Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Billions, except Share data in Millions, unless otherwise specified | Dec. 31, 2014 | Feb. 13, 2015 | Jun. 30, 2014 |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | HCC INSURANCE HOLDINGS INC/DE/ | ||
Entity Central Index Key | 888919 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $4.80 | ||
Entity Common Stock, Shares Outstanding | 96.3 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Investments | ||
Fixed maturity securities - available for sale, at fair value (amortized cost: 2014 - $6,352,737 and 2013 - $5,921,487) | $6,610,368 | $6,022,473 |
Equity securities - available for sale, at fair value (cost: 2014 - $291,070 and 2013 - $464,388) | 296,352 | 517,466 |
Short-term investments, at cost (approximates fair value) | 258,186 | 178,753 |
Total investments | 7,164,906 | 6,718,692 |
Cash | 102,093 | 58,301 |
Restricted cash and securities | 119,010 | 125,777 |
Premium, claims and other receivables | 553,027 | 580,107 |
Reinsurance recoverables | 1,168,900 | 1,277,257 |
Ceded unearned premium | 316,715 | 305,438 |
Ceded life and annuity benefits | 48,499 | 56,491 |
Deferred policy acquisition costs | 220,321 | 201,698 |
Goodwill | 905,636 | 895,200 |
Other assets | 115,239 | 125,559 |
Total assets | 10,714,346 | 10,344,520 |
LIABILITIES | ||
Loss and loss adjustment expense payable | 3,728,085 | 3,902,132 |
Life and annuity policy benefits | 48,499 | 56,491 |
Reinsurance, premium and claims payable | 301,476 | 332,985 |
Unearned premium | 1,198,930 | 1,134,849 |
Deferred ceding commissions | 94,202 | 89,528 |
Notes payable | 824,251 | 654,098 |
Accounts payable and accrued liabilities | 615,552 | 500,007 |
Total liabilities | 6,810,995 | 6,670,090 |
SHAREHOLDERS' EQUITY | ||
Common stock, $1.00 par value; 250,000 shares authorized (shares issued: 2014 - 126,472 and 2013 - 125,577; outstanding: 2014 - 96,521 and 2013 - 100,336) | 126,472 | 125,577 |
Additional paid-in capital | 1,113,551 | 1,073,105 |
Retained earnings | 3,441,424 | 3,085,501 |
Accumulated other comprehensive income | 175,014 | 118,651 |
Treasury stock, at cost (shares: 2014 - 29,951 and 2013 - 25,241) | -953,110 | -728,404 |
Total shareholders' equity | 3,903,351 | 3,674,430 |
Total liabilities and shareholders' equity | $10,714,346 | $10,344,520 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Per Share data, unless otherwise specified | ||
Investments | ||
Fixed maturity securities, available for sale, amortized cost | $6,352,737 | $5,921,487 |
Equity securities, available for sale, cost | $291,070 | $464,388 |
SHAREHOLDERS' EQUITY | ||
Common stock, par value | $1 | $1 |
Common stock, shares authorized | 250,000 | 250,000 |
Common stock, shares issued | 126,472 | 125,577 |
Common stock, shares outstanding | 96,521 | 100,336 |
Treasury stock | 29,951 | 25,241 |
Consolidated_Statement_of_Earn
Consolidated Statement of Earnings (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
REVENUE | |||||||||||
Net earned premium | $601,832 | $586,935 | $572,248 | $562,612 | $560,030 | $556,668 | $561,356 | $561,186 | $2,323,627 | $2,239,240 | $2,242,625 |
Net investment income | 221,620 | 220,182 | 222,634 | ||||||||
Other operating income | 40,932 | 35,452 | 30,448 | ||||||||
Net realized investment gain | 66,370 | 42,030 | 31,148 | ||||||||
Other-than-temporary impairment credit losses | -1,028 | ||||||||||
Total revenue | 670,007 | 690,038 | 643,574 | 648,930 | 636,630 | 636,477 | 629,431 | 634,366 | 2,652,549 | 2,536,904 | 2,525,827 |
EXPENSE | |||||||||||
Loss and loss adjustment expense, net | 339,434 | 320,758 | 335,897 | 330,746 | 305,477 | 328,530 | 347,353 | 341,094 | 1,326,835 | 1,322,454 | 1,338,074 |
Policy acquisition costs, net | 294,670 | 279,439 | 281,201 | ||||||||
Other operating expense | 341,083 | 336,091 | 326,497 | ||||||||
Interest expense | 28,125 | 26,210 | 25,628 | ||||||||
Total expense | 505,444 | 485,381 | 505,930 | 493,958 | 480,247 | 496,377 | 504,600 | 482,970 | 1,990,713 | 1,964,194 | 1,971,400 |
Earnings before income taxes | 164,563 | 204,657 | 137,644 | 154,972 | 156,383 | 140,100 | 124,831 | 151,396 | 661,836 | 572,710 | 554,427 |
Income tax expense | 51,534 | 64,390 | 40,508 | 47,061 | 41,373 | 41,925 | 36,669 | 45,546 | 203,493 | 165,513 | 163,187 |
Net earnings | $113,029 | $140,267 | $97,136 | $107,911 | $115,010 | $98,175 | $88,162 | $105,850 | $458,343 | $407,197 | $391,240 |
Earnings per common share | |||||||||||
Basic | $1.17 | $1.41 | $0.97 | $1.08 | $1.15 | $0.98 | $0.88 | $1.05 | $4.62 | $4.05 | $3.84 |
Diluted | $1.16 | $1.41 | $0.97 | $1.07 | $1.14 | $0.98 | $0.87 | $1.05 | $4.61 | $4.04 | $3.83 |
Consolidated_Statement_of_Comp
Consolidated Statement of Comprehensive Income (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Income and Comprehensive Income [Abstract] | |||
Net earnings | $458,343 | $407,197 | $391,240 |
Investment gains (losses): | |||
Investment gains (losses) during the period | 175,219 | -240,601 | 135,746 |
Income tax charge (benefit) | 62,055 | -85,377 | 46,779 |
Investments gains (losses), net of tax | 113,164 | -155,224 | 88,967 |
Less reclassification adjustments to: | |||
Net realized investment gain | -66,370 | -42,030 | -31,148 |
Other-than-temporary impairment credit losses | -1,028 | ||
Income tax expense | -23,230 | -14,711 | -10,542 |
Total reclassifications included in net earnings, net of tax | -43,140 | -27,319 | -19,578 |
Net unrealized investment gains (losses) | 70,024 | -182,543 | 69,389 |
Foreign currency translation adjustment | -9,529 | 6,078 | -2,720 |
Income tax charge (benefit) | 4,132 | 155 | -943 |
Foreign currency translation adjustment, net of tax | -13,661 | 5,923 | -1,777 |
Other comprehensive income (loss) | 56,363 | -176,620 | 67,612 |
Comprehensive income | $514,706 | $230,577 | $458,852 |
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, 2011 | $3,273,982 | $122,720 | $1,001,308 | $2,429,818 | $227,659 | ($507,523) |
Net earnings | 391,240 | 391,240 | ||||
Other comprehensive income | 67,612 | 67,612 | ||||
Issuance of 461, 381 and 2,079 shares for exercise of options, including tax effect in 2014, 2013 and 2012, respectively | 59,838 | 2,079 | 57,759 | |||
Purchase of 4,710, 1,055 and 5,567 common shares in 2014, 2013 and 2012, respectively | -178,669 | -178,669 | ||||
Stock-based compensation | 7,902 | 315 | 7,587 | |||
Cash dividends declared, $1.04, $0.78 and $0.64 per share in 2014, 2013 and 2012, respectively | -64,892 | -64,892 | ||||
Other | -14,401 | -14,401 | ||||
Balance at Dec. 31, 2012 | 3,542,612 | 125,114 | 1,052,253 | 2,756,166 | 295,271 | -686,192 |
Net earnings | 407,197 | 407,197 | ||||
Other comprehensive income | -176,620 | -176,620 | ||||
Issuance of 461, 381 and 2,079 shares for exercise of options, including tax effect in 2014, 2013 and 2012, respectively | 12,908 | 381 | 12,527 | |||
Purchase of 4,710, 1,055 and 5,567 common shares in 2014, 2013 and 2012, respectively | -42,212 | -42,212 | ||||
Stock-based compensation | 8,407 | 82 | 8,325 | |||
Cash dividends declared, $1.04, $0.78 and $0.64 per share in 2014, 2013 and 2012, respectively | -77,862 | -77,862 | ||||
Other | 0 | 0 | ||||
Balance at Dec. 31, 2013 | 3,674,430 | 125,577 | 1,073,105 | 3,085,501 | 118,651 | -728,404 |
Net earnings | 458,343 | 458,343 | ||||
Other comprehensive income | 56,363 | 56,363 | ||||
Issuance of 461, 381 and 2,079 shares for exercise of options, including tax effect in 2014, 2013 and 2012, respectively | 16,798 | 461 | 16,337 | |||
Issuance of 92 shares for employee stock purchase plan in 2014 | 3,439 | 92 | 3,347 | |||
Purchase of 4,710, 1,055 and 5,567 common shares in 2014, 2013 and 2012, respectively | -224,706 | -224,706 | ||||
Stock-based compensation | 21,104 | 342 | 20,762 | |||
Cash dividends declared, $1.04, $0.78 and $0.64 per share in 2014, 2013 and 2012, respectively | -102,420 | -102,420 | ||||
Other | 0 | 0 | ||||
Balance at Dec. 31, 2014 | $3,903,351 | $126,472 | $1,113,551 | $3,441,424 | $175,014 | ($953,110) |
Consolidated_Statement_of_Chan1
Consolidated Statement of Changes in Shareholders' Equity (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Issuance of shares for exercise of options | 461 | 381 | 2,079 |
Issuance of shares for employee stock purchase plan | 92 | 0 | 0 |
Purchase of common shares | 4,710 | 1,055 | 5,567 |
Cash dividends declared | $1.04 | $0.78 | $0.64 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating activities | |||
Net earnings | $458,343 | $407,197 | $391,240 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Change in premium, claims and other receivables | 11,060 | -16,584 | 61,675 |
Change in reinsurance recoverables | 78,551 | -193,906 | -6,812 |
Change in ceded unearned premium | -11,657 | -48,284 | -34,580 |
Change in loss and loss adjustment expense payable | -132,253 | 115,880 | 82,201 |
Change in unearned premium | 65,295 | 64,452 | 38,662 |
Change in reinsurance, premium and claims payable | -25,863 | 39,321 | -59,177 |
Change in accounts payable and accrued liabilities | -22,343 | -120,859 | 100,091 |
Stock-based compensation expense | 26,142 | 15,531 | 12,088 |
Depreciation and amortization expense | 16,675 | 18,289 | 19,476 |
Gain on investments | -66,370 | -42,030 | -30,120 |
Other, net | 81,057 | 23,700 | 86,403 |
Cash provided by operating activities | 478,637 | 262,707 | 661,147 |
Investing activities | |||
Sales of available for sale fixed maturity securities | 480,876 | 492,891 | 639,834 |
Sales of equity securities | 434,389 | 146,624 | 14,117 |
Sales of other investments | 0 | 23,719 | 21,736 |
Maturity or call of available for sale fixed maturity securities | 532,706 | 627,041 | 697,404 |
Maturity or call of held to maturity fixed maturity securities | 0 | 0 | 28,527 |
Cost of available for sale fixed maturity securities acquired | -1,475,171 | -1,346,498 | -1,489,235 |
Cost of equity securities acquired | -200,265 | -345,129 | -262,528 |
Change in short-term investments | -86,467 | 181,972 | -207,403 |
Payments for purchase of businesses, net of cash received | -8,024 | -8,328 | -46,627 |
Proceeds from sales of subsidiaries | 16,589 | 2,031 | 2,029 |
Other, net | -5,943 | -9,377 | -16,757 |
Cash used by investing activities | -311,310 | -235,054 | -618,903 |
Financing activities | |||
Advances on line of credit | 275,000 | 180,000 | 185,000 |
Payments on line of credit | -105,000 | -110,000 | -80,000 |
Sale of common stock | 20,237 | 12,908 | 59,838 |
Purchase of common stock | -224,706 | -47,869 | -173,028 |
Dividends paid | -96,544 | -71,967 | -64,345 |
Other, net | 7,478 | -3,814 | -2,869 |
Cash used by financing activities | -123,535 | -40,742 | -75,404 |
Net increase (decrease) in cash | 43,792 | -13,089 | -33,160 |
Cash at beginning of year | 58,301 | 71,390 | 104,550 |
Cash at end of year | $102,093 | $58,301 | $71,390 |
General_Information
General Information | 12 Months Ended |
Dec. 31, 2014 | |
General Information [Abstract] | |
General Information | (1) General Information and Significant Accounting and Reporting Policies |
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. | |
Our principal domestic insurance companies are Houston Casualty Company and U.S. Specialty Insurance Company, HCC Life Insurance Company, Avemco Insurance Company, American Contractors Indemnity Company and United States Surety Company. These companies operate throughout the United States. All of these insurance companies operate on an admitted basis, except Houston Casualty Company, which operates on a surplus lines basis in the United States and also insures international risks. Our principal foreign insurance companies are HCC International Insurance Company PLC, HCC Reinsurance Company Limited and the London branch of Houston Casualty Company. These companies operate principally from the United Kingdom. We also participate in Syndicate 4141, a Lloyd’s of London syndicate that we manage. | |
Basis of Presentation | |
Our 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. All significant intercompany balances and transactions have been eliminated in consolidation. 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. | |
Revision of Financial Statement Presentation | |
We revised the presentation of our 2013 and 2012 consolidated statements of earnings to correctly classify $32.4 million and $32.6 million of internal claims department costs, respectively, as loss and loss adjustment expense. Previously, these costs were included in other operating expense, which was not in compliance with GAAP. The impact of this incorrect classification was not considered to be material to previously issued financial statements and had no effect on our consolidated net earnings, shareholders’ equity or cash flows in any previously issued financial statements. | |
Net Earned Premium, Policy Acquisition Costs and Ceding Commissions | |
Substantially all of the property and casualty, surety, and accident and health policies written by our insurance companies qualify as short-duration contracts. We recognize in current earned income the portion of the premium that provides insurance protection in the period. For the majority of our insurance policies, we recognize premium, net of reinsurance, on a pro rata basis over the term of the related contract. For certain disability policies, directors’ and officers’ liability tail policies, surety bonds and construction contracts, we recognize premium, net of reinsurance, over the period of risk in proportion to the amount of insurance protection provided. Unearned premium represents the portion of premium written that relates to the unexpired period of protection. Premium for commercial title insurance and group life policies is recognized in earnings on the effective date of the contract and when the premium is due, respectively. When the limit under a specific ceded excess of loss reinsurance layer has been exhausted, we effectively expense the remaining premium for that limit and defer and amortize the reinstatement premium over the remaining period of risk. | |
We defer our direct costs to underwrite insurance policies, less amounts reimbursed by reinsurers, and charge or credit the costs to earnings proportionate with the premium earned. These policy acquisition costs include underwriters’ salaries and bonuses attributable to successful marketing or underwriting efforts, commissions, premium taxes, fees and other incremental underwriting costs. Historical and current loss adjustment expense experience and anticipated investment income are considered in determining any premium deficiency and recoverability of related deferred policy acquisition costs. | |
Premium, Claims and Other Receivables | |
We use the gross method for reporting receivables and payables on brokered transactions. We review the collectibility of our receivables, primarily related to premiums receivable, on a current basis and generally cancel insurance coverage if the premium is unpaid. We provide an allowance for amounts due from agents and brokers that are doubtful of collection. The allowance was $5.1 million and $5.8 million at December 31, 2014 and 2013, respectively. Our estimate of the level of the allowance could change as conditions change in the future. | |
Loss and Loss Adjustment Expense Payable | |
Loss and loss adjustment expense payable by our insurance companies is based on estimates of payments to be made for reported losses, incurred but not reported losses, and anticipated receipts from salvage and subrogation. Reserves are recorded on an undiscounted basis, except for reserves of acquired companies. The discount on those reserves is not material. Estimates for reported losses are based on all available information, including reports received from ceding companies on assumed business. Estimates for incurred but not reported losses are based both on our experience and the industry’s experience. We continually review the estimates with our actuaries, and any changes are reflected in loss and loss adjustment expense in our consolidated statements of earnings in the period of the change. While we believe that amounts included in our consolidated financial statements are adequate, such estimates may be more or less than the amounts ultimately paid when the claims are settled. | |
We have no material exposure to asbestos claims or environmental pollution losses in any of our segments. Policies issued by our insurance companies do not have significant environmental exposure because of the types of risks covered. | |
Reinsurance | |
We record all reinsurance recoverables and ceded unearned premium as assets, and deferred ceding commissions as liabilities. All such amounts are calculated based on the reinsurance contract terms and recorded in a manner consistent with the underlying reinsured contracts. We record a reserve for uncollectible reinsurance based on our assessment of the reinsurer’s creditworthiness and collectibility of the recorded amounts. Information utilized to calculate the reserve is subject to change, which could affect the level of the reserve in the future. | |
Cash and Short-term Investments | |
Cash consists of cash in banks, generally in operating accounts. Short-term investments, including certificates of deposit and money-market funds, are classified as investments in our consolidated balance sheets as they relate principally to our investment activities. We generally maintain our cash deposits in major banks and invest our short-term funds in institutional money-market funds and short-term financial instruments. These securities typically mature within ninety days and, therefore, bear minimal risk. | |
Restricted Cash and Securities | |
Our agencies hold funds of unaffiliated parties for the payment of claims, and our surety businesses hold funds as collateral for potential claims. We also hold certain securities in accordance with acquisition agreements. These restricted fiduciary funds are shown as restricted cash and securities in our consolidated balance sheets. The corresponding liability is included within loss and loss adjustment expense payable; reinsurance, premium and claims payable; or accounts payable and accrued liabilities in our consolidated balance sheets. Interest earned on these funds accrues to the benefit of the parties from whom the funds were withheld. Therefore, we do not include cash activity related to these funds in our consolidated statements of cash flows. | |
Investments | |
All of our fixed maturity securities are classified as available for sale and reported at fair value. In determining fair value, we apply the market approach, which uses quoted prices or other relevant data based on market transactions involving identical or comparable assets. The change in unrealized gain or loss on available for sale securities (including the foreign exchange effect for securities denominated in currencies other than the functional currency of the subsidiary) is recorded as a component of other comprehensive income, net of the related deferred income tax effect, within our consolidated shareholders’ equity. We purchase our available for sale fixed maturity securities with the expectation that we will hold them to maturity, but we may sell them if market conditions or credit-related risk warrant earlier sales. | |
Our available for sale fixed maturity securities portfolio includes mortgage-backed and asset-backed securities for which we recognize income using a constant effective yield based on anticipated prepayments and the estimated economic life of the securities. When actual prepayments differ significantly from anticipated prepayments, the estimated economic life is recalculated and the remaining unamortized premium or discount is amortized prospectively over the remaining economic life. | |
Equity securities and other investment securities are carried at fair value. We classify these securities as available for sale, and the change in carrying value is recorded as a component of other comprehensive income, net of the related deferred income tax effect, within our consolidated shareholders’ equity. | |
Short-term investments are carried at cost, which approximates fair value. | |
Realized investment gains or losses are determined on an average cost basis and included in earnings on the trade date. If a structured security fails to pay the full amount of expected principal, we recognize the unpaid amount as a realized loss in the period due and permanently reduce the security’s cost basis. | |
Other-than-temporary Impairments | |
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 impaired securities for possible other-than-temporary impairment loss at each quarter end, considering various factors including: 1) amount by which the security’s fair value is less than its cost, 2) length of time the security has been impaired, 3) whether we intend to sell the security, 4) if it is more likely than not that we will sell the security before recovery of its amortized cost basis, 5) whether the impairment is due to an issuer-specific event, credit issues or change in market interest rates, 6) the security’s credit rating and any recent downgrades and 7) stress testing of expected cash flows under various scenarios. | |
For each impaired security, we determine if: 1) we do not intend to sell the security and 2) it is more likely than not that we will not be required to sell the security before recovery of its amortized cost basis. If we cannot assert these conditions, we record an other-than-temporary impairment loss through our consolidated statements of earnings in the current period. For all other impaired securities, we assess whether the net present value of the cash flows expected to be collected from the security is less than its amortized cost basis. Such a shortfall in cash flows is referred to as a “credit loss.” For any such security, we separate the impairment loss into: 1) the credit loss and 2) the non-credit loss, which is the amount related to all other factors such as interest rate changes, fluctuations in exchange rates and market conditions. We charge the credit loss to current period earnings and the non-credit loss to other comprehensive income, within shareholders’ equity, on an after-tax basis. A security’s cost basis is permanently reduced by the amount of a credit loss. We accrete income over the remaining life of a fixed maturity security based on the interest rate necessary to discount the expected future cash flows to the new basis. If the security is non-income producing, we apply any cash proceeds as a reduction of principal when received. | |
Derivative Financial Instruments | |
We hold an interest in a long-term mortgage impairment insurance contract, denominated in British pound sterling, for which the exposure is measured based on movement in a specified U.K. housing index. The contract qualifies as a derivative financial instrument, is unhedged and is reported at fair value in other assets in our consolidated balance sheets. We record changes in fair value and any foreign exchange gain/loss on the contract within other operating income in our consolidated statements of earnings. | |
We utilize the British pound sterling and the Euro as the functional currency in certain of our foreign operations. As a result, we have exposure to fluctuations in exchange rates between these currencies and the U.S. dollar. From time to time, we may use derivative instruments to protect our investment in these foreign operations by limiting our exposure to fluctuations in exchange rates. | |
Other Operating Income | |
Fee and commission income, primarily from third party agency and broker commissions, is reported in other operating income in our consolidated statements of earnings. We recognize fee and commission income on the later of the effective date of the policy, the date when the premium can be reasonably established, or the date when substantially all services related to the insurance placement have been rendered to the client. We record revenue from profit commissions based on the profitability of business written, calculated using the respective commission formula and actual underwriting results through the date of calculation. Such amounts are adjusted if and when experience changes. | |
When our underwriting agencies utilize one of our insurance company subsidiaries as the policy issuing company, we eliminate in consolidation the fee and commission income against the related insurance company’s policy acquisition costs and defer the policy acquisition costs of the underwriting agencies. | |
Goodwill and Intangible Assets | |
Goodwill is impaired when the fair value of a reporting unit is less than its carrying amount. We assess our goodwill for impairment annually, or sooner if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. We noted no indicators of impairment in 2014. 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. Our 2014 impairment test consisted of a qualitative assessment in which we determined that it is more likely than not that the fair value of each of our five reporting units exceeded its carrying amount as of June 30, 2014. | |
In years where we assess goodwill for impairment by determining the fair value of each reporting unit, we consider three valuation approaches (market, income and cost). We utilize the income and market valuation approaches and base our assumptions and inputs on market participant data, as well as our own data. For the income approach, we estimate the present value of each reporting unit’s expected cash flows to determine its fair value. We utilize estimated future cash flows of the portfolio of products included in each reporting unit, as well as a risk-appropriate rate of return specific to each reporting unit. We utilize our budgets and projection of future operations based on historical and expected industry trends to estimate our future cash flows and their probability of occurring as projected. We also determine fair value of each reporting unit based on market participant data, and use those results to test the reasonableness and validity of the income approach results. We utilized this methodology to determine the fair value of our reporting units in 2013. Our 2012 impairment test consisted of a qualitative assessment in which we determined that it is more likely than not that the fair value of each of our five reporting units exceeded its carrying amount as of June 30, 2012. | |
When we complete a business acquisition, we record the business combination using the acquisition method of accounting. We value all identifiable assets and liabilities at fair value and allocate any remaining consideration to goodwill in our purchase price allocations. We assign goodwill to applicable reporting units, based on the reporting unit’s share of the estimated future cash flows of all acquired insurance products. Any future adjustments to finalize pre-2009 purchase price allocations, other than for certain tax-related items, are recorded as an adjustment to goodwill. All other adjustments of purchase price allocations are recorded through earnings in the period when the adjustment is determined. | |
Intangible assets not subject to amortization are tested for impairment annually, or sooner if an event occurs or circumstances change that indicate that an intangible asset might be impaired. Other intangible assets are amortized over their respective useful lives. | |
Foreign Currency | |
We utilize the British pound sterling and the Euro as the functional currency in certain of our foreign operations. The cumulative translation adjustment, representing the effect of translating these subsidiaries’ assets and liabilities into U.S. dollars, is included in the foreign currency translation adjustment, net of the related deferred income tax effect, within accumulated other comprehensive income in consolidated shareholders’ equity. | |
For our other foreign subsidiaries and branches, the functional currency is the U.S. dollar. For all subsidiaries, transactions in non-functional currencies are translated at the rates of exchange in effect on the date the transaction occurs. Transaction gains and losses are recorded in earnings and included in other operating expense in the consolidated statements of earnings. We recognized a foreign currency benefit of $23.2 million in 2014, compared to $5.3 million and $6.2 million of expense in 2013 and 2012, respectively. Assets and liabilities recorded in non-functional currencies are translated into the functional currencies at exchange rates in effect at the balance sheet date. | |
For available for sale securities, unrealized gains and losses related to fluctuations in exchange rates are recorded as a component of other comprehensive income, net of the related deferred income tax effect, within consolidated shareholders’ equity until the securities mature or are sold. | |
The effect of exchange rate changes on cash balances held in foreign currencies was immaterial for all periods presented and is not shown separately in the consolidated statements of cash flows. | |
Income Taxes | |
We file a consolidated Federal income tax return and include the foreign subsidiaries’ income to the extent required by law. Deferred income tax is accounted for using the liability method, which reflects the tax impact of temporary differences between the bases of assets and liabilities for financial reporting purposes and such bases as measured by tax laws and regulations. We provide a deferred tax liability for un-repatriated earnings of our foreign subsidiaries at prevailing statutory rates when required. We regularly review our deferred tax assets for recoverability and establish a valuation allowance based on our history of earnings, expectations for future earnings, taxable income in carryback years and the expected timing of the reversals of existing temporary differences. Due to our history of earnings, expectations for future earnings, and taxable income in carryback years, we expect to be able to fully realize the benefit of any net deferred tax asset, excluding amounts covered by valuation allowances, on a consolidated basis. | |
We maintain a liability for our uncertain tax positions where we determine it is not more likely than not the tax position will be sustained upon examination by the appropriate tax authority. Changes in the liability for our uncertain tax positions are reflected in income tax expense in the period when a new uncertain tax position arises, we change our judgment about the likelihood of uncertainty, the tax issue is settled, or the statute of limitations expires. We report any potential net interest income or expense and penalties related to changes in our uncertain tax positions in our consolidated statements of earnings as interest expense and other operating expense, respectively. | |
Stock-Based Compensation | |
We measure the fair value of restricted stock awards and units based on the closing stock price of our common stock on the grant date and expense that value on a straight-line basis over the vesting period. For restricted stock awards/units that contain a performance condition, we recognize expense based on the awards/units expected to vest and adjust the cumulative expense whenever our estimate of the number of awards/units to vest changes. For restricted stock awards that contain a market condition, we determine the fair value at the grant date using a Monte Carlo simulation model that takes into account the probabilities of numerous vesting outcomes. This fair value is expensed on a straight-line basis over the vesting period and is not adjusted for the ultimate number of shares to vest. For stock option awards, we use the Black-Scholes option pricing model to determine the fair value of an option on its grant date and expense that value on a straight-line basis over the option’s vesting period. For grants of unrestricted common stock, we measure fair value based on the closing stock price of our common stock on the grant date and expense that value on the grant date. We calculate expense for our employee stock purchase plan using a Black-Scholes option pricing model and recognize the expense over each six-month offering period. | |
Earnings Per Share | |
Basic earnings per share is computed by dividing net earnings attributable to common stock by the weighted-average common shares outstanding during the year. Diluted earnings per share is computed by dividing net earnings attributable to common stock by the weighted-average common shares outstanding plus the weighted-average potential common shares outstanding during the year. Outstanding common stock options and unvested restricted stock with no right to dividends, when dilutive, are included in the weighted-average potential common shares outstanding. We use the treasury stock method to calculate the dilutive effect of potential common shares outstanding. We treat unvested restricted stock and unvested restricted stock units that contain non-forfeitable rights to dividends or dividend-equivalents as participating securities and include them in the earnings allocation in calculating earnings per share under the two-class method. | |
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. |
General_Information_Details_Te
General Information (Details Textuals) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
countries | |||
General Information [Abstract] | |||
Number of countries in which The Company underwrites non-correlated specialty insurance products | 180 | ||
Amount of internal claims department cost reclassified from other operating expense to loss and loss adjustment expense, net | $32.40 | $32.60 | |
Premiums Receivable, Allowance for Doubtful Accounts | 5.1 | 5.8 | |
ForeignCurrencyTransactionGainLossBeforeTax | $23.20 | ($5.30) | ($6.20) |
General_Information_Policies
General Information (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
General Information [Abstract] | |
Basis of presentation | Basis of Presentation |
Our 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. All significant intercompany balances and transactions have been eliminated in consolidation. 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. | |
Revision of Financial Statement Presentation | Revision of Financial Statement Presentation |
We revised the presentation of our 2013 and 2012 consolidated statements of earnings to correctly classify $32.4 million and $32.6 million of internal claims department costs, respectively, as loss and loss adjustment expense. Previously, these costs were included in other operating expense, which was not in compliance with GAAP. The impact of this incorrect classification was not considered to be material to previously issued financial statements and had no effect on our consolidated net earnings, shareholders’ equity or cash flows in any previously issued financial statements. | |
Net earned premium, policy acquisitions costs and ceding commisions | Net Earned Premium, Policy Acquisition Costs and Ceding Commissions |
Substantially all of the property and casualty, surety, and accident and health policies written by our insurance companies qualify as short-duration contracts. We recognize in current earned income the portion of the premium that provides insurance protection in the period. For the majority of our insurance policies, we recognize premium, net of reinsurance, on a pro rata basis over the term of the related contract. For certain disability policies, directors’ and officers’ liability tail policies, surety bonds and construction contracts, we recognize premium, net of reinsurance, over the period of risk in proportion to the amount of insurance protection provided. Unearned premium represents the portion of premium written that relates to the unexpired period of protection. Premium for commercial title insurance and group life policies is recognized in earnings on the effective date of the contract and when the premium is due, respectively. When the limit under a specific ceded excess of loss reinsurance layer has been exhausted, we effectively expense the remaining premium for that limit and defer and amortize the reinstatement premium over the remaining period of risk. | |
We defer our direct costs to underwrite insurance policies, less amounts reimbursed by reinsurers, and charge or credit the costs to earnings proportionate with the premium earned. These policy acquisition costs include underwriters’ salaries and bonuses attributable to successful marketing or underwriting efforts, commissions, premium taxes, fees and other incremental underwriting costs. Historical and current loss adjustment expense experience and anticipated investment income are considered in determining any premium deficiency and recoverability of related deferred policy acquisition costs. | |
Premium, claims and other receivables | Premium, Claims and Other Receivables |
We use the gross method for reporting receivables and payables on brokered transactions. We review the collectibility of our receivables, primarily related to premiums receivable, on a current basis and generally cancel insurance coverage if the premium is unpaid. We provide an allowance for amounts due from agents and brokers that are doubtful of collection. The allowance was $5.1 million and $5.8 million at December 31, 2014 and 2013, respectively. Our estimate of the level of the allowance could change as conditions change in the future. | |
Loss and loss adjustment expense payable | Loss and Loss Adjustment Expense Payable |
Loss and loss adjustment expense payable by our insurance companies is based on estimates of payments to be made for reported losses, incurred but not reported losses, and anticipated receipts from salvage and subrogation. Reserves are recorded on an undiscounted basis, except for reserves of acquired companies. The discount on those reserves is not material. Estimates for reported losses are based on all available information, including reports received from ceding companies on assumed business. Estimates for incurred but not reported losses are based both on our experience and the industry’s experience. We continually review the estimates with our actuaries, and any changes are reflected in loss and loss adjustment expense in our consolidated statements of earnings in the period of the change. While we believe that amounts included in our consolidated financial statements are adequate, such estimates may be more or less than the amounts ultimately paid when the claims are settled. | |
We have no material exposure to asbestos claims or environmental pollution losses in any of our segments. Policies issued by our insurance companies do not have significant environmental exposure because of the types of risks covered. | |
Reinsurance | Reinsurance |
We record all reinsurance recoverables and ceded unearned premium as assets, and deferred ceding commissions as liabilities. All such amounts are calculated based on the reinsurance contract terms and recorded in a manner consistent with the underlying reinsured contracts. We record a reserve for uncollectible reinsurance based on our assessment of the reinsurer’s creditworthiness and collectibility of the recorded amounts. Information utilized to calculate the reserve is subject to change, which could affect the level of the reserve in the future. | |
Cash and short-term investments | Cash and Short-term Investments |
Cash consists of cash in banks, generally in operating accounts. Short-term investments, including certificates of deposit and money-market funds, are classified as investments in our consolidated balance sheets as they relate principally to our investment activities. We generally maintain our cash deposits in major banks and invest our short-term funds in institutional money-market funds and short-term financial instruments. These securities typically mature within ninety days and, therefore, bear minimal risk. | |
Restricted cash and cash investments | Restricted Cash and Securities |
Our agencies hold funds of unaffiliated parties for the payment of claims, and our surety businesses hold funds as collateral for potential claims. We also hold certain securities in accordance with acquisition agreements. These restricted fiduciary funds are shown as restricted cash and securities in our consolidated balance sheets. The corresponding liability is included within loss and loss adjustment expense payable; reinsurance, premium and claims payable; or accounts payable and accrued liabilities in our consolidated balance sheets. Interest earned on these funds accrues to the benefit of the parties from whom the funds were withheld. Therefore, we do not include cash activity related to these funds in our consolidated statements of cash flows. | |
Investments | Investments |
All of our fixed maturity securities are classified as available for sale and reported at fair value. In determining fair value, we apply the market approach, which uses quoted prices or other relevant data based on market transactions involving identical or comparable assets. The change in unrealized gain or loss on available for sale securities (including the foreign exchange effect for securities denominated in currencies other than the functional currency of the subsidiary) is recorded as a component of other comprehensive income, net of the related deferred income tax effect, within our consolidated shareholders’ equity. We purchase our available for sale fixed maturity securities with the expectation that we will hold them to maturity, but we may sell them if market conditions or credit-related risk warrant earlier sales. | |
Our available for sale fixed maturity securities portfolio includes mortgage-backed and asset-backed securities for which we recognize income using a constant effective yield based on anticipated prepayments and the estimated economic life of the securities. When actual prepayments differ significantly from anticipated prepayments, the estimated economic life is recalculated and the remaining unamortized premium or discount is amortized prospectively over the remaining economic life. | |
Equity securities and other investment securities are carried at fair value. We classify these securities as available for sale, and the change in carrying value is recorded as a component of other comprehensive income, net of the related deferred income tax effect, within our consolidated shareholders’ equity. | |
Short-term investments are carried at cost, which approximates fair value. | |
Realized investment gains or losses are determined on an average cost basis and included in earnings on the trade date. If a structured security fails to pay the full amount of expected principal, we recognize the unpaid amount as a realized loss in the period due and permanently reduce the security’s cost basis. | |
Other-than-temporary impairments | Other-than-temporary Impairments |
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 impaired securities for possible other-than-temporary impairment loss at each quarter end, considering various factors including: 1) amount by which the security’s fair value is less than its cost, 2) length of time the security has been impaired, 3) whether we intend to sell the security, 4) if it is more likely than not that we will sell the security before recovery of its amortized cost basis, 5) whether the impairment is due to an issuer-specific event, credit issues or change in market interest rates, 6) the security’s credit rating and any recent downgrades and 7) stress testing of expected cash flows under various scenarios. | |
For each impaired security, we determine if: 1) we do not intend to sell the security and 2) it is more likely than not that we will not be required to sell the security before recovery of its amortized cost basis. If we cannot assert these conditions, we record an other-than-temporary impairment loss through our consolidated statements of earnings in the current period. For all other impaired securities, we assess whether the net present value of the cash flows expected to be collected from the security is less than its amortized cost basis. Such a shortfall in cash flows is referred to as a “credit loss.” For any such security, we separate the impairment loss into: 1) the credit loss and 2) the non-credit loss, which is the amount related to all other factors such as interest rate changes, fluctuations in exchange rates and market conditions. We charge the credit loss to current period earnings and the non-credit loss to other comprehensive income, within shareholders’ equity, on an after-tax basis. A security’s cost basis is permanently reduced by the amount of a credit loss. We accrete income over the remaining life of a fixed maturity security based on the interest rate necessary to discount the expected future cash flows to the new basis. If the security is non-income producing, we apply any cash proceeds as a reduction of principal when received. | |
Derivative financial instruments | Derivative Financial Instruments |
We hold an interest in a long-term mortgage impairment insurance contract, denominated in British pound sterling, for which the exposure is measured based on movement in a specified U.K. housing index. The contract qualifies as a derivative financial instrument, is unhedged and is reported at fair value in other assets in our consolidated balance sheets. We record changes in fair value and any foreign exchange gain/loss on the contract within other operating income in our consolidated statements of earnings. | |
We utilize the British pound sterling and the Euro as the functional currency in certain of our foreign operations. As a result, we have exposure to fluctuations in exchange rates between these currencies and the U.S. dollar. From time to time, we may use derivative instruments to protect our investment in these foreign operations by limiting our exposure to fluctuations in exchange rates. | |
Other operating income | Other Operating Income |
Fee and commission income, primarily from third party agency and broker commissions, is reported in other operating income in our consolidated statements of earnings. We recognize fee and commission income on the later of the effective date of the policy, the date when the premium can be reasonably established, or the date when substantially all services related to the insurance placement have been rendered to the client. We record revenue from profit commissions based on the profitability of business written, calculated using the respective commission formula and actual underwriting results through the date of calculation. Such amounts are adjusted if and when experience changes. | |
When our underwriting agencies utilize one of our insurance company subsidiaries as the policy issuing company, we eliminate in consolidation the fee and commission income against the related insurance company’s policy acquisition costs and defer the policy acquisition costs of the underwriting agencies. | |
Goodwill and intangible assets | Goodwill and Intangible Assets |
Goodwill is impaired when the fair value of a reporting unit is less than its carrying amount. We assess our goodwill for impairment annually, or sooner if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. We noted no indicators of impairment in 2014. 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. Our 2014 impairment test consisted of a qualitative assessment in which we determined that it is more likely than not that the fair value of each of our five reporting units exceeded its carrying amount as of June 30, 2014. | |
In years where we assess goodwill for impairment by determining the fair value of each reporting unit, we consider three valuation approaches (market, income and cost). We utilize the income and market valuation approaches and base our assumptions and inputs on market participant data, as well as our own data. For the income approach, we estimate the present value of each reporting unit’s expected cash flows to determine its fair value. We utilize estimated future cash flows of the portfolio of products included in each reporting unit, as well as a risk-appropriate rate of return specific to each reporting unit. We utilize our budgets and projection of future operations based on historical and expected industry trends to estimate our future cash flows and their probability of occurring as projected. We also determine fair value of each reporting unit based on market participant data, and use those results to test the reasonableness and validity of the income approach results. We utilized this methodology to determine the fair value of our reporting units in 2013. Our 2012 impairment test consisted of a qualitative assessment in which we determined that it is more likely than not that the fair value of each of our five reporting units exceeded its carrying amount as of June 30, 2012. | |
When we complete a business acquisition, we record the business combination using the acquisition method of accounting. We value all identifiable assets and liabilities at fair value and allocate any remaining consideration to goodwill in our purchase price allocations. We assign goodwill to applicable reporting units, based on the reporting unit’s share of the estimated future cash flows of all acquired insurance products. Any future adjustments to finalize pre-2009 purchase price allocations, other than for certain tax-related items, are recorded as an adjustment to goodwill. All other adjustments of purchase price allocations are recorded through earnings in the period when the adjustment is determined. | |
Intangible assets not subject to amortization are tested for impairment annually, or sooner if an event occurs or circumstances change that indicate that an intangible asset might be impaired. Other intangible assets are amortized over their respective useful lives. | |
Foreign currency | Foreign Currency |
We utilize the British pound sterling and the Euro as the functional currency in certain of our foreign operations. The cumulative translation adjustment, representing the effect of translating these subsidiaries’ assets and liabilities into U.S. dollars, is included in the foreign currency translation adjustment, net of the related deferred income tax effect, within accumulated other comprehensive income in consolidated shareholders’ equity. | |
For our other foreign subsidiaries and branches, the functional currency is the U.S. dollar. For all subsidiaries, transactions in non-functional currencies are translated at the rates of exchange in effect on the date the transaction occurs. Transaction gains and losses are recorded in earnings and included in other operating expense in the consolidated statements of earnings. We recognized a foreign currency benefit of $23.2 million in 2014, compared to $5.3 million and $6.2 million of expense in 2013 and 2012, respectively. Assets and liabilities recorded in non-functional currencies are translated into the functional currencies at exchange rates in effect at the balance sheet date. | |
For available for sale securities, unrealized gains and losses related to fluctuations in exchange rates are recorded as a component of other comprehensive income, net of the related deferred income tax effect, within consolidated shareholders’ equity until the securities mature or are sold. | |
The effect of exchange rate changes on cash balances held in foreign currencies was immaterial for all periods presented and is not shown separately in the consolidated statements of cash flows. | |
Income taxes | Income Taxes |
We file a consolidated Federal income tax return and include the foreign subsidiaries’ income to the extent required by law. Deferred income tax is accounted for using the liability method, which reflects the tax impact of temporary differences between the bases of assets and liabilities for financial reporting purposes and such bases as measured by tax laws and regulations. We provide a deferred tax liability for un-repatriated earnings of our foreign subsidiaries at prevailing statutory rates when required. We regularly review our deferred tax assets for recoverability and establish a valuation allowance based on our history of earnings, expectations for future earnings, taxable income in carryback years and the expected timing of the reversals of existing temporary differences. Due to our history of earnings, expectations for future earnings, and taxable income in carryback years, we expect to be able to fully realize the benefit of any net deferred tax asset, excluding amounts covered by valuation allowances, on a consolidated basis. | |
We maintain a liability for our uncertain tax positions where we determine it is not more likely than not the tax position will be sustained upon examination by the appropriate tax authority. Changes in the liability for our uncertain tax positions are reflected in income tax expense in the period when a new uncertain tax position arises, we change our judgment about the likelihood of uncertainty, the tax issue is settled, or the statute of limitations expires. We report any potential net interest income or expense and penalties related to changes in our uncertain tax positions in our consolidated statements of earnings as interest expense and other operating expense, respectively. | |
Stock-based compensation | Stock-Based Compensation |
We measure the fair value of restricted stock awards and units based on the closing stock price of our common stock on the grant date and expense that value on a straight-line basis over the vesting period. For restricted stock awards/units that contain a performance condition, we recognize expense based on the awards/units expected to vest and adjust the cumulative expense whenever our estimate of the number of awards/units to vest changes. For restricted stock awards that contain a market condition, we determine the fair value at the grant date using a Monte Carlo simulation model that takes into account the probabilities of numerous vesting outcomes. This fair value is expensed on a straight-line basis over the vesting period and is not adjusted for the ultimate number of shares to vest. For stock option awards, we use the Black-Scholes option pricing model to determine the fair value of an option on its grant date and expense that value on a straight-line basis over the option’s vesting period. For grants of unrestricted common stock, we measure fair value based on the closing stock price of our common stock on the grant date and expense that value on the grant date. We calculate expense for our employee stock purchase plan using a Black-Scholes option pricing model and recognize the expense over each six-month offering period. | |
Earnings per share | Earnings Per Share |
Basic earnings per share is computed by dividing net earnings attributable to common stock by the weighted-average common shares outstanding during the year. Diluted earnings per share is computed by dividing net earnings attributable to common stock by the weighted-average common shares outstanding plus the weighted-average potential common shares outstanding during the year. Outstanding common stock options and unvested restricted stock with no right to dividends, when dilutive, are included in the weighted-average potential common shares outstanding. We use the treasury stock method to calculate the dilutive effect of potential common shares outstanding. We treat unvested restricted stock and unvested restricted stock units that contain non-forfeitable rights to dividends or dividend-equivalents as participating securities and include them in the earnings allocation in calculating earnings per share under the two-class method. | |
Recently Issued Accounting Guidance | 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. |
Investments
Investments | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 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 | |||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||
U.S. government and government agency securities | $ | 70,279 | $ | 827 | $ | -137 | $ | 70,969 | ||||||||||||||
Fixed maturity securities of states, municipalities | ||||||||||||||||||||||
and political subdivisions | 896,130 | 58,738 | -160 | 954,708 | ||||||||||||||||||
Special purpose revenue bonds of states, municipalities | ||||||||||||||||||||||
and political subdivisions | 2,246,707 | 143,291 | -986 | 2,389,012 | ||||||||||||||||||
Corporate securities | 1,251,625 | 36,759 | -11,549 | 1,276,835 | ||||||||||||||||||
Residential mortgage-backed securities | 805,458 | 20,215 | -3,979 | 821,694 | ||||||||||||||||||
Commercial mortgage-backed securities | 593,956 | 19,707 | -2,032 | 611,631 | ||||||||||||||||||
Asset-backed securities | 369,103 | 316 | -2,592 | 366,827 | ||||||||||||||||||
Foreign government securities | 119,479 | 767 | -1,554 | 118,692 | ||||||||||||||||||
Total fixed maturity securities | $ | 6,352,737 | $ | 280,620 | $ | -22,989 | $ | 6,610,368 | ||||||||||||||
Equity securities | $ | 291,070 | $ | 24,069 | $ | -18,787 | $ | 296,352 | ||||||||||||||
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 | |||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||
U.S. government and government agency | ||||||||||||||||||||||
securities | $ | 14,813 | $ | -8 | $ | 11,236 | $ | -129 | $ | 26,049 | $ | -137 | ||||||||||
Fixed maturity securities of states, | ||||||||||||||||||||||
municipalities and political subdivisions | 3,857 | -21 | 19,337 | -139 | 23,194 | -160 | ||||||||||||||||
Special purpose revenue bonds of states, | ||||||||||||||||||||||
municipalities and political subdivisions | 4,041 | -19 | 100,947 | -967 | 104,988 | -986 | ||||||||||||||||
Corporate securities | 393,274 | -7,085 | 69,662 | -4,464 | 462,936 | -11,549 | ||||||||||||||||
Residential mortgage-backed securities | 37,434 | -100 | 226,256 | -3,879 | 263,690 | -3,979 | ||||||||||||||||
Commercial mortgage-backed securities | 5,228 | -26 | 99,868 | -2,006 | 105,096 | -2,032 | ||||||||||||||||
Asset-backed securities | 181,579 | -1,245 | 78,797 | -1,347 | 260,376 | -2,592 | ||||||||||||||||
Foreign government securities | 55,280 | -1,498 | 7,187 | -56 | 62,467 | -1,554 | ||||||||||||||||
Equity securities | 111,251 | -17,839 | 3,934 | -948 | 115,185 | -18,787 | ||||||||||||||||
Total | $ | 806,757 | $ | -27,841 | $ | 617,224 | $ | -13,935 | $ | 1,423,981 | $ | -41,776 | ||||||||||
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 December 31, 2014, we held approximately 2,900 fixed maturity and equity securities, of which 24% 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. During 2014, our reviews covered all impaired securities where the loss exceeded $1.0 million and the loss either exceeded 10% of cost or the security had been in a loss position for longer than twelve consecutive months. During 2013 and 2012, our reviews covered all impaired securities where the loss exceeded $0.5 million and the loss either exceeded 10% of cost or the security had been in a loss position for longer than twelve consecutive months. Our reviews considered the factors described in the “Other-than-temporary Impairments” section in Note 1. | ||||||||||||||||||||||
For other-than-temporary impairment losses, we recognize an other-than-temporary impairment loss in earnings in the period that we determine: 1) we intend to sell the security, 2) it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis or 3) the security has a credit loss. Any non-credit portion of the other-than-temporary impairment loss is recognized in shareholders’ equity. We recognized no other-than-temporary impairment losses in 2014 and 2013. In 2012, we recognized $2.0 million of other-than-temporary impairment losses, of which $1.0 million was recognized in other comprehensive income and $1.0 million was recognized in earnings, as reported in our consolidated statement of earnings. | ||||||||||||||||||||||
Certain of the securities for which we had previously recognized an other-than-temporary impairment loss had both a credit loss and an impairment loss recorded in other comprehensive income. The balance of these securities was $5.0 million at January 1, 2012. During 2012, we sold all but one of these securities, and sold the remaining security in 2013. No such securities were held at December 31, 2014. | ||||||||||||||||||||||
We do not consider the $41.8 million of gross unrealized losses in our portfolio at December 31, 2014 to be other-than-temporary impairments because: 1) as of that date, we had received all contractual interest and principal payments on the fixed maturity securities, 2) we do not intend to sell the securities, 3) it is more likely than not that we will not be required to sell the securities before recovery of their amortized cost or cost bases and 4) the unrealized loss relates to non-credit factors, such as interest rate changes, fluctuations in exchange rates and market conditions. | ||||||||||||||||||||||
The change in our unrealized pretax net gains (losses) on investments during each year was as follows: | ||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||
Available for sale fixed maturity securities | $ | 156,645 | $ | -324,363 | $ | 91,947 | ||||||||||||||||
Equity securities | -47,796 | 44,266 | 8,812 | |||||||||||||||||||
Other investments | - | -2,534 | 4,867 | |||||||||||||||||||
Change in net unrealized investment gains (losses) | $ | 108,849 | $ | -282,631 | $ | 105,626 | ||||||||||||||||
The amortized cost and fair value of our fixed maturity securities at December 31, 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 5.3 years at December 31, 2014. | ||||||||||||||||||||||
Cost or amortized cost | Fair value | |||||||||||||||||||||
Due in 1 year or less | $ | 168,246 | $ | 171,070 | ||||||||||||||||||
Due after 1 year through 5 years | 1,150,042 | 1,177,120 | ||||||||||||||||||||
Due after 5 years through 10 years | 1,392,501 | 1,470,264 | ||||||||||||||||||||
Due after 10 years through 15 years | 875,679 | 934,490 | ||||||||||||||||||||
Due after 15 years | 997,752 | 1,057,272 | ||||||||||||||||||||
Securities with contractual maturities | 4,584,220 | 4,810,216 | ||||||||||||||||||||
Mortgage-backed and asset-backed securities | 1,768,517 | 1,800,152 | ||||||||||||||||||||
Total fixed maturity securities | $ | 6,352,737 | $ | 6,610,368 | ||||||||||||||||||
At December 31, 2014, our domestic insurance companies had deposited fixed maturity securities of $39.0 million (amortized cost of $38.7 million) to meet the deposit requirements of various state insurance departments. There are withdrawal and other restrictions on these deposits, but we direct how the deposits are invested and we earn interest on the funds. | ||||||||||||||||||||||
The sources of our net investment income were as follows: | ||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||
Fixed maturity securities | $ | 210,866 | $ | 212,841 | $ | 221,535 | ||||||||||||||||
Equity securities | 16,555 | 14,537 | 3,959 | |||||||||||||||||||
Other | 1,434 | 828 | 3,476 | |||||||||||||||||||
Total investment income | 228,855 | 228,206 | 228,970 | |||||||||||||||||||
Investment expense | -7,235 | -8,024 | -6,336 | |||||||||||||||||||
Net investment income | $ | 221,620 | $ | 220,182 | $ | 222,634 | ||||||||||||||||
Realized pretax gains (losses) on the sale of investments, which exclude other-than-temporary impairment credit losses, included the following: | ||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||
Gains | ||||||||||||||||||||||
Fixed maturity securities | $ | 9,805 | $ | 20,191 | $ | 32,644 | ||||||||||||||||
Equity securities | 68,671 | 20,886 | 797 | |||||||||||||||||||
Other investments | - | 5,345 | 2,074 | |||||||||||||||||||
Total gains | 78,476 | 46,422 | 35,515 | |||||||||||||||||||
Losses | ||||||||||||||||||||||
Fixed maturity securities | -5,268 | -1,174 | -3,327 | |||||||||||||||||||
Equity securities | -6,838 | -3,218 | -1,039 | |||||||||||||||||||
Other investments | - | - | -1 | |||||||||||||||||||
Total losses | -12,106 | -4,392 | -4,367 | |||||||||||||||||||
Net | ||||||||||||||||||||||
Fixed maturity securities | 4,537 | 19,017 | 29,317 | |||||||||||||||||||
Equity securities | 61,833 | 17,668 | -242 | |||||||||||||||||||
Other investments | - | 5,345 | 2,073 | |||||||||||||||||||
Net realized investment gain | $ | 66,370 | $ | 42,030 | $ | 31,148 |
Investments_Tables
Investments (Tables) | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||
Investment [Abstract] | ||||||||||||||||||||||
Fixed Maturity & Equity Securities Available For Sale | Cost or | Gross | Gross | |||||||||||||||||||
amortized | unrealized | unrealized | ||||||||||||||||||||
cost | gain | loss | Fair value | |||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||
U.S. government and government agency securities | $ | 70,279 | $ | 827 | $ | -137 | $ | 70,969 | ||||||||||||||
Fixed maturity securities of states, municipalities | ||||||||||||||||||||||
and political subdivisions | 896,130 | 58,738 | -160 | 954,708 | ||||||||||||||||||
Special purpose revenue bonds of states, municipalities | ||||||||||||||||||||||
and political subdivisions | 2,246,707 | 143,291 | -986 | 2,389,012 | ||||||||||||||||||
Corporate securities | 1,251,625 | 36,759 | -11,549 | 1,276,835 | ||||||||||||||||||
Residential mortgage-backed securities | 805,458 | 20,215 | -3,979 | 821,694 | ||||||||||||||||||
Commercial mortgage-backed securities | 593,956 | 19,707 | -2,032 | 611,631 | ||||||||||||||||||
Asset-backed securities | 369,103 | 316 | -2,592 | 366,827 | ||||||||||||||||||
Foreign government securities | 119,479 | 767 | -1,554 | 118,692 | ||||||||||||||||||
Total fixed maturity securities | $ | 6,352,737 | $ | 280,620 | $ | -22,989 | $ | 6,610,368 | ||||||||||||||
Equity securities | $ | 291,070 | $ | 24,069 | $ | -18,787 | $ | 296,352 | ||||||||||||||
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 | |||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||
U.S. government and government agency | ||||||||||||||||||||||
securities | $ | 14,813 | $ | -8 | $ | 11,236 | $ | -129 | $ | 26,049 | $ | -137 | ||||||||||
Fixed maturity securities of states, | ||||||||||||||||||||||
municipalities and political subdivisions | 3,857 | -21 | 19,337 | -139 | 23,194 | -160 | ||||||||||||||||
Special purpose revenue bonds of states, | ||||||||||||||||||||||
municipalities and political subdivisions | 4,041 | -19 | 100,947 | -967 | 104,988 | -986 | ||||||||||||||||
Corporate securities | 393,274 | -7,085 | 69,662 | -4,464 | 462,936 | -11,549 | ||||||||||||||||
Residential mortgage-backed securities | 37,434 | -100 | 226,256 | -3,879 | 263,690 | -3,979 | ||||||||||||||||
Commercial mortgage-backed securities | 5,228 | -26 | 99,868 | -2,006 | 105,096 | -2,032 | ||||||||||||||||
Asset-backed securities | 181,579 | -1,245 | 78,797 | -1,347 | 260,376 | -2,592 | ||||||||||||||||
Foreign government securities | 55,280 | -1,498 | 7,187 | -56 | 62,467 | -1,554 | ||||||||||||||||
Equity securities | 111,251 | -17,839 | 3,934 | -948 | 115,185 | -18,787 | ||||||||||||||||
Total | $ | 806,757 | $ | -27,841 | $ | 617,224 | $ | -13,935 | $ | 1,423,981 | $ | -41,776 | ||||||||||
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 | $ | 168,246 | $ | 171,070 | ||||||||||||||||||
Due after 1 year through 5 years | 1,150,042 | 1,177,120 | ||||||||||||||||||||
Due after 5 years through 10 years | 1,392,501 | 1,470,264 | ||||||||||||||||||||
Due after 10 years through 15 years | 875,679 | 934,490 | ||||||||||||||||||||
Due after 15 years | 997,752 | 1,057,272 | ||||||||||||||||||||
Securities with contractual maturities | 4,584,220 | 4,810,216 | ||||||||||||||||||||
Mortgage-backed and asset-backed securities | 1,768,517 | 1,800,152 | ||||||||||||||||||||
Total fixed maturity securities | $ | 6,352,737 | $ | 6,610,368 | ||||||||||||||||||
Sources of net investment income | 2014 | 2013 | 2012 | |||||||||||||||||||
Fixed maturity securities | $ | 210,866 | $ | 212,841 | $ | 221,535 | ||||||||||||||||
Equity securities | 16,555 | 14,537 | 3,959 | |||||||||||||||||||
Other | 1,434 | 828 | 3,476 | |||||||||||||||||||
Total investment income | 228,855 | 228,206 | 228,970 | |||||||||||||||||||
Investment expense | -7,235 | -8,024 | -6,336 | |||||||||||||||||||
Net investment income | $ | 221,620 | $ | 220,182 | $ | 222,634 | ||||||||||||||||
Realized pretax gains (losses) on the sale of investments | 2014 | 2013 | 2012 | |||||||||||||||||||
Gains | ||||||||||||||||||||||
Fixed maturity securities | $ | 9,805 | $ | 20,191 | $ | 32,644 | ||||||||||||||||
Equity securities | 68,671 | 20,886 | 797 | |||||||||||||||||||
Other investments | - | 5,345 | 2,074 | |||||||||||||||||||
Total gains | 78,476 | 46,422 | 35,515 | |||||||||||||||||||
Losses | ||||||||||||||||||||||
Fixed maturity securities | -5,268 | -1,174 | -3,327 | |||||||||||||||||||
Equity securities | -6,838 | -3,218 | -1,039 | |||||||||||||||||||
Other investments | - | - | -1 | |||||||||||||||||||
Total losses | -12,106 | -4,392 | -4,367 | |||||||||||||||||||
Net | ||||||||||||||||||||||
Fixed maturity securities | 4,537 | 19,017 | 29,317 | |||||||||||||||||||
Equity securities | 61,833 | 17,668 | -242 | |||||||||||||||||||
Other investments | - | 5,345 | 2,073 | |||||||||||||||||||
Net realized investment gain | $ | 66,370 | $ | 42,030 | $ | 31,148 | ||||||||||||||||
Change in Unrealized Gain (Loss) on Investments | 2014 | 2013 | 2012 | |||||||||||||||||||
Available for sale fixed maturity securities | $ | 156,645 | $ | -324,363 | $ | 91,947 | ||||||||||||||||
Equity securities | -47,796 | 44,266 | 8,812 | |||||||||||||||||||
Other investments | - | -2,534 | 4,867 | |||||||||||||||||||
Change in net unrealized investment gains (losses) | $ | 108,849 | $ | -282,631 | $ | 105,626 |
Investments_Details
Investments (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Fixed Maturity & Equity Securities Available for Sale | ||
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis | $6,352,737 | $5,921,487 |
Gross unrealized gain | 280,620 | 200,443 |
Gross unrealized loss | -22,989 | -99,457 |
Fixed maturity securities - available for sale | 6,610,368 | 6,022,473 |
Available for sale equity securities | ||
Available-for-sale Equity Securities, Amortized Cost Basis | 291,070 | 464,388 |
Gross unrealized gain | 24,069 | 58,842 |
Gross unrealized loss | -18,787 | -5,764 |
Available-for-sale Securities, Equity Securities | 296,352 | 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 | 70,279 | 91,047 |
Gross unrealized gain | 827 | 2,157 |
Gross unrealized loss | -137 | -495 |
Fixed maturity securities - available for sale | 70,969 | 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 | 896,130 | 941,580 |
Gross unrealized gain | 58,738 | 50,885 |
Gross unrealized loss | -160 | -5,979 |
Fixed maturity securities - available for sale | 954,708 | 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 | 2,246,707 | 2,240,412 |
Gross unrealized gain | 143,291 | 71,541 |
Gross unrealized loss | -986 | -46,758 |
Fixed maturity securities - available for sale | 2,389,012 | 2,265,195 |
Corporate Securities [Member] | ||
Fixed Maturity & Equity Securities Available for Sale | ||
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis | 1,251,625 | 1,195,387 |
Gross unrealized gain | 36,759 | 40,860 |
Gross unrealized loss | -11,549 | -11,009 |
Fixed maturity securities - available for sale | 1,276,835 | 1,225,238 |
Residential Mortgage Backed Securities [Member] | ||
Fixed Maturity & Equity Securities Available for Sale | ||
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis | 805,458 | 622,766 |
Gross unrealized gain | 20,215 | 15,289 |
Gross unrealized loss | -3,979 | -19,936 |
Fixed maturity securities - available for sale | 821,694 | 618,119 |
Commercial Mortgage Backed Securities [Member] | ||
Fixed Maturity & Equity Securities Available for Sale | ||
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis | 593,956 | 502,069 |
Gross unrealized gain | 19,707 | 16,155 |
Gross unrealized loss | -2,032 | -13,336 |
Fixed maturity securities - available for sale | 611,631 | 504,888 |
Asset-backed Securities [Member] | ||
Fixed Maturity & Equity Securities Available for Sale | ||
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis | 369,103 | 183,660 |
Gross unrealized gain | 316 | 319 |
Gross unrealized loss | -2,592 | -1,587 |
Fixed maturity securities - available for sale | 366,827 | 182,392 |
Foreign Government Securities [Member] | ||
Fixed Maturity & Equity Securities Available for Sale | ||
Available-for-sale Fixed Maturity Securities, Amortized Cost Basis | 119,479 | 144,566 |
Gross unrealized gain | 767 | 3,237 |
Gross unrealized loss | -1,554 | -357 |
Fixed maturity securities - available for sale | $118,692 | $147,446 |
Investments_Details_1
Investments (Details 1) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 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 | $806,757 | $1,913,235 |
Less than 12 months, Unrealized losses | -27,841 | -85,659 |
12 months or more, Fair value | 617,224 | 171,280 |
12 months or more, Unrealized losses | -13,935 | -19,562 |
Total, Fair value | 1,423,981 | 2,084,515 |
Total, Unrealized losses | -41,776 | -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 | 14,813 | 23,717 |
Less than 12 months, Unrealized losses | -8 | -495 |
12 months or more, Fair value | 11,236 | 0 |
12 months or more, Unrealized losses | -129 | 0 |
Total, Fair value | 26,049 | 23,717 |
Total, Unrealized losses | -137 | -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 | 3,857 | 136,160 |
Less than 12 months, Unrealized losses | -21 | -5,277 |
12 months or more, Fair value | 19,337 | 8,997 |
12 months or more, Unrealized losses | -139 | -702 |
Total, Fair value | 23,194 | 145,157 |
Total, Unrealized losses | -160 | -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 | 4,041 | 684,560 |
Less than 12 months, Unrealized losses | -19 | -35,832 |
12 months or more, Fair value | 100,947 | 83,228 |
12 months or more, Unrealized losses | -967 | -10,926 |
Total, Fair value | 104,988 | 767,788 |
Total, Unrealized losses | -986 | -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 | 393,274 | 277,853 |
Less than 12 months, Unrealized losses | -7,085 | -8,202 |
12 months or more, Fair value | 69,662 | 35,437 |
12 months or more, Unrealized losses | -4,464 | -2,807 |
Total, Fair value | 462,936 | 313,290 |
Total, Unrealized losses | -11,549 | -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 | 37,434 | 306,874 |
Less than 12 months, Unrealized losses | -100 | -15,861 |
12 months or more, Fair value | 226,256 | 31,687 |
12 months or more, Unrealized losses | -3,879 | -4,075 |
Total, Fair value | 263,690 | 338,561 |
Total, Unrealized losses | -3,979 | -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 | 5,228 | 203,347 |
Less than 12 months, Unrealized losses | -26 | -12,611 |
12 months or more, Fair value | 99,868 | 4,915 |
12 months or more, Unrealized losses | -2,006 | -725 |
Total, Fair value | 105,096 | 208,262 |
Total, Unrealized losses | -2,032 | -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 | 181,579 | 126,922 |
Less than 12 months, Unrealized losses | -1,245 | -1,587 |
12 months or more, Fair value | 78,797 | 0 |
12 months or more, Unrealized losses | -1,347 | 0 |
Total, Fair value | 260,376 | 126,922 |
Total, Unrealized losses | -2,592 | -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 | 55,280 | 78,182 |
Less than 12 months, Unrealized losses | -1,498 | -357 |
12 months or more, Fair value | 7,187 | 0 |
12 months or more, Unrealized losses | -56 | 0 |
Total, Fair value | 62,467 | 78,182 |
Total, Unrealized losses | -1,554 | -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 | 111,251 | 75,620 |
Less than 12 months, Unrealized losses | -17,839 | -5,437 |
12 months or more, Fair value | 3,934 | 7,016 |
12 months or more, Unrealized losses | -948 | -327 |
Total, Fair value | 115,185 | 82,636 |
Total, Unrealized losses | ($18,787) | ($5,764) |
Investments_Details_Change_in_
Investments (Details Change in Unrealized) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Investment [Abstract] | |||
Available for sale fixed income securities | $156,645 | ($324,363) | $91,947 |
Other investments | 0 | -2,534 | 4,867 |
Equity securities | -47,796 | 44,266 | 8,812 |
Change in net unrealized investment gains (losses) | $108,849 | ($282,631) | $105,626 |
Investments_Details_3
Investments (Details 3) (USD $) | Dec. 31, 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 | $168,246 | |
Due after 1 year through 5 years, Available for sale, Cost or amortized cost | 1,150,042 | |
Due after 5 years through 10 years, Available for sale, Cost or amortized cost | 1,392,501 | |
Due after 10 years through 15 years, Available for sale, Cost or amortized cost | 875,679 | |
Due after 15 years, Available for sale, Cost or amortized cost | 997,752 | |
Securities with contractual maturities, Available for sale, Cost or amortized cost | 4,584,220 | |
Mortgage-backed and asset-backed securities, Available for sale, Cost or amortized cost | 1,768,517 | |
Available-for-sale fixed maturity Securities, Amortized Cost Basis | 6,352,737 | 5,921,487 |
Due in 1 year or less, Available for sale, Fair value | 171,070 | |
Due after 1 year through 5 years, Available for sale, Fair value | 1,177,120 | |
Due after 5 years through 10 years, Available for sale, Fair value | 1,470,264 | |
Due after 10 years through 15 years, Available for sale, Fair value | 934,490 | |
Due after 15 years, Available for sale, Fair value | 1,057,272 | |
Securities with contractual maturities, Available for sale, Fair value | 4,810,216 | |
Mortgage-backed and asset-backed securities, Available for sale, Fair value | 1,800,152 | |
Available-for-sale Securities, Fixed Maturity Securities, Fair value | $6,610,368 | $6,022,473 |
Investments_Details_4
Investments (Details 4) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Fixed Maturity Securities | |||
Fixed maturity securities | $210,866 | $212,841 | $221,535 |
Equity securities | 16,555 | 14,537 | 3,959 |
Other investment income | 1,434 | 828 | 3,476 |
Total investment income | 228,855 | 228,206 | 228,970 |
Investment expense | -7,235 | -8,024 | -6,336 |
Net investment income | $221,620 | $220,182 | $222,634 |
Investments_Details_5
Investments (Details 5) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Realized pretax gains (losses) on the sale of investments | |||
Gains | $78,476 | $46,422 | $35,515 |
Losses | -12,106 | -4,392 | -4,367 |
Net realized investment gain | 66,370 | 42,030 | 31,148 |
Fixed Maturity Securities [Member] | |||
Realized pretax gains (losses) on the sale of investments | |||
Gains | 9,805 | 20,191 | 32,644 |
Losses | -5,268 | -1,174 | -3,327 |
Net realized investment gain | 4,537 | 19,017 | 29,317 |
Equity Securities [Member] | |||
Realized pretax gains (losses) on the sale of investments | |||
Gains | 68,671 | 20,886 | 797 |
Losses | -6,838 | -3,218 | -1,039 |
Net realized investment gain | 61,833 | 17,668 | -242 |
Others [Member] | |||
Realized pretax gains (losses) on the sale of investments | |||
Gains | 0 | 5,345 | 2,074 |
Losses | 0 | 0 | -1 |
Net realized investment gain | $0 | $5,345 | $2,073 |
Investments_Details_Textuals
Investments (Details Textuals) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Other than Temporary Impairment Losses, Investments [Abstract] | ||||
Total other-than-temporary impairment loss | ($2,000,000) | |||
Portion recognized in other comprehensive income | -1,000,000 | |||
Net other-than-temporary impairment loss recognized in earnings | 1,028,000 | |||
Condition for categorizing the impaired securities | 1,000,000 | 500,000 | ||
Condition for categorizing the impaired securities, percentage | 10.00% | 10.00% | ||
Gross unrealized losses on fixed income securities | 41,800,000 | |||
Weighted-average life of mortgage-backed and asset-backed securities, Years | 5.3 | |||
Domestic insurance companies deposited fixed income securities (at fair value) required by state insurance departments. | 39,000,000 | |||
Domestic insurance companies deposited fixed income securities (at amortized cost) required by state insurance departments. | 38,700,000 | |||
Number of fixed maturity and equity securities held | 2,900 | |||
Percentage of securities in unrealized loss position | 24.00% | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses | -41,776,000 | -105,221,000 | ||
Other-than-temporary impairment credit losses | $5,000,000 |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||||
Dec. 31, 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, foreign government 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 year-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 December 31, 2014 or 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 | ||||||||||||
31-Dec-14 | |||||||||||||||
Fixed maturity securities | |||||||||||||||
U.S. government and government agency securities | $ | 63,663 | $ | 7,306 | $ | - | $ | 70,969 | |||||||
Fixed maturity securities of states, municipalities | |||||||||||||||
and political subdivisions | - | 954,708 | - | 954,708 | |||||||||||
Special purpose revenue bonds of states, municipalities | |||||||||||||||
and political subdivisions | - | 2,389,012 | - | 2,389,012 | |||||||||||
Corporate securities | - | 1,276,687 | 148 | 1,276,835 | |||||||||||
Residential mortgage-backed securities | - | 821,694 | - | 821,694 | |||||||||||
Commercial mortgage-backed securities | - | 611,631 | - | 611,631 | |||||||||||
Asset-backed securities | - | 366,827 | - | 366,827 | |||||||||||
Foreign government securities | - | 118,692 | - | 118,692 | |||||||||||
Total fixed maturity securities | 63,663 | 6,546,557 | 148 | 6,610,368 | |||||||||||
Equity securities | 296,352 | - | - | 296,352 | |||||||||||
Short-term investments* | 159,297 | 98,889 | - | 258,186 | |||||||||||
Restricted cash and securities | - | 2,729 | - | 2,729 | |||||||||||
Premium, claims and other receivables | - | 56,493 | - | 56,493 | |||||||||||
Other assets | 18 | - | 1,306 | 1,324 | |||||||||||
Total assets measured at fair value | $ | 519,330 | $ | 6,704,668 | $ | 1,454 | $ | 7,225,452 | |||||||
Notes payable* | $ | - | $ | 875,094 | $ | - | $ | 875,094 | |||||||
Accounts payable and accrued liabilities – earnout liabilities | - | 2,729 | 8,744 | 11,473 | |||||||||||
Total liabilities measured at fair value | $ | - | $ | 877,823 | $ | 8,744 | $ | 886,567 | |||||||
__________ | |||||||||||||||
* 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. | |||||||||||||||
The following table presents the changes in fair value of our Level 3 financial instruments. | |||||||||||||||
Accounts | |||||||||||||||
payable | |||||||||||||||
Fixed | and | ||||||||||||||
maturity | Other | Total | accrued | ||||||||||||
securities | assets | assets | liabilities | ||||||||||||
Balance at December 31, 2012 | $ | 164 | $ | 349 | $ | 513 | $ | 7,009 | |||||||
Purchases | 9,430 | - | 9,430 | - | |||||||||||
Gains (losses) reported in: | |||||||||||||||
Net earnings | 54 | 592 | 646 | -250 | |||||||||||
Other comprehensive loss | -231 | - | -231 | - | |||||||||||
Balance at December 31, 2013 | 9,417 | 941 | 10,358 | 7,259 | |||||||||||
Sales or settlements | -9,859 | - | -9,859 | -61 | |||||||||||
Increase in earnout liabilities | - | - | - | 1,588 | |||||||||||
Gains (losses) reported in: | |||||||||||||||
Net earnings | 375 | 365 | 740 | -258 | |||||||||||
Other comprehensive income | 215 | - | 215 | - | |||||||||||
Transfers out of Level 3 | - | - | - | -300 | |||||||||||
Balance at December 31, 2014 | $ | 148 | $ | 1,306 | $ | 1,454 | $ | 8,744 | |||||||
In 2014, we transferred an earnout liability from Level 3 to Level 2 because the earnout was attained and the funds held as collateral were deposited in restricted cash and securities. There were no transfers between Level 1, Level 2 or Level 3 in 2013. |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
Fair Value Measurements [Abstract] | |||||||||||||||
Assets and liabilities at fair value | Level 1 | Level 2 | Level 3 | Total | |||||||||||
31-Dec-14 | |||||||||||||||
Fixed maturity securities | |||||||||||||||
U.S. government and government agency securities | $ | 63,663 | $ | 7,306 | $ | - | $ | 70,969 | |||||||
Fixed maturity securities of states, municipalities | |||||||||||||||
and political subdivisions | - | 954,708 | - | 954,708 | |||||||||||
Special purpose revenue bonds of states, municipalities | |||||||||||||||
and political subdivisions | - | 2,389,012 | - | 2,389,012 | |||||||||||
Corporate securities | - | 1,276,687 | 148 | 1,276,835 | |||||||||||
Residential mortgage-backed securities | - | 821,694 | - | 821,694 | |||||||||||
Commercial mortgage-backed securities | - | 611,631 | - | 611,631 | |||||||||||
Asset-backed securities | - | 366,827 | - | 366,827 | |||||||||||
Foreign government securities | - | 118,692 | - | 118,692 | |||||||||||
Total fixed maturity securities | 63,663 | 6,546,557 | 148 | 6,610,368 | |||||||||||
Equity securities | 296,352 | - | - | 296,352 | |||||||||||
Short-term investments* | 159,297 | 98,889 | - | 258,186 | |||||||||||
Restricted cash and securities | - | 2,729 | - | 2,729 | |||||||||||
Premium, claims and other receivables | - | 56,493 | - | 56,493 | |||||||||||
Other assets | 18 | - | 1,306 | 1,324 | |||||||||||
Total assets measured at fair value | $ | 519,330 | $ | 6,704,668 | $ | 1,454 | $ | 7,225,452 | |||||||
Notes payable* | $ | - | $ | 875,094 | $ | - | $ | 875,094 | |||||||
Accounts payable and accrued liabilities – earnout liabilities | - | 2,729 | 8,744 | 11,473 | |||||||||||
Total liabilities measured at fair value | $ | - | $ | 877,823 | $ | 8,744 | $ | 886,567 | |||||||
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 | |||||||
Changes in fair value of level 3 assets | Accounts | ||||||||||||||
payable | |||||||||||||||
Fixed | and | ||||||||||||||
maturity | Other | Total | accrued | ||||||||||||
securities | assets | assets | liabilities | ||||||||||||
Balance at December 31, 2012 | $ | 164 | $ | 349 | $ | 513 | $ | 7,009 | |||||||
Purchases | 9,430 | - | 9,430 | - | |||||||||||
Gains (losses) reported in: | |||||||||||||||
Net earnings | 54 | 592 | 646 | -250 | |||||||||||
Other comprehensive loss | -231 | - | -231 | - | |||||||||||
Balance at December 31, 2013 | 9,417 | 941 | 10,358 | 7,259 | |||||||||||
Sales or settlements | -9,859 | - | -9,859 | -61 | |||||||||||
Increase in earnout liabilities | - | - | - | 1,588 | |||||||||||
Gains (losses) reported in: | |||||||||||||||
Net earnings | 375 | 365 | 740 | -258 | |||||||||||
Other comprehensive income | 215 | - | 215 | - | |||||||||||
Transfers out of Level 3 | - | - | - | -300 | |||||||||||
Balance at December 31, 2014 | $ | 148 | $ | 1,306 | $ | 1,454 | $ | 8,744 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Available for sale | ||
Fixed maturity securities - available for sale | $6,610,368 | $6,022,473 |
Equity securities - available for sale, at fair value | 296,352 | 517,466 |
Short-term investments* | 258,186 | 178,753 |
Restricted cash and securities | 2,729 | 1,853 |
Premium, claims and other receivables | 56,493 | 66,515 |
Other assets | 1,324 | 961 |
Total assets measured at fair value | 7,225,452 | 6,788,021 |
Notes payable | 875,094 | 707,656 |
Accounts payable and accrued liabilities - earnout liabilities | 11,473 | 9,112 |
Total liabilities measured at fair value | 886,567 | 716,768 |
Fair Value, Inputs, Level 1 [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 63,663 | 84,032 |
Equity securities - available for sale, at fair value | 296,352 | 517,466 |
Short-term investments* | 159,297 | 68,958 |
Restricted cash and securities | 0 | 0 |
Premium, claims and other receivables | 0 | 0 |
Other assets | 18 | 20 |
Total assets measured at fair value | 519,330 | 670,476 |
Notes payable | 0 | 0 |
Accounts payable and accrued liabilities - earnout liabilities | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 6,546,557 | 5,929,024 |
Equity securities - available for sale, at fair value | 0 | 0 |
Short-term investments* | 98,889 | 109,795 |
Restricted cash and securities | 2,729 | 1,853 |
Premium, claims and other receivables | 56,493 | 66,515 |
Other assets | 0 | 0 |
Total assets measured at fair value | 6,704,668 | 6,107,187 |
Notes payable | 875,094 | 707,656 |
Accounts payable and accrued liabilities - earnout liabilities | 2,729 | 1,853 |
Total liabilities measured at fair value | 877,823 | 709,509 |
Fair Value, Inputs, Level 3 [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 148 | 9,417 |
Equity securities - available for sale, at fair value | 0 | 0 |
Short-term investments* | 0 | 0 |
Restricted cash and securities | 0 | 0 |
Premium, claims and other receivables | 0 | 0 |
Other assets | 1,306 | 941 |
Total assets measured at fair value | 1,454 | 10,358 |
Notes payable | 0 | 0 |
Accounts payable and accrued liabilities - earnout liabilities | 8,744 | 7,259 |
Total liabilities measured at fair value | 8,744 | 7,259 |
US Government and Government Agency Securities [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 70,969 | 92,709 |
US Government and Government Agency Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 63,663 | 84,032 |
US Government and Government Agency Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 7,306 | 8,677 |
US Government and Government Agency Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 0 | 0 |
Fixed Maturity Securities of States, Municipalities and Political Subdivisions Securities [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 954,708 | 986,486 |
Fixed Maturity Securities of States, Municipalities and Political Subdivisions Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 0 | 0 |
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 | 954,708 | 986,486 |
Fixed Maturity Securities of States, Municipalities and Political Subdivisions Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 0 | 0 |
Special Purpose Revenue Bonds Of States Municipalities And Political Subdivisions [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 2,389,012 | 2,265,195 |
Special Purpose Revenue Bonds Of States Municipalities And Political Subdivisions [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 0 | 0 |
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 | 2,389,012 | 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 | 0 | 9,267 |
Corporate Securities [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 1,276,835 | 1,225,238 |
Corporate Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 0 | 0 |
Corporate Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 1,276,687 | 1,225,088 |
Corporate Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 148 | 150 |
Residential Mortgage Backed Securities [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 821,694 | 618,119 |
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 0 | 0 |
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 821,694 | 618,119 |
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 0 | 0 |
Commercial Mortgage Backed Securities [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 611,631 | 504,888 |
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 0 | 0 |
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 611,631 | 504,888 |
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 0 | 0 |
Asset-backed Securities [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 366,827 | 182,392 |
Asset-backed Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 0 | 0 |
Asset-backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 366,827 | 182,392 |
Asset-backed Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 0 | 0 |
Foreign Government Securities [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 118,692 | 147,446 |
Foreign Government Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 0 | 0 |
Foreign Government Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | 118,692 | 147,446 |
Foreign Government Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Available for sale | ||
Fixed maturity securities - available for sale | $0 | $0 |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 1) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Changes in fair value of level 3 assets | ||
Balance at beginning of period | $10,358 | $513 |
Earnout liability | 27,100 | 22,800 |
Purchases | 9,430 | |
Sales or settlements | -9,859 | |
Other comprehensive income | 215 | -231 |
Net earnings | 740 | 646 |
Transfers out of Level 3 | 0 | |
Balance at end of period | 1,454 | 10,358 |
Fixed Maturity Securities [Member] | ||
Changes in fair value of level 3 assets | ||
Balance at beginning of period | 9,417 | 164 |
Purchases | 9,430 | |
Sales or settlements | -9,859 | |
Other comprehensive income | 215 | -231 |
Net earnings | 375 | 54 |
Transfers out of Level 3 | 0 | |
Balance at end of period | 148 | 9,417 |
Other Assets [Member] | ||
Changes in fair value of level 3 assets | ||
Balance at beginning of period | 941 | 349 |
Purchases | 0 | |
Sales or settlements | 0 | |
Other comprehensive income | 0 | 0 |
Net earnings | 365 | 592 |
Transfers out of Level 3 | 0 | |
Balance at end of period | 1,306 | 941 |
Earn Out Liability [Member] | ||
Changes in fair value of level 3 assets | ||
Balance at beginning of period | 7,259 | 7,009 |
Earnout liability | 1,588 | |
Sales or settlements | -61 | |
Other comprehensive income | 0 | 0 |
Net earnings | -258 | -250 |
Transfers out of Level 3 | -300 | |
Balance at end of period | $8,744 | $7,259 |
Fair_Value_Measurements_Detail2
Fair Value Measurements (Details Textuals) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
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 | $9,430 | |
Interest rate of senior notes | 6.30% | |
Fixed Maturity Securities [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases | 9,430 | |
Other Assets [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases | $0 |
Acquisitions_Dispositions_and_
Acquisitions, Dispositions and Goodwill | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Goodwill [Abstract] | ||||||||||||||||||||
Goodwill | (5) Acquisitions and Goodwill | |||||||||||||||||||
Acquisitions | ||||||||||||||||||||
Effective January 1, 2015, we completed the acquisition of all of the capital stock of Producers Ag Insurance Group, Inc. (ProAg) from CUNA Mutual Group for $104.5 million cash. ProAg writes multi-peril crop, crop hail, named peril and livestock insurance. | ||||||||||||||||||||
In 2014, we acquired an agency for $6.4 million cash and a contingent earnout for a three-year period. We recognized $7.0 million of goodwill related to this acquisition. | ||||||||||||||||||||
Goodwill | ||||||||||||||||||||
The goodwill balances by reportable segment and the changes in goodwill are shown in the table below. | ||||||||||||||||||||
U.S. Property | Professional | Accident | U.S. Surety | |||||||||||||||||
& Casualty | Liability | & Health | & Credit | International | Total | |||||||||||||||
Balance at December 31, 2012 | $ | 223,000 | $ | 314,089 | $ | 144,113 | $ | 79,700 | $ | 124,958 | $ | 885,860 | ||||||||
Earnout and other | - | 9,104 | - | - | 236 | 9,340 | ||||||||||||||
Balance at December 31, 2013 | 223,000 | 323,193 | 144,113 | 79,700 | 125,194 | 895,200 | ||||||||||||||
Acquisition | - | - | - | 6,996 | - | 6,996 | ||||||||||||||
Earnout and other | - | 4,131 | - | - | -691 | 3,440 | ||||||||||||||
Balance at December 31, 2014 | $ | 223,000 | $ | 327,324 | $ | 144,113 | $ | 86,696 | $ | 124,503 | $ | 905,636 | ||||||||
We acquired HCC Global Financial Products, which underwrites our U.S. and International directors’ and officers’ liability business in our Professional Liability segment, in 2002. The purchase agreement includes a contingency for future earnout payments based on the settlement of claims. The ultimate total net earnout cannot be finally determined until all claims are settled or paid. All adjustments to the ultimate purchase price have been, or will be, recorded to goodwill. |
Acquisitions_Dispositions_and_1
Acquisitions, Dispositions and Goodwill (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Goodwill [Abstract] | ||||||||||||||||||||
Goodwill balances by reportable segments | U.S. Property | Professional | Accident | U.S. Surety | ||||||||||||||||
& Casualty | Liability | & Health | & Credit | International | Total | |||||||||||||||
Balance at December 31, 2012 | $ | 223,000 | $ | 314,089 | $ | 144,113 | $ | 79,700 | $ | 124,958 | $ | 885,860 | ||||||||
Earnout and other | - | 9,104 | - | - | 236 | 9,340 | ||||||||||||||
Balance at December 31, 2013 | 223,000 | 323,193 | 144,113 | 79,700 | 125,194 | 895,200 | ||||||||||||||
Acquisition | - | - | - | 6,996 | - | 6,996 | ||||||||||||||
Earnout and other | - | 4,131 | - | - | -691 | 3,440 | ||||||||||||||
Balance at December 31, 2014 | $ | 223,000 | $ | 327,324 | $ | 144,113 | $ | 86,696 | $ | 124,503 | $ | 905,636 |
Acquisitions_Dispositions_and_2
Acquisitions, Dispositions and Goodwill (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Goodwill [Line Items] | |||
Balance at beginning of period | $895,200 | $885,860 | |
Acquisition | 6,996 | ||
Earnout and other | 3,440 | 9,340 | |
Balance at end of period | 905,636 | 895,200 | |
U.S. Property & Casualty [Member] | |||
Goodwill [Line Items] | |||
Balance at beginning of period | 223,000 | ||
Balance at end of period | 223,000 | 223,000 | 223,000 |
Professional Liability [Member] | |||
Goodwill [Line Items] | |||
Balance at beginning of period | 323,193 | 314,089 | |
Earnout and other | 4,131 | 9,104 | |
Balance at end of period | 327,324 | 323,193 | |
Accident & Health [Member] | |||
Goodwill [Line Items] | |||
Balance at beginning of period | 144,113 | ||
Balance at end of period | 144,113 | 144,113 | 144,113 |
U.S. Surety & Credit [Member] | |||
Goodwill [Line Items] | |||
Balance at beginning of period | 79,700 | 79,700 | |
Acquisition | 6,996 | ||
Balance at end of period | 86,696 | 79,700 | |
International [Member] | |||
Goodwill [Line Items] | |||
Balance at beginning of period | 125,194 | 124,958 | |
Earnout and other | -691 | 236 | |
Balance at end of period | $124,503 | $125,194 |
Acquisitions_Dispositions_and_3
Acquisitions, Dispositions and Goodwill (Details Textuals) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Jan. 01, 2015 | |
Goodwill [Abstract] | ||
Amount of assets acquired in acquisition | $6,996,000 | |
Amount of cash paid to acquire an entity | $6,400,000 | $104,500,000 |
Reinsurance
Reinsurance | 12 Months Ended | |||||||||||||
Dec. 31, 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. | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Direct written premium | $ | 2,689,478 | $ | 2,545,054 | $ | 2,422,517 | ||||||||
Reinsurance assumed | 312,140 | 335,195 | 361,556 | |||||||||||
Reinsurance ceded | -628,373 | -624,926 | -530,677 | |||||||||||
Net written premium | $ | 2,373,245 | $ | 2,255,323 | $ | 2,253,396 | ||||||||
Direct earned premium | $ | 2,633,433 | $ | 2,482,527 | $ | 2,396,756 | ||||||||
Reinsurance assumed | 306,896 | 333,344 | 351,611 | |||||||||||
Reinsurance ceded | -616,702 | -576,631 | -505,742 | |||||||||||
Net earned premium | $ | 2,323,627 | $ | 2,239,240 | $ | 2,242,625 | ||||||||
Direct loss and loss adjustment expense | $ | 1,551,700 | $ | 1,616,097 | $ | 1,467,393 | ||||||||
Reinsurance assumed | 119,980 | 151,145 | 162,534 | |||||||||||
Reinsurance ceded | -344,845 | -444,788 | -291,853 | |||||||||||
Net loss and loss adjustment expense | $ | 1,326,835 | $ | 1,322,454 | $ | 1,338,074 | ||||||||
Policy acquisition costs | $ | 445,794 | $ | 413,782 | $ | 398,453 | ||||||||
Ceding commissions | -151,124 | -134,343 | -117,252 | |||||||||||
Net policy acquisition costs | $ | 294,670 | $ | 279,439 | $ | 281,201 | ||||||||
The table below shows the components of our reinsurance recoverables in our consolidated balance sheets at December 31, 2014 and 2013. | ||||||||||||||
2014 | 2013 | |||||||||||||
Reinsurance recoverable on paid losses | $ | 99,937 | $ | 156,026 | ||||||||||
Reinsurance recoverable on outstanding losses | 443,059 | 459,134 | ||||||||||||
Reinsurance recoverable on incurred but not reported losses | 627,404 | 663,597 | ||||||||||||
Reserve for uncollectible reinsurance | -1,500 | -1,500 | ||||||||||||
Total reinsurance recoverables | $ | 1,168,900 | $ | 1,277,257 | ||||||||||
In order to reduce our exposure to reinsurance credit risk, we evaluate the financial condition of our reinsurers and place our reinsurance with a diverse group of companies and syndicates, which we believe to be financially sound. Our recoverables are due principally from highly-rated reinsurers. The following table shows reinsurance balances with our reinsurers that had a net recoverable balance greater than $30.0 million at December 31, 2014 and 2013. The companies’ ratings were the latest published by A.M. Best Company, Inc. as of February 13, 2015 (for 2014) and February 14, 2014 (for 2013). The total recoverables column includes paid losses recoverable, outstanding losses recoverable and incurred but not reported losses recoverable. The total credits column includes 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. | ||||||||||||||
Total | Total | Net | ||||||||||||
Reinsurer | Rating | Location | recoverables | credits | recoverables | |||||||||
31-Dec-14 | ||||||||||||||
Transatlantic Reinsurance Company | A | New York | $ | 157,349 | $ | 8,063 | $ | 149,286 | ||||||
Axis Reinsurance Company | A+ | New York | 103,836 | 12,593 | 91,243 | |||||||||
Hannover Rück SE | A+ | Germany | 107,125 | 18,468 | 88,657 | |||||||||
ACE Property & Casualty Insurance Company | A++ | Pennsylvania | 58,996 | 5,552 | 53,444 | |||||||||
Swiss Reinsurance America Corporation | A+ | New York | 45,756 | 5,314 | 40,442 | |||||||||
Arch Reinsurance Company | A+ | Nebraska | 37,172 | 602 | 36,570 | |||||||||
31-Dec-13 | ||||||||||||||
Transatlantic Reinsurance Company | A | New York | $ | 172,165 | $ | 18,196 | $ | 153,969 | ||||||
Hannover Rück SE | A+ | Germany | 128,518 | 20,559 | 107,959 | |||||||||
Axis Reinsurance Company | A+ | New York | 92,562 | 11,983 | 80,579 | |||||||||
ACE Property & Casualty Insurance Company | A+ | Pennsylvania | 67,742 | 4,267 | 63,475 | |||||||||
Arch Reinsurance Company | A+ | Nebraska | 40,481 | 3,693 | 36,788 | |||||||||
HCC Life Insurance Company previously sold its entire block of individual life insurance and annuity business to Swiss Re Life & Health America, Inc. (rated “A+” by A.M. Best Company, Inc.) in the form of an indemnity reinsurance contract. Ceded life and annuity benefits included in our consolidated balance sheets at December 31, 2014 and 2013 were $48.5 million and $56.5 million, respectively. | ||||||||||||||
At each quarter end, we review our financial exposure to the reinsurance market based on our individual reinsurance recoverable balances as of the prior quarter end. We take actions to collect outstanding balances or to mitigate our exposure to possible loss. We had a $1.5 million reserve for potentially uncollectible amounts in 2014 and 2013. Reinsurance recoverables related to our settlement of Spanish surety bond claims totaled $107.7 million at December 31, 2014, including $49.9 million on paid losses. Our reinsurers have paid our reinsurance claims related to Spanish surety bonds in full on a timely basis, with the exception of a small number of reinsurers that are currently in run-off and disputing balances owed us. Recoverables from these run-off reinsurers totaled $46.2 million, including $39.4 million on paid losses, at December 31, 2014. No payments have been received from these reinsurers despite their participation in substantially the same contracts and terms of our other reinsurers. We are vigorously pursuing collection of these recoverables, including through arbitration where necessary, and believe these amounts are fully recoverable. Accordingly, we have not recorded a reserve for uncollectibility related to these amounts. While we believe our reserve at year-end 2014 is adequate based on information currently available, market conditions may change or additional information might be obtained that may require us to change the reserve in the future. | ||||||||||||||
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, at December 31, 2014 and 2013, the amounts of 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. | ||||||||||||||
2014 | 2013 | |||||||||||||
Payables to reinsurers | $ | 172,871 | $ | 208,850 | ||||||||||
Letters of credit | 96,895 | 100,529 | ||||||||||||
Funds held in trust | 133,981 | 88,310 | ||||||||||||
Total credits | $ | 403,747 | $ | 397,689 |
Reinsurance_Tables
Reinsurance (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Reinsurance [Abstract] | |||||||||
Effect of reinsurance transactions on our premium, loss and loss adjustment expense and policy acquisition costs | 2014 | 2013 | 2012 | ||||||
Direct written premium | $ | 2,689,478 | $ | 2,545,054 | $ | 2,422,517 | |||
Reinsurance assumed | 312,140 | 335,195 | 361,556 | ||||||
Reinsurance ceded | -628,373 | -624,926 | -530,677 | ||||||
Net written premium | $ | 2,373,245 | $ | 2,255,323 | $ | 2,253,396 | |||
Direct earned premium | $ | 2,633,433 | $ | 2,482,527 | $ | 2,396,756 | |||
Reinsurance assumed | 306,896 | 333,344 | 351,611 | ||||||
Reinsurance ceded | -616,702 | -576,631 | -505,742 | ||||||
Net earned premium | $ | 2,323,627 | $ | 2,239,240 | $ | 2,242,625 | |||
Direct loss and loss adjustment expense | $ | 1,551,700 | $ | 1,616,097 | $ | 1,467,393 | |||
Reinsurance assumed | 119,980 | 151,145 | 162,534 | ||||||
Reinsurance ceded | -344,845 | -444,788 | -291,853 | ||||||
Net loss and loss adjustment expense | $ | 1,326,835 | $ | 1,322,454 | $ | 1,338,074 | |||
Policy acquisition costs | $ | 445,794 | $ | 413,782 | $ | 398,453 | |||
Ceding commissions | -151,124 | -134,343 | -117,252 | ||||||
Net policy acquisition costs | $ | 294,670 | $ | 279,439 | $ | 281,201 | |||
Components of our reinsurance recoverables | 2014 | 2013 | |||||||
Reinsurance recoverable on paid losses | $ | 99,937 | $ | 156,026 | |||||
Reinsurance recoverable on outstanding losses | 443,059 | 459,134 | |||||||
Reinsurance recoverable on incurred but not reported losses | 627,404 | 663,597 | |||||||
Reserve for uncollectible reinsurance | -1,500 | -1,500 | |||||||
Total reinsurance recoverables | $ | 1,168,900 | $ | 1,277,257 |
Reinsurance_Details
Reinsurance (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Effect of reinsurance transactions on our premium, loss and loss adjustment expense and policy acquisition costs | |||||||||||
Direct written premium | $2,689,478 | $2,545,054 | $2,422,517 | ||||||||
Reinsurance assumed | 312,140 | 335,195 | 361,556 | ||||||||
Reinsurance ceded | -628,373 | -624,926 | -530,677 | ||||||||
Net written premium | 2,373,245 | 2,255,323 | 2,253,396 | ||||||||
Direct earned premium | 2,633,433 | 2,482,527 | 2,396,756 | ||||||||
Reinsurance assumed | 306,896 | 333,344 | 351,611 | ||||||||
Reinsurance ceded | -616,702 | -576,631 | -505,742 | ||||||||
Net earned premium | 601,832 | 586,935 | 572,248 | 562,612 | 560,030 | 556,668 | 561,356 | 561,186 | 2,323,627 | 2,239,240 | 2,242,625 |
Direct loss and loss adjustment expense | 1,551,700 | 1,616,097 | 1,467,393 | ||||||||
Reinsurance assumed | 119,980 | 151,145 | 162,534 | ||||||||
Reinsurance ceded | -344,845 | -444,788 | -291,853 | ||||||||
Net loss and loss adjustment expense | 339,434 | 320,758 | 335,897 | 330,746 | 305,477 | 328,530 | 347,353 | 341,094 | 1,326,835 | 1,322,454 | 1,338,074 |
Policy acquisition costs | 445,794 | 413,782 | 398,453 | ||||||||
Ceding commissions | -151,124 | -134,343 | -117,252 | ||||||||
Net policy acquisition costs | $294,670 | $279,439 | $281,201 |
Reinsurance_Details_1
Reinsurance (Details 1) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Components of reinsurance recoverables | ||||
Reinsurance recoverable on paid losses | $99,937 | $156,026 | ||
Reinsurance recoverable on outstanding losses | 443,059 | 459,134 | ||
Reinsurance recoverable on incurred but not reported losses | 627,404 | 663,597 | ||
Reserve for uncollectible reinsurance | -1,500 | -1,500 | -1,500 | -1,875 |
Total reinsurance recoverables | $1,168,900 | $1,277,257 |
Reinsurance_Details_2
Reinsurance (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Transatlantic Reinsurance Company [Member] | ||
Reinsurers With Net Recoverable Balances Greater Than 25 Million [Line Items] | ||
Total recoverables | $157,349 | $172,165 |
Total credits | 8,063 | 18,196 |
Net recoverables | 149,286 | 153,969 |
Axis Reinsurance Company [Member] | ||
Reinsurers With Net Recoverable Balances Greater Than 25 Million [Line Items] | ||
Total recoverables | 103,836 | 92,562 |
Total credits | 12,593 | 11,983 |
Net recoverables | 91,243 | 80,579 |
Hannover Rueckversicherungs Ag [Member] | ||
Reinsurers With Net Recoverable Balances Greater Than 25 Million [Line Items] | ||
Total recoverables | 107,125 | 128,518 |
Total credits | 18,468 | 20,559 |
Net recoverables | 88,657 | 107,959 |
Ace Property And Casualty Insurance Company [Member] | ||
Reinsurers With Net Recoverable Balances Greater Than 25 Million [Line Items] | ||
Total recoverables | 58,996 | 67,742 |
Total credits | 5,552 | 4,267 |
Net recoverables | 53,444 | 63,475 |
Swiss Reinsurance America Corporation [Member] | ||
Reinsurers With Net Recoverable Balances Greater Than 25 Million [Line Items] | ||
Total recoverables | 45,756 | |
Total credits | 5,314 | |
Net recoverables | 40,442 | |
Arch Reinsurance Company [Member] | ||
Reinsurers With Net Recoverable Balances Greater Than 25 Million [Line Items] | ||
Total recoverables | 37,172 | 40,481 |
Total credits | 602 | 3,693 |
Net recoverables | $36,570 | $36,788 |
Reinsurance_Details_4
Reinsurance (Details 4) (USD $) | Dec. 31, 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 | $172,871 | $208,850 |
Letters of credit | 96,895 | 100,529 |
Funds held in trust | 133,981 | 88,310 |
Total credits | $403,747 | $397,689 |
Reinsurance_Detail_Textuals
Reinsurance (Detail Textuals) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Reinsurance [Abstract] | ||||
Ceded life and annuity benefits | $48,499,000 | $56,491,000 | ||
Recoverables related to Spanish surety bonds | 107,700,000 | |||
Paid loss recoverables related to Spanish surety bonds | 49,900,000 | |||
Recoverables in dispute from run-off reinsurers related to Spanish surety bonds | 46,200,000 | |||
Paid loss recoverables in dispute from run-off reinsurers related to Spanish surety bonds | 39,400,000 | |||
Reserve for uncollectible reinsurance | $1,500,000 | $1,500,000 | $1,500,000 | $1,875,000 |
Liability_for_Unpaid_Loss_and_
Liability for Unpaid Loss and Loss Adjustment Expense | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Liability for Unpaid Loss and Loss Adjustment Expense | |||||||||||||
Liability For Future Policy Benefits And Unpaid Claims Disclosure TextBlock | (6) 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) at December 31, 2014, 2013 and 2012. | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Reserves at beginning of year | $ | 3,902,132 | $ | 3,767,850 | $ | 3,658,317 | |||||||
Less reinsurance recoverables on reserves | 1,122,731 | 1,018,047 | 974,834 | ||||||||||
Net reserves at beginning of year | 2,779,401 | 2,749,803 | 2,683,483 | ||||||||||
Net reserve additions from acquired businesses | - | - | 14,705 | ||||||||||
Net loss and loss adjustment expense: | |||||||||||||
Provision for loss and loss adjustment expense for claims occurring | |||||||||||||
in current year | 1,383,192 | 1,396,196 | 1,408,085 | ||||||||||
Decrease in estimated loss and loss adjustment expense for | |||||||||||||
claims occurring in prior years | -56,357 | -73,742 | -70,011 | ||||||||||
Net loss and loss adjustment expense | 1,326,835 | 1,322,454 | 1,338,074 | ||||||||||
Net loss and loss adjustment expense payments for claims occurring during: | |||||||||||||
Current year | 543,605 | 562,049 | 575,573 | ||||||||||
Prior years | 856,896 | 736,351 | 729,335 | ||||||||||
Net loss and loss adjustment expense payments | 1,400,501 | 1,298,400 | 1,304,908 | ||||||||||
Foreign currency adjustment | -48,113 | 5,544 | 18,449 | ||||||||||
Net reserves at end of year | 2,657,622 | 2,779,401 | 2,749,803 | ||||||||||
Plus reinsurance recoverables on reserves | 1,070,463 | 1,122,731 | 1,018,047 | ||||||||||
Reserves at end of year | $ | 3,728,085 | $ | 3,902,132 | $ | 3,767,850 | |||||||
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. | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Net (favorable) adverse loss development | |||||||||||||
U.S. Property & Casualty | $ | -41,560 | $ | -39,363 | $ | 2,321 | |||||||
Professional Liability | 973 | -26,346 | -25,897 | ||||||||||
Accident & Health | -13,086 | -18,027 | -10,511 | ||||||||||
U.S. Surety & Credit | -22,629 | -37,898 | -25,377 | ||||||||||
International | 25,050 | 43,805 | -10,084 | ||||||||||
Exited Lines | -5,105 | 4,087 | -463 | ||||||||||
Total net favorable loss development | -56,357 | -73,742 | -70,011 | ||||||||||
Accident year catastrophe losses | 28,683 | 55,939 | 52,390 | ||||||||||
All other net loss and loss adjustment expense | 1,354,509 | 1,340,257 | 1,355,695 | ||||||||||
Net loss and loss adjustment expense | $ | 1,326,835 | $ | 1,322,454 | $ | 1,338,074 | |||||||
Loss development represents an increase or decrease in estimates of ultimate losses related to business written in prior accident years. We record such increases or decreases as loss and loss adjustment expense in the current reporting year. Favorable development means our original ultimate loss estimate was higher than the current estimate. Adverse development means the current ultimate loss estimate is higher than our original estimate. Loss development occurs as we review our loss exposure with our actuaries, increasing or decreasing estimates of our ultimate losses as a result of such reviews, and as losses are finally settled or claims exposure changes. | |||||||||||||
Based on our annual review of reserves in our five insurance underwriting segments and in our Exited Lines, we recognized net favorable loss development of $56.4 million, $73.7 million and $70.0 in 2014, 2013, and 2012, respectively. These amounts included favorable development of $5.9 million, $7.3 million and $21.4 million, respectively, from the release of prior years’ catastrophe reserves. The primary drivers of development in each year by segment are described below. | |||||||||||||
U.S. Property & Casualty | |||||||||||||
Net favorable loss development of $41.6 million in 2014 was due to better than expected loss experience, primarily in underwriting years 2012 and prior, compared to the 2013 annual reserve review. The majority of the development related to various liability lines of business ($18.7 million), our aviation business ($9.0 million) and a run-off assumed quota share contract that we wrote from 2003 – 2008 ($5.0 million). | |||||||||||||
Net favorable development of $39.4 million in 2013 was due to better than expected experience, primarily in underwriting years 2011 and prior, compared to the 2012 reserve review. This amount included $17.0 million of favorable development related to the run-off assumed quota share contract, where expected ultimate losses have continued to decline. In addition, we recognized $5.8 million of favorable development related to our errors and omissions (E&O) business. | |||||||||||||
In 2012, the segment recognized net adverse development of $2.3 million, which included adverse development of $8.1 million in our public risk business and $7.0 million in our E&O business, partially offset by $5.6 million of favorable development in the run-off assumed quota share contract. The adverse development, which impacted underwriting years 2010 and prior for public risk and 2011 and prior for E&O, was based on higher than expected losses compared to our 2011 reserve review. | |||||||||||||
Professional Liability | |||||||||||||
In 2014, we recognized minimal loss development based on our annual review of reserves. | |||||||||||||
Net favorable development of $26.3 million in 2013 was due to better than expected loss experience, compared to the 2012 reserve review. 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. | |||||||||||||
Net favorable development of $25.9 million in 2012 included reserve releases of $62.1 million due to better than expected loss experience, compared to the 2011 reserve review. This development related to underwriting years prior to 2007 and was partially offset by reserve strengthening in underwriting year 2008. | |||||||||||||
Accident & Health | |||||||||||||
The segment recognized net favorable development as follows: 1) 2014 – $13.1 million related to underwriting years 2012 and 2013, 2) 2013 – $18.0 million related to underwriting years 2011 and 2012 and 3) 2012 – $10.5 million related to underwriting year 2011. Our review of the segment’s reserves indicated better than expected claims activity in our medical stop-loss product. | |||||||||||||
U.S. Surety & Credit | |||||||||||||
The segment recognized net favorable development as follows: 1) 2014 – $20.3 million related to surety and $2.3 million related to credit, 2) 2013 – $20.6 million for surety and $17.3 million for credit and 3) 2012 – $18.0 million for surety and $7.4 million for credit. Our review of the segment’s reserves indicated better experience than our actuarial expectations in each year’s review compared to the prior year review. | |||||||||||||
International | |||||||||||||
In 2014, the segment’s $25.1 million net adverse loss development primarily related to $44.1 million of adverse development for the surety & credit line of business, partially offset by net favorable development in various lines of business and a $5.4 million reduction of prior years’ catastrophe reserves. In the third quarter of 2014, 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 majority of the outstanding claims during that quarter. The segment’s favorable development primarily related to our energy, property treaty and liability lines, which had better than expected loss experience in underwriting years 2013 and prior, compared to our annual 2013 reserve review. 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 2013, the segment’s net adverse development of $43.8 million was due to reserve strengthening in the surety & credit line of business, partially offset by net favorable development in other lines of business, primarily energy and liability. For surety & credit, we increased our reserves by $70.3 million 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 2013. We recognized net favorable development of $10.1 million in energy and $16.1 million in our U.K. professional liability products based on better than expected loss experience primarily in underwriting years 2011 and prior, compared to our 2012 reserve review. In addition, we recognized favorable development related to our release of catastrophe reserves for Superstorm Sandy ($3.4 million) and the 2010 New Zealand earthquake ($2.3 million), due to lower than expected losses. | |||||||||||||
The segment’s $10.1 million of net favorable development in 2012 included $59.0 million of net favorable development, primarily related to the liability and energy lines, partially offset by $48.9 million of adverse development related to the Spanish surety bonds. The adverse development was based on management’s evaluation of the claims and the likelihood that we would ultimately be required to pay the claims, based on information available at that time. The segment’s net favorable development related to better than expected experience in underwriting years 2011 and prior and also included $18.9 million of catastrophe reserve releases, primarily for Hurricane Irene ($10.7 million) and the Japan earthquake and tsunami ($4.6 million). |
Liability_for_Unpaid_Loss_and_1
Liability for Unpaid Loss and Loss Adjustment Expense (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Liability for Unpaid Loss and Loss Adjustment Expense | |||||||||||||
Rollforward of Liability for Unpaid Loss and Loss Adjustment Expense | 2014 | 2013 | 2012 | ||||||||||
Reserves at beginning of year | $ | 3,902,132 | $ | 3,767,850 | $ | 3,658,317 | |||||||
Less reinsurance recoverables on reserves | 1,122,731 | 1,018,047 | 974,834 | ||||||||||
Net reserves at beginning of year | 2,779,401 | 2,749,803 | 2,683,483 | ||||||||||
Net reserve additions from acquired businesses | - | - | 14,705 | ||||||||||
Net loss and loss adjustment expense: | |||||||||||||
Provision for loss and loss adjustment expense for claims occurring | |||||||||||||
in current year | 1,383,192 | 1,396,196 | 1,408,085 | ||||||||||
Decrease in estimated loss and loss adjustment expense for | |||||||||||||
claims occurring in prior years | -56,357 | -73,742 | -70,011 | ||||||||||
Net loss and loss adjustment expense | 1,326,835 | 1,322,454 | 1,338,074 | ||||||||||
Net loss and loss adjustment expense payments for claims occurring during: | |||||||||||||
Current year | 543,605 | 562,049 | 575,573 | ||||||||||
Prior years | 856,896 | 736,351 | 729,335 | ||||||||||
Net loss and loss adjustment expense payments | 1,400,501 | 1,298,400 | 1,304,908 | ||||||||||
Foreign currency adjustment | -48,113 | 5,544 | 18,449 | ||||||||||
Net reserves at end of year | 2,657,622 | 2,779,401 | 2,749,803 | ||||||||||
Plus reinsurance recoverables on reserves | 1,070,463 | 1,122,731 | 1,018,047 | ||||||||||
Reserves at end of year | $ | 3,728,085 | $ | 3,902,132 | $ | 3,767,850 | |||||||
Details of Loss and Loss Adjustment Expense | 2014 | 2013 | 2012 | ||||||||||
Net (favorable) adverse loss development | |||||||||||||
U.S. Property & Casualty | $ | -41,560 | $ | -39,363 | $ | 2,321 | |||||||
Professional Liability | 973 | -26,346 | -25,897 | ||||||||||
Accident & Health | -13,086 | -18,027 | -10,511 | ||||||||||
U.S. Surety & Credit | -22,629 | -37,898 | -25,377 | ||||||||||
International | 25,050 | 43,805 | -10,084 | ||||||||||
Exited Lines | -5,105 | 4,087 | -463 | ||||||||||
Total net favorable loss development | -56,357 | -73,742 | -70,011 | ||||||||||
Accident year catastrophe losses | 28,683 | 55,939 | 52,390 | ||||||||||
All other net loss and loss adjustment expense | 1,354,509 | 1,340,257 | 1,355,695 | ||||||||||
Net loss and loss adjustment expense | $ | 1,326,835 | $ | 1,322,454 | $ | 1,338,074 |
Liability_for_Unpaid_Loss_and_2
Liability for Unpaid Loss and Loss Adjustment Expense (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
LiabilityForUnpaidClaimsAndClaimsAdjustmentExpenseNetAbstract | |||||||||||
Reserves at beginning of period | $3,902,132,000 | $3,767,850,000 | $3,902,132,000 | $3,767,850,000 | $3,658,317,000 | ||||||
Less reinsurance recoverables on reserves | 1,122,731,000 | 1,018,047,000 | 1,122,731,000 | 1,018,047,000 | 974,834,000 | ||||||
Net reserves at beginning of period | 2,779,401,000 | 2,749,803,000 | 2,779,401,000 | 2,749,803,000 | 2,683,483,000 | ||||||
Net reserve additions from acquired businesses | 14,705,000,000 | ||||||||||
Net loss and loss adjustment expense: | |||||||||||
Provision for loss and loss adjustment expense for claims occurring in current year | 1,383,192,000 | 1,396,196,000 | 1,408,085,000 | ||||||||
Increase (decrease) in estimated loss and loss adjustment expense for claims occurring in prior years | -56,357,000 | -73,742,000 | -70,011,000 | ||||||||
Net loss and loss adjustment expense | 339,434,000 | 320,758,000 | 335,897,000 | 330,746,000 | 305,477,000 | 328,530,000 | 347,353,000 | 341,094,000 | 1,326,835,000 | 1,322,454,000 | 1,338,074,000 |
Net loss and loss adjustment expense payments for claims occurring during: | |||||||||||
Current year | 543,605,000 | 562,049,000 | 575,573,000 | ||||||||
Prior years | 856,896,000 | 736,351,000 | 729,335,000 | ||||||||
Net loss and loss adjustment expense payments | 1,400,501,000 | 1,298,400,000 | 1,304,908,000 | ||||||||
Foreign currency adjustment | -48,113,000 | 5,544,000 | 18,449,000 | ||||||||
Net reserves at end of period | 2,657,622,000 | 2,779,401,000 | 2,657,622,000 | 2,779,401,000 | 2,749,803,000 | ||||||
Plus reinsurance recoverables on reserves | 1,070,463,000 | 1,122,731,000 | 1,070,463,000 | 1,122,731,000 | 1,018,047,000 | ||||||
Reserves at end of period | $3,728,085,000 | $3,902,132,000 | $3,728,085,000 | $3,902,132,000 | $3,767,850,000 |
Liability_for_Unpaid_Loss_and_3
Liability for Unpaid Loss and Loss Adjustment Expense (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment Reporting Information [Line Items] | |||||||||||
Total net (favorable) adverse loss development | ($56,357) | ($73,742) | ($70,011) | ||||||||
Accident year catastrophe losses | 28,683 | 55,939 | 52,390 | ||||||||
All other net loss and loss adjustment expense | 1,354,509 | 1,340,257 | 1,355,695 | ||||||||
Loss and loss adjustment expense, net | 339,434 | 320,758 | 335,897 | 330,746 | 305,477 | 328,530 | 347,353 | 341,094 | 1,326,835 | 1,322,454 | 1,338,074 |
U.S. Property & Casualty [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net (favorable) adverse loss development | -41,560 | -39,363 | 2,321 | ||||||||
Loss and loss adjustment expense, net | 154,200 | 175,190 | 209,286 | ||||||||
Professional Liability [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net (favorable) adverse loss development | 973 | -26,346 | -25,897 | ||||||||
Loss and loss adjustment expense, net | 206,690 | 195,429 | 229,873 | ||||||||
Accident & Health [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net (favorable) adverse loss development | -13,086 | -18,027 | -10,511 | ||||||||
Loss and loss adjustment expense, net | 696,288 | 630,210 | 601,076 | ||||||||
U.S. Surety & Credit [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net (favorable) adverse loss development | -22,629 | -37,898 | -25,377 | ||||||||
Loss and loss adjustment expense, net | 42,273 | 24,143 | 38,535 | ||||||||
International [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net (favorable) adverse loss development | 25,050 | 43,805 | -10,084 | ||||||||
Loss and loss adjustment expense, net | 196,134 | 249,199 | 189,410 | ||||||||
Exited Lines [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net (favorable) adverse loss development | ($5,105) | $4,087 | ($463) |
Liability_for_Unpaid_Loss_and_4
Liability for Unpaid Loss and Loss Adjustment Expense (Details Textuals1) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment LOB Event Reporting Information [Line Items] | |||
Total net (favorable) adverse loss development | ($56,357) | ($73,742) | ($70,011) |
U.S. Property & Casualty [Member] | |||
Segment LOB Event Reporting Information [Line Items] | |||
Total net (favorable) adverse loss development | -41,560 | -39,363 | 2,321 |
Professional Liability [Member] | |||
Segment LOB Event Reporting Information [Line Items] | |||
Total net (favorable) adverse loss development | 973 | -26,346 | -25,897 |
Accident & Health [Member] | |||
Segment LOB Event Reporting Information [Line Items] | |||
Total net (favorable) adverse loss development | -13,086 | -18,027 | -10,511 |
U.S. Surety & Credit [Member] | |||
Segment LOB Event Reporting Information [Line Items] | |||
Total net (favorable) adverse loss development | -22,629 | -37,898 | -25,377 |
International [Member] | |||
Segment LOB Event Reporting Information [Line Items] | |||
Total net (favorable) adverse loss development | 25,050 | 43,805 | -10,084 |
Exited Lines [Member] | |||
Segment LOB Event Reporting Information [Line Items] | |||
Total net (favorable) adverse loss development | -5,105 | 4,087 | -463 |
Aviation [Member] | U.S. Property & Casualty [Member] | |||
Segment LOB Event Reporting Information [Line Items] | |||
Total net (favorable) adverse loss development | 9,000 | ||
E & O [Member] | U.S. Property & Casualty [Member] | |||
Segment LOB Event Reporting Information [Line Items] | |||
Total net (favorable) adverse loss development | 5,800 | 7,000 | |
Public Risk [Member] | U.S. Property & Casualty [Member] | |||
Segment LOB Event Reporting Information [Line Items] | |||
Total net (favorable) adverse loss development | 8,100 | ||
Surety [Member] | U.S. Surety & Credit [Member] | |||
Segment LOB Event Reporting Information [Line Items] | |||
Total net (favorable) adverse loss development | 20,300 | 20,600 | 18,000 |
Credit LOB [Member] | U.S. Surety & Credit [Member] | |||
Segment LOB Event Reporting Information [Line Items] | |||
Total net (favorable) adverse loss development | 2,300 | 17,300 | 7,400 |
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 | 18,700 | ||
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 | 44,100 | 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 | 62,100 | |
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 | ||
Hurricane Irene [Member] | International [Member] | |||
Segment LOB Event Reporting Information [Line Items] | |||
Total net (favorable) adverse loss development | 10,700 | ||
Japan Earthquake and Tsunami [Member] | International [Member] | |||
Segment LOB Event Reporting Information [Line Items] | |||
Total net (favorable) adverse loss development | 4,600 | ||
Spanish Surety Bonds [Member] | International [Member] | |||
Segment LOB Event Reporting Information [Line Items] | |||
Total net (favorable) adverse loss development | 48,900 | ||
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 | 5,600 |
Prior Year Catastrophe Reserve Releases [Member] | |||
Segment LOB Event Reporting Information [Line Items] | |||
Total net (favorable) adverse loss development | 5,900 | 7,300 | 21,400 |
Prior Year Catastrophe Reserve Releases [Member] | International [Member] | |||
Segment LOB Event Reporting Information [Line Items] | |||
Total net (favorable) adverse loss development | 5,400 | 18,900 | |
Liability And Energy Lines [Member] | International [Member] | |||
Segment LOB Event Reporting Information [Line Items] | |||
Total net (favorable) adverse loss development | $59,000 |
Notes_Payable
Notes Payable | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes Payable [Abstract] | |||||||||
Notes Payable | (7) Notes Payable | ||||||||
Our notes payable consisted of the following at December 31, 2014 and 2013. | |||||||||
2014 | 2013 | ||||||||
6.30% Senior Notes | $ | 299,251 | $ | 299,098 | |||||
Revolving Loan Facility | 525,000 | 355,000 | |||||||
Total notes payable | $ | 824,251 | $ | 654,098 | |||||
The estimated fair value of our Senior Notes was $350.1 million at December 31, 2014 and $352.7 million at December 31, 2013, based on quoted market prices. The estimated fair value of our Revolving Loan Facility approximated the carrying value at December 31, 2014 and 2013, based on borrowing rates offered to us at that time. | |||||||||
Senior Notes | |||||||||
Our $300.0 million 6.30% Senior Notes due 2019 were issued in 2009 at a discount of $1.5 million, for an effective interest rate of 6.37%. We pay interest semi-annually in arrears on May 15 and November 15. The Senior Notes are unsecured and subordinated general obligations of HCC. The Senior Notes may be redeemed in whole at any time or in part from time to time, at our option, at the redemption price determined in the manner described in the indenture governing the Senior Notes. The indenture contains covenants that impose conditions on our ability to create liens on the capital stock of our restricted subsidiaries (as defined in the indenture) or to engage in sales of the capital stock of our restricted subsidiaries. We were in compliance with these covenants at December 31, 2014. | |||||||||
Revolving Loan Facility | |||||||||
On April 30, 2014, we entered into an agreement to modify our $600.0 million Revolving Loan Facility (Facility) to increase the borrowing capacity to $825.0 million and extend the term to April 30, 2019, among other changes. The Facility allows us to borrow up to the maximum allowed on a revolving basis until the Facility expires. The borrowing rate is LIBOR plus 125 basis points, subject to increase or decrease based on changes in our debt rating. The weighted-average interest rate on borrowings under the Facility at December 31, 2014 was 1.4%. In addition, we pay an annual commitment fee of 15 basis points on the unused balance of the Facility. The borrowings and letters of credit issued under the Facility reduced our available borrowing capacity on the Facility to $294.1 million at December 31, 2014. The Facility contains two restrictive financial covenants that require HCC to maintain a minimum consolidated net worth and a maximum leverage ratio of 35%. We were in compliance with these covenants at December 31, 2014. In addition, HCC is restricted from paying annual dividends in excess of the greater of $150.0 million or 33% of our prior year’s net earnings. | |||||||||
Subsidiary Letters of Credit | |||||||||
At December 31, 2014, certain of our subsidiaries had outstanding letters of credit with banks totaling $6.3 million. Of this amount, $5.9 million of outstanding letters of credit reduced our borrowing capacity under the Facility at year-end 2014. | |||||||||
Standby Letter of Credit Facility | |||||||||
We had a $90.0 million Standby Letter of Credit Facility (Standby Facility) that was used to guarantee our performance in our Lloyd’s of London Syndicate, which was scheduled to expire on December 31, 2017. In December 2014, we internally funded the guarantee, cancelled all letters of credit issued under the Standby Facility and terminated the Standby Facility. We paid an annual fee of 105 basis points for the Standby Facility in 2014. |
Notes_Payable_Tables
Notes Payable (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes Payable [Abstract] | |||||||||
Notes Payable | 2014 | 2013 | |||||||
6.30% Senior Notes | $ | 299,251 | $ | 299,098 | |||||
Revolving Loan Facility | 525,000 | 355,000 | |||||||
Total notes payable | $ | 824,251 | $ | 654,098 |
Notes_Payable_Details
Notes Payable (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Notes Payable [Line Items] | ||
Notes payable | $824,251 | $654,098 |
6.3% Senior Notes [Member] | ||
Notes Payable [Line Items] | ||
Notes payable | 299,251 | 299,098 |
Revolving Loan Facility [Member] | ||
Notes Payable [Line Items] | ||
Notes payable | $525,000 | $355,000 |
Notes_Payable_Detail_Textuals
Notes Payable (Detail Textuals) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Notes Payable [Abstract] | |||
Interest rate of senior notes | 6.30% | ||
Senior note, face amount | $300 | ||
Senior note, unamortized discount | 1.5 | ||
Senior note, effective interest rate | 6.37% | ||
Borrowing capacity under line of credit facility | 825 | 600 | |
Borrowing rate under revolving loan facility | 125.00% | ||
Contractual interest rate on borrowing under facility | 1.40% | ||
Commitment fees basis points for revolving loan facility | 15.00% | ||
Remaining borrowing capacity under Revolving Loan Facility as reduced by outstanding letters of credit | 294.1 | ||
Leverage ratio on restrictive financial covenants | 35 | ||
Letter of credit facility outstanding amount | 90 | ||
Line of credit facility expiration date | 30-Apr-19 | ||
Outstanding letters of credit reduced our borrowing capacity | 5.9 | ||
Subsidiary letter of credit facility outstanding amount | 6.3 | ||
Senior Notes Payable Fair Value | 352.7 | 350.1 | |
Annual Dividend Restrictions In Excess Of The Greater Of Amount | $150 | ||
Annual Dividend Restrictions In Excess Of The Greater Of Percentage | 33.00% |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes [Abstract] | |||||||||||
Income Taxes [Text Block] | (8) Income Taxes | ||||||||||
At December 31, 2014 and 2013, we had current income taxes payable of $27.9 million and $2.0 million, respectively, included in accounts payable and accrued liabilities in the consolidated balance sheets. | |||||||||||
The following table summarizes the differences between our effective tax rate for financial statement purposes and the Federal statutory rate. | |||||||||||
2014 | 2013 | 2012 | |||||||||
Statutory tax rate | 35 | % | 35 | % | 35 | % | |||||
Federal tax at statutory rate | $ | 231,643 | $ | 200,448 | $ | 194,049 | |||||
Nontaxable municipal bond interest and dividend received deduction | -35,166 | -34,734 | -31,939 | ||||||||
State income taxes, net of federal tax benefit | 2,135 | 2,097 | 3,619 | ||||||||
Foreign income taxes | 42,093 | 42,691 | 40,703 | ||||||||
Foreign tax credit | -42,093 | -42,691 | -40,703 | ||||||||
Uncertain tax positions (net of federal tax benefit on state | |||||||||||
positions: $223 in 2014, $340 in 2013 and $719 in 2012) | 1,091 | 518 | 878 | ||||||||
Other, net | 3,790 | -2,816 | -3,420 | ||||||||
Income tax expense | $ | 203,493 | $ | 165,513 | $ | 163,187 | |||||
Effective tax rate | 30.7 | % | 28.9 | % | 29.4 | % | |||||
The components of income tax expense were as follows: | |||||||||||
2014 | 2013 | 2012 | |||||||||
Federal current | $ | 126,442 | $ | 117,933 | $ | 94,493 | |||||
Federal deferred | 30,359 | 804 | 20,827 | ||||||||
Total federal | 156,801 | 118,737 | 115,320 | ||||||||
State current | 1,740 | 2,649 | 2,570 | ||||||||
State deferred | 1,545 | 578 | 2,997 | ||||||||
Total state | 3,285 | 3,227 | 5,567 | ||||||||
Foreign current | 35,243 | 37,978 | 34,678 | ||||||||
Foreign deferred | 6,850 | 4,713 | 6,025 | ||||||||
Total foreign | 42,093 | 42,691 | 40,703 | ||||||||
Uncertain tax positions | 1,314 | 858 | 1,597 | ||||||||
Income tax expense | $ | 203,493 | $ | 165,513 | $ | 163,187 | |||||
The net deferred tax liability is included in accounts payable and accrued liabilities in our consolidated balance sheets. The deferred tax liability that related to the book over tax basis of our foreign subsidiaries at December 31, 2014 and 2013 was based on the assumption that we will merge certain subsidiaries in our International operations. The composition of deferred tax assets and liabilities at December 31, 2014 and 2013 was as follows: | |||||||||||
2014 | 2013 | ||||||||||
Excess of financial statement unearned premium over tax | $ | 30,225 | $ | 26,821 | |||||||
Discounting of loss reserves, net of salvage and subrogation | 40,046 | 50,481 | |||||||||
Excess of financial statement accrued expenses over tax | 20,103 | 18,920 | |||||||||
Allowance for bad debts, not deductible for tax | 2,427 | 3,146 | |||||||||
Stock-based compensation expense in excess of deduction for tax | 8,919 | 5,163 | |||||||||
Financial statement loss for Lloyd’s syndicates in excess of deduction for tax | - | 351 | |||||||||
Federal tax net operating loss carryforwards | 2,983 | 3,202 | |||||||||
State tax net operating loss carryforwards | 441 | 181 | |||||||||
Foreign tax net operating loss carryforwards | 20,008 | 22,605 | |||||||||
Federal benefit of state uncertain tax positions | 1,705 | 1,482 | |||||||||
Valuation allowance | -25,050 | -27,430 | |||||||||
Total deferred tax assets | 101,807 | 104,922 | |||||||||
Unrealized gain on increase in value of securities | 91,515 | 52,424 | |||||||||
Deferred policy acquisition costs, net of ceding commissions, deductible for tax | 15,764 | 14,570 | |||||||||
Amortizable goodwill for tax | 123,017 | 110,064 | |||||||||
Financial statement income for Lloyd’s syndicates in excess of taxable income | 7,143 | - | |||||||||
Book basis in net assets of foreign subsidiaries in excess of tax basis | 23,075 | 2,414 | |||||||||
Depreciation and other items | 12,676 | 14,458 | |||||||||
Total deferred tax liabilities | 273,190 | 193,930 | |||||||||
Net deferred tax liability | $ | -171,383 | $ | -89,008 | |||||||
Changes in the valuation allowance account applicable to deferred tax assets relate primarily to net operating losses in various foreign and state tax jurisdictions. Changes in the valuation allowance were as follows: | |||||||||||
2014 | 2013 | 2012 | |||||||||
Balance at beginning of year | $ | 27,430 | $ | 9,187 | $ | 7,983 | |||||
State net operating loss carryforwards | 260 | -2,228 | -651 | ||||||||
Foreign net operating loss carryforwards | -3,232 | 20,207 | 296 | ||||||||
Other | 592 | 264 | 1,559 | ||||||||
Balance at December 31 | $ | 25,050 | $ | 27,430 | $ | 9,187 | |||||
At December 31, 2014, we had Federal, state and Spanish tax net operating loss carryforwards of approximately $8.5 million, $17.6 million and $71.7 million, respectively, which will expire in varying amounts through 2034. We had $11.7 million of additional foreign net operating losses in the U.K., France and Ireland that can be carried forward indefinitely. Future use of our $8.5 million Federal loss carryforward is subject to statutory limitations due to a prior ownership change. We have recorded valuation allowances of $5.0 million and $20.0 million against our state and Spanish loss carryforwards, respectively. Based on our history of taxable income in our domestic insurance and other operations, we believe it is more likely than not that the deferred tax assets related to net operating loss carryforwards, excluding amounts covered by valuation allowances, will be realized. | |||||||||||
At December 31, 2014 and 2013, we had recorded tax liabilities for unrecognized gross tax benefits related to uncertain tax positions of $6.3 million and $5.0 million, respectively. If the uncertain tax benefits as of year-end 2014 had been recognized in 2014, the total amount of such benefits would have reduced our 2014 income tax expense and our effective tax rate. At December 31, 2014, it is reasonably possible that liabilities for unrecognized tax benefits could decrease $0.1 million (including no interest or penalties) in the next twelve months, due to the expiration of statutes of limitation. | |||||||||||
The changes in our liability for unrecognized gross tax benefits were as follows: | |||||||||||
2014 | 2013 | 2012 | |||||||||
Balance at beginning of year | $ | 5,003 | $ | 4,129 | $ | 2,522 | |||||
Gross increases | |||||||||||
Tax position of current year | 593 | 632 | 145 | ||||||||
Tax positions of prior years | 825 | 506 | 2,988 | ||||||||
Gross decreases | |||||||||||
Statute expirations | -151 | -264 | -713 | ||||||||
Settlements | - | - | -404 | ||||||||
Tax positions of prior years | - | - | -409 | ||||||||
Balance at December 31 | $ | 6,270 | $ | 5,003 | $ | 4,129 | |||||
We report any potential net interest income and expense and penalties related to changes in our uncertain tax positions in our consolidated statements of earnings as interest expense and other operating expense, respectively. We recognized net interest expense of $0.7 million in 2014, $0.3 million in 2013 and $0.5 million in 2012, and no penalties in any year. At December 31, 2014, we had no accrual for penalties and $1.9 million for interest payable. | |||||||||||
We file income tax returns in the U.S. Federal jurisdiction, and various state and foreign jurisdictions. With a few exceptions, we are no longer subject to U.S. Federal, state and local, or foreign income tax examinations by tax authorities for years before 2009. We currently are not under U.S. Federal examination. Our income tax returns for New York (2007 – 2012), Massachusetts (2009 – 2010), Illinois (2009 – 2011), California (2011 – 2012), Spain (2009 – 2010) and France (2011 – 2013) are currently under audit. While we cannot predict the outcome of these audits, we do not anticipate the results to have a material effect on our consolidated financial position, results of operations or cash flows. |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes [Abstract] | |||||||||||
Differences between our effective tax rate for financial statement purposes and the Federal Statutory rate | 2014 | 2013 | 2012 | ||||||||
Statutory tax rate | 35 | % | 35 | % | 35 | % | |||||
Federal tax at statutory rate | $ | 231,643 | $ | 200,448 | $ | 194,049 | |||||
Nontaxable municipal bond interest and dividend received deduction | -35,166 | -34,734 | -31,939 | ||||||||
State income taxes, net of federal tax benefit | 2,135 | 2,097 | 3,619 | ||||||||
Foreign income taxes | 42,093 | 42,691 | 40,703 | ||||||||
Foreign tax credit | -42,093 | -42,691 | -40,703 | ||||||||
Uncertain tax positions (net of federal tax benefit on state | |||||||||||
positions: $223 in 2014, $340 in 2013 and $719 in 2012) | 1,091 | 518 | 878 | ||||||||
Other, net | 3,790 | -2,816 | -3,420 | ||||||||
Income tax expense | $ | 203,493 | $ | 165,513 | $ | 163,187 | |||||
Effective tax rate | 30.7 | % | 28.9 | % | 29.4 | % | |||||
The components of income tax expense | 2014 | 2013 | 2012 | ||||||||
Federal current | $ | 126,442 | $ | 117,933 | $ | 94,493 | |||||
Federal deferred | 30,359 | 804 | 20,827 | ||||||||
Total federal | 156,801 | 118,737 | 115,320 | ||||||||
State current | 1,740 | 2,649 | 2,570 | ||||||||
State deferred | 1,545 | 578 | 2,997 | ||||||||
Total state | 3,285 | 3,227 | 5,567 | ||||||||
Foreign current | 35,243 | 37,978 | 34,678 | ||||||||
Foreign deferred | 6,850 | 4,713 | 6,025 | ||||||||
Total foreign | 42,093 | 42,691 | 40,703 | ||||||||
Uncertain tax positions | 1,314 | 858 | 1,597 | ||||||||
Income tax expense | $ | 203,493 | $ | 165,513 | $ | 163,187 | |||||
Composition of deferred tax assets and liabilities | 2014 | 2013 | |||||||||
Excess of financial statement unearned premium over tax | $ | 30,225 | $ | 26,821 | |||||||
Discounting of loss reserves, net of salvage and subrogation | 40,046 | 50,481 | |||||||||
Excess of financial statement accrued expenses over tax | 20,103 | 18,920 | |||||||||
Allowance for bad debts, not deductible for tax | 2,427 | 3,146 | |||||||||
Stock-based compensation expense in excess of deduction for tax | 8,919 | 5,163 | |||||||||
Financial statement loss for Lloyd’s syndicates in excess of deduction for tax | - | 351 | |||||||||
Federal tax net operating loss carryforwards | 2,983 | 3,202 | |||||||||
State tax net operating loss carryforwards | 441 | 181 | |||||||||
Foreign tax net operating loss carryforwards | 20,008 | 22,605 | |||||||||
Federal benefit of state uncertain tax positions | 1,705 | 1,482 | |||||||||
Valuation allowance | -25,050 | -27,430 | |||||||||
Total deferred tax assets | 101,807 | 104,922 | |||||||||
Unrealized gain on increase in value of securities | 91,515 | 52,424 | |||||||||
Deferred policy acquisition costs, net of ceding commissions, deductible for tax | 15,764 | 14,570 | |||||||||
Amortizable goodwill for tax | 123,017 | 110,064 | |||||||||
Financial statement income for Lloyd’s syndicates in excess of taxable income | 7,143 | - | |||||||||
Book basis in net assets of foreign subsidiaries in excess of tax basis | 23,075 | 2,414 | |||||||||
Depreciation and other items | 12,676 | 14,458 | |||||||||
Total deferred tax liabilities | 273,190 | 193,930 | |||||||||
Net deferred tax liability | $ | -171,383 | $ | -89,008 | |||||||
Changes in the valuation allowance | 2014 | 2013 | 2012 | ||||||||
Balance at beginning of year | $ | 27,430 | $ | 9,187 | $ | 7,983 | |||||
State net operating loss carryforwards | 260 | -2,228 | -651 | ||||||||
Foreign net operating loss carryforwards | -3,232 | 20,207 | 296 | ||||||||
Other | 592 | 264 | 1,559 | ||||||||
Balance at December 31 | $ | 25,050 | $ | 27,430 | $ | 9,187 | |||||
Changes in our liability for unrecognized gross tax benefits | 2014 | 2013 | 2012 | ||||||||
Balance at beginning of year | $ | 5,003 | $ | 4,129 | $ | 2,522 | |||||
Gross increases | |||||||||||
Tax position of current year | 593 | 632 | 145 | ||||||||
Tax positions of prior years | 825 | 506 | 2,988 | ||||||||
Gross decreases | |||||||||||
Statute expirations | -151 | -264 | -713 | ||||||||
Settlements | - | - | -404 | ||||||||
Tax positions of prior years | - | - | -409 | ||||||||
Balance at December 31 | $ | 6,270 | $ | 5,003 | $ | 4,129 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Differences between our effective tax rate for financial statement purposes and the Federal statutory rate | |||||||||||
Statutory tax rate | 35.00% | 35.00% | 35.00% | ||||||||
Federal tax at statutory rate | $231,643 | $200,448 | $194,049 | ||||||||
Nontaxable municipal bond interest and dividend received deduction | -35,166 | -34,734 | -31,939 | ||||||||
State income taxes, net of federal tax benefit | 2,135 | 2,097 | 3,619 | ||||||||
Foreign income taxes | 42,093 | 42,691 | 40,703 | ||||||||
Foreign tax credits | -42,093 | -42,691 | -40,703 | ||||||||
Uncertain tax positions (net of federal tax benefit (expense) on state positions: $223 in 2014, $340 in 2013 and $719 in 2012) | 1,091 | 518 | 878 | ||||||||
Other, net | 3,790 | -2,816 | -3,420 | ||||||||
Income tax expense | $51,534 | $64,390 | $40,508 | $47,061 | $41,373 | $41,925 | $36,669 | $45,546 | $203,493 | $165,513 | $163,187 |
Effective tax rate | 30.70% | 28.90% | 29.40% |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Components Of Income Tax Expense Benefit Continuing Operations Abstract | |||||||||||
Federal current | $126,442 | $117,933 | $94,493 | ||||||||
Federal deferred | 30,359 | 804 | 20,827 | ||||||||
Total federal | 156,801 | 118,737 | 115,320 | ||||||||
State current | 1,740 | 2,649 | 2,570 | ||||||||
State deferred | 1,545 | 578 | 2,997 | ||||||||
Total state | 3,285 | 3,227 | 5,567 | ||||||||
Foreign current | 35,243 | 37,978 | 34,678 | ||||||||
Foreign deferred | 6,850 | 4,713 | 6,025 | ||||||||
Total foreign | 42,093 | 42,691 | 40,703 | ||||||||
Uncertain Tax Positions Gross | 1,314 | 858 | 1,597 | ||||||||
Income tax expense | $51,534 | $64,390 | $40,508 | $47,061 | $41,373 | $41,925 | $36,669 | $45,546 | $203,493 | $165,513 | $163,187 |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Composition of deferred tax assets and liabilities | ||
Excess of financial statement unearned premium over tax | $30,225 | $26,821 |
Discounting of loss reserves, net of salvage and subrogation | 40,046 | 50,481 |
Excess of financial statement accrued expenses over tax | 20,103 | 18,920 |
Allowance for bad debts, not deductible for tax | 2,427 | 3,146 |
Stock-based compensation expense in excess of deduction for tax | 8,919 | 5,163 |
Financial statement loss for Lloyd's syndicates in excess of deduction for tax | 0 | 351 |
Federal tax net operating loss carryforwards | 2,983 | 3,202 |
State tax net operating loss carryforwards | 441 | 181 |
Foreign tax net operating loss carryforwards | 20,008 | 22,605 |
Federal benefit of state uncertain tax positions | 1,705 | 1,482 |
Valuation allowance | 25,050 | 27,430 |
Total deferred tax assets | 101,807 | 104,922 |
Unrealized gain on increase in value of securities | 91,515 | 52,424 |
Deferred policy acquisition costs, net of ceding commissions, deductible for tax | 15,764 | 14,570 |
Amortizable goodwill for tax | 123,017 | 110,064 |
Financial statement income for Lloyd's syndicates in excess of taxable income | 7,143 | 0 |
Book Basis in net assets of foreign subsidiaries in excess of tax basis | 23,075 | 2,414 |
Depreciation and other items | 12,676 | 14,458 |
Total deferred tax liabilities | 273,190 | 193,930 |
Net deferred tax liability | $171,383 | $89,008 |
Income_Taxes_Details_3
Income Taxes (Details 3) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2012 |
Changes in the valuation allowance | ||||
Balance at beginning of year | $25,050 | $27,430 | $7,983 | |
State net operating loss carryforwards | 260 | -2,228 | -651 | |
Foreign net operating loss carryforwards | -3,232 | 20,207 | 296 | |
Other | 592 | 264 | 1,559 | |
Balance at end of year | $25,050 | $27,430 | $7,983 |
Income_Taxes_Details_4
Income Taxes (Details 4) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Changes in our liability for unrecognized gross tax benefits | |||
Balance at beginnng of year | $5,003 | $4,129 | $2,522 |
Tax position of current year | 593 | 632 | 145 |
Tax position of prior years | 825 | 506 | 2,988 |
Statute expirations | -151 | -264 | -713 |
Settlements | 0 | 0 | -404 |
Tax positions of prior years | 0 | 0 | -409 |
Balance at end of year | $6,270 | $5,003 | $4,129 |
Income_Taxes_Details_Textuals
Income Taxes (Details Textuals) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | |||
Income Taxes [Abstract] | |||
Current income taxes payable | $27.90 | $2 | |
Federal tax net operating loss carryforward | 8.5 | ||
State tax net operating loss carryforward | 17.6 | ||
Foreign tax net operating loss carryforward | 71.7 | ||
Foreign loss carryforward indefinetly | 11.7 | ||
Valuation allowances against our state loss carryforwards | 5 | ||
Valuation allowances against our foreign loss carryforwards | 20 | ||
Recorded tax liabilities for unrecognized gross tax benefits | 6.3 | 5 | |
Decrease in recorded tax liabilities for unrecognized gross tax benefits | 0.1 | ||
Net interest expense for uncertain tax positions | 0.7 | 0.3 | 0.5 |
Accrued interest payable for uncertain tax positions | $1.90 |
Income_Taxes_Parentheticals
Income Taxes (Parentheticals) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Income Taxes [Abstract] | |||
Federal tax benefit on state positions | $223 | $340 | $719 |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Accumulated Other Comprehensive Income [Abstract] | ||||||||||||||
Stockholders' Equity Note Disclosure [Text Block] | (9) Shareholders’ Equity | |||||||||||||
Treasury Stock | ||||||||||||||
We purchased our common stock as follows: | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Shares of common stock | 4,710 | 1,055 | 5,567 | |||||||||||
Total cost | $ | 224,706 | $ | 42,212 | $ | 178,669 | ||||||||
Weighted-average cost per share | $ | 47.7 | $ | 40.02 | $ | 32.09 | ||||||||
Dividends | ||||||||||||||
U.S. insurance companies are limited in the amount of dividends they can pay to their parent by the laws of their state of domicile. The maximum dividends that our direct domestic insurance subsidiaries can pay in 2015 without special permission is $235.2 million. | ||||||||||||||
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 (losses) | adjustment | income | ||||||||||||
Balance at December 31, 2011 | $ | 213,114 | $ | 14,545 | $ | 227,659 | ||||||||
Other comprehensive income (loss) – 2012 | 69,389 | -1,777 | 67,612 | |||||||||||
Balance at December 31, 2012 | 282,503 | 12,768 | 295,271 | |||||||||||
Other comprehensive income (loss) – 2013 | -182,543 | 5,923 | -176,620 | |||||||||||
Balance at December 31, 2013 | 99,960 | 18,691 | 118,651 | |||||||||||
Other comprehensive income (loss) – 2014 | 70,024 | -13,661 | 56,363 | |||||||||||
Balance at December 31, 2014 | $ | 169,984 | $ | 5,030 | $ | 175,014 | ||||||||
Other | ||||||||||||||
In 2012, we acquired the non-controlling interest of an entity we previously controlled and consolidated, resulting in a decrease in additional paid-in capital of $14.4 million. |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 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 (losses) | adjustment | income | ||||||||||||
Balance at December 31, 2011 | $ | 213,114 | $ | 14,545 | $ | 227,659 | ||||||||
Other comprehensive income (loss) – 2012 | 69,389 | -1,777 | 67,612 | |||||||||||
Balance at December 31, 2012 | 282,503 | 12,768 | 295,271 | |||||||||||
Other comprehensive income (loss) – 2013 | -182,543 | 5,923 | -176,620 | |||||||||||
Balance at December 31, 2013 | 99,960 | 18,691 | 118,651 | |||||||||||
Other comprehensive income (loss) – 2014 | 70,024 | -13,661 | 56,363 | |||||||||||
Balance at December 31, 2014 | $ | 169,984 | $ | 5,030 | $ | 175,014 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accumulated Other Comprehensive Income, Net of Tax, Beginning Balance | $118,651 | ||
Other comprehensive income | 56,363 | -176,620 | 67,612 |
Accumulated Other Comprehensive Income, Net of Tax, Ending Balance | 175,014 | 118,651 | |
Accumulated Net Unrealized Investment Gain [Member] | |||
Accumulated Other Comprehensive Income, Net of Tax, Beginning Balance | 99,960 | 282,503 | 213,114 |
Other comprehensive income | 70,024 | -182,543 | 69,389 |
Accumulated Other Comprehensive Income, Net of Tax, Ending Balance | 169,984 | 99,960 | 282,503 |
Accumulated Translation Adjustment [Member] | |||
Accumulated Other Comprehensive Income, Net of Tax, Beginning Balance | 18,691 | 12,768 | 14,545 |
Other comprehensive income | -13,661 | 5,923 | -1,777 |
Accumulated Other Comprehensive Income, Net of Tax, Ending Balance | 5,030 | 18,691 | 12,768 |
Accumulated other comprehensive income [Member] | |||
Other comprehensive income | $56,363 | ($176,620) | $67,612 |
Shareholders_Equity_Detail_Tex
Shareholder's Equity (Detail Textuals) (USD $) | 12 Months Ended | ||
Share data in Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Stockholders' Equity Note [Abstract] | |||
Treasury stock shares acquired | 4,710 | 1,055 | 5,567 |
Treasury stock value acquired cost method | $224,706,000 | $42,212,000 | $178,669,000 |
Treasury Stock Acquired Average Cost Per Share | $47.70 | $40.02 | $32.09 |
Statutory Accounting Practices Statutory Amount Available For Dividend Payments | 235,200,000 | ||
Adjustments To Additional Paid In Capital Other | $14,400,000 |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
Earnings Per Share | (10) Earnings Per Share | |||||||||||
The following table details the numerator and denominator used in our earnings per share calculations. | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Net earnings | $ | 458,343 | $ | 407,197 | $ | 391,240 | ||||||
Less: net earnings attributable to unvested restricted stock | -7,497 | -6,638 | -6,982 | |||||||||
Net earnings available to common stock | $ | 450,846 | $ | 400,559 | $ | 384,258 | ||||||
Weighted-average common shares outstanding | 97,591 | 98,853 | 100,176 | |||||||||
Dilutive effect of outstanding securities (determined using treasury | ||||||||||||
stock method) | 260 | 260 | 280 | |||||||||
Weighted-average common shares and potential common | ||||||||||||
shares outstanding | 97,851 | 99,113 | 100,456 | |||||||||
Earnings per common share | ||||||||||||
Basic | $ | 4.62 | $ | 4.05 | $ | 3.84 | ||||||
Diluted | $ | 4.61 | $ | 4.04 | $ | 3.83 |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
Earnings per share | 2014 | 2013 | 2012 | |||||||||
Net earnings | $ | 458,343 | $ | 407,197 | $ | 391,240 | ||||||
Less: net earnings attributable to unvested restricted stock | -7,497 | -6,638 | -6,982 | |||||||||
Net earnings available to common stock | $ | 450,846 | $ | 400,559 | $ | 384,258 | ||||||
Weighted-average common shares outstanding | 97,591 | 98,853 | 100,176 | |||||||||
Dilutive effect of outstanding securities (determined using treasury | ||||||||||||
stock method) | 260 | 260 | 280 | |||||||||
Weighted-average common shares and potential common | ||||||||||||
shares outstanding | 97,851 | 99,113 | 100,456 | |||||||||
Earnings per common share | ||||||||||||
Basic | $ | 4.62 | $ | 4.05 | $ | 3.84 | ||||||
Diluted | $ | 4.61 | $ | 4.04 | $ | 3.83 |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Earnings Per Share, Basic and Diluted | |||||||||||
Net earnings | $113,029 | $140,267 | $97,136 | $107,911 | $115,010 | $98,175 | $88,162 | $105,850 | $458,343 | $407,197 | $391,240 |
Less: net earnings attributable to unvested restricted stock | 7,497 | 6,638 | 6,982 | ||||||||
Net earnings available to common stock | $450,846 | $400,559 | $384,258 | ||||||||
Weighted-average common shares outstanding | 95,373 | 97,909 | 98,442 | 98,662 | 98,770 | 98,723 | 98,870 | 99,056 | 97,591 | 98,853 | 100,176 |
Dilutive effect of outstanding securities (determined using treasury stock method) | 260 | 260 | 280 | ||||||||
Weighted-average common shares and potential common shares outstanding | 95,636 | 98,134 | 98,660 | 98,913 | 99,046 | 98,993 | 99,121 | 99,287 | 97,851 | 99,113 | 100,456 |
Earnings Per Share, Basic | $1.17 | $1.41 | $0.97 | $1.08 | $1.15 | $0.98 | $0.88 | $1.05 | $4.62 | $4.05 | $3.84 |
Earnings Per Share, Diluted | $1.16 | $1.41 | $0.97 | $1.07 | $1.14 | $0.98 | $0.87 | $1.05 | $4.61 | $4.04 | $3.83 |
Stock_based_Compensation
Stock based Compensation | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Stock based Compensation [Abstract] | ||||||||||||||
Stock based Compensation | (11) Stock-Based Compensation | |||||||||||||
Our stock-based compensation plan, the 2008 Flexible Incentive Plan, is administered by the Compensation Committee of the Board of Directors. We currently have restricted stock awards, restricted stock units and stock options outstanding under this plan. Each restricted stock award and unit entitles the recipient to one share or equivalent unit of our common stock. Outstanding restricted stock awards and units vest over a period of up to five years, which is the requisite service period. Each option granted under the plan may be used to purchase one share of our common stock. Outstanding options vest over a period of up to five years, which is the requisite service period, and expire six to ten years after the grant date. | ||||||||||||||
In 2013, our stockholders authorized the issuance of up to 2.0 million shares of our common stock under the 2013 Employee Stock Purchase Plan (ESPP). The ESPP encourages share ownership by providing employees the opportunity to purchase HCC common stock at 85% of the closing price of the stock on either the first day or the last day of each six-month offering period (whichever is lower). Employees can invest between 1% and 15% of their base salary, subject to a maximum of the lesser of 1,500 shares in each offering period or $25,000 in each calendar year. We issued 0.1 million shares of common stock during 2014 upon completion of the first two ESPP offering periods. We recognize expense related to the ESPP over each offering period. The expense includes the 15% discount and the fair value of the “look-back” option calculated using a Black-Scholes option pricing model. | ||||||||||||||
The consolidated statements of earnings reflect total stock-based compensation expense of $25.1 million, $16.2 million and $13.2 million in 2014, 2013 and 2012, respectively. The total tax benefit recognized in earnings from stock-based compensation arrangements was $8.8 million, $5.7 million and $4.6 million in 2014, 2013 and 2012, respectively. At December 31, 2014, there was approximately $29.3 million of total unrecognized compensation expense related to unvested restricted stock awards and units, options and our employee stock purchase plan that is expected to be recognized over a weighted-average period of 1.6 years. At December 31, 2014, 3.7 million shares of our common stock were authorized and reserved for the exercise of options and release of restricted stock units, of which 0.9 million shares were reserved for awards previously granted and 2.8 million shares were reserved for future issuance. | ||||||||||||||
Restricted Stock | ||||||||||||||
We measure the fair value of our restricted stock awards and units based on the closing price of our common stock on the grant date and expense that value on a straight-line basis over the vesting period. | ||||||||||||||
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. These awards earn dividends or dividend equivalents during the vesting period. | ||||||||||||||
Beginning in 2013, certain of our executive officers were granted performance-based restricted stock. 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 (ROE factor) and a total shareholder return performance factor (TSR factor). The ROE factor is calculated by comparing our actual results over the three-year period to an internal target, whereas the TSR factor is calculated by comparing our TSR over the three-year period to that of nine peer companies. The ROE factor qualifies as a performance condition and those awards are accounted for in the same manner as the other restricted stock grants described above. The TSR factor qualifies as a market condition, and we determine the fair value at grant date using a Monte Carlo simulation model that takes into account the probabilities of numerous outcomes of our TSR as well as that of the peer companies. This fair value is expensed on a straight-line basis over the vesting period and is not adjusted for the ultimate number of shares to vest. No dividends are earned during the vesting period on these shares. | ||||||||||||||
The fair value of restricted stock awards that vested during 2014, 2013 and 2012 was $13.0 million, $14.4 million and $10.9 million, respectively. The fair value of restricted stock units that vested during 2014, 2013 and 2012 was $0.4 million, $1.6 million and $2.6 million, respectively. | ||||||||||||||
The following table details activity for our restricted stock awards and units during 2014. | ||||||||||||||
Weighted- | Weighted- | |||||||||||||
average | average | Aggregate | ||||||||||||
Number | grant date | contractual | intrinsic | |||||||||||
of shares | fair value | life | value | |||||||||||
Restricted Stock Awards | ||||||||||||||
Outstanding, beginning of year | 1,437 | $ | 32.91 | |||||||||||
Awarded | 398 | 44.73 | ||||||||||||
Vested | -271 | 28.3 | ||||||||||||
Forfeited | -6 | 40.7 | ||||||||||||
Outstanding, end of year | 1,558 | 36.7 | 1.6 years | $ | 83,383 | |||||||||
Restricted Stock Units | ||||||||||||||
Outstanding, beginning of year | 135 | $ | 33.91 | |||||||||||
Awarded | 13 | 45.17 | ||||||||||||
Vested | -9 | 28.41 | ||||||||||||
Outstanding, end of year | 139 | 35.31 | 1.1 years | $ | 7,457 | |||||||||
Expected to vest, end of year | 132 | 1.0 years | 7,069 | |||||||||||
Stock Options | ||||||||||||||
The table below shows the weighted-average fair value of options granted and the related weighted-average assumptions used in the Black-Scholes model, which we use to determine the fair value of an option on its grant date. We expense the fair value on a straight-line basis over the option’s vesting period. The risk-free interest rate is based on the U.S. Treasury rate that most closely approximates each option’s expected term. We based our expected volatility on the historical volatility of our stock over a period matching each option’s expected term. Our dividend yield is based on an average of our historical dividend payments divided by the stock price. We used historical exercise patterns by grant type to estimate the expected option life. | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Fair value of options granted | $ | 6.51 | $ | 7.17 | $ | 7.89 | ||||||||
Risk free interest rate | 1.4 | % | 1 | % | 1.1 | % | ||||||||
Expected volatility | 18.4 | % | 23 | % | 31.4 | % | ||||||||
Expected dividend yield | 2.1 | % | 1.8 | % | 2.1 | % | ||||||||
Expected option life | 4.1 years | 4.9 years | 6.6 years | |||||||||||
The following table details our stock option activity during 2014. | ||||||||||||||
Weighted- | Weighted- | |||||||||||||
average | average | Aggregate | ||||||||||||
Number | exercise | contractual | intrinsic | |||||||||||
of shares | price | life | value | |||||||||||
Outstanding, beginning of year | 1,293 | $ | 29.5 | |||||||||||
Granted | 10 | 52.51 | ||||||||||||
Exercised | -461 | 25.66 | ||||||||||||
Forfeited and expired | -40 | 37.28 | ||||||||||||
Outstanding, end of year | 802 | 31.61 | 4.2 years | $ | 17,575 | |||||||||
Vested or expected to vest, end of year | 771 | 31.49 | 4.2 years | 16,983 | ||||||||||
Exercisable, end of year | 311 | 29.26 | 3.7 years | 7,554 | ||||||||||
The aggregate intrinsic value (the amount by which the fair value of the underlying stock exceeds the exercise price) of options exercised during 2014, 2013 and 2012 was $10.1 million, $5.6 million and $10.2 million, respectively. Exercise of options during 2014, 2013 and 2012 resulted in cash receipts of $11.8 million, $10.3 million and $60.0 million, respectively. The tax benefits realized from stock options exercised during 2014, 2013 and 2012 were $3.5 million, $2.0 million and $3.7 million, respectively. | ||||||||||||||
Common Stock Grants | ||||||||||||||
In 2012 and 2013, we granted fully-vested common stock valued at $80,000 to each non-management director as part of their annual compensation for serving on our Board of Directors. Beginning in 2014, we granted fully-vested common stock valued at $110,000 to each non-management director. New directors were granted a pro-rata portion of the value for the applicable year based on the date they joined the Board. Two directors who had previously deferred their annual grants under a deferred compensation plan retired in 2014. Upon retirement, additional shares valued at $323,000, representing the increase in value of the deferred amounts, were issued to the former directors. We also granted $200,000 of fully vested common stock to the chairman of our Board in each of the past three years. The number of shares granted was based on our closing stock price on the grant date, which was either the day of the Annual Meeting of Shareholders, the day the director joined the Board or the date the values in the deferred compensation plan were paid. |
Stock_Based_Compensation_Table
Stock Based Compensation (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Share-based Compensation [Abstract] | ||||||||||||||
Schedule of Share-based Compensation, Common Stock, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | Weighted- | Weighted- | ||||||||||||
average | average | Aggregate | ||||||||||||
Number | grant date | contractual | intrinsic | |||||||||||
of shares | fair value | life | value | |||||||||||
Restricted Stock Awards | ||||||||||||||
Outstanding, beginning of year | 1,437 | $ | 32.91 | |||||||||||
Awarded | 398 | 44.73 | ||||||||||||
Vested | -271 | 28.3 | ||||||||||||
Forfeited | -6 | 40.7 | ||||||||||||
Outstanding, end of year | 1,558 | 36.7 | 1.6 years | $ | 83,383 | |||||||||
Restricted Stock Units | ||||||||||||||
Outstanding, beginning of year | 135 | $ | 33.91 | |||||||||||
Awarded | 13 | 45.17 | ||||||||||||
Vested | -9 | 28.41 | ||||||||||||
Outstanding, end of year | 139 | 35.31 | 1.1 years | $ | 7,457 | |||||||||
Expected to vest, end of year | 132 | 1.0 years | 7,069 | |||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | 2014 | 2013 | 2012 | |||||||||||
Fair value of options granted | $ | 6.51 | $ | 7.17 | $ | 7.89 | ||||||||
Risk free interest rate | 1.4 | % | 1 | % | 1.1 | % | ||||||||
Expected volatility | 18.4 | % | 23 | % | 31.4 | % | ||||||||
Expected dividend yield | 2.1 | % | 1.8 | % | 2.1 | % | ||||||||
Expected option life | 4.1 years | 4.9 years | 6.6 years | |||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Weighted- | Weighted- | ||||||||||||
average | average | Aggregate | ||||||||||||
Number | exercise | contractual | intrinsic | |||||||||||
of shares | price | life | value | |||||||||||
Outstanding, beginning of year | 1,293 | $ | 29.5 | |||||||||||
Granted | 10 | 52.51 | ||||||||||||
Exercised | -461 | 25.66 | ||||||||||||
Forfeited and expired | -40 | 37.28 | ||||||||||||
Outstanding, end of year | 802 | 31.61 | 4.2 years | $ | 17,575 | |||||||||
Vested or expected to vest, end of year | 771 | 31.49 | 4.2 years | 16,983 | ||||||||||
Exercisable, end of year | 311 | 29.26 | 3.7 years | 7,554 |
Stock_based_Compensation_Detai
Stock based Compensation (Details Textuals) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Stock Based Compensation [Line Items] | |||
Stock-based compensation expense | $25,100,000 | $16,200,000 | $13,200,000 |
Total tax benefit recognized in earnings from stock-based compensation | 8,800,000 | 5,700,000 | 4,600,000 |
Unrecognized compensation expense related to unvested options and restricted stock awards | 29,300,000 | ||
Total unrecognized compensation cost recognized over a weighted-average period | 1.6 | ||
Board Of Directors Fully Vested Stock Compensation | 110,000 | 80,000 | |
Chairman Of Board Fully Vested Common Stock Compensation | 200,000 | ||
Aggregate intrinsic value of options exercised | 10,100,000 | 5,600,000 | 10,200,000 |
Cash receipts from option exercises | 11,800,000 | 10,300,000 | 60,000,000 |
Fair Value Of Rest Stock Awards Vested | 13,000,000 | 14,400,000 | 10,900,000 |
Fair Value Of Rest Stock Units Vested | 400,000 | 1,600,000 | 2,600,000 |
Tax benefit (charge) from stock options | 3,500,000 | 2,000,000 | 3,700,000 |
Employee Stock Purchase Plans Discount Rate | 85.00% | ||
Employee Stock Purchase Plans Base Salary Investment Percentage Minimum | 1.00% | ||
Employee Stock Purchase Plans Base Salary Investment Percentage Maximum | 15.00% | ||
Employee Stock Purchase Plans Investment Limit Per Period Shares | 1,500 | ||
Employee Stock Purchase Plans Investment Limit Per Calendar Year Fair Value | 25,000 | ||
Issuance of shares for employee stock purchase plan | 92,000 | 0 | 0 |
Board of Directors increase in deferred Stock Compensation paid out | $323,000 | ||
Employee Stock Purchase Plan [Member] | |||
Stock Based Compensation [Line Items] | |||
Shares authorized for Issuance Under Employee Stock Purchase Plan | 2,000,000 | ||
Flexible Incentive Plan 2008 [Member] | |||
Stock Based Compensation [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 900,000 | ||
Share Based Compensation Arrangement By Share Based Payment Award Number Of Shares Reserved For Issuance | 2,800,000 | ||
Shares authorized for Issuance Under Employee Stock Purchase Plan | 3,700,000 | ||
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) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk free interest rate | 1.40% | 1.00% | 1.10% |
Expected volatility | 18.40% | 23.00% | 31.40% |
Expected dividend yield | 2.10% | 1.80% | 2.10% |
Expected option life | 4 years 1 month 6 days | 4 years 10 months 24 days | 6 years 7 months 6 days |
StockOptionsMember | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average grant date fair value | 6.51 | 7.17 | 7.89 |
Stock_based_Compensation_Detai2
Stock based Compensation (Details 1) (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingRollForward | |||
Outstanding, beginning of year | 1,293 | ||
Stock Issued During Period Shares Stock Options Exercised | -461 | -381 | -2,079 |
Forfeited and expired | -40 | ||
Outstanding, end of year | 802 | 1,293 | |
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsAdditionalDisclosuresAbstrac | |||
Outstanding, weighted average exercise price | $31.61 | $29.50 | |
Granted, weighted-average exercise price | $52.51 | ||
Exercised, weighted-average exercise price | $25.66 | ||
Forfeited and expired, weighted-average exercise price | $37.28 | ||
Outstanding, end of year, weighted-average contractual life, Options | 4 years 2 months 12 days | ||
Outstanding, end of year, aggregate intrinsic value, options | $17,575 | ||
Vested or expected to vest, end of year, number of shares | 771 | ||
Vested or expected to vest, end of year, weighted-average exercise price | $31.49 | ||
Vested or expected to vest, end of year, weighted-average contractual life | 4 years 2 months 12 days | ||
Vested or expected to vest, end of year, aggregate intrinsic value | 16,983 | ||
Exercisable, end of year, number of shares | 311 | ||
Exercisable, end of year, weighted-average exercise price | $29.26 | ||
Exercisable, end of year, weighted-average contractual life | 3 years 8 months 12 days | ||
Exercisable, end of year, aggregate intrinsic value | $7,554 |
Stock_based_Compensation_Detai3
Stock based Compensation (Details 2) (USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Restricted stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward] | ||
Oustanding, beginning of year | 1,437 | |
Number of shares | 398 | |
Vested | -271 | |
Forfeited | -6 | |
Oustanding, end of year | 1,558 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | ||
Outstanding, weighted-average grant date fair value | $36.70 | $32.91 |
Weighted-average grant date fair value, awarded | $44.73 | |
Vested, weighted average grant date fair value | $28.30 | |
Forfeited, weighted-average grant date fair value | $40.70 | |
Outstanding, end of year, weighted-average contractual life | 1 year 7 months 6 days | |
Expected to vest, end of year | 0 | |
Expected to vest, End of year, Aggregate intrinsic value | $0 | |
Outstanding, End of year, aggregate intrinsic value | 83,383 | |
Restricted stock units (RSU) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward] | ||
Oustanding, beginning of year | 135 | |
Number of shares | 13 | |
Vested | -9 | |
Oustanding, end of year | 139 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | ||
Outstanding, weighted-average grant date fair value | $35.31 | $33.91 |
Weighted-average grant date fair value, awarded | $45.17 | |
Vested, weighted average grant date fair value | $28.41 | |
Outstanding, end of year, weighted-average contractual life | 1 year 1 month 6 days | |
Expected To Vest End Of Year Weighted Average Contractual Life | 1 year 0 months 0 days | |
Expected to vest, end of year | 132 | |
Expected to vest, End of year, Aggregate intrinsic value | 7,069 | |
Outstanding, End of year, aggregate intrinsic value | $7,457 |
Segments
Segments | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||
Segments [Abstract] | ||||||||||||||||||||||||||
Segments | (12) Segments | |||||||||||||||||||||||||
We report HCC’s results in six operating segments, which includes an Investing segment. Each of our five insurance underwriting segments bears risk for insurance coverage written within its portfolio of insurance products. Each segment generates income from premium written by our underwriting agencies, through third party agents and brokers, or on a direct basis. Fee and commission income earned by our agencies from third party insurance companies is included in segment revenue. Each segment incurs insurance losses, acquisition costs and other administrative expenses related to our insurance companies and underwriting agencies. We monitor and assess each segment’s pretax results based on underwriting profit, gross and net written premium, and its combined ratio, consisting of the net loss ratio and expense ratio. | ||||||||||||||||||||||||||
Included in the portfolio of products for each insurance underwriting segment are the following key products: | ||||||||||||||||||||||||||
• U.S. Property & Casualty – aviation, primary and excess casualty, small account errors and omissions liability (E&O), employment practices liability (EPLI), disability, contingency, public risk, technical and construction property, title and mortgage reinsurance, residual value, and brown water marine written in the United States. | ||||||||||||||||||||||||||
• Professional Liability – directors’ and officers’ (D&O) liability, large account E&O liability, fiduciary liability, fidelity and bankers’ blanket bonds, EPLI, transactional insurance and cyber liability, written in the United States and internationally. | ||||||||||||||||||||||||||
• Accident & Health – medical stop-loss and short-term domestic and international medical coverages written in the United States. | ||||||||||||||||||||||||||
• U.S. Surety & Credit – contract surety bonds, commercial surety bonds and bail bonds written in the United States and credit insurance managed in the United States. | ||||||||||||||||||||||||||
• International – energy, ocean marine, property treaty, surety, credit, liability, property (direct and facultative), accident and health and other smaller product lines written outside the United States. | ||||||||||||||||||||||||||
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: 1) a reclassification of internal claims department costs that are managed as operating expenses in our segments, but reported as loss and loss adjustment expense in our consolidated financial statements, 2) corporate operating expenses not allocated to the segments, 3) interest expense on notes payable, 4) foreign currency expense (benefit) and 5) underwriting results of our Exited Lines. Our Exited Lines include these eight product lines that we no longer write and do not expect to write in the future: 1) accident and health business managed by our underwriting agency, LDG Reinsurance, 2) workers’ compensation, 3) provider excess, 4) Spanish medical malpractice, 5) U.K. motor, 6) film completion bonds, 7) HMO reinsurance and 8) medical excess reinsurance. | ||||||||||||||||||||||||||
The majority of our stock-based compensation expense is included in Corporate & Other. All bonuses are expensed in the respective employee’s segment in the year the bonuses are earned. Any such bonuses that will be paid by restricted stock awards or units, which will be granted by the Compensation Committee in the following year, are reversed within Corporate & Other. The appropriate stock-based compensation expense for these awards will be recorded in Corporate & Other as the awards vest in future years. The majority of our depreciation and amortization expense is included in Corporate & Other. | ||||||||||||||||||||||||||
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 | |||||||||||||||||||
Year ended December 31, 2014 | ||||||||||||||||||||||||||
Net earned premium | $ | 363,998 | $ | 351,690 | $ | 981,219 | $ | 199,764 | $ | 426,480 | $ | - | $ | 476 | $ | 2,323,627 | ||||||||||
Other revenue | 20,822 | 1,082 | 9,663 | 2,505 | 3,711 | 287,990 | 3,149 | 328,922 | ||||||||||||||||||
Segment revenue | 384,820 | 352,772 | 990,882 | 202,269 | 430,191 | 287,990 | 3,625 | 2,652,549 | ||||||||||||||||||
Loss and LAE | 154,200 | 206,690 | 696,288 | 42,273 | 196,134 | - | 31,250 | 1,326,835 | ||||||||||||||||||
Other expense | 116,553 | 67,692 | 155,469 | 112,232 | 175,158 | - | 36,774 | 663,878 | ||||||||||||||||||
Segment expense | 270,753 | 274,382 | 851,757 | 154,505 | 371,292 | - | 68,024 | 1,990,713 | ||||||||||||||||||
Segment pretax earnings (loss) | $ | 114,067 | $ | 78,390 | $ | 139,125 | $ | 47,764 | $ | 58,899 | $ | 287,990 | $ | -64,399 | $ | 661,836 | ||||||||||
Year ended December 31, 2013 | ||||||||||||||||||||||||||
Net earned premium | $ | 367,135 | $ | 368,167 | $ | 883,515 | $ | 194,286 | $ | 413,206 | $ | - | $ | 12,931 | $ | 2,239,240 | ||||||||||
Other revenue | 24,266 | -7 | 4,932 | 1,468 | 4,334 | 262,212 | 459 | 297,664 | ||||||||||||||||||
Segment revenue | 391,401 | 368,160 | 888,447 | 195,754 | 417,540 | 262,212 | 13,390 | 2,536,904 | ||||||||||||||||||
Loss and LAE | 175,190 | 195,429 | 630,210 | 24,143 | 249,199 | - | 48,283 | 1,322,454 | ||||||||||||||||||
Other expense | 117,910 | 66,391 | 130,814 | 109,550 | 158,869 | - | 58,206 | 641,740 | ||||||||||||||||||
Segment expense | 293,100 | 261,820 | 761,024 | 133,693 | 408,068 | - | 106,489 | 1,964,194 | ||||||||||||||||||
Segment pretax earnings (loss) | $ | 98,301 | $ | 106,340 | $ | 127,423 | $ | 62,061 | $ | 9,472 | $ | 262,212 | $ | -93,099 | $ | 572,710 | ||||||||||
Year ended December 31, 2012 | ||||||||||||||||||||||||||
Net earned premium | $ | 354,050 | $ | 394,687 | $ | 831,827 | $ | 207,955 | $ | 412,853 | $ | - | $ | 41,253 | $ | 2,242,625 | ||||||||||
Other revenue | 18,865 | 731 | 4,918 | 843 | 5,005 | 252,754 | 86 | 283,202 | ||||||||||||||||||
Segment revenue | 372,915 | 395,418 | 836,745 | 208,798 | 417,858 | 252,754 | 41,339 | 2,525,827 | ||||||||||||||||||
Loss and LAE | 209,286 | 229,873 | 601,076 | 38,535 | 189,410 | - | 69,894 | 1,338,074 | ||||||||||||||||||
Other expense | 116,398 | 66,721 | 122,232 | 113,619 | 146,807 | - | 67,549 | 633,326 | ||||||||||||||||||
Segment expense | 325,684 | 296,594 | 723,308 | 152,154 | 336,217 | - | 137,443 | 1,971,400 | ||||||||||||||||||
Segment pretax earnings (loss) | $ | 47,231 | $ | 98,824 | $ | 113,437 | $ | 56,644 | $ | 81,641 | $ | 252,754 | $ | -96,104 | $ | 554,427 | ||||||||||
In the above tables, the reconciling amounts for internal claims department costs included in Corporate & Other, which increase loss and LAE and decrease other expense, were $36.4 million in 2014, $32.4 million in 2013 and $32.6 million in 2012. | ||||||||||||||||||||||||||
The following table presents total assets by segment at December 31, 2014 and 2013. | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
U.S. Property & Casualty | $ | 985,871 | $ | 914,697 | ||||||||||||||||||||||
Professional Liability | 1,104,892 | 1,110,592 | ||||||||||||||||||||||||
Accident & Health | 242,278 | 235,950 | ||||||||||||||||||||||||
U.S. Surety & Credit | 189,054 | 168,389 | ||||||||||||||||||||||||
International | 688,828 | 859,659 | ||||||||||||||||||||||||
Investing | 7,228,608 | 6,800,313 | ||||||||||||||||||||||||
Corporate & Other | 274,815 | 254,920 | ||||||||||||||||||||||||
Total | $ | 10,714,346 | $ | 10,344,520 | ||||||||||||||||||||||
The tables below present the split of our revenue, pretax earnings and total assets by geographic location. For these disclosures, we determine geographic location by the country of domicile of our subsidiaries that write the business and not by the location of insureds or reinsureds from whom the business was generated. | ||||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||||
Domestic | $ | 1,984,992 | $ | 1,868,557 | $ | 1,880,954 | ||||||||||||||||||||
Foreign | 667,557 | 668,347 | 644,873 | |||||||||||||||||||||||
Total revenue | $ | 2,652,549 | $ | 2,536,904 | $ | 2,525,827 | ||||||||||||||||||||
Domestic | $ | 437,774 | $ | 443,898 | $ | 364,083 | ||||||||||||||||||||
Foreign | 224,062 | 128,812 | 190,344 | |||||||||||||||||||||||
Total pretax earnings | $ | 661,836 | $ | 572,710 | $ | 554,427 | ||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Domestic | $ | 7,750,039 | $ | 7,397,509 | ||||||||||||||||||||||
Foreign | 2,964,307 | 2,947,011 | ||||||||||||||||||||||||
Total assets | $ | 10,714,346 | $ | 10,344,520 |
Segments_Tables
Segments (Tables) | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||
Segments [Abstract] | ||||||||||||||||||||||||||
Information by business segment | U.S. Property | Professional | Accident | U.S. Surety | Corporate | |||||||||||||||||||||
& Casualty | Liability | & Health | & Credit | International | Investing | & Other | Consolidated | |||||||||||||||||||
Year ended December 31, 2014 | ||||||||||||||||||||||||||
Net earned premium | $ | 363,998 | $ | 351,690 | $ | 981,219 | $ | 199,764 | $ | 426,480 | $ | - | $ | 476 | $ | 2,323,627 | ||||||||||
Other revenue | 20,822 | 1,082 | 9,663 | 2,505 | 3,711 | 287,990 | 3,149 | 328,922 | ||||||||||||||||||
Segment revenue | 384,820 | 352,772 | 990,882 | 202,269 | 430,191 | 287,990 | 3,625 | 2,652,549 | ||||||||||||||||||
Loss and LAE | 154,200 | 206,690 | 696,288 | 42,273 | 196,134 | - | 31,250 | 1,326,835 | ||||||||||||||||||
Other expense | 116,553 | 67,692 | 155,469 | 112,232 | 175,158 | - | 36,774 | 663,878 | ||||||||||||||||||
Segment expense | 270,753 | 274,382 | 851,757 | 154,505 | 371,292 | - | 68,024 | 1,990,713 | ||||||||||||||||||
Segment pretax earnings (loss) | $ | 114,067 | $ | 78,390 | $ | 139,125 | $ | 47,764 | $ | 58,899 | $ | 287,990 | $ | -64,399 | $ | 661,836 | ||||||||||
Year ended December 31, 2013 | ||||||||||||||||||||||||||
Net earned premium | $ | 367,135 | $ | 368,167 | $ | 883,515 | $ | 194,286 | $ | 413,206 | $ | - | $ | 12,931 | $ | 2,239,240 | ||||||||||
Other revenue | 24,266 | -7 | 4,932 | 1,468 | 4,334 | 262,212 | 459 | 297,664 | ||||||||||||||||||
Segment revenue | 391,401 | 368,160 | 888,447 | 195,754 | 417,540 | 262,212 | 13,390 | 2,536,904 | ||||||||||||||||||
Loss and LAE | 175,190 | 195,429 | 630,210 | 24,143 | 249,199 | - | 48,283 | 1,322,454 | ||||||||||||||||||
Other expense | 117,910 | 66,391 | 130,814 | 109,550 | 158,869 | - | 58,206 | 641,740 | ||||||||||||||||||
Segment expense | 293,100 | 261,820 | 761,024 | 133,693 | 408,068 | - | 106,489 | 1,964,194 | ||||||||||||||||||
Segment pretax earnings (loss) | $ | 98,301 | $ | 106,340 | $ | 127,423 | $ | 62,061 | $ | 9,472 | $ | 262,212 | $ | -93,099 | $ | 572,710 | ||||||||||
Year ended December 31, 2012 | ||||||||||||||||||||||||||
Net earned premium | $ | 354,050 | $ | 394,687 | $ | 831,827 | $ | 207,955 | $ | 412,853 | $ | - | $ | 41,253 | $ | 2,242,625 | ||||||||||
Other revenue | 18,865 | 731 | 4,918 | 843 | 5,005 | 252,754 | 86 | 283,202 | ||||||||||||||||||
Segment revenue | 372,915 | 395,418 | 836,745 | 208,798 | 417,858 | 252,754 | 41,339 | 2,525,827 | ||||||||||||||||||
Loss and LAE | 209,286 | 229,873 | 601,076 | 38,535 | 189,410 | - | 69,894 | 1,338,074 | ||||||||||||||||||
Other expense | 116,398 | 66,721 | 122,232 | 113,619 | 146,807 | - | 67,549 | 633,326 | ||||||||||||||||||
Segment expense | 325,684 | 296,594 | 723,308 | 152,154 | 336,217 | - | 137,443 | 1,971,400 | ||||||||||||||||||
Segment pretax earnings (loss) | $ | 47,231 | $ | 98,824 | $ | 113,437 | $ | 56,644 | $ | 81,641 | $ | 252,754 | $ | -96,104 | $ | 554,427 | ||||||||||
Total assets by segment | 2014 | 2013 | ||||||||||||||||||||||||
U.S. Property & Casualty | $ | 985,871 | $ | 914,697 | ||||||||||||||||||||||
Professional Liability | 1,104,892 | 1,110,592 | ||||||||||||||||||||||||
Accident & Health | 242,278 | 235,950 | ||||||||||||||||||||||||
U.S. Surety & Credit | 189,054 | 168,389 | ||||||||||||||||||||||||
International | 688,828 | 859,659 | ||||||||||||||||||||||||
Investing | 7,228,608 | 6,800,313 | ||||||||||||||||||||||||
Corporate & Other | 274,815 | 254,920 | ||||||||||||||||||||||||
Total | $ | 10,714,346 | $ | 10,344,520 | ||||||||||||||||||||||
Revenue, pretax earnings and total assets by geographical location | 2014 | 2013 | 2012 | |||||||||||||||||||||||
Domestic | $ | 1,984,992 | $ | 1,868,557 | $ | 1,880,954 | ||||||||||||||||||||
Foreign | 667,557 | 668,347 | 644,873 | |||||||||||||||||||||||
Total revenue | $ | 2,652,549 | $ | 2,536,904 | $ | 2,525,827 | ||||||||||||||||||||
Domestic | $ | 437,774 | $ | 443,898 | $ | 364,083 | ||||||||||||||||||||
Foreign | 224,062 | 128,812 | 190,344 | |||||||||||||||||||||||
Total pretax earnings | $ | 661,836 | $ | 572,710 | $ | 554,427 | ||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Domestic | $ | 7,750,039 | $ | 7,397,509 | ||||||||||||||||||||||
Foreign | 2,964,307 | 2,947,011 | ||||||||||||||||||||||||
Total assets | $ | 10,714,346 | $ | 10,344,520 |
Segments_Details
Segments (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Information by business segment | |||||||||||
Net earned premium | $601,832 | $586,935 | $572,248 | $562,612 | $560,030 | $556,668 | $561,356 | $561,186 | $2,323,627 | $2,239,240 | $2,242,625 |
Other revenue | 68,175 | 103,103 | 71,326 | 86,318 | 76,600 | 79,809 | 68,075 | 73,180 | 328,922 | 297,664 | 283,202 |
Total revenue | 670,007 | 690,038 | 643,574 | 648,930 | 636,630 | 636,477 | 629,431 | 634,366 | 2,652,549 | 2,536,904 | 2,525,827 |
Loss and LAE | 339,434 | 320,758 | 335,897 | 330,746 | 305,477 | 328,530 | 347,353 | 341,094 | 1,326,835 | 1,322,454 | 1,338,074 |
Other expense | 166,010 | 164,623 | 170,033 | 163,212 | 174,770 | 167,847 | 157,247 | 141,876 | 663,878 | 641,740 | 633,326 |
Total expense | 505,444 | 485,381 | 505,930 | 493,958 | 480,247 | 496,377 | 504,600 | 482,970 | 1,990,713 | 1,964,194 | 1,971,400 |
Earnings before income taxes | 164,563 | 204,657 | 137,644 | 154,972 | 156,383 | 140,100 | 124,831 | 151,396 | 661,836 | 572,710 | 554,427 |
U.S. Property & Casualty [Member] | |||||||||||
Information by business segment | |||||||||||
Net earned premium | 363,998 | 367,135 | 354,050 | ||||||||
Other revenue | 20,822 | 24,266 | 18,865 | ||||||||
Total revenue | 384,820 | 391,401 | 372,915 | ||||||||
Loss and LAE | 154,200 | 175,190 | 209,286 | ||||||||
Other expense | 116,553 | 117,910 | 116,398 | ||||||||
Total expense | 270,753 | 293,100 | 325,684 | ||||||||
Earnings before income taxes | 114,067 | 98,301 | 47,231 | ||||||||
Professional Liability [Member] | |||||||||||
Information by business segment | |||||||||||
Net earned premium | 351,690 | 368,167 | 394,687 | ||||||||
Other revenue | 1,082 | -7 | 731 | ||||||||
Total revenue | 352,772 | 368,160 | 395,418 | ||||||||
Loss and LAE | 206,690 | 195,429 | 229,873 | ||||||||
Other expense | 67,692 | 66,391 | 66,721 | ||||||||
Total expense | 274,382 | 261,820 | 296,594 | ||||||||
Earnings before income taxes | 78,390 | 106,340 | 98,824 | ||||||||
Accident & Health [Member] | |||||||||||
Information by business segment | |||||||||||
Net earned premium | 981,219 | 883,515 | 831,827 | ||||||||
Other revenue | 9,663 | 4,932 | 4,918 | ||||||||
Total revenue | 990,882 | 888,447 | 836,745 | ||||||||
Loss and LAE | 696,288 | 630,210 | 601,076 | ||||||||
Other expense | 155,469 | 130,814 | 122,232 | ||||||||
Total expense | 851,757 | 761,024 | 723,308 | ||||||||
Earnings before income taxes | 139,125 | 127,423 | 113,437 | ||||||||
U.S. Surety & Credit [Member] | |||||||||||
Information by business segment | |||||||||||
Net earned premium | 199,764 | 194,286 | 207,955 | ||||||||
Other revenue | 2,505 | 1,468 | 843 | ||||||||
Total revenue | 202,269 | 195,754 | 208,798 | ||||||||
Loss and LAE | 42,273 | 24,143 | 38,535 | ||||||||
Other expense | 112,232 | 109,550 | 113,619 | ||||||||
Total expense | 154,505 | 133,693 | 152,154 | ||||||||
Earnings before income taxes | 47,764 | 62,061 | 56,644 | ||||||||
International [Member] | |||||||||||
Information by business segment | |||||||||||
Net earned premium | 426,480 | 413,206 | 412,853 | ||||||||
Other revenue | 3,711 | 4,334 | 5,005 | ||||||||
Total revenue | 430,191 | 417,540 | 417,858 | ||||||||
Loss and LAE | 196,134 | 249,199 | 189,410 | ||||||||
Other expense | 175,158 | 158,869 | 146,807 | ||||||||
Total expense | 371,292 | 408,068 | 336,217 | ||||||||
Earnings before income taxes | 58,899 | 9,472 | 81,641 | ||||||||
Investing [Member] | |||||||||||
Information by business segment | |||||||||||
Net earned premium | 0 | 0 | 0 | ||||||||
Other revenue | 287,990 | 262,212 | 252,754 | ||||||||
Total revenue | 287,990 | 262,212 | 252,754 | ||||||||
Loss and LAE | 0 | 0 | 0 | ||||||||
Other expense | 0 | 0 | 0 | ||||||||
Total expense | 0 | 0 | 0 | ||||||||
Earnings before income taxes | 287,990 | 262,212 | 252,754 | ||||||||
Corporate & Other [Member] | |||||||||||
Information by business segment | |||||||||||
Net earned premium | 476 | 12,931 | 41,253 | ||||||||
Other revenue | 3,149 | 459 | 86 | ||||||||
Total revenue | 3,625 | 13,390 | 41,339 | ||||||||
Loss and LAE | 31,250 | 48,283 | 69,894 | ||||||||
Other expense | 36,774 | 58,206 | 67,549 | ||||||||
Total expense | 68,024 | 106,489 | 137,443 | ||||||||
Earnings before income taxes | ($64,399) | ($93,099) | ($96,104) |
Segments_Textuals
Segments (Textuals) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Segment Reporting Information [Line Items] | |||
Total net (favorable) adverse loss development | ($56,357,000) | ($73,742,000) | ($70,011,000) |
Internal Claims Department Costs | 36,400,000 | 32,400,000 | 32,600,000 |
Professional Liability [Member] | |||
Segment Reporting Information [Line Items] | |||
Total net (favorable) adverse loss development | 973,000 | -26,346,000 | -25,897,000 |
International [Member] | |||
Segment Reporting Information [Line Items] | |||
Total net (favorable) adverse loss development | 25,050,000 | 43,805,000 | -10,084,000 |
International [Member] | Surety & Credit [Member] | |||
Segment Reporting Information [Line Items] | |||
Total net (favorable) adverse loss development | $44,100,000 | $70,300,000 |
Segments_Details_1
Segments (Details 1) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Segment Reporting Information [Line Items] | ||
Assets | $10,714,346 | $10,344,520 |
United States Property And Casualty [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | 985,871 | 914,697 |
Professional Liability [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | 1,104,892 | 1,110,592 |
Accident And Health [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | 242,278 | 235,950 |
United States Surety And Credit [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | 189,054 | 168,389 |
International [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | 688,828 | 859,659 |
Investing [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | 7,228,608 | 6,800,313 |
Corporate And Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | $274,815 | $254,920 |
Segments_Details_2
Segments (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | $670,007 | $690,038 | $643,574 | $648,930 | $636,630 | $636,477 | $629,431 | $634,366 | $2,652,549 | $2,536,904 | $2,525,827 |
Domestic [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 1,984,992 | 1,868,557 | 1,880,954 | ||||||||
Foreign [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | $667,557 | $668,347 | $644,873 |
Segments_Details_3
Segments (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment Reporting Information [Line Items] | |||||||||||
Total pretax earnings | $164,563 | $204,657 | $137,644 | $154,972 | $156,383 | $140,100 | $124,831 | $151,396 | $661,836 | $572,710 | $554,427 |
Domestic [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total pretax earnings | 437,774 | 443,898 | 364,083 | ||||||||
Foreign [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total pretax earnings | $224,062 | $128,812 | $190,344 |
Segments_Details_4
Segments (Details 4) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Segment Reporting Information [Line Items] | ||
Total assets | $10,714,346 | $10,344,520 |
Domestic [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | 7,750,039 | 7,397,509 |
Foreign [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | $2,964,307 | $2,947,011 |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||
Dec. 31, 2014 | |||
Commitments and Contingencies [Abstract] | |||
Commitments and Contingencies | (13) 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 2014, we recognized accident year gross losses of $28.8 million from catastrophic events related to various small catastrophes. After reinsurance and reinstatement premium, our pretax loss was $26.4 million. In 2013, we recognized accident year gross losses of $56.6 million, primarily due to European floods, German hail storms and various small catastrophes. After reinsurance and reinstatement premium, our pretax loss was $52.0 million. In 2012, we recognized accident year gross losses of $84.8 million, primarily from Superstorm Sandy in the United States. After reinsurance and reinstatement premium, our pretax loss was $52.8 million. | |||
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 such indemnification expires in 2025. We accrue a loss when a valid claim is made by a purchaser and we believe we have potential exposure. | |||
Terrorist Exposure | |||
Under the Terrorism Risk Insurance Program Reauthorization Act of 2015 (Reauthorization Act), we are required to offer terrorism coverage to our commercial policyholders in certain lines of business, for which we may charge an additional premium. The policyholders may or may not accept such coverage. The Reauthorization Act requires a $100.0 million terrorism-related loss event to trigger coverage in 2015. For such an event in 2015, the Federal government will reimburse 85% of our losses in excess of our deductible, up to the maximum annual amount in the Reauthorization Act. Our deductible is approximately $151.2 million for 2015. Currently, the Reauthorization Act expires on December 31, 2020. | |||
Leases | |||
We lease administrative office facilities and transportation equipment under operating leases that expire at various dates through 2024. The agreements generally require us to pay rent, utilities, real estate or property taxes, sales taxes, insurance and repairs. We recognize rent expense on a straight-line basis over the term of the lease, including free-rent periods. Rent expense under operating leases totaled $16.7 million in 2014, $15.7 million in 2013 and $16.0 million in 2012. | |||
At December 31, 2014, future minimum rental payments required under long-term, non-cancelable operating leases, excluding certain expenses payable by us, were as follows: | |||
2015 | $ | 11,870 | |
2016 | 10,098 | ||
2017 | 7,393 | ||
2018 | 5,411 | ||
2019 | 1,802 | ||
Thereafter | 2,628 | ||
Total future minimum rental payments | $ | 39,202 |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||
Dec. 31, 2014 | |||
Commitments and Contingencies [Abstract] | |||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | 2015 | $ | 11,870 |
2016 | 10,098 | ||
2017 | 7,393 | ||
2018 | 5,411 | ||
2019 | 1,802 | ||
Thereafter | 2,628 | ||
Total future minimum rental payments | $ | 39,202 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Commitments and Contingencies [Abstract] | |
2015 | $11,870 |
2016 | 10,098 |
2017 | 7,393 |
2018 | 5,411 |
2019 | 1,802 |
Thereafter | 2,628 |
Total future minimum rental payments | $39,202 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details Textuals) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Commitments And Contingencies [Line Items] | |||
Recognized Gross losses from catastrophic events | $28.80 | $56.60 | $84.80 |
Pretax cat loss after reinsurance | 26.4 | 52 | 52.8 |
Operating Leases, Rent Expense | 16.7 | 15.7 | 16 |
Terrorism Insurance Deductible | 151.2 | ||
Federal Reimbursement Percentage For Terrorism Losses | 85.00% | ||
Longest Indemnification Expiration Date | 2025 | ||
Terrorism Insurance Minimum Loss Coverage | $100 |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Parties [Abstract] | |
Related Party Transactions Disclosure [Text Block] | (14) Related Party Transactions |
We have amounts due to former owners of businesses we have acquired, some of whom are officers of certain of our subsidiaries. We had earnout liabilities of $27.1 million and $22.8 million at December 31, 2014 and 2013, respectively, reported in accounts payable and accrued liabilities in our consolidated balance sheets. We paid $3.0 million in 2014 and $7.2 million in 2013 related to these earnout agreements. |
Related_Parties_Detail_Textual
Related Parties (Detail Textuals) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Related Parties [Abstract] | ||
Earnout payments | $3 | $7.20 |
Earnout Liability | $27.10 | $22.80 |
Statutory_Information
Statutory Information | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Statutory Information Disclosure [Abstract] | |||||||||
Statutory Information | 2014 | 2013 | 2012 | ||||||
Statutory capital and surplus | $ | 2,615,818 | $ | 2,517,867 | $ | 2,374,420 | |||
Statutory net income | 483,403 | 453,649 | 445,999 |
Statutory_Information_Table
Statutory Information (Table) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Statutory Information [Abstract] | |||||||||
Statutory Information | 2014 | 2013 | 2012 | ||||||
Statutory capital and surplus | $ | 2,615,818 | $ | 2,517,867 | $ | 2,374,420 | |||
Statutory net income | 483,403 | 453,649 | 445,999 |
Statutory_Information_Details
Statutory Information (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statutory Information Table [Abstract] | |||
Statutory policyholders' surplus | $2,615,818 | $2,517,867 | $2,374,420 |
Statutory net income | $483,403 | $453,649 | $445,999 |
Supplemental_Information
Supplemental Information | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Supplemental Information [Abstract] | |||||||||
Supplemental Information | (16) Supplemental Information | ||||||||
Supplemental cash flow information was as follows: | |||||||||
2014 | 2013 | 2012 | |||||||
Income taxes paid | $ | 132,571 | $ | 181,521 | $ | 107,918 | |||
Interest paid | 27,700 | 25,795 | 24,107 | ||||||
Dividends declared but not paid at year-end | 28,451 | 22,575 | 16,680 |
Supplemental_Information_Table
Supplemental Information (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Supplemental Information [Abstract] | |||||||||
Supplemental Information | 2014 | 2013 | 2012 | ||||||
Income taxes paid | $ | 132,571 | $ | 181,521 | $ | 107,918 | |||
Interest paid | 27,700 | 25,795 | 24,107 | ||||||
Dividends declared but not paid at year-end | 28,451 | 22,575 | 16,680 |
Supplemental_Information_Detai
Supplemental Information (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Supplemental Information | |||
Income taxes paid | $132,571 | $181,521 | $107,918 |
Interest paid | 27,700 | 25,795 | 24,107 |
Dividends declared but not paid at end of period | $28,451 | $22,575 | $16,680 |
Quarterly_Information
Quarterly Information | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||
Quarterly Financial Data [Abstract] | ||||||||||||||||||||||||||
Quarterly Financial Data (Unaudited) | (17) Quarterly Financial Data (Unaudited) | |||||||||||||||||||||||||
Fourth Quarter | Third Quarter | Second Quarter | First Quarter | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Net earned premium | $ | 601,832 | $ | 560,030 | $ | 586,935 | $ | 556,668 | $ | 572,248 | $ | 561,356 | $ | 562,612 | $ | 561,186 | ||||||||||
Other revenue | 68,175 | 76,600 | 103,103 | 79,809 | 71,326 | 68,075 | 86,318 | 73,180 | ||||||||||||||||||
Total revenue | 670,007 | 636,630 | 690,038 | 636,477 | 643,574 | 629,431 | 648,930 | 634,366 | ||||||||||||||||||
Loss and LAE expense | 339,434 | 305,477 | 320,758 | 328,530 | 335,897 | 347,353 | 330,746 | 341,094 | ||||||||||||||||||
Other expense | 166,010 | 174,770 | 164,623 | 167,847 | 170,033 | 157,247 | 163,212 | 141,876 | ||||||||||||||||||
Total expense | 505,444 | 480,247 | 485,381 | 496,377 | 505,930 | 504,600 | 493,958 | 482,970 | ||||||||||||||||||
Earnings before income taxes | 164,563 | 156,383 | 204,657 | 140,100 | 137,644 | 124,831 | 154,972 | 151,396 | ||||||||||||||||||
Income tax expense | 51,534 | 41,373 | 64,390 | 41,925 | 40,508 | 36,669 | 47,061 | 45,546 | ||||||||||||||||||
Net earnings | $ | 113,029 | $ | 115,010 | $ | 140,267 | $ | 98,175 | $ | 97,136 | $ | 88,162 | $ | 107,911 | $ | 105,850 | ||||||||||
Earnings per share | ||||||||||||||||||||||||||
Basic | $ | 1.17 | $ | 1.15 | $ | 1.41 | $ | 0.98 | $ | 0.97 | $ | 0.88 | $ | 1.08 | $ | 1.05 | ||||||||||
Diluted | 1.16 | 1.14 | 1.41 | 0.98 | 0.97 | 0.87 | 1.07 | 1.05 | ||||||||||||||||||
Weighted-average shares | ||||||||||||||||||||||||||
outstanding | ||||||||||||||||||||||||||
Basic | 95,373 | 98,770 | 97,909 | 98,723 | 98,442 | 98,870 | 98,662 | 99,056 | ||||||||||||||||||
Diluted | 95,636 | 99,046 | 98,134 | 98,993 | 98,660 | 99,121 | 98,913 | 99,287 | ||||||||||||||||||
The sum of earnings per share for the quarters may not equal the annual amounts due to rounding. | ||||||||||||||||||||||||||
As discussed in “Revision of Financial Statement Presentation” in Note 1, we revised our previously issued consolidated statements of earnings to correctly classify internal claims department costs as loss and loss adjustment expense. These costs previously had been included in other operating expense. The unaudited quarterly financial data presented above also has been revised. The amounts reclassified in 2014 and 2013 were as follows: 1) first quarter – $8.9 million and $8.4 million, respectively, 2) second quarter – $8.8 million and $7.9 million, respectively, 3) third quarter – $8.8 million and $8.1 million, respectively and 4) fourth quarter 2013 – $8.0 million. There was no impact on net earnings in any quarterly period. |
Quarterly_Information_Tables
Quarterly Information (Tables) | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||
Quarterly Financial Data [Abstract] | ||||||||||||||||||||||||||
Quarterly Financial Data (Unaudited) | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | ||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Net earned premium | $ | 601,832 | $ | 560,030 | $ | 586,935 | $ | 556,668 | $ | 572,248 | $ | 561,356 | $ | 562,612 | $ | 561,186 | ||||||||||
Other revenue | 68,175 | 76,600 | 103,103 | 79,809 | 71,326 | 68,075 | 86,318 | 73,180 | ||||||||||||||||||
Total revenue | 670,007 | 636,630 | 690,038 | 636,477 | 643,574 | 629,431 | 648,930 | 634,366 | ||||||||||||||||||
Loss and LAE expense | 339,434 | 305,477 | 320,758 | 328,530 | 335,897 | 347,353 | 330,746 | 341,094 | ||||||||||||||||||
Other expense | 166,010 | 174,770 | 164,623 | 167,847 | 170,033 | 157,247 | 163,212 | 141,876 | ||||||||||||||||||
Total expense | 505,444 | 480,247 | 485,381 | 496,377 | 505,930 | 504,600 | 493,958 | 482,970 | ||||||||||||||||||
Earnings before income taxes | 164,563 | 156,383 | 204,657 | 140,100 | 137,644 | 124,831 | 154,972 | 151,396 | ||||||||||||||||||
Income tax expense | 51,534 | 41,373 | 64,390 | 41,925 | 40,508 | 36,669 | 47,061 | 45,546 | ||||||||||||||||||
Net earnings | $ | 113,029 | $ | 115,010 | $ | 140,267 | $ | 98,175 | $ | 97,136 | $ | 88,162 | $ | 107,911 | $ | 105,850 | ||||||||||
Earnings per share | ||||||||||||||||||||||||||
Basic | $ | 1.17 | $ | 1.15 | $ | 1.41 | $ | 0.98 | $ | 0.97 | $ | 0.88 | $ | 1.08 | $ | 1.05 | ||||||||||
Diluted | 1.16 | 1.14 | 1.41 | 0.98 | 0.97 | 0.87 | 1.07 | 1.05 | ||||||||||||||||||
Weighted-average shares | ||||||||||||||||||||||||||
outstanding | ||||||||||||||||||||||||||
Basic | 95,373 | 98,770 | 97,909 | 98,723 | 98,442 | 98,870 | 98,662 | 99,056 | ||||||||||||||||||
Diluted | 95,636 | 99,046 | 98,134 | 98,993 | 98,660 | 99,121 | 98,913 | 99,287 |
Quarterly_Information_Details
Quarterly Information (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Quarterly Financial Data (Unaudited) [Abstract] | |||||||||||
Net earned premium | $601,832 | $586,935 | $572,248 | $562,612 | $560,030 | $556,668 | $561,356 | $561,186 | $2,323,627 | $2,239,240 | $2,242,625 |
Other revenue | 68,175 | 103,103 | 71,326 | 86,318 | 76,600 | 79,809 | 68,075 | 73,180 | 328,922 | 297,664 | 283,202 |
Total revenue | 670,007 | 690,038 | 643,574 | 648,930 | 636,630 | 636,477 | 629,431 | 634,366 | 2,652,549 | 2,536,904 | 2,525,827 |
Loss and loss adjustment expense, net | 339,434 | 320,758 | 335,897 | 330,746 | 305,477 | 328,530 | 347,353 | 341,094 | 1,326,835 | 1,322,454 | 1,338,074 |
Other expense | 166,010 | 164,623 | 170,033 | 163,212 | 174,770 | 167,847 | 157,247 | 141,876 | 663,878 | 641,740 | 633,326 |
Total expense | 505,444 | 485,381 | 505,930 | 493,958 | 480,247 | 496,377 | 504,600 | 482,970 | 1,990,713 | 1,964,194 | 1,971,400 |
Earnings before income taxes | 164,563 | 204,657 | 137,644 | 154,972 | 156,383 | 140,100 | 124,831 | 151,396 | 661,836 | 572,710 | 554,427 |
Income tax expense | 51,534 | 64,390 | 40,508 | 47,061 | 41,373 | 41,925 | 36,669 | 45,546 | 203,493 | 165,513 | 163,187 |
Net earnings | $113,029 | $140,267 | $97,136 | $107,911 | $115,010 | $98,175 | $88,162 | $105,850 | $458,343 | $407,197 | $391,240 |
Earnings per share | |||||||||||
Basic | $1.17 | $1.41 | $0.97 | $1.08 | $1.15 | $0.98 | $0.88 | $1.05 | $4.62 | $4.05 | $3.84 |
Diluted | $1.16 | $1.41 | $0.97 | $1.07 | $1.14 | $0.98 | $0.87 | $1.05 | $4.61 | $4.04 | $3.83 |
Weighted-average shares outstanding | |||||||||||
Basic | 95,373 | 97,909 | 98,442 | 98,662 | 98,770 | 98,723 | 98,870 | 99,056 | 97,591 | 98,853 | 100,176 |
Diluted | 95,636 | 98,134 | 98,660 | 98,913 | 99,046 | 98,993 | 99,121 | 99,287 | 97,851 | 99,113 | 100,456 |
Quarterly_Information_Details_
Quarterly Information (Details Textuals) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Quarterly Financial Data [Abstract] | |||
Internal Claims Department Costs | $36.40 | $32.40 | $32.60 |
Schedule_1_Summary_of_Investme
Schedule 1 Summary of Investments | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Summary Of Investments | ||||||||||||||
Summary of Investments, Other than Investments in Related Parties | SCHEDULE 1 | |||||||||||||
HCC INSURANCE HOLDINGS, INC. AND SUBSIDIARIES | ||||||||||||||
SUMMARY OF INVESTMENTS | ||||||||||||||
OTHER THAN INVESTMENTS IN RELATED PARTIES | ||||||||||||||
(in thousands) | ||||||||||||||
31-Dec-14 | ||||||||||||||
Column A | Column B | Column C | Column D | |||||||||||
Amount | ||||||||||||||
shown in | ||||||||||||||
Type of Investment | Cost | Value | balance sheet | |||||||||||
Fixed maturity securities | ||||||||||||||
Bonds — United States government and government agencies and | ||||||||||||||
authorities | $ | 70,279 | $ | 70,969 | $ | 70,969 | ||||||||
Bonds — states, municipalities and political subdivisions | 896,130 | 954,708 | 954,708 | |||||||||||
Bonds — special revenue | 2,246,707 | 2,389,012 | 2,389,012 | |||||||||||
Bonds — corporate | 1,251,625 | 1,276,835 | 1,276,835 | |||||||||||
Residential mortgage-backed securities | 805,458 | 821,694 | 821,694 | |||||||||||
Commercial mortgage-backed securities | 593,956 | 611,631 | 611,631 | |||||||||||
Asset-backed securities | 369,103 | 366,827 | 366,827 | |||||||||||
Bonds — foreign | 119,479 | 118,692 | 118,692 | |||||||||||
Total fixed maturity securities | 6,352,737 | $ | 6,610,368 | 6,610,368 | ||||||||||
Equity securities | ||||||||||||||
Common stocks — banks, trust and insurance companies | 46,538 | 46,183 | 46,183 | |||||||||||
Common stocks — industrial and miscellaneous | 244,532 | 250,169 | 250,169 | |||||||||||
Total equity securities | 291,070 | $ | 296,352 | 296,352 | ||||||||||
Short-term investments | 258,186 | 258,186 | ||||||||||||
Total investments | $ | 6,901,993 | $ | 7,164,906 |
Schedule_1_Summary_of_Investme1
Schedule 1 Summary of Investments (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | $6,901,993 |
Amount shown in Balance Sheet | 7,164,906 |
Available For Sale Fixed Maturities [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 6,352,737 |
Fair Value | 6,610,368 |
Amount shown in Balance Sheet | 6,610,368 |
US Government Agencies Debt Securities [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 70,279 |
Fair Value | 70,969 |
Amount shown in Balance Sheet | 70,969 |
US States and Political Subdivisions Debt Securities [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 896,130 |
Fair Value | 954,708 |
Amount shown in Balance Sheet | 954,708 |
Special Purpose Revenue Bonds Of States Municipalities And Political Subdivisions [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 2,246,707 |
Fair Value | 2,389,012 |
Amount shown in Balance Sheet | 2,389,012 |
Corporate Debt Securities [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 1,251,625 |
Fair Value | 1,276,835 |
Amount shown in Balance Sheet | 1,276,835 |
Residential Mortgage Backed Securities [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 805,458 |
Fair Value | 821,694 |
Amount shown in Balance Sheet | 821,694 |
Commercial Mortgage Backed Securities [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 593,956 |
Fair Value | 611,631 |
Amount shown in Balance Sheet | 611,631 |
Asset-backed Securities [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 369,103 |
Fair Value | 366,827 |
Amount shown in Balance Sheet | 366,827 |
Foreign Government Debt Securities [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 119,479 |
Fair Value | 118,692 |
Amount shown in Balance Sheet | 118,692 |
Equity Securities [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 291,070 |
Fair Value | 296,352 |
Amount shown in Balance Sheet | 296,352 |
Banks, Trust and Insurance, Equities [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 46,538 |
Fair Value | 46,183 |
Amount shown in Balance Sheet | 46,183 |
Industrial, Miscellaneous, and All Others [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 244,532 |
Fair Value | 250,169 |
Amount shown in Balance Sheet | 250,169 |
Short Term Investments Schedule One [Member] | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 258,186 |
Amount shown in Balance Sheet | $258,186 |
Schedule_2_HCCIH_Financial_Sta
Schedule 2 HCCIH Financial Statements | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Text Block] | SCHEDULE 2 | ||||||||||||||
HCC INSURANCE HOLDINGS, INC. | |||||||||||||||
CONDENSED FINANCIAL INFORMATION OF REGISTRANT | |||||||||||||||
BALANCE SHEETS | |||||||||||||||
(in thousands) | |||||||||||||||
December 31, | |||||||||||||||
2014 | 2013 | ||||||||||||||
ASSETS | |||||||||||||||
Cash | $ | 11,647 | $ | 2,206 | |||||||||||
Fixed maturity securities – available for sale, at fair value (amortized cost: | |||||||||||||||
2014 – $726,301 and 2013 – $497,233) | 750,033 | 518,822 | |||||||||||||
Equity securities – available for sale, at fair value (cost: 2013 – $134,156) | - | 157,122 | |||||||||||||
Short-term investments, at cost (approximates fair value) | 76,759 | 6,498 | |||||||||||||
Investment in subsidiaries | 3,820,270 | 3,538,542 | |||||||||||||
Intercompany loans to subsidiaries | 176,002 | 174,280 | |||||||||||||
Receivable from subsidiaries | 94,989 | 80,946 | |||||||||||||
Other assets | 12,400 | 9,833 | |||||||||||||
Total assets | $ | 4,942,100 | $ | 4,488,249 | |||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||
Payable to subsidiaries | $ | 36,415 | $ | 36,654 | |||||||||||
Notes payable | 824,251 | 654,098 | |||||||||||||
Deferred Federal income tax | 16,526 | 18,690 | |||||||||||||
Accounts payable and accrued liabilities | 161,557 | 104,377 | |||||||||||||
Total liabilities | 1,038,749 | 813,819 | |||||||||||||
Total shareholders’ equity | 3,903,351 | 3,674,430 | |||||||||||||
Total liabilities and shareholders’ equity | $ | 4,942,100 | $ | 4,488,249 | |||||||||||
See Notes to Condensed Financial Information. | |||||||||||||||
SCHEDULE 2 | |||||||||||||||
HCC INSURANCE HOLDINGS, INC. | |||||||||||||||
CONDENSED FINANCIAL INFORMATION OF REGISTRANT | |||||||||||||||
STATEMENTS OF EARNINGS | |||||||||||||||
(in thousands) | |||||||||||||||
Years ended December 31, | |||||||||||||||
2014 | 2013 | 2012 | |||||||||||||
REVENUE | |||||||||||||||
Equity in earnings of subsidiaries | $ | 448,762 | $ | 415,408 | $ | 400,294 | |||||||||
Interest income from subsidiaries | 11,562 | 9,101 | 8,858 | ||||||||||||
Net investment income | 20,311 | 13,691 | 10,290 | ||||||||||||
Net realized investment gain (loss) | 16,746 | 7,691 | -309 | ||||||||||||
Other operating income | - | 46 | 99 | ||||||||||||
Total revenue | 497,381 | 445,937 | 419,232 | ||||||||||||
EXPENSE | |||||||||||||||
Interest expense | 27,948 | 25,804 | 25,132 | ||||||||||||
Other operating expense | 8,642 | 6,433 | 7,138 | ||||||||||||
Total expense | 36,590 | 32,237 | 32,270 | ||||||||||||
Earnings before income tax expense | 460,791 | 413,700 | 386,962 | ||||||||||||
Income tax expense (benefit) | 2,448 | 6,503 | -4,278 | ||||||||||||
Net earnings | $ | 458,343 | $ | 407,197 | $ | 391,240 | |||||||||
See Notes to Condensed Financial Information. | |||||||||||||||
SCHEDULE 2 | |||||||||||||||
HCC INSURANCE HOLDINGS, INC. | |||||||||||||||
CONDENSED FINANCIAL INFORMATION OF REGISTRANT | |||||||||||||||
STATEMENTS OF CASH FLOWS | |||||||||||||||
(in thousands) | |||||||||||||||
Years ended December 31, | |||||||||||||||
2014 | 2013 | 2012 | |||||||||||||
Operating activities | |||||||||||||||
Net earnings | $ | 458,343 | $ | 407,197 | $ | 391,240 | |||||||||
Adjustments to reconcile net earnings to net cash provided by operating | |||||||||||||||
activities: | |||||||||||||||
Undistributed net earnings of subsidiaries | -404,468 | -404,441 | -392,486 | ||||||||||||
Change in accrued interest receivable on intercompany loans | -9,190 | -9,097 | -3,154 | ||||||||||||
Change in accounts payable and accrued liabilities | 41,729 | -13,866 | 23,629 | ||||||||||||
(Gain) loss on investments | -16,746 | -7,691 | 309 | ||||||||||||
Other, net | 14,907 | 28,555 | 3,947 | ||||||||||||
Cash provided by operating activities | 84,575 | 657 | 23,485 | ||||||||||||
Investing activities | |||||||||||||||
Sales of available for sale fixed maturity securities | 123,447 | 78,350 | 87,099 | ||||||||||||
Sales of equity securities | 158,630 | 39,974 | 9,780 | ||||||||||||
Sales of other investments | - | 23,720 | 21,736 | ||||||||||||
Maturity or call of available for sale fixed maturity securities | 153,261 | 31,054 | 105,982 | ||||||||||||
Cost of available for sale fixed maturity securities acquired | -187,680 | -20,030 | -6,666 | ||||||||||||
Cost of equity securities acquired | -1,533 | -53,723 | -124,710 | ||||||||||||
Change in short-term investments | -70,261 | 15,911 | -20,987 | ||||||||||||
Cash contributions to subsidiaries | -100,610 | -49,892 | -30,250 | ||||||||||||
Change in receivable from/payable to subsidiaries | -10,753 | -18,748 | 776 | ||||||||||||
Intercompany loans to subsidiaries | -2,579 | -7,228 | -66,765 | ||||||||||||
Payments on intercompany loans to subsidiaries | - | 19,157 | 51,427 | ||||||||||||
Payments for purchase of business and other | -6,043 | - | - | ||||||||||||
Cash provided by investing activities | 55,879 | 58,545 | 27,422 | ||||||||||||
Financing activities | |||||||||||||||
Issuance of notes payable | - | - | 25,000 | ||||||||||||
Payments on notes payable | - | -25,000 | - | ||||||||||||
Advances on line of credit | 275,000 | 180,000 | 185,000 | ||||||||||||
Payments on line of credit | -105,000 | -110,000 | -80,000 | ||||||||||||
Sale of common stock | 20,237 | 12,908 | 59,838 | ||||||||||||
Purchase of common stock | -224,706 | -47,869 | -173,028 | ||||||||||||
Dividends paid | -96,544 | -71,967 | -64,345 | ||||||||||||
Cash used by financing activities | -131,013 | -61,928 | -47,535 | ||||||||||||
Net increase (decrease) in cash | 9,441 | -2,726 | 3,372 | ||||||||||||
Cash at beginning of year | 2,206 | 4,932 | 1,560 | ||||||||||||
Cash at end of year | $ | 11,647 | $ | 2,206 | $ | 4,932 | |||||||||
See Notes to Condensed Financial Information. |
Schedule_2_HCCIH_Financial_Sta1
Schedule 2 HCCIH Financial Statements (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Condensed Financial Statements, Captions [Line Items] | ||
Available-for-sale Securities, Amortized Cost | $6,352,737 | $5,921,487 |
Available-for-sale Equity Securities, Amortized Cost Basis | 291,070 | 464,388 |
Parent Company [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Available-for-sale Securities, Amortized Cost | 726,301 | 497,233 |
Available-for-sale Equity Securities, Amortized Cost Basis | $134,156 |
Schedule_2_HCCIH_Financial_Sta2
Schedule 2 HCCIH Financial Statements (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
ASSETS | ||||
Cash | $102,093 | $58,301 | $71,390 | $104,550 |
Fixed income securities - available for sale, at fair value (amortized cost: 2014 - $726,301 and 2013 - $497,233) | 6,610,368 | 6,022,473 | ||
Equity securities - available for sale, at fair value (cost: 2013 - $134,156) | 296,352 | 517,466 | ||
Short-term investments, at cost (approximates fair value) | 258,186 | 178,753 | ||
Other assets | 115,239 | 125,559 | ||
Total assets | 10,714,346 | 10,344,520 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
Notes payable | 824,251 | 654,098 | ||
Accounts payable and accrued liabilities | 615,552 | 500,007 | ||
Total liabilities | 6,810,995 | 6,670,090 | ||
Total shareholders' equity | 3,903,351 | 3,674,430 | 3,542,612 | 3,273,982 |
Total liabilities and stockholders' equity | 10,714,346 | 10,344,520 | ||
Parent Company [Member] | ||||
ASSETS | ||||
Cash | 11,647 | 2,206 | 4,932 | 1,560 |
Fixed income securities - available for sale, at fair value (amortized cost: 2014 - $726,301 and 2013 - $497,233) | 750,033 | 518,822 | ||
Equity securities - available for sale, at fair value (cost: 2013 - $134,156) | 0 | 157,122 | ||
Short-term investments, at cost (approximates fair value) | 76,759 | 6,498 | ||
Investment in subsidiaries | 3,820,270 | 3,538,542 | ||
Intercompany loans to subsidiaries | 176,002 | 174,280 | ||
Receivable from subsidiaries | 94,989 | 80,946 | ||
Other assets | 12,400 | 9,833 | ||
Total assets | 4,942,100 | 4,488,249 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
Payable to subsidiaries | 36,415 | 36,654 | ||
Notes payable | 824,251 | 654,098 | ||
Deferred Federal income tax | 16,526 | 18,690 | ||
Accounts payable and accrued liabilities | 161,557 | 104,377 | ||
Total liabilities | 1,038,749 | 813,819 | ||
Total shareholders' equity | 3,903,351 | 3,674,430 | ||
Total liabilities and stockholders' equity | $4,942,100 | $4,488,249 |
Schedule_2_HCCIH_Financial_Sta3
Schedule 2 HCCIH Financial Statements (Details 1) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
REVENUE | |||||||||||
Net investment income | $221,620 | $220,182 | $222,634 | ||||||||
Net realized investment gain (loss) | 66,370 | 42,030 | 31,148 | ||||||||
Other operating income | 40,932 | 35,452 | 30,448 | ||||||||
Total revenue | 670,007 | 690,038 | 643,574 | 648,930 | 636,630 | 636,477 | 629,431 | 634,366 | 2,652,549 | 2,536,904 | 2,525,827 |
EXPENSE | |||||||||||
Interest expense | 28,125 | 26,210 | 25,628 | ||||||||
Other operating expense | 341,083 | 336,091 | 326,497 | ||||||||
Total expense | 505,444 | 485,381 | 505,930 | 493,958 | 480,247 | 496,377 | 504,600 | 482,970 | 1,990,713 | 1,964,194 | 1,971,400 |
Earnings before income taxes | 164,563 | 204,657 | 137,644 | 154,972 | 156,383 | 140,100 | 124,831 | 151,396 | 661,836 | 572,710 | 554,427 |
Income tax expense (benefit) | 51,534 | 64,390 | 40,508 | 47,061 | 41,373 | 41,925 | 36,669 | 45,546 | 203,493 | 165,513 | 163,187 |
Net earnings | 113,029 | 140,267 | 97,136 | 107,911 | 115,010 | 98,175 | 88,162 | 105,850 | 458,343 | 407,197 | 391,240 |
Parent Company [Member] | |||||||||||
REVENUE | |||||||||||
Equity in earnings of subsidiaries | 448,762 | 415,408 | 400,294 | ||||||||
Interest income from subsidiaries | 11,562 | 9,101 | 8,858 | ||||||||
Net investment income | 20,311 | 13,691 | 10,290 | ||||||||
Net realized investment gain (loss) | 16,746 | 7,691 | -309 | ||||||||
Other operating income | 0 | 46 | 99 | ||||||||
Total revenue | 497,381 | 445,937 | 419,232 | ||||||||
EXPENSE | |||||||||||
Interest expense | 27,948 | 25,804 | 25,132 | ||||||||
Other operating expense | 8,642 | 6,433 | 7,138 | ||||||||
Total expense | 36,590 | 32,237 | 32,270 | ||||||||
Earnings before income taxes | 460,791 | 413,700 | 386,962 | ||||||||
Income tax expense (benefit) | 2,448 | 6,503 | -4,278 | ||||||||
Net earnings | $458,343 | $407,197 | $391,240 |
Schedule_2_HCCIH_Financial_Sta4
Schedule 2 HCCIH Financial Statements (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating activities | |||||||||||
Net earnings | $113,029 | $140,267 | $97,136 | $107,911 | $115,010 | $98,175 | $88,162 | $105,850 | $458,343 | $407,197 | $391,240 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||||
Change in accounts payable and accrued liabilities | -22,343 | -120,859 | 100,091 | ||||||||
(Gain) loss on investments | -66,370 | -42,030 | -30,120 | ||||||||
Other, net | 81,057 | 23,700 | 86,403 | ||||||||
Cash provided by operating activities | 478,637 | 262,707 | 661,147 | ||||||||
Investing activities | |||||||||||
Sales of available for sale fixed maturity securities | 480,876 | 492,891 | 639,834 | ||||||||
Sales of equity securities | 434,389 | 146,624 | 14,117 | ||||||||
Sales of other investments | 0 | 23,719 | 21,736 | ||||||||
Maturity or call of available for sale fixed maturity securities | 532,706 | 627,041 | 697,404 | ||||||||
Cost of available for sale fixed maturity securities acquired | -1,475,171 | -1,346,498 | -1,489,235 | ||||||||
Cost of equity securities acquired | 200,265 | 345,129 | 262,528 | ||||||||
Change in short-term investments | -86,467 | 181,972 | -207,403 | ||||||||
Payments for purchase of business and other | -8,024 | -8,328 | -46,627 | ||||||||
Other, net | -5,943 | -9,377 | -16,757 | ||||||||
Cash provided by investing activities | -311,310 | -235,054 | -618,903 | ||||||||
Financing activities | |||||||||||
Advances on line of credit | 275,000 | 180,000 | 185,000 | ||||||||
Payments on line of credit | -105,000 | -110,000 | -80,000 | ||||||||
Sale of common stock | 20,237 | 12,908 | 59,838 | ||||||||
Purchase of common stock | -224,706 | -47,869 | -173,028 | ||||||||
Dividends paid | -96,544 | -71,967 | -64,345 | ||||||||
Other, net | 7,478 | -3,814 | -2,869 | ||||||||
Cash used by financing activities | -123,535 | -40,742 | -75,404 | ||||||||
Net increase (decrease) in cash | 43,792 | -13,089 | -33,160 | ||||||||
Cash at beginning of year | 58,301 | 71,390 | 58,301 | 71,390 | 104,550 | ||||||
Cash at end of year | 102,093 | 58,301 | 102,093 | 58,301 | 71,390 | ||||||
Parent Company [Member] | |||||||||||
Operating activities | |||||||||||
Net earnings | 458,343 | 407,197 | 391,240 | ||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||||
Undistributed net earnings of subsidiaries | -404,468 | -404,441 | -392,486 | ||||||||
Change in accrued interest receivable on intercompany loans | -9,190 | -9,097 | -3,154 | ||||||||
Change in accounts payable and accrued liabilities | 41,729 | -13,866 | 23,629 | ||||||||
(Gain) loss on investments | -16,746 | -7,691 | 309 | ||||||||
Other, net | 14,907 | 28,555 | 3,947 | ||||||||
Cash provided by operating activities | 84,575 | 657 | 23,485 | ||||||||
Investing activities | |||||||||||
Sales of available for sale fixed maturity securities | 123,447 | 78,350 | 87,099 | ||||||||
Sales of equity securities | 158,630 | 39,974 | 9,780 | ||||||||
Sales of other investments | 0 | 23,720 | 21,736 | ||||||||
Maturity or call of available for sale fixed maturity securities | 153,261 | 31,054 | 105,982 | ||||||||
Cost of available for sale fixed maturity securities acquired | -187,680 | -20,030 | -6,666 | ||||||||
Cost of equity securities acquired | 1,533 | 53,723 | 124,710 | ||||||||
Change in short-term investments | -70,261 | 15,911 | -20,987 | ||||||||
Cash contributions to subsidiaries | -100,610 | -49,892 | -30,250 | ||||||||
Change in receivable from/payable to subsidiaries | -10,753 | -18,748 | 776 | ||||||||
Intercompany loans to subsidiaries | -2,579 | -7,228 | -66,765 | ||||||||
Payments on intercompany loans to subsidiaries | 0 | 19,157 | 51,427 | ||||||||
Payments for purchase of business and other | -6,043 | ||||||||||
Cash provided by investing activities | 55,879 | 58,545 | 27,422 | ||||||||
Financing activities | |||||||||||
Issuance of notes payable | 0 | 0 | 25,000 | ||||||||
Advances on line of credit | 275,000 | 180,000 | 185,000 | ||||||||
Payments on line of credit | -105,000 | -110,000 | -80,000 | ||||||||
Sale of common stock | 20,237 | 12,908 | 59,838 | ||||||||
Purchase of common stock | -224,706 | -47,869 | -173,028 | ||||||||
Dividends paid | -96,544 | -71,967 | -64,345 | ||||||||
Payments on notes payable | 0 | -25,000 | 0 | ||||||||
Cash used by financing activities | -131,013 | -61,928 | -47,535 | ||||||||
Net increase (decrease) in cash | 9,441 | -2,726 | 3,372 | ||||||||
Cash at beginning of year | 2,206 | 4,932 | 2,206 | 4,932 | 1,560 | ||||||
Cash at end of year | $11,647 | $2,206 | $11,647 | $2,206 | $4,932 |
Schedule_2_HCCIH_Financial_Sta5
Schedule 2 HCCIH Financial Statements (Details Textuals) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||
Interest rate on intercompany loan | 6.25% | ||
Parent intercompany loan from subsidiary | $25 | ||
Dividends received from subsidiary | 377.2 | 328.2 | 270.3 |
Dividend received including fixed income securities and related accrued interest | $332.90 | $317.20 | $262.80 |
Interest rate on loan from subsidiary | 0.02% |
Schedule_3_Supplementary_Insur
Schedule 3 Supplementary Insurance Information | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||
Supplementary Insurance Information [Abstract] | |||||||||||||||||||||||||||||
Supplementary Insurance Information, for Insurance Companies Disclosure [Text Block] | SCHEDULE 3 | ||||||||||||||||||||||||||||
HCC INSURANCE HOLDINGS, INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||
SUPPLEMENTARY INSURANCE INFORMATION | |||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||
Column A | Column B | Column C | Column D | Column F | Column G | Column H | Column I | Column J | Column K | ||||||||||||||||||||
-1 | -2 | -2 | -1 | -1 | -1 | -3 | -1 | ||||||||||||||||||||||
December 31, | Years ended December 31, | ||||||||||||||||||||||||||||
Future | |||||||||||||||||||||||||||||
policy | Benefits, | ||||||||||||||||||||||||||||
benefits, | claims, | Amortization | |||||||||||||||||||||||||||
Deferred | losses, | losses | of deferred | ||||||||||||||||||||||||||
policy | claims | Net | and | policy | Other | ||||||||||||||||||||||||
acquisition | and loss | Unearned | Premium | investment | settlement | acquisition | operating | Premium | |||||||||||||||||||||
Segments | costs | expenses | premiums | revenue | income | expenses | costs | expenses | written | ||||||||||||||||||||
2014 | |||||||||||||||||||||||||||||
U.S. Property & Casualty | $ | 29,815 | $ | 703,653 | $ | 511,218 | $ | 363,998 | $ | - | $ | 154,200 | $ | 28,405 | $ | 88,141 | $ | 380,299 | |||||||||||
Professional Liability | 12,335 | 1,756,600 | 295,576 | 351,690 | - | 206,690 | 20,018 | 47,667 | 346,720 | ||||||||||||||||||||
Accident & Health | 8,692 | 350,187 | 28,937 | 981,219 | - | 696,288 | 85,410 | 70,058 | 992,034 | ||||||||||||||||||||
U.S. Surety & Credit | 37,106 | 127,470 | 129,831 | 199,764 | - | 42,273 | 69,990 | 42,242 | 204,767 | ||||||||||||||||||||
International | 38,901 | 643,062 | 233,368 | 426,480 | - | 196,134 | 92,347 | 82,651 | 448,949 | ||||||||||||||||||||
Investing | - | - | - | - | 221,620 | - | - | - | - | ||||||||||||||||||||
Corporate & Other (4) | -730 | 195,612 | - | 476 | - | 31,250 | -1,500 | 10,324 | 476 | ||||||||||||||||||||
Total | $ | 126,119 | $ | 3,776,584 | $ | 1,198,930 | $ | 2,323,627 | $ | 221,620 | $ | 1,326,835 | $ | 294,670 | $ | 341,083 | $ | 2,373,245 | |||||||||||
2013 | |||||||||||||||||||||||||||||
U.S. Property & Casualty | $ | 26,374 | $ | 665,871 | $ | 473,230 | $ | 367,135 | $ | - | $ | 175,190 | $ | 35,260 | $ | 82,563 | $ | 385,355 | |||||||||||
Professional Liability | 12,946 | 1,789,113 | 303,599 | 368,167 | - | 195,429 | 19,010 | 47,381 | 359,509 | ||||||||||||||||||||
Accident & Health | 3,618 | 314,593 | 18,105 | 883,515 | - | 630,210 | 69,745 | 61,069 | 881,368 | ||||||||||||||||||||
U.S. Surety & Credit | 35,549 | 112,916 | 125,948 | 194,286 | - | 24,143 | 68,105 | 41,444 | 199,121 | ||||||||||||||||||||
International | 34,483 | 853,711 | 213,967 | 413,206 | - | 249,199 | 88,048 | 70,737 | 417,039 | ||||||||||||||||||||
Investing | - | - | - | - | 220,182 | - | - | - | - | ||||||||||||||||||||
Corporate & Other (4)(5) | -800 | 222,419 | - | 12,931 | - | 48,283 | -729 | 32,897 | 12,931 | ||||||||||||||||||||
Total | $ | 112,170 | $ | 3,958,623 | $ | 1,134,849 | $ | 2,239,240 | $ | 220,182 | $ | 1,322,454 | $ | 279,439 | $ | 336,091 | $ | 2,255,323 | |||||||||||
2012 | |||||||||||||||||||||||||||||
U.S. Property & Casualty | $ | 30,400 | $ | 668,824 | $ | 421,195 | $ | 354,050 | $ | - | $ | 209,286 | $ | 36,289 | $ | 79,694 | $ | 383,938 | |||||||||||
Professional Liability | 15,382 | 1,754,824 | 305,315 | 394,687 | - | 229,873 | 25,365 | 41,356 | 378,138 | ||||||||||||||||||||
Accident & Health | 3,296 | 301,241 | 20,252 | 831,827 | - | 601,076 | 63,559 | 58,671 | 835,008 | ||||||||||||||||||||
U.S. Surety & Credit | 34,235 | 109,790 | 117,150 | 207,955 | - | 38,535 | 72,327 | 41,292 | 195,904 | ||||||||||||||||||||
International | 34,789 | 734,779 | 206,044 | 412,853 | - | 189,410 | 83,368 | 63,360 | 419,155 | ||||||||||||||||||||
Investing | - | - | - | - | 222,634 | - | - | - | - | ||||||||||||||||||||
Corporate & Other (4)(5) | -751 | 257,033 | - | 41,253 | - | 69,894 | 293 | 42,124 | 41,253 | ||||||||||||||||||||
Total | $ | 117,351 | $ | 3,826,491 | $ | 1,069,956 | $ | 2,242,625 | $ | 222,634 | $ | 1,338,074 | $ | 281,201 | $ | 326,497 | $ | 2,253,396 | |||||||||||
-1 | Columns B, F, H, I and K are shown including the effects of reinsurance. | ||||||||||||||||||||||||||||
-2 | Columns C and D are shown excluding the effect of reinsurance. | ||||||||||||||||||||||||||||
-3 | Other operating expenses are after all corporate expense allocations have been charged or credited to the individual segments. | ||||||||||||||||||||||||||||
-4 | Includes internal claims department costs and activity related to Exited Lines. | ||||||||||||||||||||||||||||
-5 | We revised the amounts in Columns H and J to correctly classify internal claims department costs as benefits, claims, losses and settlement expenses. These costs had been included | ||||||||||||||||||||||||||||
in other operating expenses. | |||||||||||||||||||||||||||||
Note: Column E is omitted because we have no other policy claims and benefits payable. |
Schedule_3_Supplementary_Insur1
Schedule 3 Supplementary Insurance Information (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred policy acquisition costs | $126,119 | $112,170 | $117,351 |
Future policy benefits, losses, claims and loss expenses | 3,776,584 | 3,958,623 | 3,826,491 |
Unearned premiums | 1,198,930 | 1,134,849 | 1,069,956 |
Premium revenue | 2,323,627 | 2,239,240 | 2,242,625 |
Net investment income | 221,620 | 220,182 | 222,634 |
Benefits, claims, losses and settlement expenses | 1,326,835 | 1,322,454 | 1,338,074 |
Amortization of deferred policy acquisition costs | 294,670 | 279,439 | 281,201 |
Other operating expenses | 341,083 | 336,091 | 326,497 |
Premium written | 2,373,245 | 2,255,323 | 2,253,396 |
United States Property And Casualty [Member] | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred policy acquisition costs | 29,815 | 26,374 | 30,400 |
Future policy benefits, losses, claims and loss expenses | 703,653 | 665,871 | 668,824 |
Unearned premiums | 511,218 | 473,230 | 421,195 |
Premium revenue | 363,998 | 367,135 | 354,050 |
Benefits, claims, losses and settlement expenses | 154,200 | 175,190 | 209,286 |
Amortization of deferred policy acquisition costs | 28,405 | 35,260 | 36,289 |
Other operating expenses | 88,141 | 82,563 | 79,694 |
Premium written | 380,299 | 385,355 | 383,938 |
Professional Liability [Member] | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred policy acquisition costs | 12,335 | 12,946 | 15,382 |
Future policy benefits, losses, claims and loss expenses | 1,756,600 | 1,789,113 | 1,754,824 |
Unearned premiums | 295,576 | 303,599 | 305,315 |
Premium revenue | 351,690 | 368,167 | 394,687 |
Benefits, claims, losses and settlement expenses | 206,690 | 195,429 | 229,873 |
Amortization of deferred policy acquisition costs | 20,018 | 19,010 | 25,365 |
Other operating expenses | 47,667 | 47,381 | 41,356 |
Premium written | 346,720 | 359,509 | 378,138 |
Accident And Health [Member] | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred policy acquisition costs | 8,692 | 3,618 | 3,296 |
Future policy benefits, losses, claims and loss expenses | 350,187 | 314,593 | 301,241 |
Unearned premiums | 28,937 | 18,105 | 20,252 |
Premium revenue | 981,219 | 883,515 | 831,827 |
Benefits, claims, losses and settlement expenses | 696,288 | 630,210 | 601,076 |
Amortization of deferred policy acquisition costs | 85,410 | 69,745 | 63,559 |
Other operating expenses | 70,058 | 61,069 | 58,671 |
Premium written | 992,034 | 881,368 | 835,008 |
United States Surety And Credit [Member] | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred policy acquisition costs | 37,106 | 35,549 | 34,235 |
Future policy benefits, losses, claims and loss expenses | 127,470 | 112,916 | 109,790 |
Unearned premiums | 129,831 | 125,948 | 117,150 |
Premium revenue | 199,764 | 194,286 | 207,955 |
Benefits, claims, losses and settlement expenses | 42,273 | 24,143 | 38,535 |
Amortization of deferred policy acquisition costs | 69,990 | 68,105 | 72,327 |
Other operating expenses | 42,242 | 41,444 | 41,292 |
Premium written | 204,767 | 199,121 | 195,904 |
International [Member] | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred policy acquisition costs | 38,901 | 34,483 | 34,789 |
Future policy benefits, losses, claims and loss expenses | 643,062 | 853,711 | 734,779 |
Unearned premiums | 233,368 | 213,967 | 206,044 |
Premium revenue | 426,480 | 413,206 | 412,853 |
Benefits, claims, losses and settlement expenses | 196,134 | 249,199 | 189,410 |
Amortization of deferred policy acquisition costs | 92,347 | 88,048 | 83,368 |
Other operating expenses | 82,651 | 70,737 | 63,360 |
Premium written | 448,949 | 417,039 | 419,155 |
Investing [Member] | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Net investment income | 221,620 | 220,182 | 222,634 |
Corporate And Other [Member] | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred policy acquisition costs | -730 | -800 | -751 |
Future policy benefits, losses, claims and loss expenses | 195,612 | 222,419 | 257,033 |
Premium revenue | 476 | 12,931 | 41,253 |
Benefits, claims, losses and settlement expenses | 31,250 | 48,283 | 69,894 |
Amortization of deferred policy acquisition costs | -1,500 | -729 | 293 |
Other operating expenses | 10,324 | 32,897 | 42,124 |
Premium written | $476 | $12,931 | $41,253 |
Schedule_4_Reinsurance
Schedule 4 Reinsurance | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Abstract] | |||||||||||||||||
Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Text Block] | SCHEDULE 4 | ||||||||||||||||
HCC INSURANCE HOLDINGS, INC. AND SUBSIDIARIES | |||||||||||||||||
REINSURANCE | |||||||||||||||||
(in thousands) | |||||||||||||||||
Column A | Column B | Column C | Column D | Column E | Column F | ||||||||||||
Assumed from | Percent of | ||||||||||||||||
Ceded to other | other | amount | |||||||||||||||
Direct amount | companies | companies | Net amount | assumed to net | |||||||||||||
Year ended December 31, 2014 | |||||||||||||||||
Life insurance in force | $ | 512,185 | $ | 195,492 | $ | - | $ | 316,693 | — | % | |||||||
Earned premium | |||||||||||||||||
Property and liability insurance | $ | 1,554,031 | $ | 538,021 | $ | 278,663 | $ | 1,294,673 | 22 | % | |||||||
Accident and health insurance | 1,079,402 | 78,681 | 28,233 | 1,028,954 | 3 | % | |||||||||||
Total | $ | 2,633,433 | $ | 616,702 | $ | 306,896 | $ | 2,323,627 | 13 | % | |||||||
Year ended December 31, 2013 | |||||||||||||||||
Life insurance in force | $ | 904,189 | $ | 210,475 | $ | - | $ | 693,714 | — | % | |||||||
Earned premium | |||||||||||||||||
Property and liability insurance | $ | 1,499,179 | $ | 498,794 | $ | 293,256 | $ | 1,293,641 | 23 | % | |||||||
Accident and health insurance | 983,348 | 77,837 | 40,088 | 945,599 | 4 | % | |||||||||||
Total | $ | 2,482,527 | $ | 576,631 | $ | 333,344 | $ | 2,239,240 | 15 | % | |||||||
Year ended December 31, 2012 | |||||||||||||||||
Life insurance in force | $ | 977,492 | $ | 238,389 | $ | - | $ | 739,103 | — | % | |||||||
Earned premium | |||||||||||||||||
Property and liability insurance | $ | 1,483,722 | $ | 446,890 | $ | 282,500 | $ | 1,319,332 | 21 | % | |||||||
Accident and health insurance | 913,034 | 58,852 | 69,111 | 923,293 | 7 | % | |||||||||||
Total | $ | 2,396,756 | $ | 505,742 | $ | 351,611 | $ | 2,242,625 | 16 | % | |||||||
Schedule_4_Reinsurance_Details
Schedule 4 Reinsurance (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
ReinsurancePremiumsForInsuranceCompaniesByProductSegmentNetAmountAbstract | |||||||||||
Direct Amount | $2,633,433 | $2,482,527 | $2,396,756 | ||||||||
Ceded to other companies | 616,702 | 576,631 | 505,742 | ||||||||
Assumed from other companies | 306,896 | 333,344 | 351,611 | ||||||||
Net earned premium | $601,832 | $586,935 | $572,248 | $562,612 | $560,030 | $556,668 | $561,356 | $561,186 | $2,323,627 | $2,239,240 | $2,242,625 |
Schedule_5_Valuation_and_Quali
Schedule 5 Valuation and Qualifying Accounts | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Valuation and Qualifying Accounts [Abstract] | ||||||||||||
Schedule of Valuation and Qualifying Accounts Disclosure [Text Block] | SCHEDULE 5 | |||||||||||
HCC INSURANCE HOLDINGS, INC. AND SUBSIDIARIES | ||||||||||||
VALUATION AND QUALIFYING ACCOUNTS | ||||||||||||
(in thousands) | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Allowance for doubtful accounts | ||||||||||||
Balance at beginning of year | $ | 5,777 | $ | 3,622 | $ | 3,668 | ||||||
Provision expense | 1,448 | 2,807 | 1,584 | |||||||||
Amounts written off and other | -2,140 | -652 | -1,630 | |||||||||
Balance at end of year | $ | 5,085 | $ | 5,777 | $ | 3,622 | ||||||
Reserve for uncollectible reinsurance | ||||||||||||
Balance at beginning of year | $ | 1,500 | $ | 1,500 | $ | 1,875 | ||||||
Provision recovery | - | - | -375 | |||||||||
Balance at end of year | $ | 1,500 | $ | 1,500 | $ | 1,500 |
Schedule_5_Valuation_and_Quali1
Schedule 5 Valuation and Qualifying Accounts (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of year | $5,777 | $3,622 | $3,668 |
Provision expense | 1,448 | 2,807 | 1,584 |
Amounts written off and other | -2,140 | -652 | -1,630 |
Balance at end of year | 5,085 | 5,777 | 3,622 |
Reserve for potentially uncollectible amounts | |||
Balance at beginning of year | 1,500 | 1,500 | 1,875 |
Provision recovery | 0 | 0 | -375 |
Balance at end of year | $1,500 | $1,500 | $1,500 |
Uncategorized_Items
Uncategorized Items | |||||
[us-gaap_StockholdersEquity] | 97,186,000 | 954,332,000 | 120,942,000 | 2,239,863,000 | -133,923,000 |