3.45 | $ | 2.91 | $ | 1.41 | $ | 0.98 | |||||||
Diluted | $ | 3.45 | $ | 2.9 | $ | 1.41 | $ | 0.98 |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Earnings Per Share, Basic and Diluted | ' | ' | ' | ' |
Net earnings | $140,267 | $98,175 | $345,314 | $292,187 |
Less: net earnings attributable to unvested restricted stock | 2,328 | 1,527 | 5,610 | 4,754 |
Net earnings available to common stock | 137,939 | 96,648 | 339,704 | 287,433 |
Weighted-average common shares outstanding | 97,909 | 98,723 | 98,340 | 98,881 |
Dilutive effect of outstanding securities (determined using treasury stock method) | 225 | 270 | 238 | 254 |
Weighted-average common shares and potential common shares outstanding | 98,134 | 98,993 | 98,578 | 99,135 |
Earnings Per Share, Basic | $1.41 | $0.98 | $3.45 | $2.91 |
Earnings Per Share, Diluted | $1.41 | $0.98 | $3.45 | $2.90 |
Net earnings available to common stock | $137,939 | $96,648 | $339,704 | $287,433 |
Stock_based_Compensation
Stock based Compensation | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Stock based Compensation [Abstract] | ' | |||||||||||||
Stock based Compensation | ' | |||||||||||||
(9) Stock-Based Compensation | ||||||||||||||
In 2014, we granted the following shares of common stock, restricted stock and restricted stock units. | ||||||||||||||
Weighted-average | ||||||||||||||
Number | grant date | Aggregate | Vesting | |||||||||||
of shares | fair value | fair value | period | |||||||||||
Common stock | 38 | $ | 46.41 | $ | 1,771 | None | ||||||||
Restricted stock | 355 | 43.92 | 15,603 | 0 - 4 years | ||||||||||
Restricted stock units | 13 | 45.14 | 593 | 4 years | ||||||||||
For common stock grants, we measure fair value based on the closing stock price of our common stock on the grant date and expense it on the grant date. | ||||||||||||||
Certain awards of restricted stock and restricted stock units contain a performance condition based on the ultimate results for the applicable underwriting year. The number of such shares that vest could be higher or lower than initially granted. We measure fair value for these awards based on the closing price of our common stock on the grant date, and we recognize expense on a straight-line basis over the vesting period for those restricted stock awards or units expected to vest. | ||||||||||||||
Certain of our executive officers were granted performance-based restricted stock in 2014. This restricted stock vests after three years and can vest from 0% to 200% of the initial shares granted. Vesting is based equally on an operating return on equity performance factor and a total shareholder return performance factor. |
Stock_Based_Compensation_Table
Stock Based Compensation (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Share-based Compensation [Abstract] | ' | |||||||||||||
Schedule of Share-based Compensation, Common Stock, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | ' | |||||||||||||
Weighted-average | ||||||||||||||
Number | grant date | Aggregate | Vesting | |||||||||||
of shares | fair value | fair value | period | |||||||||||
Common stock | 38 | $ | 46.41 | $ | 1,771 | None | ||||||||
Restricted stock | 355 | 43.92 | 15,603 | 0 - 4 years | ||||||||||
Restricted stock units | 13 | 45.14 | 593 | 4 years |
Stock_based_Compensation_Detai
Stock based Compensation (Details Textuals) | 9 Months Ended |
Sep. 30, 2014 | |
MinimumMember | ' |
Stock Based Compensation [Line Items] | ' |
Percentage Of Restricted Stock Shares Vesting Range | 0.00% |
MaximumMember | ' |
Stock Based Compensation [Line Items] | ' |
Percentage Of Restricted Stock Shares Vesting Range | 200.00% |
Stock_based_Compensation_Detai1
Stock based Compensation (Details 2) (USD $) | 9 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 |
Restricted stock [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward] | ' |
Number of shares | 355 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | ' |
Weighted-average grant date fair value, awarded | $43.92 |
Restricted stock units (RSU) [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward] | ' |
Number of shares | 13 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | ' |
Weighted-average grant date fair value, awarded | $45.14 |
Recovered_Sheet1
Stock based compensation (Details 3) (USD $) | 9 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 |
Common stock [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Number of shares | 38 |
Weighted-average grant date fair value, awarded | $46.41 |
Aggregate fair value | $1,771 |
Restricted stock [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Number of shares | 355 |
Weighted-average grant date fair value, awarded | $43.92 |
Aggregate fair value | 15,603 |
Restricted stock [Member] | MinimumMember | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Vesting period | '0 years |
Restricted stock [Member] | MaximumMember | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Vesting period | '4 years |
Restricted stock units (RSU) [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Number of shares | 13 |
Weighted-average grant date fair value, awarded | $45.14 |
Aggregate fair value | $593 |
Restricted stock units (RSU) [Member] | MinimumMember | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Vesting period | '4 years |
Restricted stock units (RSU) [Member] | MaximumMember | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Vesting period | '4 years |
Segments
Segments | 9 Months Ended | |||||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||||
Segments [Abstract] | ' | |||||||||||||||||||||||||
Segments | ' | |||||||||||||||||||||||||
(10) Segments | ||||||||||||||||||||||||||
We report HCC’s results in six operating segments, including the following five insurance underwriting segments: | ||||||||||||||||||||||||||
U.S. Property & Casualty | ||||||||||||||||||||||||||
Professional Liability | ||||||||||||||||||||||||||
Accident & Health | ||||||||||||||||||||||||||
U.S. Surety & Credit | ||||||||||||||||||||||||||
International | ||||||||||||||||||||||||||
The Investing segment includes our consolidated investment portfolio, as well as all investment income, investment related expenses, realized investment gains and losses, and other-than-temporary impairment credit losses on investments. All investment activity is reported as revenue, consistent with our consolidated presentation. | ||||||||||||||||||||||||||
In addition to our segments, we include a Corporate & Other category to reconcile segment results to consolidated totals. The Corporate & Other category includes corporate operating expenses not allocated to the segments, interest expense on long-term debt, foreign currency expense (benefit), and underwriting results of our Exited Lines. Our Exited Lines include product lines that we no longer write and do not expect to write in the future. | ||||||||||||||||||||||||||
The following tables present information by business segment. | ||||||||||||||||||||||||||
U.S. Property | Professional | Accident | U.S. Surety | Corporate | ||||||||||||||||||||||
& Casualty | Liability | & Health | & Credit | International | Investing | & Other | Consolidated | |||||||||||||||||||
Nine months ended | ||||||||||||||||||||||||||
30-Sep-14 | ||||||||||||||||||||||||||
Net earned premium | $ | 271,718 | $ | 261,457 | $ | 723,051 | $ | 148,496 | $ | 316,591 | $ | - | $ | 482 | $ | 1,721,795 | ||||||||||
Other revenue | 14,933 | 800 | 7,865 | 1,576 | 2,745 | 232,015 | 813 | 260,747 | ||||||||||||||||||
Segment revenue | 286,651 | 262,257 | 730,916 | 150,072 | 319,336 | 232,015 | 1,295 | 1,982,542 | ||||||||||||||||||
Loss and LAE | 106,442 | 154,172 | 519,497 | 43,108 | 142,809 | - | -5,153 | 960,875 | ||||||||||||||||||
Other expense | 86,807 | 49,533 | 114,855 | 82,052 | 128,080 | - | 63,067 | 524,394 | ||||||||||||||||||
Segment expense | 193,249 | 203,705 | 634,352 | 125,160 | 270,889 | - | 57,914 | 1,485,269 | ||||||||||||||||||
Segment pretax earnings (loss) | $ | 93,402 | $ | 58,552 | $ | 96,564 | $ | 24,912 | $ | 48,447 | $ | 232,015 | $ | -56,619 | $ | 497,273 | ||||||||||
Nine months ended | ||||||||||||||||||||||||||
30-Sep-13 | ||||||||||||||||||||||||||
Net earned premium | $ | 276,647 | $ | 277,662 | $ | 657,995 | $ | 144,673 | $ | 311,261 | $ | - | $ | 10,972 | $ | 1,679,210 | ||||||||||
Other revenue | 16,198 | 304 | 3,736 | 1,027 | 2,790 | 196,756 | 253 | 221,064 | ||||||||||||||||||
Segment revenue | 292,845 | 277,966 | 661,731 | 145,700 | 314,051 | 196,756 | 11,225 | 1,900,274 | ||||||||||||||||||
Loss and LAE | 121,060 | 141,921 | 483,709 | 32,287 | 204,137 | - | 9,433 | 992,547 | ||||||||||||||||||
Other expense | 84,801 | 46,781 | 97,414 | 80,182 | 114,534 | - | 67,688 | 491,400 | ||||||||||||||||||
Segment expense | 205,861 | 188,702 | 581,123 | 112,469 | 318,671 | - | 77,121 | 1,483,947 | ||||||||||||||||||
Segment pretax earnings (loss) | $ | 86,984 | $ | 89,264 | $ | 80,608 | $ | 33,231 | $ | -4,620 | $ | 196,756 | $ | -65,896 | $ | 416,327 | ||||||||||
Three months ended | ||||||||||||||||||||||||||
30-Sep-14 | ||||||||||||||||||||||||||
Net earned premium | $ | 86,130 | $ | 87,880 | $ | 250,570 | $ | 51,362 | $ | 111,131 | $ | - | $ | -138 | $ | 586,935 | ||||||||||
Other revenue | 4,987 | 330 | 2,363 | 708 | 846 | 93,620 | 249 | 103,103 | ||||||||||||||||||
Segment revenue | 91,117 | 88,210 | 252,933 | 52,070 | 111,977 | 93,620 | 111 | 690,038 | ||||||||||||||||||
Loss and LAE | 13,054 | 50,851 | 178,202 | 14,550 | 60,429 | - | -5,149 | 311,937 | ||||||||||||||||||
Other expense | 28,659 | 14,988 | 40,601 | 28,645 | 48,101 | - | 12,450 | 173,444 | ||||||||||||||||||
Segment expense | 41,713 | 65,839 | 218,803 | 43,195 | 108,530 | - | 7,301 | 485,381 | ||||||||||||||||||
Segment pretax earnings (loss) | $ | 49,404 | $ | 22,371 | $ | 34,130 | $ | 8,875 | $ | 3,447 | $ | 93,620 | $ | -7,190 | $ | 204,657 | ||||||||||
Three months ended | ||||||||||||||||||||||||||
30-Sep-13 | ||||||||||||||||||||||||||
Net earned premium | $ | 91,684 | $ | 92,439 | $ | 223,048 | $ | 47,442 | $ | 100,849 | $ | - | $ | 1,206 | $ | 556,668 | ||||||||||
Other revenue | 4,769 | -21 | 1,406 | 406 | 888 | 72,130 | 231 | 79,809 | ||||||||||||||||||
Segment revenue | 96,453 | 92,418 | 224,454 | 47,848 | 101,737 | 72,130 | 1,437 | 636,477 | ||||||||||||||||||
Loss and LAE | 13,666 | 30,100 | 163,143 | 13,436 | 99,221 | - | 810 | 320,376 | ||||||||||||||||||
Other expense | 32,044 | 10,909 | 33,705 | 26,501 | 42,613 | - | 30,229 | 176,001 | ||||||||||||||||||
Segment expense | 45,710 | 41,009 | 196,848 | 39,937 | 141,834 | - | 31,039 | 496,377 | ||||||||||||||||||
Segment pretax earnings (loss) | $ | 50,743 | $ | 51,409 | $ | 27,606 | $ | 7,911 | $ | -40,097 | $ | 72,130 | $ | -29,602 | $ | 140,100 | ||||||||||
In the first nine months and third quarter of 2013, the Professional Liability segment pretax earnings included net favorable loss development of $26.3 million. In the first nine months and third quarter of 2014, the International segment pretax income included adverse development of $43.5 million related to strengthening reserves for Spanish surety bonds, compared to $70.3 million in the same periods of 2013. |
Segments_Tables
Segments (Tables) | 9 Months Ended | |||||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||||
Segments [Abstract] | ' | |||||||||||||||||||||||||
Information by business segment | ' | |||||||||||||||||||||||||
U.S. Property | Professional | Accident | U.S. Surety | Corporate | ||||||||||||||||||||||
& Casualty | Liability | & Health | & Credit | International | Investing | & Other | Consolidated | |||||||||||||||||||
Nine months ended | ||||||||||||||||||||||||||
30-Sep-14 | ||||||||||||||||||||||||||
Net earned premium | $ | 271,718 | $ | 261,457 | $ | 723,051 | $ | 148,496 | $ | 316,591 | $ | - | $ | 482 | $ | 1,721,795 | ||||||||||
Other revenue | 14,933 | 800 | 7,865 | 1,576 | 2,745 | 232,015 | 813 | 260,747 | ||||||||||||||||||
Segment revenue | 286,651 | 262,257 | 730,916 | 150,072 | 319,336 | 232,015 | 1,295 | 1,982,542 | ||||||||||||||||||
Loss and LAE | 106,442 | 154,172 | 519,497 | 43,108 | 142,809 | - | -5,153 | 960,875 | ||||||||||||||||||
Other expense | 86,807 | 49,533 | 114,855 | 82,052 | 128,080 | - | 63,067 | 524,394 | ||||||||||||||||||
Segment expense | 193,249 | 203,705 | 634,352 | 125,160 | 270,889 | - | 57,914 | 1,485,269 | ||||||||||||||||||
Segment pretax earnings (loss) | $ | 93,402 | $ | 58,552 | $ | 96,564 | $ | 24,912 | $ | 48,447 | $ | 232,015 | $ | -56,619 | $ | 497,273 | ||||||||||
Nine months ended | ||||||||||||||||||||||||||
30-Sep-13 | ||||||||||||||||||||||||||
Net earned premium | $ | 276,647 | $ | 277,662 | $ | 657,995 | $ | 144,673 | $ | 311,261 | $ | - | $ | 10,972 | $ | 1,679,210 | ||||||||||
Other revenue | 16,198 | 304 | 3,736 | 1,027 | 2,790 | 196,756 | 253 | 221,064 | ||||||||||||||||||
Segment revenue | 292,845 | 277,966 | 661,731 | 145,700 | 314,051 | 196,756 | 11,225 | 1,900,274 | ||||||||||||||||||
Loss and LAE | 121,060 | 141,921 | 483,709 | 32,287 | 204,137 | - | 9,433 | 992,547 | ||||||||||||||||||
Other expense | 84,801 | 46,781 | 97,414 | 80,182 | 114,534 | - | 67,688 | 491,400 | ||||||||||||||||||
Segment expense | 205,861 | 188,702 | 581,123 | 112,469 | 318,671 | - | 77,121 | 1,483,947 | ||||||||||||||||||
Segment pretax earnings (loss) | $ | 86,984 | $ | 89,264 | $ | 80,608 | $ | 33,231 | $ | -4,620 | $ | 196,756 | $ | -65,896 | $ | 416,327 | ||||||||||
Three months ended | ||||||||||||||||||||||||||
30-Sep-14 | ||||||||||||||||||||||||||
Net earned premium | $ | 86,130 | $ | 87,880 | $ | 250,570 | $ | 51,362 | $ | 111,131 | $ | - | $ | -138 | $ | 586,935 | ||||||||||
Other revenue | 4,987 | 330 | 2,363 | 708 | 846 | 93,620 | 249 | 103,103 | ||||||||||||||||||
Segment revenue | 91,117 | 88,210 | 252,933 | 52,070 | 111,977 | 93,620 | 111 | 690,038 | ||||||||||||||||||
Loss and LAE | 13,054 | 50,851 | 178,202 | 14,550 | 60,429 | - | -5,149 | 311,937 | ||||||||||||||||||
Other expense | 28,659 | 14,988 | 40,601 | 28,645 | 48,101 | - | 12,450 | 173,444 | ||||||||||||||||||
Segment expense | 41,713 | 65,839 | 218,803 | 43,195 | 108,530 | - | 7,301 | 485,381 | ||||||||||||||||||
Segment pretax earnings (loss) | $ | 49,404 | $ | 22,371 | $ | 34,130 | $ | 8,875 | $ | 3,447 | $ | 93,620 | $ | -7,190 | $ | 204,657 | ||||||||||
Three months ended | ||||||||||||||||||||||||||
30-Sep-13 | ||||||||||||||||||||||||||
Net earned premium | $ | 91,684 | $ | 92,439 | $ | 223,048 | $ | 47,442 | $ | 100,849 | $ | - | $ | 1,206 | $ | 556,668 | ||||||||||
Other revenue | 4,769 | -21 | 1,406 | 406 | 888 | 72,130 | 231 | 79,809 | ||||||||||||||||||
Segment revenue | 96,453 | 92,418 | 224,454 | 47,848 | 101,737 | 72,130 | 1,437 | 636,477 | ||||||||||||||||||
Loss and LAE | 13,666 | 30,100 | 163,143 | 13,436 | 99,221 | - | 810 | 320,376 | ||||||||||||||||||
Other expense | 32,044 | 10,909 | 33,705 | 26,501 | 42,613 | - | 30,229 | 176,001 | ||||||||||||||||||
Segment expense | 45,710 | 41,009 | 196,848 | 39,937 | 141,834 | - | 31,039 | 496,377 | ||||||||||||||||||
Segment pretax earnings (loss) | $ | 50,743 | $ | 51,409 | $ | 27,606 | $ | 7,911 | $ | -40,097 | $ | 72,130 | $ | -29,602 | $ | 140,100 |
Segments_Details
Segments (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Information by business segment | ' | ' | ' | ' |
Net earned premium | $586,935 | $556,668 | $1,721,795 | $1,679,210 |
Other revenue | 103,103 | 79,809 | 260,747 | 221,064 |
Total revenue | 690,038 | 636,477 | 1,982,542 | 1,900,274 |
Loss and LAE | 311,937 | 320,376 | 960,875 | 992,547 |
Other expense | 173,444 | 176,001 | 524,394 | 491,400 |
Total expense | 485,381 | 496,377 | 1,485,269 | 1,483,947 |
Earnings before income taxes | 204,657 | 140,100 | 497,273 | 416,327 |
U.S. Property & Casualty [Member] | ' | ' | ' | ' |
Information by business segment | ' | ' | ' | ' |
Net earned premium | 86,130 | 91,684 | 271,718 | 276,647 |
Other revenue | 4,987 | 4,769 | 14,933 | 16,198 |
Total revenue | 91,117 | 96,453 | 286,651 | 292,845 |
Loss and LAE | 13,054 | 13,666 | 106,442 | 121,060 |
Other expense | 28,659 | 32,044 | 86,807 | 84,801 |
Total expense | 41,713 | 45,710 | 193,249 | 205,861 |
Earnings before income taxes | 49,404 | 50,743 | 93,402 | 86,984 |
Professional Liability [Member] | ' | ' | ' | ' |
Information by business segment | ' | ' | ' | ' |
Net earned premium | 87,880 | 92,439 | 261,457 | 277,662 |
Other revenue | 330 | -21 | 800 | 304 |
Total revenue | 88,210 | 92,418 | 262,257 | 277,966 |
Loss and LAE | 50,851 | 30,100 | 154,172 | 141,921 |
Other expense | 14,988 | 10,909 | 49,533 | 46,781 |
Total expense | 65,839 | 41,009 | 203,705 | 188,702 |
Earnings before income taxes | 22,371 | 51,409 | 58,552 | 89,264 |
Accident & Health [Member] | ' | ' | ' | ' |
Information by business segment | ' | ' | ' | ' |
Net earned premium | 250,570 | 223,048 | 723,051 | 657,995 |
Other revenue | 2,363 | 1,406 | 7,865 | 3,736 |
Total revenue | 252,933 | 224,454 | 730,916 | 661,731 |
Loss and LAE | 178,202 | 163,143 | 519,497 | 483,709 |
Other expense | 40,601 | 33,705 | 114,855 | 97,414 |
Total expense | 218,803 | 196,848 | 634,352 | 581,123 |
Earnings before income taxes | 34,130 | 27,606 | 96,564 | 80,608 |
U.S. Surety & Credit [Member] | ' | ' | ' | ' |
Information by business segment | ' | ' | ' | ' |
Net earned premium | 51,362 | 47,442 | 148,496 | 144,673 |
Other revenue | 708 | 406 | 1,576 | 1,027 |
Total revenue | 52,070 | 47,848 | 150,072 | 145,700 |
Loss and LAE | 14,550 | 13,436 | 43,108 | 32,287 |
Other expense | 28,645 | 26,501 | 82,052 | 80,182 |
Total expense | 43,195 | 39,937 | 125,160 | 112,469 |
Earnings before income taxes | 8,875 | 7,911 | 24,912 | 33,231 |
International [Member] | ' | ' | ' | ' |
Information by business segment | ' | ' | ' | ' |
Net earned premium | 111,131 | 100,849 | 316,591 | 311,261 |
Other revenue | 846 | 888 | 2,745 | 2,790 |
Total revenue | 111,977 | 101,737 | 319,336 | 314,051 |
Loss and LAE | 60,429 | 99,221 | 142,809 | 204,137 |
Other expense | 48,101 | 42,613 | 128,080 | 114,534 |
Total expense | 108,530 | 141,834 | 270,889 | 318,671 |
Earnings before income taxes | 3,447 | -40,097 | 48,447 | -4,620 |
Investing [Member] | ' | ' | ' | ' |
Information by business segment | ' | ' | ' | ' |
Net earned premium | 0 | 0 | 0 | 0 |
Other revenue | 93,620 | 72,130 | 232,015 | 196,756 |
Total revenue | 93,620 | 72,130 | 232,015 | 196,756 |
Loss and LAE | 0 | 0 | 0 | 0 |
Other expense | 0 | 0 | 0 | 0 |
Total expense | 0 | 0 | 0 | 0 |
Earnings before income taxes | 93,620 | 72,130 | 232,015 | 196,756 |
Corporate & Other [Member] | ' | ' | ' | ' |
Information by business segment | ' | ' | ' | ' |
Net earned premium | -138 | 1,206 | 482 | 10,972 |
Other revenue | 249 | 231 | 813 | 253 |
Total revenue | 111 | 1,437 | 1,295 | 11,225 |
Loss and LAE | -5,149 | 810 | -5,153 | 9,433 |
Other expense | 12,450 | 30,229 | 63,067 | 67,688 |
Total expense | 7,301 | 31,039 | 57,914 | 77,121 |
Earnings before income taxes | ($7,190) | ($29,602) | ($56,619) | ($65,896) |
Segments_Textuals
Segments (Textuals) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Total net (favorable) adverse loss development | ($30,651) | ($27,842) | ($30,651) | ($39,634) |
Professional Liability [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Total net (favorable) adverse loss development | -978 | -26,284 | -978 | -26,284 |
International [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Total net (favorable) adverse loss development | 15,685 | 39,196 | 15,685 | 36,896 |
International [Member] | Surety & Credit [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Total net (favorable) adverse loss development | $43,500 | $70,300 | $43,500 | $70,300 |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies [Abstract] | ' |
Commitments and Contingencies | ' |
(12) Commitments and Contingencies | |
Catastrophe and Large Loss Exposure | |
We have exposure to catastrophic and other large losses caused by natural perils (such as hurricanes, earthquakes, floods, tsunamis, hail storms and tornados) and man-made events (such as terrorist attacks). The incidence, timing and severity of these losses are unpredictable. We assess our exposures in areas most vulnerable to natural catastrophes and apply procedures to ascertain our probable maximum loss from a single event. We maintain reinsurance protection to reduce our potential losses from a future event. In the first nine months of 2014, we recognized accident year net catastrophe losses, after reinsurance and reinstatement premium, of $14.3 million related to various small catastrophes. We recognized $44.5 million in the first nine months of 2013, primarily due to European floods, German hail storms and various small catastrophes. | |
Litigation | |
We are a party to lawsuits, arbitrations and other proceedings that arise in the normal course of our business. Many of such lawsuits, arbitrations and other proceedings involve claims under policies that we underwrite as an insurer or reinsurer, the liabilities for which, we believe, have been adequately included in our loss reserves. Also, from time to time, we are a party to lawsuits, arbitrations and other proceedings that relate to disputes with third parties, or that involve alleged errors and omissions on the part of our subsidiaries. We have provided accruals for these items to the extent we deem the losses probable and reasonably estimable. Although the ultimate outcome of these matters cannot be determined at this time, based on present information, the availability of insurance coverage and advice received from our outside legal counsel, we believe the resolution of any such matters will not, individually or in the aggregate, have a material adverse effect on our consolidated financial position, results of operations or cash flows. | |
Indemnifications | |
In conjunction with the sales of business assets and subsidiaries, we have provided indemnifications to the buyers. Certain indemnifications cover typical representations and warranties related to our responsibilities to perform under the sales contracts. Under other indemnifications, we agree to reimburse the purchasers for taxes or ERISA-related amounts, if any, assessed after the sale date but related to pre-sale activities. We cannot quantify the maximum potential exposure covered by all of our indemnifications because the indemnifications cover a variety of matters, operations and scenarios and some have no time limit. For those with a time limit, the longest indemnification expires in 2025. We accrue a loss when a valid claim is made by a purchaser and we believe we have potential exposure. |
Commitments_and_Contingencies_
Commitments and Contingencies (Details Textuals) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Commitments And Contingencies [Line Items] | ' | ' |
Pretax cat loss after reinsurance | $14.30 | $44.50 |
Longest Indemnification Expiration Date | '2025 | ' |
Supplemental_Information
Supplemental Information | 9 Months Ended | |||||||||||
Sep. 30, 2014 | ||||||||||||
Supplemental Information [Abstract] | ' | |||||||||||
Supplemental Information | ' | |||||||||||
(12) Supplemental Information | ||||||||||||
Supplemental cash flow information was as follows: | ||||||||||||
Nine months ended September 30, | Three months ended September 30, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Income taxes paid | $ | 95,678 | $ | 126,295 | $ | 25,265 | $ | 26,354 | ||||
Interest paid | 16,758 | 14,808 | 1,774 | 1,486 | ||||||||
Proceeds from sales of available for sale fixed maturity | ||||||||||||
securities | 314,424 | 337,895 | 27,581 | 166,094 | ||||||||
Proceeds from sales of equity securities | 436,126 | 95,989 | 265,944 | 51,681 | ||||||||
Dividends declared but not paid at end of period | 28,985 | 22,540 | ||||||||||
Purchases of common stock not paid at end of period | 12,323 | - |
Supplemental_Information_Table
Supplemental Information (Tables) | 9 Months Ended | |||||||||||
Sep. 30, 2014 | ||||||||||||
Supplemental Information [Abstract] | ' | |||||||||||
Supplemental Information | ' | |||||||||||
Nine months ended September 30, | Three months ended September 30, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Income taxes paid | $ | 95,678 | $ | 126,295 | $ | 25,265 | $ | 26,354 | ||||
Interest paid | 16,758 | 14,808 | 1,774 | 1,486 | ||||||||
Proceeds from sales of available for sale fixed maturity | ||||||||||||
securities | 314,424 | 337,895 | 27,581 | 166,094 | ||||||||
Proceeds from sales of equity securities | 436,126 | 95,989 | 265,944 | 51,681 | ||||||||
Dividends declared but not paid at end of period | 28,985 | 22,540 | ||||||||||
Purchases of common stock not paid at end of period | 12,323 | - |
Supplemental_Information_Detai
Supplemental Information (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Supplemental Information | ' | ' | ' | ' |
Income taxes paid | $25,265 | $26,354 | $95,678 | $126,295 |
Interest paid | 1,774 | 1,486 | 16,758 | 14,808 |
Proceeds from sales of available for sale fixed maturity securities | 27,581 | 166,094 | 314,424 | 337,895 |
Proceeds from sales of equity securities | 265,944 | 51,681 | 436,126 | 95,989 |
Dividends declared but not paid at end of period | 28,985 | 22,540 | 28,985 | 22,540 |
Purchases of common stock not paid at end of period | $12,323 | ' | $12,323 | ' |