Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 01, 2018 | |
Entity Information [Line Items] | ||
Entity Registrant Name | Protective Insurance Corp | |
Entity Central Index Key | 9,346 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 14,878,921 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Class A (voting) [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 2,617,659 | |
Class B (nonvoting) [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 12,261,262 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Investments: | ||
Fixed maturities | $ 590,961 | $ 521,853 |
Equity securities | 109,099 | 201,763 |
Limited partnerships | 64,369 | 70,806 |
Short-term and other | 1,000 | 1,000 |
Total Investments | 765,429 | 795,422 |
Cash and cash equivalents | 108,993 | 64,680 |
Restricted cash and cash equivalents | 6,138 | 4,033 |
Accounts receivable | 113,386 | 87,551 |
Reinsurance recoverable | 350,647 | 318,331 |
Other assets | 94,906 | 80,061 |
Current federal income taxes recoverable | 7,531 | 6,938 |
Total Assets | 1,447,030 | 1,357,016 |
Liabilities and shareholders' equity | ||
Reserves for losses and loss expenses | 777,837 | 680,274 |
Reserves for unearned premiums | 68,108 | 53,085 |
Short-term borrowings | 20,000 | 20,000 |
Accounts payable and other liabilities | 191,953 | 170,488 |
Deferred federal income taxes | 1,087 | 14,358 |
Total Liabilities | 1,058,985 | 938,205 |
Shareholders' equity: | ||
Additional paid-in capital | 55,115 | 55,078 |
Unrealized net gains (losses) on investments | (5,638) | 46,700 |
Foreign exchange adjustment | (518) | (309) |
Retained earnings | 338,448 | 316,700 |
Shareholders' equity | 388,045 | 418,811 |
Total liabilities and shareholders' equity | 1,447,030 | 1,357,016 |
Class A Voting [Member] | ||
Shareholders' equity: | ||
Common stock | 112 | 112 |
Class B Non-voting [Member] | ||
Shareholders' equity: | ||
Common stock | $ 526 | $ 530 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Class A Voting [Member] | ||
Shareholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 3,000,000 | 3,000,000 |
Common stock, shares outstanding (in shares) | 2,622,809 | 2,623,109 |
Class B Non-voting [Member] | ||
Shareholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares outstanding (in shares) | 12,323,845 | 12,423,518 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues | ||||
Net premiums earned | $ 96,807 | $ 89,100 | $ 314,209 | $ 231,070 |
Net investment income | 5,578 | 4,027 | 16,010 | 12,434 |
Commissions and other income | 3,413 | 1,407 | 7,488 | 3,789 |
Net realized gains on investments, excluding impairment losses | 449 | 3,484 | 1,740 | 7,088 |
Other-than-temporary impairment losses on investments | 0 | (38) | 0 | (69) |
Net unrealized gains (losses) on equity securities and limited partnership investments | 1,924 | 2,498 | (7,335) | 8,515 |
Net realized and unrealized gains (losses) on investments | 2,373 | 5,944 | (5,595) | 15,534 |
Total revenues | 108,171 | 100,478 | 332,112 | 262,827 |
Expenses | ||||
Losses and loss expenses incurred | 94,540 | 60,673 | 244,327 | 181,026 |
Other operating expenses | 29,200 | 29,187 | 99,984 | 82,185 |
Total expenses | 123,740 | 89,860 | 344,311 | 263,211 |
Income (loss) before federal income tax expense (benefit) | (15,569) | 10,618 | (12,199) | (384) |
Federal income tax expense (benefit) | (3,244) | 3,184 | (2,691) | (2,231) |
Net income (loss) | $ (12,325) | $ 7,434 | $ (9,508) | $ 1,847 |
Per share data: | ||||
Basic and diluted earnings (loss) (in dollars per share) | $ (0.82) | $ 0.49 | $ (0.63) | $ 0.12 |
Dividends paid to shareholders (in dollars per share) | $ 0.28 | $ 0.27 | $ 0.84 | $ 0.81 |
Reconciliation of shares outstanding: | ||||
Average shares outstanding - basic (in shares) | 14,969 | 15,089 | 14,998 | 15,084 |
Dilutive effect of share equivalents (in shares) | 0 | 29 | 0 | 40 |
Average shares outstanding - diluted (in shares) | 14,969 | 15,118 | 14,998 | 15,124 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) [Abstract] | ||||
Net income (loss) | $ (12,325) | $ 7,434 | $ (9,508) | $ 1,847 |
Unrealized net gains (losses) on fixed income securities: | ||||
Unrealized net gains (losses) arising during the period | (766) | 4,862 | (4,815) | 15,999 |
Less: reclassification adjustment for net gains included in net income (loss) | 385 | 2,240 | 1,483 | 4,562 |
Change in unrealized gains (losses) on investments | (1,151) | 2,622 | (6,298) | 11,437 |
Foreign currency translation adjustments | 202 | 57 | (209) | 510 |
Other comprehensive income (loss) | (949) | 2,679 | (6,507) | 11,947 |
Comprehensive income (loss) | $ (13,274) | $ 10,113 | $ (16,015) | $ 13,794 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating activities | ||
Net income (loss) | $ (9,508) | $ 1,847 |
Adjustments to reconcile net income to net cash provided by operating activities | 69,878 | 53,388 |
Net cash provided by operating activities | 60,370 | 55,235 |
Investing activities: | ||
Purchases of fixed maturities and equity securities | (330,217) | (305,130) |
Purchases of limited partnership interests | (450) | (897) |
Distributions from limited partnerships | 369 | 16,313 |
Proceeds from maturities | 46,620 | 84,170 |
Proceeds from sales of fixed maturities | 181,867 | 141,574 |
Proceeds from sales of equity securities | 117,692 | 32,233 |
Net sales of short-term investments | 0 | 500 |
Purchase of insurance company-owned life insurance | (10,000) | 0 |
Purchases of property and equipment | (4,360) | (5,405) |
Proceeds from disposals of property and equipment | 8 | 580 |
Net cash provided by (used in) investing activities | 1,529 | (36,062) |
Financing activities: | ||
Dividends paid to shareholders | (12,652) | (12,250) |
Repurchase of common shares | (2,620) | (1,880) |
Net cash used in financing activities | (15,272) | (14,130) |
Effect of foreign exchange rates on cash and cash equivalents | (209) | 510 |
Increase in cash, cash equivalents and restricted cash | 46,418 | 5,553 |
Cash, cash equivalents and restricted cash at beginning of period | 68,713 | 62,976 |
Cash, cash equivalents and restricted cash at end of period | $ 115,131 | $ 68,529 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | (1) Summary of Significant Accounting Policies: Description of Business: Effective August 1, 2018, the Company changed its name to Protective Insurance Corporation to better align its operational and market identities to reflect its position within the transportation and workers' compensation insurance industry. Basis of Presentation: Investments : Short-term and other investments are carried at cost, which approximates their fair values. Realized gains and losses on disposals of investments are recorded on the trade date and are determined by the specific identification of the cost of investments sold and are included in income. Fixed maturity securities are considered to be available-for-sale. The related unrealized net gains or losses (net of applicable tax effects) on fixed maturity securities are reflected directly in shareholders' equity. Included within available-for-sale fixed maturity securities are convertible debt securities. A portion of the changes in the fair values of convertible debt securities is reflected as a component of net realized gains on investments, excluding impairment losses within the condensed consolidated statements of operations. Equity securities are recorded at fair value, with unrealized net gains or losses reflected as a component of net unrealized gains (losses) on equity securities and limited partnership investments within the condensed consolidated statements of operations. In accordance with the Financial Accounting Standards Board's ("FASB") other-than-temporary impairment guidance, if a fixed maturity security is in an unrealized loss position and the Company has the intent to sell the fixed maturity security, or it is more likely than not that the Company will have to sell the fixed maturity security before recovery of its amortized cost basis, the decline in value is deemed to be other-than-temporary and is recorded to other-than-temporary impairment losses on investments in the condensed consolidated statements of operations. For impaired fixed maturity securities that the Company does not intend to sell or in cases where it is more likely than not that the Company will not have to sell such securities, but the Company expects that it will not fully recover the amortized cost basis, the credit component of the other-than-temporary impairment is recognized in other-than-temporary impairment losses on investments in the condensed consolidated statements of operations and the non-credit component of the other-than-temporary impairment is recognized directly in shareholders' equity. The credit component of an other-than-temporary impairment is determined by comparing the net present value of projected future cash flows with the amortized cost basis of the fixed maturity security. The net present value is calculated by discounting the Company's best estimate of projected future cash flows at the appropriate effective interest rate. Revenue Recognition: Recently Adopted Accounting Pronouncements: In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, or ASU 2016-01. The amendments in ASU 2016-01 changed the accounting for non-consolidated equity investments that are not accounted for under the equity method of accounting by requiring changes in fair value to be recognized in income. Previously, the Company's equity securities were classified as available-for-sale and changes in fair value were recognized in accumulated other comprehensive income (loss) as a component of shareholders' equity. ASU 2016-01 became effective for interim and annual reporting periods beginning after December 15, 2017. The Company adopted the new guidance as of January 1, 2018 using the modified retrospective approach and recorded a cumulative-effect adjustment to reclassify unrealized gains on equity securities of $71,012 ($46,157, net of tax) from other comprehensive income (loss) to retained earnings within the current period condensed consolidated balance sheet. Going forward, unrealized gains or losses on equity securities will be recognized in the condensed consolidated statements of operations within net unrealized gains (losses) on equity securities and limited partnership investments. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, or ASU 2016-15. This update addresses the presentation and classification on the statement of cash flows for eight specific items, with the objective of reducing existing diversity in practice in how certain cash receipts and cash payments are presented and classified. ASU 2016-15 became effective for interim and annual reporting periods beginning after December 15, 2017. The Company adopted the new guidance as of January 1, 2018. The adoption of the new guidance did not have a material impact on the Company's condensed consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This update amends Accounting Standards Codification ("ASC") Topic 230 to add and clarify guidance on the classification and presentation of restricted cash in the statement of cash flows. The guidance requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. The guidance was applied retrospectively and is effective for annual periods beginning after December 15, 2017, and interim periods within those years. The Company adopted the new guidance as of January 1, 2018 and reclassified $4.0 million of restricted cash as of December 31, 2017 to the beginning cash balance within the condensed consolidated statement of cash flows. The adoption of the new guidance did not have a material impact on the Company's condensed consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220). This ASU allows for the option to reclassify, from accumulated other comprehensive income (loss) to retained earnings, stranded tax effects resulting from the newly enacted federal corporate income tax rate in the Tax Cuts and Jobs Act of 2017 (the "U.S. Tax Act"), which was enacted on December 22, 2017. The legislation included a reduction to the corporate income tax rate from 35 percent to 21 percent effective January 1, 2018. The amount of the reclassification would be the difference between the historical corporate income tax rate and the newly enacted 21 percent corporate income tax rate. ASU 2018-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted the new guidance in the first quarter of 2018 and recorded a cumulative-effect adjustment to reclassify the tax effects on fixed maturity investments of $117 from other comprehensive income (loss) to retained earnings within the current period condensed consolidated balance sheet. Recently Issued Accounting Pronouncements: In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provides adopters an additional transition method by allowing entities to initially apply ASU 2016-02, and subsequent related standards, at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. These ASUs are In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, or ASU 2016-13. This update introduces a current expected credit loss model for measuring expected credit losses for certain types of financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. ASU 2016-13 replaces the current incurred loss model for measuring expected credit losses, requires expected losses on available-for-sale debt securities to be recognized through an allowance for credit losses rather than as reductions in the amortized cost of the securities, and provides for additional disclosure requirements. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted for interim and annual reporting periods beginning after December 15, 2018. The Company is currently evaluating the effects the adoption of ASU 2016-13 will have on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, or ASU 2017-04. This amendment removes Step 2 of the goodwill impairment test under current guidance. The new guidance requires an impairment charge to be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value. ASU 2017-04 is effective for interim and annual reporting periods beginning after December 15, 2020, with early adoption permitted. The Company does not expect the adoption of ASU 2017-04 to have a material impact on its consolidated financial statements. In July 2018, the FASB issued ASU No. 2018-09, Codification Improvements. This update provides clarification, corrects errors in and makes minor improvements to the ASC within various ASC topics. Many of the amendments in this update have transition guidance with effective dates for annual periods beginning after December 15, 2018 and some amendments in this update do not require transition guidance and are effective upon issuance of this update. The Company will adopt amendments as they become applicable. The Company has determined the impact of these improvements will not be material to its consolidated financial statements. I n August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, or ASU 2018-13. This update removes the disclosure requirements for the amounts of and the reasons for transfers between Level 1 and Level 2 and disclosure of the policy for timing of transfers between levels. This update also removes disclosure requirements for the valuation processes for Level 3 fair value measurements. Additionally, this update adds disclosure requirements for the changes in unrealized gains and losses for recurring Level 3 fair value measurements and quantitative information for certain unobservable inputs in Level 3 fair value measurements. ASU 2018-13 is effective for interim and annual reporting periods beginning after December 15, 2019. The Company is currently evaluating the effects the adoption of ASU 2018-13 will have on its consolidated financial statements. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2018 | |
Investments [Abstract] | |
Investments | (2) Investments: The following is a summary of available-for-sale securities at September 30, 2018 and December 31, 2017: Fair Value Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Net Unrealized Gains (Losses) September 30, 2018 1 Fixed maturities Agency collateralized mortgage obligations $ 10,471 $ 10,499 $ 183 $ (211) $ (28) Agency mortgage-backed securities 36,181 37,179 6 (1,004) (998) Asset-backed securities 53,881 53,603 533 (255) 278 Bank loans 17,067 16,923 166 (22) 144 Certificates of deposit 3,126 3,123 3 – 3 Collateralized mortgage obligations 5,131 4,755 405 (29) 376 Corporate securities 198,698 202,977 315 (4,594) (4,279) Mortgage-backed securities 32,790 32,360 807 (377) 430 Municipal obligations 30,594 30,602 279 (287) (8) Non-U.S. government obligations 39,750 40,947 180 (1,377) (1,197) U.S. government obligations 163,272 165,130 6 (1,864) (1,858) Total fixed maturities $ 590,961 $ 598,098 $ 2,883 $ (10,020) $ (7,137) Fair Value Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Net Unrealized Gains (Losses) December 31, 2017 1 Fixed maturities Agency collateralized mortgage obligations $ 16,586 $ 15,839 $ 818 $ (71) $ 747 Agency mortgage-backed securities 27,075 27,180 47 (152) (105) Asset-backed securities 43,469 42,861 749 (141) 608 Bank loans 19,488 19,271 266 (49) 217 Certificates of deposit 3,135 3,124 11 – 11 Collateralized mortgage obligations 6,492 6,079 451 (38) 413 Corporate securities 198,349 198,419 1,602 (1,672) (70) Mortgage-backed securities 24,204 23,656 933 (385) 548 Municipal obligations 96,650 97,059 322 (731) (409) Non-U.S. government obligations 37,394 37,971 475 (1,052) (577) U.S. government obligations 49,011 49,558 – (547) (547) Total fixed maturities 521,853 521,017 5,674 (4,838) 836 Equity securities: Consumer 46,578 23,565 24,031 (1,018) 23,013 Energy 10,278 6,763 3,602 (87) 3,515 Financial 45,470 31,859 13,937 (326) 13,611 Industrial 25,402 8,949 16,793 (340) 16,453 Technology 13,061 5,768 7,401 (108) 7,293 Funds (e.g. mutual funds, closed end funds, ETFs) 50,291 46,177 4,153 (39) 4,114 Other 10,683 7,670 3,313 (300) 3,013 Total equity securities 201,763 130,751 73,230 (2,218) 71,012 Total $ 723,616 $ 651,768 $ 78,904 $ (7,056) $ 71,848 1 Effective January 1, 2018, the Company adopted ASU 2016-01 and equity securities are no longer classified as available-for-sale. Prior periods have not been restated to conform to the current presentation. See Note 1 – Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements for further discussion. The following table summarizes, for available-for-sale fixed maturities in an unrealized loss position at September 30, 2018 and available-for-sale fixed maturities and equity securities in an unrealized loss position at December 31, 2017, respectively, the aggregate fair value and gross unrealized loss categorized by the duration individual securities have been continuously in an unrealized loss position September 30, 2018 December 31, 2017 Number of Securities Fair Value Gross Unrealized Loss Number of Securities Fair Value Gross Unrealized Loss Fixed maturity securities: 12 months or less 486 $ 431,601 $ (7,330) 459 $ 313,421 $ (2,683) Greater than 12 months 135 81,091 (2,690) 112 75,638 (2,155) Total fixed maturities 621 512,692 (10,020) 571 389,059 (4,838) Equity securities 1 12 months or less – – – 65 46,654 (2,218) Greater than 12 months – – – – – – Total equity securities – – – 65 46,654 (2,218) Total fixed maturity and equity securities 621 $ 512,692 $ (10,020) 636 $ 435,713 $ (7,056) 1 Effective January 1, 2018, the Company adopted ASU 2016-01 and equity securities are no longer classified as available-for-sale. Prior periods have not been restated to conform to the current presentation. See Note 1 – Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements for further discussion. The fair value and the cost or amortized costs of fixed maturity investments at September 30, 2018, by contractual maturity, are shown below. Actual maturities may ultimately differ from contractual maturities because borrowers have, in some cases, the right to call or prepay obligations with or without call or prepayment penalties. Pre-refunded municipal bonds are classified based on their pre-refunded call dates. Fair Value Cost or Amortized Cost One year or less $ 47,012 $ 47,538 Excess of one year to five years 298,807 303,274 Excess of five years to ten years 104,228 106,384 Excess of ten years 2,460 2,506 Contractual maturities 452,507 459,702 Asset-backed securities 138,454 138,396 Total $ 590,961 $ 598,098 Following is a summary of the components of net realized and unrealized gains (losses) on investments for the periods presented in the accompanying condensed consolidated statements of operations. Three Months Ended September 30 Nine Months Ended September 30 2018 2017 2018 2017 Gross gains on available-for-sale investments sold during the period: Fixed maturities $ 2,690 $ 3,852 $ 8,824 $ 9,544 Equity securities 1 – 4,103 – 8,601 Total gains 2,690 7,955 8,824 18,145 Gross losses on available-for-sale investments sold during the period: Fixed maturities $ (2,743) (3,973) $ (8,539) (10,112) Equity securities 1 – (498) – (945) Total losses (2,743) (4,471) (8,539) (11,057) Other-than-temporary impairments – (38) – (69) Change in value of limited partnership investments (1,073) 2,498 (6,518) 8,515 Gains (losses) on equity securities: Realized gains on equity securities sold during the period 2 502 – 1,455 – Unrealized gains (losses) on equity securities held at the end of the period 2,997 – (817) – Realized and unrealized losses on equity securities held at the end of the period 3,499 – 638 – Net realized and unrealized gains (losses) on investments $ 2,373 $ 5,944 $ (5,595) $ 15,534 1 Effective January 1, 2018, the Company adopted ASU 2016-01 and equity securities are no longer classified as available-for-sale. Prior periods have not been restated to conform to the current presentation. See Note 1 – Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements for further discussion. 2 During the three and nine months ended September 30, 2018, the Company sold $30,135 and $117,692 in equity securities, resulting in realized gains of $5,721 and $50,848, respectively. The majority of these gains were included in unrealized gains within other comprehensive income at December 31, 2017 and, as a result of the adoption of ASU 2016-01, were reclassified to retained earnings as of January 1, 2018 and were therefore not recognized in the condensed consolidated statements of operations for the three and nine months ended September 30, 2018. Shareholders' equity at September 30, 2018 included approximately $34,787, net of federal income tax expense, of reported earnings that remain undistributed by limited partnerships. |
Reinsurance
Reinsurance | 9 Months Ended |
Sep. 30, 2018 | |
Reinsurance [Abstract] | |
Reinsurance | (3) Reinsurance: The following table summarizes the Company's transactions with reinsurers for the 2018 and 2017 comparative periods. 2018 2017 Three months ended September 30: Premiums ceded to reinsurers $ 39,318 $ 34,025 Losses and loss expenses ceded to reinsurers 44,015 30,531 Commissions from reinsurers 5,986 7,205 Nine months ended September 30: Premiums ceded to reinsurers $ 100,560 $ 111,124 Losses and loss expenses ceded to reinsurers 92,651 102,401 Commissions from reinsurers 20,309 21,000 |
Loss and Loss Expense Reserves
Loss and Loss Expense Reserves | 9 Months Ended |
Sep. 30, 2018 | |
Loss and Loss Expense Reserves [Abstract] | |
Loss and Loss Expense Reserves | (4) Loss and Loss Expense Reserves: Activity in the reserves for losses and loss expenses for the nine months ended September 30, 2018 and 2017 is summarized as follows. All amounts are shown net of reinsurance, unless otherwise indicated. 2018 2017 Reserves, gross of reinsurance recoverable, at the beginning of the year $ 680,274 $ 576,330 Reinsurance recoverable on unpaid losses at the beginning of the year 308,143 251,563 Reserves at the beginning of the year 372,131 324,767 Provision for losses and loss expenses: Claims occurring during the current period 229,644 164,546 Claims occurring during prior periods 14,683 16,480 Total incurred 244,327 181,026 Loss and loss expense payments: Claims occurring during the current period 49,510 41,616 Claims occurring during prior periods 123,167 109,616 Total paid 172,677 151,232 Reserves at the end of the period 443,781 354,561 Reinsurance recoverable on unpaid losses at the end of the period 334,056 301,445 Reserves, gross of reinsurance recoverable, at the end of the period $ 777,837 $ 656,006 The table above shows a roll-forward of loss and loss expense reserves from the prior year end to the current balance sheet date with comparable prior year information. Losses incurred from claims occurring during prior years reflect the development from prior accident years, composed of individual claim savings and deficiencies which, in the aggregate, have resulted from the settlement of claims at amounts higher or lower than previously reserved and from changes in estimates of losses incurred but not reported. The $14,683 prior accident year deficiency that developed during the nine months ended September 30, 2018 was largely due to unfavorable loss development in commercial automobile coverages. This unfavorable loss development was the result of increased claim severity due to a more challenging litigation environment, as well as an increase in the time to settle claims. This 2018 deficiency compares to a deficiency of $16,480 for the nine months ended September 30, 2017 also related to unfavorable loss development from commercial automobile coverages, particularly from infrequent, but severe, transportation loss events that occurred primarily during the first six months of 2017. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Information [Abstract] | |
Segment Information | (5) Segment Information: The Company has one reportable business segment in its operations: Property and Casualty Insurance. The property and casualty insurance segment provides multiple lines of insurance coverage primarily to fleet transportation companies as well as to independent contractors who contract with fleet transportation companies. In addition, the Company provides workers' compensation coverage for a variety of classes outside the transportation industry. The following table summarizes segment revenues for the three and nine months ended September 30, 2018 and 2017: Three Months Ended September 30 Nine Months Ended September 30 2018 2017 2018 2017 Revenues: Net premiums earned $ 96,807 $ 89,100 $ 314,209 $ 231,070 Net investment income 5,578 4,027 16,010 12,434 Net realized and unrealized gains (losses) on investments 2,373 5,944 (5,595) 15,534 Commissions and other income 3,413 1,407 7,488 3,789 Total revenues $ 108,171 $ 100,478 $ 332,112 $ 262,827 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt [Abstract] | |
Debt | (6) Debt: On August 9, 2018, the Company entered into a credit agreement providing a revolving credit facility with a $40,000 limit, with the option for up to an additional $35,000 in incremental loans at the discretion of the lenders. This credit agreement, which has an expiration date of August 9, 2022, replaced the Company's revolving line of credit that was to expire on September 23, 2018. Interest on this credit facility is referenced to LIBOR and can be fixed for periods of up to one year at the Company's option. Outstanding drawings on this revolving credit facility were $20,000 as of September 30, 2018. At September 30, 2018, the effective interest rate was 3.31%, and the Company had $20,000 remaining under the revolving credit facility as of September 30, 2018. The current outstanding borrowings were used to repay the previous line of credit. The Company's revolving credit facility has two financial covenants, each of which were met as of September 30, 2018, requiring the Company to have a minimum Generally Accepted Accounting Principles ("GAAP") net worth and a maximum consolidated leverage ratio of 0.35 to 1.00. |
Taxes
Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Taxes [Abstract] | |
Taxes | (7) Taxes: On December 22, 2017, the Tax Cut and Jobs Act of 2017 (the "U.S. Tax Act") was signed into law. The U.S. Tax Act lowered the U.S. corporate income tax rate from 35% to 21% effective January 1, 2018. The effective federal tax rate on consolidated loss for the three months ended September 30, 2018 was 20.8% compared to 30.0% on consolidated income for the three months ended September 30, 2017. The effective federal income tax rate differs from the normal statutory rate primarily as a result of tax-exempt investment income. The decrease also reflects the reduced federal corporate income tax rate as a result of the enactment of the U.S. Tax Act in December 2017. The effective federal tax rate on consolidated loss for the nine months ended September 30, 2018 was 22.1% compared to 581.0% on consolidated loss for the nine months ended September 30, 2017. The effective federal income tax rate differs from the normal statutory rate primarily as a result of tax-exempt investment income. The decrease also reflects the reduced federal corporate income tax rate as a result of the enactment of the U.S. Tax Act in December 2017. The prior year rate reflected the timing of the Company's net income and loss throughout the year, with the third quarter of 2017 reflecting a recovery of the net loss recorded in the second quarter of 2017. The Company continues to analyze the different aspects of the U.S. Tax Act, which could potentially affect the provisional estimates that were recorded at December 31, 2017 for the transition adjustment for loss discounting. There have been no changes to the provisional amounts recorded in the fourth quarter of 2017 associated with the U.S. Tax Act, as guidance has not yet been finalized by the Internal Revenue Service. Accounting for the tax effects of the enactment of the U.S. Tax Act will be completed in the fourth quarter of 2018. During the nine months ended September 30, 2018, the Company pa id $9,500 in |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value [Abstract] | |
Fair Value | (8) Fair Value: Assets and liabilities recorded at fair value in the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The following tables summarize fair value measurements by level for assets measured at fair value on a recurring basis: As of September 30, 2018: Description Total Level 1 Level 2 Level 3 Fixed maturities: Agency collateralized mortgage obligations $ 10,471 $ – $ 10,471 $ – Agency mortgage-backed securities 36,181 – 36,181 – Asset-backed securities 53,881 – 53,881 – Bank loans 17,067 – 17,067 – Certificates of deposit 3,126 3,126 – – Collateralized mortgage obligations 5,131 – 5,131 – Corporate securities 193,325 – 193,325 – Options embedded in convertible securities 5,373 – 5,373 – Mortgage-backed securities 32,790 – 29,162 3,628 Municipal obligations 30,594 – 30,594 – Non-U.S. government obligations 39,750 – 39,750 – U.S. government obligations 163,272 – 163,272 – Total fixed maturities 590,961 3,126 584,207 3,628 Equity securities: Consumer 25,632 25,632 – – Energy 6,438 6,438 – – Financial 39,917 39,917 – – Industrial 12,011 12,011 – – Technology 3,657 3,657 – – Funds (e.g. mutual funds, closed end funds, ETFs) 9,587 9,587 – – Other 11,857 11,857 – – Total equity securities 109,099 109,099 – – Short-term 1,000 1,000 – – Cash equivalents 104,662 – 104,662 – Total $ 805,722 $ 113,225 $ 688,869 $ 3,628 As of December 31, 2017: Description Total Level 1 Level 2 Level 3 Fixed maturities: Agency collateralized mortgage obligations $ 16,586 $ – $ 16,586 $ – Agency mortgage-backed securities 27,075 – 27,075 – Asset-backed securities 43,469 – 43,469 – Bank loans 19,488 – 19,488 – Certificates of deposit 3,135 3,135 – – Collateralized mortgage obligations 6,492 – 6,492 – Corporate securities 193,058 – 193,058 – Options embedded in convertible securities 5,291 – 5,291 – Mortgage-backed securities 24,204 – 24,204 – Municipal obligations 96,650 – 96,650 – Non-U.S. government obligations 37,394 – 37,394 – U.S. government obligations 49,011 – 49,011 – Total fixed maturities 521,853 3,135 518,718 – Equity securities: Consumer 46,578 46,578 – – Energy 10,278 10,278 – – Financial 45,470 45,470 – – Industrial 25,402 25,402 – – Technology 13,061 13,061 – – Funds (e.g. mutual funds, closed end funds, ETFs) 50,291 45,276 5,015 – Other 10,683 10,683 – – Total equity securities 201,763 196,748 5,015 – Short-term 1,000 1,000 – – Cash equivalents 59,173 – 59,173 – Total $ 783,789 $ 200,883 $ 582,906 $ – Level inputs, as defined by the FASB guidance, are as follows: Level Input: Input Definition: Level 1 Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. Level 2 Inputs other than quoted prices included in Level 1 that are observable for the asset or liability through corroboration with market data at the measurement date. Level 3 Unobservable inputs that reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. The Company's Level 3 assets consist primarily of a portfolio of commercial mortgage-backed securities. The assets are valued using various unobservable inputs including extrapolated data, proprietary models and indicative quotes. A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level 3 inputs is as follows for the nine months ended September 30, 2018 and for the year ended December 31, 2017: 2018 2017 Beginning of period balance $ – $ 25,218 Total gains or losses (realized) included in income – 406 Purchases 3,628 81 Settlements – (9,123) Transfers into Level 3 – 144 Transfers out of Level 3 – (16,726) End of period balance $ 3,628 $ – Quoted market prices are obtained whenever possible. Where quoted market prices are not available, fair values are estimated using broker/dealer quotes for specific securities. These techniques are significantly affected by the Company's assumptions, including discount rates and estimates of future cash flows. Potential taxes and other transaction costs have not been considered in estimating fair values. Transfers between levels, if any, are recorded as of the beginning of the reporting period. There were no significant transfers of assets between Level 1 and Level 2 during the nine months ended September 30, 2018 and 2017. In addition to the preceding disclosures on assets recorded at fair value in the condensed consolidated balance sheets, FASB guidance also requires the disclosure of fair values for certain other financial instruments for which it is practicable to estimate fair value, whether or not such values are recognized in the condensed consolidated balance sheets. Non-financial instruments such as real estate, property and equipment, other assets, deferred income taxes and intangible assets, and certain financial instruments such as policy reserve liabilities are excluded from the fair value disclosures. Therefore, the fair value amounts cannot be aggregated to determine the underlying economic value of the Company. The following methods, assumptions and inputs were used to estimate the fair value of each class of financial instrument. Limited partnerships: The Company accounts for investments in limited partnerships using the equity method of accounting, which requires an investor in a limited partnership to carry the investment at its proportionate share of the limited partnership's equity. The underlying assets of the Company's investments in limited partnerships are carried primarily at fair value, and, therefore, the Company's carrying value of limited partnerships approximates fair value. As these investments are not actively traded and the corresponding inputs are based on data provided by the investees, they are classified as Level 3. Short-term borrowings: The fair value of the Company's short-term borrowings is based on quoted market prices for the same or similar debt, or, if no quoted market prices are available, on the current market interest rates available to the Company for debt of similar terms and remaining maturities. A summary of the carrying value and fair value by level of financial instruments not recorded at fair value on the Company's condensed consolidated balance sheets at September 30, 2018 and December 31, 2017 is as follows: Carrying Fair Value Value Level 1 Level 2 Level 3 Total September 30, 2018 Assets: Limited partnerships $ 64,369 $ – $ – $ 64,369 $ 64,369 Liabilities: Short-term borrowings 20,000 – 20,000 – 20,000 December 31, 2017 Assets: Limited partnerships 70,806 – – 70,806 70,806 Liabilities: Short-term borrowings 20,000 – 20,000 – 20,000 |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Stock Based Compensation [Abstract] | |
Stock Based Compensation | (9) Stock Based Compensation: The Company issues shares of restricted Class B common stock to the Company's outside directors, which serve as the annual retainer compensation for the outside directors. The shares are distributed to the outside directors on the vesting date, which, with the exception of pro-rated annual retainers granted to outside directors, is one year following the date of grant. The table below provides detail of the restricted stock issuances to directors for 2017 and 2018: Grant Date Number of Shares Issued Vesting Date Service Period Grant Date Fair Value Per Share 5/9/2017 18,183 5/9/2018 7/1/2017 - 6/30/2018 $ 24.20 8/31/2017 1,257 5/9/2018 8/31/2017 - 6/30/2018 $ 21.90 2/9/2018 408 5/9/2018 2/9/2018 - 6/30/2018 $ 24.20 5/8/2018 19,085 5/8/2019 7/1/2018 - 6/30/2019 $ 23.05 Compensation expense related to the above stock grants is recognized over the period in which the directors render services. In May 2017, the Company's Compensation Committee granted equity-based awards pursuant to the Company's Long-Term Incentive Plan (the "Long-Term Incentive Plan"), which was approved by the Company's shareholders at the 2017 Annual Meeting of Shareholders. Certain participants under the Long-Term Incentive Plan were granted performance-based equity awards (the "2017 LTIP Awards"), with the number of shares of Class B common stock earned pursuant to such award determined by applying a performance matrix consisting of a measurement of the combined results of the Company's 2017 growth in net premiums earned and the Company's 2017 combined ratio. The combined ratio is calculated as a ratio of (A) losses and loss expenses incurred, plus other operating expenses, less commission and other income to (B) net premiums earned. No 2017 LTIP Awards were earned based on the Company's performance in 2017, and therefore no shares were issued pursuant to the 2017 LTIP Awards. In addition to the 2017 LTIP Awards, in May 2017 the Company's Compensation Committee also granted Value Creation Incentive Plan awards (the "2017 VCIP Awards") to certain participants under the Long-Term Incentive Plan. The 2017 VCIP Awards are performance-based equity awards that will be earned based on the Company's cumulative operating income over a three-year performance period from January 1, 2017 through December 31, 2019 relative to an operating income goal for the period set by the Compensation Committee in March 2017. For the purpose of the 2017 VCIP Awards, cumulative operating income is equal to income before taxes excluding net realized gains (losses) on investments. Any 2017 VCIP Awards that are earned will be paid in unrestricted shares of the Company's Class B common stock at the end of the three-year performance period, but no later than March 15, 2020. No shares are eligible to be issued under the 2017 VCIP Awards as of September 30, 2018. In March 2018, the Company's Compensation Committee granted equity-based awards pursuant to the Long-Term Incentive Plan. Certain participants under the Long-Term Incentive Plan were granted equity awards (the "2018 LTIP Awards"), with the number of shares of Class B common stock earned pursuant to such award determined by applying a performance matrix consisting of a measurement of the combined results of the Company's 2018 growth in gross premiums earned and the Company's 2018 combined ratio, as defined above. Any 2018 LTIP Awards earned by the Company's named executive officers ("NEOs") will be paid in shares of restricted Class B common stock at the end of the 2018 annual performance period and will vest one year from the date of issue. Any 2018 LTIP Awards earned by non-NEOs will be paid in shares of restricted Class B common stock at the end of the 2018 annual performance period and will vest ratably over a three-year period from the date of issue. In addition to the 2018 LTIP Awards, in March 2018 the Company's Compensation Committee also granted Value Creation Incentive Plan awards (the "2018 VCIP Awards") to certain participants under the Long-Term Incentive Plan. The 2018 VCIP Awards are performance-based equity awards that will be earned based on the Company's cumulative operating income, as defined above, over a three-year performance period from January 1, 2018 through December 31, 2020 relative to an operating income goal for the period set by the Compensation Committee in March 2018. Any 2018 VCIP Awards that are earned will be paid in unrestricted shares of the Company's Class B common stock at the end of the three-year performance period, but no later than March 15, 2021. The Company recorded $103 of expense related to these awards during the nine months ended September 30, 2018. |
Litigation, Commitments and Con
Litigation, Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Litigation, Commitments and Contingencies [Abstract] | |
Litigation, Commitments and Contingencies | (10) Litigation, Commitments and Contingencies: In the ordinary, regular and routine course of their business, the Company and its insurance subsidiaries are frequently involved in various matters of litigation relating principally to claims for insurance coverage provided. No currently pending matter is deemed by management to be material to the Company. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Shareholders' Equity [Abstract] | |
Shareholders' Equity | (11) Shareholders' Equity: Changes in common stock outstanding and additional paid-in-capital are as follows: Class A Class B Additional Shares Amount Shares Amount Paid-in Capital Balance at December 31, 2017 2,623,109 $ 112 12,423,518 $ 530 $ 55,078 Restricted stock grants – – 12,502 1 521 Repurchase of common shares (300) – (112,175) (5) (484) Balance at September 30, 2018 2,622,809 $ 112 12,323,845 $ 526 $ 55,115 During the nine months ended September 30, 2018, the Company paid $2,620 to repurchase 300 shares of Class A and 112,175 shares of Class B common stock under a share repurchase program approved by its Board of Directors on August 31, 2017 and reaffirmed on August 7, 2018. The change in equity for the nine months ended September 30, 2018 was as follows: Total Equity Balance at December 31, 2017 $ 418,811 Net loss (9,508) Other comprehensive loss (6,507) Cash dividends paid to shareholders (12,652) Restricted stock grants 521 Repurchase of common shares (2,620) Balance at September 30, 2018 $ 388,045 The change in equity for the nine months ended September 30, 2017 was as follows: Total Equity Balance at December 31, 2016 $ 404,345 Net income 1,847 Other comprehensive income 11,947 Cash dividends paid to shareholders (12,249) Restricted stock grants 920 Repurchase of common shares (1,880) Balance at September 30, 2017 $ $ 404,930 The following table illustrates changes in accumulated other comprehensive income (loss) by component for the nine months ended September 30, 2018: Foreign Currency Unrealized Holding Gains on Available-for-sale Securities Total Beginning balance at December 31, 2017 $ (309) $ 46,700 $ 46,391 Cumulative effect of adoption of ASU 2016-01, net of tax – (46,157) (46,157) Balance at January 1, 2018 (309) 543 234 Cumulative effect of adoption of ASU 2018-02 – 117 117 Other comprehensive loss before reclassifications (209) (4,815) (5,024) Amounts reclassified from accumulated other comprehensive income (loss) – (1,483) (1,483) Net current-period other comprehensive loss (209) (6,298) (6,507) Ending balance at September 30, 2018 $ (518) $ (5,638) $ (6,156) The following table illustrates changes in accumulated other comprehensive income by component for the nine months ended September 30, 2017: Foreign Currency Unrealized Holding Gains on Available-for-sale Securities Total Beginning balance $ (831) $ 34,051 $ 33,220 Other comprehensive income before reclassifications 510 15,999 16,509 Amounts reclassified from accumulated other comprehensive income – (4,562) (4,562) Net current-period other comprehensive income 510 11,437 11,947 Ending balance $ (321) $ 45,488 $ 45,167 |
Related Parties
Related Parties | 9 Months Ended |
Sep. 30, 2018 | |
Related Parties [Abstract] | |
Related Parties | (12) Related Parties: The Company has invested in three limited partnerships with an aggregate estimated value of $39,190 at September 30, 2018 that are managed by organizations in which one director of the Company is an executive officer and owner. The Company's ownership interest in these limited partnerships at September 30, 2018 was 6% for New Vernon India Fund, 37% for New Vernon Global Opportunity Fund and 27% for New Vernon Global Opportunity Fund II. For the nine months ended September 30, 2018 and 2017, the Company recorded $479 and $553 of fees related to the management of these limited partnership investments. The Company utilizes the services of an investment firm of which one director of the Company is a partial owner. These investment firms manage equity securities and fixed maturity portfolios with an aggregate market value of approximately $24,871 at September 30, 2018. Total commissions and net fees earned by the investment firms and affiliates on these portfolios were $81 and $70 for the nine months ended September 30, 2018 and 2017. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | ( 13) Subsequent Events: On November 6, 2018, the Board of Directors of Protective Insurance Corporation declared a regular quarterly dividend of $0.28 per share on the Company's Class A and Class B Common Stock. The dividend per share will be payable December 4, 2018 to shareholders of record on November 20, 2018. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Description of Business | Description of Business: Effective August 1, 2018, the Company changed its name to Protective Insurance Corporation to better align its operational and market identities to reflect its position within the transportation and workers' compensation insurance industry. |
Basis of Presentation | Basis of Presentation: |
Investments | Investments : Short-term and other investments are carried at cost, which approximates their fair values. Realized gains and losses on disposals of investments are recorded on the trade date and are determined by the specific identification of the cost of investments sold and are included in income. Fixed maturity securities are considered to be available-for-sale. The related unrealized net gains or losses (net of applicable tax effects) on fixed maturity securities are reflected directly in shareholders' equity. Included within available-for-sale fixed maturity securities are convertible debt securities. A portion of the changes in the fair values of convertible debt securities is reflected as a component of net realized gains on investments, excluding impairment losses within the condensed consolidated statements of operations. Equity securities are recorded at fair value, with unrealized net gains or losses reflected as a component of net unrealized gains (losses) on equity securities and limited partnership investments within the condensed consolidated statements of operations. In accordance with the Financial Accounting Standards Board's ("FASB") other-than-temporary impairment guidance, if a fixed maturity security is in an unrealized loss position and the Company has the intent to sell the fixed maturity security, or it is more likely than not that the Company will have to sell the fixed maturity security before recovery of its amortized cost basis, the decline in value is deemed to be other-than-temporary and is recorded to other-than-temporary impairment losses on investments in the condensed consolidated statements of operations. For impaired fixed maturity securities that the Company does not intend to sell or in cases where it is more likely than not that the Company will not have to sell such securities, but the Company expects that it will not fully recover the amortized cost basis, the credit component of the other-than-temporary impairment is recognized in other-than-temporary impairment losses on investments in the condensed consolidated statements of operations and the non-credit component of the other-than-temporary impairment is recognized directly in shareholders' equity. The credit component of an other-than-temporary impairment is determined by comparing the net present value of projected future cash flows with the amortized cost basis of the fixed maturity security. The net present value is calculated by discounting the Company's best estimate of projected future cash flows at the appropriate effective interest rate. |
Revenue Recognition | Revenue Recognition: |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements: In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, or ASU 2016-01. The amendments in ASU 2016-01 changed the accounting for non-consolidated equity investments that are not accounted for under the equity method of accounting by requiring changes in fair value to be recognized in income. Previously, the Company's equity securities were classified as available-for-sale and changes in fair value were recognized in accumulated other comprehensive income (loss) as a component of shareholders' equity. ASU 2016-01 became effective for interim and annual reporting periods beginning after December 15, 2017. The Company adopted the new guidance as of January 1, 2018 using the modified retrospective approach and recorded a cumulative-effect adjustment to reclassify unrealized gains on equity securities of $71,012 ($46,157, net of tax) from other comprehensive income (loss) to retained earnings within the current period condensed consolidated balance sheet. Going forward, unrealized gains or losses on equity securities will be recognized in the condensed consolidated statements of operations within net unrealized gains (losses) on equity securities and limited partnership investments. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, or ASU 2016-15. This update addresses the presentation and classification on the statement of cash flows for eight specific items, with the objective of reducing existing diversity in practice in how certain cash receipts and cash payments are presented and classified. ASU 2016-15 became effective for interim and annual reporting periods beginning after December 15, 2017. The Company adopted the new guidance as of January 1, 2018. The adoption of the new guidance did not have a material impact on the Company's condensed consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This update amends Accounting Standards Codification ("ASC") Topic 230 to add and clarify guidance on the classification and presentation of restricted cash in the statement of cash flows. The guidance requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. The guidance was applied retrospectively and is effective for annual periods beginning after December 15, 2017, and interim periods within those years. The Company adopted the new guidance as of January 1, 2018 and reclassified $4.0 million of restricted cash as of December 31, 2017 to the beginning cash balance within the condensed consolidated statement of cash flows. The adoption of the new guidance did not have a material impact on the Company's condensed consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220). This ASU allows for the option to reclassify, from accumulated other comprehensive income (loss) to retained earnings, stranded tax effects resulting from the newly enacted federal corporate income tax rate in the Tax Cuts and Jobs Act of 2017 (the "U.S. Tax Act"), which was enacted on December 22, 2017. The legislation included a reduction to the corporate income tax rate from 35 percent to 21 percent effective January 1, 2018. The amount of the reclassification would be the difference between the historical corporate income tax rate and the newly enacted 21 percent corporate income tax rate. ASU 2018-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted the new guidance in the first quarter of 2018 and recorded a cumulative-effect adjustment to reclassify the tax effects on fixed maturity investments of $117 from other comprehensive income (loss) to retained earnings within the current period condensed consolidated balance sheet. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements: In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provides adopters an additional transition method by allowing entities to initially apply ASU 2016-02, and subsequent related standards, at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. These ASUs are In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, or ASU 2016-13. This update introduces a current expected credit loss model for measuring expected credit losses for certain types of financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. ASU 2016-13 replaces the current incurred loss model for measuring expected credit losses, requires expected losses on available-for-sale debt securities to be recognized through an allowance for credit losses rather than as reductions in the amortized cost of the securities, and provides for additional disclosure requirements. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted for interim and annual reporting periods beginning after December 15, 2018. The Company is currently evaluating the effects the adoption of ASU 2016-13 will have on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, or ASU 2017-04. This amendment removes Step 2 of the goodwill impairment test under current guidance. The new guidance requires an impairment charge to be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value. ASU 2017-04 is effective for interim and annual reporting periods beginning after December 15, 2020, with early adoption permitted. The Company does not expect the adoption of ASU 2017-04 to have a material impact on its consolidated financial statements. In July 2018, the FASB issued ASU No. 2018-09, Codification Improvements. This update provides clarification, corrects errors in and makes minor improvements to the ASC within various ASC topics. Many of the amendments in this update have transition guidance with effective dates for annual periods beginning after December 15, 2018 and some amendments in this update do not require transition guidance and are effective upon issuance of this update. The Company will adopt amendments as they become applicable. The Company has determined the impact of these improvements will not be material to its consolidated financial statements. I n August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, or ASU 2018-13. This update removes the disclosure requirements for the amounts of and the reasons for transfers between Level 1 and Level 2 and disclosure of the policy for timing of transfers between levels. This update also removes disclosure requirements for the valuation processes for Level 3 fair value measurements. Additionally, this update adds disclosure requirements for the changes in unrealized gains and losses for recurring Level 3 fair value measurements and quantitative information for certain unobservable inputs in Level 3 fair value measurements. ASU 2018-13 is effective for interim and annual reporting periods beginning after December 15, 2019. The Company is currently evaluating the effects the adoption of ASU 2018-13 will have on its consolidated financial statements. |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Investments [Abstract] | |
Available-for-Sale Securities | The following is a summary of available-for-sale securities at September 30, 2018 and December 31, 2017: Fair Value Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Net Unrealized Gains (Losses) September 30, 2018 1 Fixed maturities Agency collateralized mortgage obligations $ 10,471 $ 10,499 $ 183 $ (211) $ (28) Agency mortgage-backed securities 36,181 37,179 6 (1,004) (998) Asset-backed securities 53,881 53,603 533 (255) 278 Bank loans 17,067 16,923 166 (22) 144 Certificates of deposit 3,126 3,123 3 – 3 Collateralized mortgage obligations 5,131 4,755 405 (29) 376 Corporate securities 198,698 202,977 315 (4,594) (4,279) Mortgage-backed securities 32,790 32,360 807 (377) 430 Municipal obligations 30,594 30,602 279 (287) (8) Non-U.S. government obligations 39,750 40,947 180 (1,377) (1,197) U.S. government obligations 163,272 165,130 6 (1,864) (1,858) Total fixed maturities $ 590,961 $ 598,098 $ 2,883 $ (10,020) $ (7,137) Fair Value Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Net Unrealized Gains (Losses) December 31, 2017 1 Fixed maturities Agency collateralized mortgage obligations $ 16,586 $ 15,839 $ 818 $ (71) $ 747 Agency mortgage-backed securities 27,075 27,180 47 (152) (105) Asset-backed securities 43,469 42,861 749 (141) 608 Bank loans 19,488 19,271 266 (49) 217 Certificates of deposit 3,135 3,124 11 – 11 Collateralized mortgage obligations 6,492 6,079 451 (38) 413 Corporate securities 198,349 198,419 1,602 (1,672) (70) Mortgage-backed securities 24,204 23,656 933 (385) 548 Municipal obligations 96,650 97,059 322 (731) (409) Non-U.S. government obligations 37,394 37,971 475 (1,052) (577) U.S. government obligations 49,011 49,558 – (547) (547) Total fixed maturities 521,853 521,017 5,674 (4,838) 836 Equity securities: Consumer 46,578 23,565 24,031 (1,018) 23,013 Energy 10,278 6,763 3,602 (87) 3,515 Financial 45,470 31,859 13,937 (326) 13,611 Industrial 25,402 8,949 16,793 (340) 16,453 Technology 13,061 5,768 7,401 (108) 7,293 Funds (e.g. mutual funds, closed end funds, ETFs) 50,291 46,177 4,153 (39) 4,114 Other 10,683 7,670 3,313 (300) 3,013 Total equity securities 201,763 130,751 73,230 (2,218) 71,012 Total $ 723,616 $ 651,768 $ 78,904 $ (7,056) $ 71,848 1 Effective January 1, 2018, the Company adopted ASU 2016-01 and equity securities are no longer classified as available-for-sale. Prior periods have not been restated to conform to the current presentation. See Note 1 – Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements for further discussion. |
Fixed Maturity and Equity Security Investments in Unrealized Loss Position | The following table summarizes, for available-for-sale fixed maturities in an unrealized loss position at September 30, 2018 and available-for-sale fixed maturities and equity securities in an unrealized loss position at December 31, 2017, respectively, the aggregate fair value and gross unrealized loss categorized by the duration individual securities have been continuously in an unrealized loss position September 30, 2018 December 31, 2017 Number of Securities Fair Value Gross Unrealized Loss Number of Securities Fair Value Gross Unrealized Loss Fixed maturity securities: 12 months or less 486 $ 431,601 $ (7,330) 459 $ 313,421 $ (2,683) Greater than 12 months 135 81,091 (2,690) 112 75,638 (2,155) Total fixed maturities 621 512,692 (10,020) 571 389,059 (4,838) Equity securities 1 12 months or less – – – 65 46,654 (2,218) Greater than 12 months – – – – – – Total equity securities – – – 65 46,654 (2,218) Total fixed maturity and equity securities 621 $ 512,692 $ (10,020) 636 $ 435,713 $ (7,056) 1 Effective January 1, 2018, the Company adopted ASU 2016-01 and equity securities are no longer classified as available-for-sale. Prior periods have not been restated to conform to the current presentation. See Note 1 – Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements for further discussion. |
Fair Value and Cost or Amortized Cost of Fixed Maturity Investments by Contractual Maturity | Pre-refunded municipal bonds are classified based on their pre-refunded call dates. Fair Value Cost or Amortized Cost One year or less $ 47,012 $ 47,538 Excess of one year to five years 298,807 303,274 Excess of five years to ten years 104,228 106,384 Excess of ten years 2,460 2,506 Contractual maturities 452,507 459,702 Asset-backed securities 138,454 138,396 Total $ 590,961 $ 598,098 |
Net Realized and Unrealized Gains (Losses) on Investments | Following is a summary of the components of net realized and unrealized gains (losses) on investments for the periods presented in the accompanying condensed consolidated statements of operations. Three Months Ended September 30 Nine Months Ended September 30 2018 2017 2018 2017 Gross gains on available-for-sale investments sold during the period: Fixed maturities $ 2,690 $ 3,852 $ 8,824 $ 9,544 Equity securities 1 – 4,103 – 8,601 Total gains 2,690 7,955 8,824 18,145 Gross losses on available-for-sale investments sold during the period: Fixed maturities $ (2,743) (3,973) $ (8,539) (10,112) Equity securities 1 – (498) – (945) Total losses (2,743) (4,471) (8,539) (11,057) Other-than-temporary impairments – (38) – (69) Change in value of limited partnership investments (1,073) 2,498 (6,518) 8,515 Gains (losses) on equity securities: Realized gains on equity securities sold during the period 2 502 – 1,455 – Unrealized gains (losses) on equity securities held at the end of the period 2,997 – (817) – Realized and unrealized losses on equity securities held at the end of the period 3,499 – 638 – Net realized and unrealized gains (losses) on investments $ 2,373 $ 5,944 $ (5,595) $ 15,534 1 Effective January 1, 2018, the Company adopted ASU 2016-01 and equity securities are no longer classified as available-for-sale. Prior periods have not been restated to conform to the current presentation. See Note 1 – Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements for further discussion. 2 During the three and nine months ended September 30, 2018, the Company sold $30,135 and $117,692 in equity securities, resulting in realized gains of $5,721 and $50,848, respectively. The majority of these gains were included in unrealized gains within other comprehensive income at December 31, 2017 and, as a result of the adoption of ASU 2016-01, were reclassified to retained earnings as of January 1, 2018 and were therefore not recognized in the condensed consolidated statements of operations for the three and nine months ended September 30, 2018. |
Reinsurance (Tables)
Reinsurance (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Reinsurance [Abstract] | |
Reinsurance | The following table summarizes the Company's transactions with reinsurers for the 2018 and 2017 comparative periods. 2018 2017 Three months ended September 30: Premiums ceded to reinsurers $ 39,318 $ 34,025 Losses and loss expenses ceded to reinsurers 44,015 30,531 Commissions from reinsurers 5,986 7,205 Nine months ended September 30: Premiums ceded to reinsurers $ 100,560 $ 111,124 Losses and loss expenses ceded to reinsurers 92,651 102,401 Commissions from reinsurers 20,309 21,000 |
Loss and Loss Expense Reserves
Loss and Loss Expense Reserves (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Loss and Loss Expense Reserves [Abstract] | |
Activity in Reserves for Losses and Loss Expenses | Activity in the reserves for losses and loss expenses for the nine months ended September 30, 2018 and 2017 is summarized as follows. All amounts are shown net of reinsurance, unless otherwise indicated. 2018 2017 Reserves, gross of reinsurance recoverable, at the beginning of the year $ 680,274 $ 576,330 Reinsurance recoverable on unpaid losses at the beginning of the year 308,143 251,563 Reserves at the beginning of the year 372,131 324,767 Provision for losses and loss expenses: Claims occurring during the current period 229,644 164,546 Claims occurring during prior periods 14,683 16,480 Total incurred 244,327 181,026 Loss and loss expense payments: Claims occurring during the current period 49,510 41,616 Claims occurring during prior periods 123,167 109,616 Total paid 172,677 151,232 Reserves at the end of the period 443,781 354,561 Reinsurance recoverable on unpaid losses at the end of the period 334,056 301,445 Reserves, gross of reinsurance recoverable, at the end of the period $ 777,837 $ 656,006 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Information [Abstract] | |
Segment Revenues | The following table summarizes segment revenues for the three and nine months ended September 30, 2018 and 2017: Three Months Ended September 30 Nine Months Ended September 30 2018 2017 2018 2017 Revenues: Net premiums earned $ 96,807 $ 89,100 $ 314,209 $ 231,070 Net investment income 5,578 4,027 16,010 12,434 Net realized and unrealized gains (losses) on investments 2,373 5,944 (5,595) 15,534 Commissions and other income 3,413 1,407 7,488 3,789 Total revenues $ 108,171 $ 100,478 $ 332,112 $ 262,827 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value [Abstract] | |
Fair Value Measurements by Level for Assets Measured at Fair Value on Recurring Basis | The following tables summarize fair value measurements by level for assets measured at fair value on a recurring basis: As of September 30, 2018: Description Total Level 1 Level 2 Level 3 Fixed maturities: Agency collateralized mortgage obligations $ 10,471 $ – $ 10,471 $ – Agency mortgage-backed securities 36,181 – 36,181 – Asset-backed securities 53,881 – 53,881 – Bank loans 17,067 – 17,067 – Certificates of deposit 3,126 3,126 – – Collateralized mortgage obligations 5,131 – 5,131 – Corporate securities 193,325 – 193,325 – Options embedded in convertible securities 5,373 – 5,373 – Mortgage-backed securities 32,790 – 29,162 3,628 Municipal obligations 30,594 – 30,594 – Non-U.S. government obligations 39,750 – 39,750 – U.S. government obligations 163,272 – 163,272 – Total fixed maturities 590,961 3,126 584,207 3,628 Equity securities: Consumer 25,632 25,632 – – Energy 6,438 6,438 – – Financial 39,917 39,917 – – Industrial 12,011 12,011 – – Technology 3,657 3,657 – – Funds (e.g. mutual funds, closed end funds, ETFs) 9,587 9,587 – – Other 11,857 11,857 – – Total equity securities 109,099 109,099 – – Short-term 1,000 1,000 – – Cash equivalents 104,662 – 104,662 – Total $ 805,722 $ 113,225 $ 688,869 $ 3,628 As of December 31, 2017: Description Total Level 1 Level 2 Level 3 Fixed maturities: Agency collateralized mortgage obligations $ 16,586 $ – $ 16,586 $ – Agency mortgage-backed securities 27,075 – 27,075 – Asset-backed securities 43,469 – 43,469 – Bank loans 19,488 – 19,488 – Certificates of deposit 3,135 3,135 – – Collateralized mortgage obligations 6,492 – 6,492 – Corporate securities 193,058 – 193,058 – Options embedded in convertible securities 5,291 – 5,291 – Mortgage-backed securities 24,204 – 24,204 – Municipal obligations 96,650 – 96,650 – Non-U.S. government obligations 37,394 – 37,394 – U.S. government obligations 49,011 – 49,011 – Total fixed maturities 521,853 3,135 518,718 – Equity securities: Consumer 46,578 46,578 – – Energy 10,278 10,278 – – Financial 45,470 45,470 – – Industrial 25,402 25,402 – – Technology 13,061 13,061 – – Funds (e.g. mutual funds, closed end funds, ETFs) 50,291 45,276 5,015 – Other 10,683 10,683 – – Total equity securities 201,763 196,748 5,015 – Short-term 1,000 1,000 – – Cash equivalents 59,173 – 59,173 – Total $ 783,789 $ 200,883 $ 582,906 $ – |
Reconciliation of Beginning and Ending Balances of Assets Measured at Fair Value on Recurring Basis Using Level 3 Inputs | A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level 3 inputs is as follows for the nine months ended September 30, 2018 and for the year ended December 31, 2017: 2018 2017 Beginning of period balance $ – $ 25,218 Total gains or losses (realized) included in income – 406 Purchases 3,628 81 Settlements – (9,123) Transfers into Level 3 – 144 Transfers out of Level 3 – (16,726) End of period balance $ 3,628 $ – |
Carrying Value and Fair Value by Level of Financial Instruments | A summary of the carrying value and fair value by level of financial instruments not recorded at fair value on the Company's condensed consolidated balance sheets at September 30, 2018 and December 31, 2017 is as follows: Carrying Fair Value Value Level 1 Level 2 Level 3 Total September 30, 2018 Assets: Limited partnerships $ 64,369 $ – $ – $ 64,369 $ 64,369 Liabilities: Short-term borrowings 20,000 – 20,000 – 20,000 December 31, 2017 Assets: Limited partnerships 70,806 – – 70,806 70,806 Liabilities: Short-term borrowings 20,000 – 20,000 – 20,000 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Stock Based Compensation [Abstract] | |
Detail of Restricted Stock Issuances | The table below provides detail of the restricted stock issuances to directors for 2017 and 2018: Grant Date Number of Shares Issued Vesting Date Service Period Grant Date Fair Value Per Share 5/9/2017 18,183 5/9/2018 7/1/2017 - 6/30/2018 $ 24.20 8/31/2017 1,257 5/9/2018 8/31/2017 - 6/30/2018 $ 21.90 2/9/2018 408 5/9/2018 2/9/2018 - 6/30/2018 $ 24.20 5/8/2018 19,085 5/8/2019 7/1/2018 - 6/30/2019 $ 23.05 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Shareholders' Equity [Abstract] | |
Changes in Common Stock Outstanding and Additional Paid-in-Capital | Changes in common stock outstanding and additional paid-in-capital are as follows: Class A Class B Additional Shares Amount Shares Amount Paid-in Capital Balance at December 31, 2017 2,623,109 $ 112 12,423,518 $ 530 $ 55,078 Restricted stock grants – – 12,502 1 521 Repurchase of common shares (300) – (112,175) (5) (484) Balance at September 30, 2018 2,622,809 $ 112 12,323,845 $ 526 $ 55,115 |
Change in Equity | The change in equity for the nine months ended September 30, 2018 was as follows: Total Equity Balance at December 31, 2017 $ 418,811 Net loss (9,508) Other comprehensive loss (6,507) Cash dividends paid to shareholders (12,652) Restricted stock grants 521 Repurchase of common shares (2,620) Balance at September 30, 2018 $ 388,045 The change in equity for the nine months ended September 30, 2017 was as follows: Total Equity Balance at December 31, 2016 $ 404,345 Net income 1,847 Other comprehensive income 11,947 Cash dividends paid to shareholders (12,249) Restricted stock grants 920 Repurchase of common shares (1,880) Balance at September 30, 2017 $ $ 404,930 |
Changes in Accumulated Other Comprehensive Income (Loss) by Component | The following table illustrates changes in accumulated other comprehensive income (loss) by component for the nine months ended September 30, 2018: Foreign Currency Unrealized Holding Gains on Available-for-sale Securities Total Beginning balance at December 31, 2017 $ (309) $ 46,700 $ 46,391 Cumulative effect of adoption of ASU 2016-01, net of tax – (46,157) (46,157) Balance at January 1, 2018 (309) 543 234 Cumulative effect of adoption of ASU 2018-02 – 117 117 Other comprehensive loss before reclassifications (209) (4,815) (5,024) Amounts reclassified from accumulated other comprehensive income (loss) – (1,483) (1,483) Net current-period other comprehensive loss (209) (6,298) (6,507) Ending balance at September 30, 2018 $ (518) $ (5,638) $ (6,156) The following table illustrates changes in accumulated other comprehensive income by component for the nine months ended September 30, 2017: Foreign Currency Unrealized Holding Gains on Available-for-sale Securities Total Beginning balance $ (831) $ 34,051 $ 33,220 Other comprehensive income before reclassifications 510 15,999 16,509 Amounts reclassified from accumulated other comprehensive income – (4,562) (4,562) Net current-period other comprehensive income 510 11,437 11,947 Ending balance $ (321) $ 45,488 $ 45,167 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018USD ($)Segment | Dec. 31, 2017USD ($) | Mar. 31, 2018USD ($) | |
Description of Business [Abstract] | |||
Number of reportable segments | Segment | 1 | ||
Recently Adopted Accounting Pronouncements [Abstract] | |||
Restricted cash | $ 6,138 | $ 4,033 | |
Corporate income tax rate | 21.00% | 35.00% | |
ASU 2016-01 [Member] | |||
Recently Adopted Accounting Pronouncements [Abstract] | |||
Cumulative-effect adjustment to reclassify unrealized gains on equity securities after tax | $ (46,157) | ||
ASU 2016-18 [Member] | |||
Recently Adopted Accounting Pronouncements [Abstract] | |||
Restricted cash | 4,000 | ||
ASU 2018-02 [Member] | |||
Recently Adopted Accounting Pronouncements [Abstract] | |||
Cumulative-effect adjustment to reclassify unrealized gains on equity securities after tax | 117 | ||
Other Comprehensive Income (Loss) [Member] | ASU 2016-01 [Member] | |||
Recently Adopted Accounting Pronouncements [Abstract] | |||
Cumulative-effect adjustment to reclassify unrealized gains on equity securities before tax | 71,012 | ||
Cumulative-effect adjustment to reclassify unrealized gains on equity securities after tax | 46,157 | ||
Other Comprehensive Income (Loss) [Member] | ASU 2018-02 [Member] | |||
Recently Adopted Accounting Pronouncements [Abstract] | |||
Cumulative-effect adjustment to reclassify unrealized gains on equity securities after tax | $ 117 | ||
Retained Earnings [Member] | ASU 2016-01 [Member] | |||
Recently Adopted Accounting Pronouncements [Abstract] | |||
Cumulative-effect adjustment to reclassify unrealized gains on equity securities before tax | (71,012) | ||
Cumulative-effect adjustment to reclassify unrealized gains on equity securities after tax | $ (46,157) | ||
Retained Earnings [Member] | ASU 2018-02 [Member] | |||
Recently Adopted Accounting Pronouncements [Abstract] | |||
Cumulative-effect adjustment to reclassify unrealized gains on equity securities after tax | $ (117) |
Investments (Details)
Investments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018USD ($)Security | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)Security | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($)Security | ||
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||||||
Fair value | $ 723,616 | |||||
Cost or amortized cost | 651,768 | |||||
Gross unrealized gains | 78,904 | |||||
Gross unrealized losses | (7,056) | |||||
Net unrealized gains (losses) | $ 71,848 | |||||
Available-for-sale Securities Continuous Unrealized Loss Position [Abstract] | ||||||
Number of securities, total | Security | [1] | 621 | 621 | 636 | ||
Available-for-sale Securities Continuous Unrealized Loss Position, Fair Value [Abstract] | ||||||
Fair value, total | [1] | $ 512,692 | $ 512,692 | $ 435,713 | ||
Available-for-sale Securities Continuous Unrealized Loss Position, Aggregate Losses [Abstract] | ||||||
Gross unrealized loss, total | [1] | (10,020) | (10,020) | (7,056) | ||
Gross gains on available-for-sale investments sold during the period [Abstract] | ||||||
Total gains | 2,690 | $ 7,955 | 8,824 | $ 18,145 | ||
Gross losses on available-for-sale investments sold during the period [Abstract] | ||||||
Total losses | (2,743) | (4,471) | (8,539) | (11,057) | ||
Other-than-temporary impairments | 0 | (38) | 0 | (69) | ||
Change in value of limited partnership investments | (1,073) | 2,498 | (6,518) | 8,515 | ||
Gains (losses) on equity securities [Abstract] | ||||||
Realized gains on equity securities sold during the period | [2] | 502 | 0 | 1,455 | 0 | |
Unrealized gains (losses) on equity securities held at the end of the period | 2,997 | 0 | (817) | 0 | ||
Realized and unrealized losses on equity securities held at the end of the period | 3,499 | 0 | 638 | 0 | ||
Net realized and unrealized gains (losses) on investments | 2,373 | 5,944 | (5,595) | 15,534 | ||
Proceeds from sales of equity securities | 30,135 | 117,692 | 32,233 | |||
Realized gains on equity securities | 5,721 | 50,848 | ||||
Federal income taxes | 34,787 | |||||
Fixed Maturities [Member] | ||||||
Available-for-sale Debt Securities [Abstract] | ||||||
Fair value | 590,961 | 590,961 | ||||
Cost or amortized cost | 598,098 | 598,098 | ||||
Available-for-sale Securities Debt Maturities Fair Value [Abstract] | ||||||
One year or less, Fair Value | 47,012 | 47,012 | ||||
Excess of one year to five years, Fair Value | 298,807 | 298,807 | ||||
Excess of five years to ten years, Fair Value | 104,228 | 104,228 | ||||
Excess of ten years, Fair Value | 2,460 | 2,460 | ||||
Total contractual maturities, Fair Value | 452,507 | 452,507 | ||||
Asset-backed securities, Fair Value | 138,454 | 138,454 | ||||
Total, Fair Value | 590,961 | 590,961 | ||||
Available-for-sale Securities Debt Maturities Amortized Cost Basis [Abstract] | ||||||
One year or less, Cost or Amortized Cost | 47,538 | 47,538 | ||||
Excess of one year to five years, Cost or Amortized Cost | 303,274 | 303,274 | ||||
Excess of five years to ten years, Cost or Amortized Cost | 106,384 | 106,384 | ||||
Excess of ten years, Cost or Amortized Cost | 2,506 | 2,506 | ||||
Total contractual maturities, Cost or Amortized Cost | 459,702 | 459,702 | ||||
Asset-backed securities, Cost or Amortized Cost | 138,396 | 138,396 | ||||
Cost or amortized cost | 598,098 | 598,098 | ||||
Gross gains on available-for-sale investments sold during the period [Abstract] | ||||||
Total gains | 2,690 | 3,852 | 8,824 | 9,544 | ||
Gross losses on available-for-sale investments sold during the period [Abstract] | ||||||
Total losses | (2,743) | (3,973) | (8,539) | (10,112) | ||
Agency Collateralized Mortgage Obligations [Member] | ||||||
Available-for-sale Debt Securities [Abstract] | ||||||
Fair value | 10,471 | 10,471 | 16,586 | |||
Cost or amortized cost | 10,499 | 10,499 | 15,839 | |||
Gross unrealized gains | 183 | 183 | 818 | |||
Gross unrealized losses | (211) | (211) | (71) | |||
Net unrealized gains (losses) | (28) | (28) | 747 | |||
Available-for-sale Securities Debt Maturities Fair Value [Abstract] | ||||||
Total, Fair Value | 10,471 | 10,471 | 16,586 | |||
Available-for-sale Securities Debt Maturities Amortized Cost Basis [Abstract] | ||||||
Cost or amortized cost | 10,499 | 10,499 | 15,839 | |||
Agency Mortgage-backed Securities [Member] | ||||||
Available-for-sale Debt Securities [Abstract] | ||||||
Fair value | 36,181 | 36,181 | 27,075 | |||
Cost or amortized cost | 37,179 | 37,179 | 27,180 | |||
Gross unrealized gains | 6 | 6 | 47 | |||
Gross unrealized losses | (1,004) | (1,004) | (152) | |||
Net unrealized gains (losses) | (998) | (998) | (105) | |||
Available-for-sale Securities Debt Maturities Fair Value [Abstract] | ||||||
Total, Fair Value | 36,181 | 36,181 | 27,075 | |||
Available-for-sale Securities Debt Maturities Amortized Cost Basis [Abstract] | ||||||
Cost or amortized cost | 37,179 | 37,179 | 27,180 | |||
Asset-backed Securities [Member] | ||||||
Available-for-sale Debt Securities [Abstract] | ||||||
Fair value | 53,881 | 53,881 | 43,469 | |||
Cost or amortized cost | 53,603 | 53,603 | 42,861 | |||
Gross unrealized gains | 533 | 533 | 749 | |||
Gross unrealized losses | (255) | (255) | (141) | |||
Net unrealized gains (losses) | 278 | 278 | 608 | |||
Available-for-sale Securities Debt Maturities Fair Value [Abstract] | ||||||
Total, Fair Value | 53,881 | 53,881 | 43,469 | |||
Available-for-sale Securities Debt Maturities Amortized Cost Basis [Abstract] | ||||||
Cost or amortized cost | 53,603 | 53,603 | 42,861 | |||
Bank Loans [Member] | ||||||
Available-for-sale Debt Securities [Abstract] | ||||||
Fair value | 17,067 | 17,067 | 19,488 | |||
Cost or amortized cost | 16,923 | 16,923 | 19,271 | |||
Gross unrealized gains | 166 | 166 | 266 | |||
Gross unrealized losses | (22) | (22) | (49) | |||
Net unrealized gains (losses) | 144 | 144 | 217 | |||
Available-for-sale Securities Debt Maturities Fair Value [Abstract] | ||||||
Total, Fair Value | 17,067 | 17,067 | 19,488 | |||
Available-for-sale Securities Debt Maturities Amortized Cost Basis [Abstract] | ||||||
Cost or amortized cost | 16,923 | 16,923 | 19,271 | |||
Certificates of Deposit [Member] | ||||||
Available-for-sale Debt Securities [Abstract] | ||||||
Fair value | 3,126 | 3,126 | 3,135 | |||
Cost or amortized cost | 3,123 | 3,123 | 3,124 | |||
Gross unrealized gains | 3 | 3 | 11 | |||
Gross unrealized losses | 0 | 0 | 0 | |||
Net unrealized gains (losses) | 3 | 3 | 11 | |||
Available-for-sale Securities Debt Maturities Fair Value [Abstract] | ||||||
Total, Fair Value | 3,126 | 3,126 | 3,135 | |||
Available-for-sale Securities Debt Maturities Amortized Cost Basis [Abstract] | ||||||
Cost or amortized cost | 3,123 | 3,123 | 3,124 | |||
Collateralized Mortgage Obligations [Member] | ||||||
Available-for-sale Debt Securities [Abstract] | ||||||
Fair value | 5,131 | 5,131 | 6,492 | |||
Cost or amortized cost | 4,755 | 4,755 | 6,079 | |||
Gross unrealized gains | 405 | 405 | 451 | |||
Gross unrealized losses | (29) | (29) | (38) | |||
Net unrealized gains (losses) | 376 | 376 | 413 | |||
Available-for-sale Securities Debt Maturities Fair Value [Abstract] | ||||||
Total, Fair Value | 5,131 | 5,131 | 6,492 | |||
Available-for-sale Securities Debt Maturities Amortized Cost Basis [Abstract] | ||||||
Cost or amortized cost | 4,755 | 4,755 | 6,079 | |||
Corporate Securities [Member] | ||||||
Available-for-sale Debt Securities [Abstract] | ||||||
Fair value | 198,698 | 198,698 | 198,349 | |||
Cost or amortized cost | 202,977 | 202,977 | 198,419 | |||
Gross unrealized gains | 315 | 315 | 1,602 | |||
Gross unrealized losses | (4,594) | (4,594) | (1,672) | |||
Net unrealized gains (losses) | (4,279) | (4,279) | (70) | |||
Available-for-sale Securities Debt Maturities Fair Value [Abstract] | ||||||
Total, Fair Value | 198,698 | 198,698 | 198,349 | |||
Available-for-sale Securities Debt Maturities Amortized Cost Basis [Abstract] | ||||||
Cost or amortized cost | 202,977 | 202,977 | 198,419 | |||
Mortgage-backed Securities [Member] | ||||||
Available-for-sale Debt Securities [Abstract] | ||||||
Fair value | 32,790 | 32,790 | 24,204 | |||
Cost or amortized cost | 32,360 | 32,360 | 23,656 | |||
Gross unrealized gains | 807 | 807 | 933 | |||
Gross unrealized losses | (377) | (377) | (385) | |||
Net unrealized gains (losses) | 430 | 430 | 548 | |||
Available-for-sale Securities Debt Maturities Fair Value [Abstract] | ||||||
Total, Fair Value | 32,790 | 32,790 | 24,204 | |||
Available-for-sale Securities Debt Maturities Amortized Cost Basis [Abstract] | ||||||
Cost or amortized cost | 32,360 | 32,360 | 23,656 | |||
Municipal Obligations [Member] | ||||||
Available-for-sale Debt Securities [Abstract] | ||||||
Fair value | 30,594 | 30,594 | 96,650 | |||
Cost or amortized cost | 30,602 | 30,602 | 97,059 | |||
Gross unrealized gains | 279 | 279 | 322 | |||
Gross unrealized losses | (287) | (287) | (731) | |||
Net unrealized gains (losses) | (8) | (8) | (409) | |||
Available-for-sale Securities Debt Maturities Fair Value [Abstract] | ||||||
Total, Fair Value | 30,594 | 30,594 | 96,650 | |||
Available-for-sale Securities Debt Maturities Amortized Cost Basis [Abstract] | ||||||
Cost or amortized cost | 30,602 | 30,602 | 97,059 | |||
Non-U.S. Government Obligations [Member] | ||||||
Available-for-sale Debt Securities [Abstract] | ||||||
Fair value | 39,750 | 39,750 | 37,394 | |||
Cost or amortized cost | 40,947 | 40,947 | 37,971 | |||
Gross unrealized gains | 180 | 180 | 475 | |||
Gross unrealized losses | (1,377) | (1,377) | (1,052) | |||
Net unrealized gains (losses) | (1,197) | (1,197) | (577) | |||
Available-for-sale Securities Debt Maturities Fair Value [Abstract] | ||||||
Total, Fair Value | 39,750 | 39,750 | 37,394 | |||
Available-for-sale Securities Debt Maturities Amortized Cost Basis [Abstract] | ||||||
Cost or amortized cost | 40,947 | 40,947 | 37,971 | |||
U.S. Government Obligations [Member] | ||||||
Available-for-sale Debt Securities [Abstract] | ||||||
Fair value | 163,272 | 163,272 | 49,011 | |||
Cost or amortized cost | 165,130 | 165,130 | 49,558 | |||
Gross unrealized gains | 6 | 6 | 0 | |||
Gross unrealized losses | (1,864) | (1,864) | (547) | |||
Net unrealized gains (losses) | (1,858) | (1,858) | (547) | |||
Available-for-sale Securities Debt Maturities Fair Value [Abstract] | ||||||
Total, Fair Value | 163,272 | 163,272 | 49,011 | |||
Available-for-sale Securities Debt Maturities Amortized Cost Basis [Abstract] | ||||||
Cost or amortized cost | 165,130 | 165,130 | 49,558 | |||
Total Fixed Maturities [Member] | ||||||
Available-for-sale Debt Securities [Abstract] | ||||||
Fair value | 590,961 | 590,961 | 521,853 | |||
Cost or amortized cost | 598,098 | 598,098 | 521,017 | |||
Gross unrealized gains | 2,883 | 2,883 | 5,674 | |||
Gross unrealized losses | (10,020) | (10,020) | (4,838) | |||
Net unrealized gains (losses) | $ (7,137) | $ (7,137) | $ 836 | |||
Available-for-sale Securities Continuous Unrealized Loss Position [Abstract] | ||||||
Number of securities, 12 months or less | Security | 486 | 486 | 459 | |||
Number of securities, Greater than 12 months | Security | 135 | 135 | 112 | |||
Number of securities, total | Security | 621 | 621 | 571 | |||
Available-for-sale Securities Continuous Unrealized Loss Position, Fair Value [Abstract] | ||||||
Fair value, 12 months or less | $ 431,601 | $ 431,601 | $ 313,421 | |||
Fair value, Greater than 12 months | 81,091 | 81,091 | 75,638 | |||
Fair value, total | 512,692 | 512,692 | 389,059 | |||
Available-for-sale Securities Continuous Unrealized Loss Position, Aggregate Losses [Abstract] | ||||||
Gross unrealized loss, 12 months or less | (7,330) | (7,330) | (2,683) | |||
Gross unrealized loss, Greater than 12 months | (2,690) | (2,690) | (2,155) | |||
Gross unrealized loss, total | (10,020) | (10,020) | (4,838) | |||
Available-for-sale Securities Debt Maturities Fair Value [Abstract] | ||||||
Total, Fair Value | 590,961 | 590,961 | 521,853 | |||
Available-for-sale Securities Debt Maturities Amortized Cost Basis [Abstract] | ||||||
Cost or amortized cost | 598,098 | 598,098 | 521,017 | |||
Equity Securities [Member] | ||||||
Gross gains on available-for-sale investments sold during the period [Abstract] | ||||||
Total gains | [1] | 0 | 4,103 | 0 | 8,601 | |
Gross losses on available-for-sale investments sold during the period [Abstract] | ||||||
Total losses | [1] | $ 0 | $ (498) | $ 0 | $ (945) | |
Consumer [Member] | ||||||
Available-for-sale Equity Securities [Abstract] | ||||||
Fair value | [1] | 46,578 | ||||
Cost or amortized cost | 23,565 | |||||
Gross unrealized gains | 24,031 | |||||
Gross unrealized losses | (1,018) | |||||
Net unrealized gains (losses) | 23,013 | |||||
Energy [Member] | ||||||
Available-for-sale Equity Securities [Abstract] | ||||||
Fair value | [1] | 10,278 | ||||
Cost or amortized cost | 6,763 | |||||
Gross unrealized gains | 3,602 | |||||
Gross unrealized losses | (87) | |||||
Net unrealized gains (losses) | 3,515 | |||||
Financial [Member] | ||||||
Available-for-sale Equity Securities [Abstract] | ||||||
Fair value | [1] | 45,470 | ||||
Cost or amortized cost | 31,859 | |||||
Gross unrealized gains | 13,937 | |||||
Gross unrealized losses | (326) | |||||
Net unrealized gains (losses) | 13,611 | |||||
Industrial [Member] | ||||||
Available-for-sale Equity Securities [Abstract] | ||||||
Fair value | [1] | 25,402 | ||||
Cost or amortized cost | 8,949 | |||||
Gross unrealized gains | 16,793 | |||||
Gross unrealized losses | (340) | |||||
Net unrealized gains (losses) | 16,453 | |||||
Technology [Member] | ||||||
Available-for-sale Equity Securities [Abstract] | ||||||
Fair value | [1] | 13,061 | ||||
Cost or amortized cost | 5,768 | |||||
Gross unrealized gains | 7,401 | |||||
Gross unrealized losses | (108) | |||||
Net unrealized gains (losses) | 7,293 | |||||
Funds (e.g. mutual funds, closed end funds, ETFs) [Member] | ||||||
Available-for-sale Equity Securities [Abstract] | ||||||
Fair value | [1] | 50,291 | ||||
Cost or amortized cost | 46,177 | |||||
Gross unrealized gains | 4,153 | |||||
Gross unrealized losses | (39) | |||||
Net unrealized gains (losses) | 4,114 | |||||
Other [Member] | ||||||
Available-for-sale Equity Securities [Abstract] | ||||||
Fair value | [1] | 10,683 | ||||
Cost or amortized cost | 7,670 | |||||
Gross unrealized gains | 3,313 | |||||
Gross unrealized losses | (300) | |||||
Net unrealized gains (losses) | 3,013 | |||||
Total Equity Securities [Member] | ||||||
Available-for-sale Equity Securities [Abstract] | ||||||
Fair value | 201,763 | |||||
Cost or amortized cost | 130,751 | |||||
Gross unrealized gains | 73,230 | |||||
Gross unrealized losses | (2,218) | |||||
Net unrealized gains (losses) | $ 71,012 | |||||
Available-for-sale Securities Continuous Unrealized Loss Position [Abstract] | ||||||
Number of securities, 12 months or less | Security | [1] | 0 | 0 | 65 | ||
Number of securities, Greater than 12 months | Security | [1] | 0 | 0 | 0 | ||
Number of securities, total | Security | [1] | 0 | 0 | 65 | ||
Available-for-sale Securities Continuous Unrealized Loss Position, Fair Value [Abstract] | ||||||
Fair value, 12 months or less | [1] | $ 0 | $ 0 | $ 46,654 | ||
Fair value, Greater than 12 months | [1] | 0 | 0 | 0 | ||
Fair value, total | [1] | 0 | 0 | 46,654 | ||
Available-for-sale Securities Continuous Unrealized Loss Position, Aggregate Losses [Abstract] | ||||||
Gross unrealized loss, 12 months or less | [1] | 0 | 0 | (2,218) | ||
Gross unrealized loss, Greater than 12 months | [1] | 0 | 0 | 0 | ||
Gross unrealized loss, total | [1] | $ 0 | $ 0 | $ (2,218) | ||
[1] | Effective January 1, 2018, the Company adopted ASU 2016-01 and equity securities are no longer classified as available-for-sale. Prior periods have not been restated to conform to the current presentation. See Note 1 - Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements for further discussion. | |||||
[2] | During the three and nine months ended September 30, 2018, the Company sold $30,135 and $117,692 in equity securities, resulting in realized gains of $5,721 and $50,848, respectively. The majority of these gains were included in unrealized gains within other comprehensive income at December 31, 2017 and, as a result of the adoption of ASU 2016-01, were reclassified to retained earnings as of January 1, 2018 and were therefore not recognized in the condensed consolidated statements of operations for the three and nine months ended September 30, 2018. |
Reinsurance (Details)
Reinsurance (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Reinsurance [Abstract] | ||||
Premiums ceded to reinsurers | $ 39,318 | $ 34,025 | $ 100,560 | $ 111,124 |
Losses and loss expenses ceded to reinsurers | 44,015 | 30,531 | 92,651 | 102,401 |
Commissions from reinsurers | $ 5,986 | $ 7,205 | $ 20,309 | $ 21,000 |
Loss and Loss Expense Reserve_2
Loss and Loss Expense Reserves (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Activity in the reserve for losses and loss expenses [Roll Forward] | ||
Reserves, gross of reinsurance recoverable, at the beginning of the year | $ 680,274 | $ 576,330 |
Reinsurance recoverable on unpaid losses at the beginning of the year | 308,143 | 251,563 |
Reserves at the beginning of the year | 372,131 | 324,767 |
Provision for losses and loss expenses [Abstract] | ||
Claims occurring during the current period | 229,644 | 164,546 |
Claims occurring during prior periods | 14,683 | 16,480 |
Total incurred | 244,327 | 181,026 |
Loss and loss expense payments [Abstract] | ||
Claims occurring during the current period | 49,510 | 41,616 |
Claims occurring during prior periods | 123,167 | 109,616 |
Total paid | 172,677 | 151,232 |
Reserves at the end of the period | 443,781 | 354,561 |
Reinsurance recoverable on unpaid losses at the end of the period | 334,056 | 301,445 |
Reserves, gross of reinsurance recoverable, at the end of the period | $ 777,837 | $ 656,006 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)Segment | Sep. 30, 2017USD ($) | |
Segment Information [Abstract] | ||||
Number of reportable segments | Segment | 1 | |||
Summary of Segment Revenue [Abstract] | ||||
Net premiums earned | $ 96,807 | $ 89,100 | $ 314,209 | $ 231,070 |
Net investment income | 5,578 | 4,027 | 16,010 | 12,434 |
Net realized and unrealized gains (losses) on investments | 2,373 | 5,944 | (5,595) | 15,534 |
Commissions and other income | 3,413 | 1,407 | 7,488 | 3,789 |
Total revenues | 108,171 | 100,478 | 332,112 | 262,827 |
Property and Casualty Insurance [Member] | ||||
Summary of Segment Revenue [Abstract] | ||||
Net premiums earned | 96,807 | 89,100 | 314,209 | 231,070 |
Net investment income | 5,578 | 4,027 | 16,010 | 12,434 |
Net realized and unrealized gains (losses) on investments | 2,373 | 5,944 | (5,595) | 15,534 |
Commissions and other income | 3,413 | 1,407 | 7,488 | 3,789 |
Total revenues | $ 108,171 | $ 100,478 | $ 332,112 | $ 262,827 |
Debt (Details)
Debt (Details) - Revolving Credit Facility [Member] $ in Thousands | 9 Months Ended | |
Sep. 30, 2018USD ($)Covenant | Aug. 09, 2018USD ($) | |
Credit Agreement [Abstract] | ||
Maximum credit limit | $ 40,000 | |
Additional incremental loans limit | $ 35,000 | |
Expiration date | Aug. 9, 2022 | |
Optional period of fixed interest | 1 year | |
Outstanding drawings | $ 20,000 | |
Effective interest rate | 3.31% | |
Amount remaining on credit facility | $ 20,000 | |
Number of financial covenants | Covenant | 2 | |
Net worth and maximum consolidated leverage ratio | 0.35 |
Taxes (Details)
Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Taxes [Abstract] | |||||
Corporate income tax rate | 21.00% | 35.00% | |||
Effective federal tax rate on consolidated loss | 20.80% | 30.00% | 22.10% | 581.00% | |
Taxes paid | $ 9,500 |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fixed maturities [Abstract] | ||
Total fixed maturities | $ 590,961 | $ 521,853 |
Equity securities [Abstract] | ||
Total equity securities | 109,099 | 201,763 |
Recurring [Member] | ||
Fixed maturities [Abstract] | ||
Agency collateralized mortgage obligations | 10,471 | 16,586 |
Agency mortgage-backed securities | 36,181 | 27,075 |
Asset-backed securities | 53,881 | 43,469 |
Bank loans | 17,067 | 19,488 |
Certificates of deposit | 3,126 | 3,135 |
Collateralized mortgage obligations | 5,131 | 6,492 |
Corporate securities | 193,325 | 193,058 |
Options embedded in convertible securities | 5,373 | 5,291 |
Mortgage-backed securities | 32,790 | 24,204 |
Municipal obligations | 30,594 | 96,650 |
Non-U.S. government obligations | 39,750 | 37,394 |
U.S. government obligations | 163,272 | 49,011 |
Total fixed maturities | 590,961 | 521,853 |
Equity securities [Abstract] | ||
Consumer | 25,632 | 46,578 |
Energy | 6,438 | 10,278 |
Financial | 39,917 | 45,470 |
Industrial | 12,011 | 25,402 |
Technology | 3,657 | 13,061 |
Funds (e.g. mutual funds, closed end funds, ETFs) | 9,587 | 50,291 |
Other | 11,857 | 10,683 |
Total equity securities | 109,099 | 201,763 |
Short-term | 1,000 | 1,000 |
Cash equivalents | 104,662 | 59,173 |
Total fair value | 805,722 | 783,789 |
Recurring [Member] | Level 1 [Member] | ||
Fixed maturities [Abstract] | ||
Agency collateralized mortgage obligations | 0 | 0 |
Agency mortgage-backed securities | 0 | 0 |
Asset-backed securities | 0 | 0 |
Bank loans | 0 | 0 |
Certificates of deposit | 3,126 | 3,135 |
Collateralized mortgage obligations | 0 | 0 |
Corporate securities | 0 | 0 |
Options embedded in convertible securities | 0 | 0 |
Mortgage-backed securities | 0 | 0 |
Municipal obligations | 0 | 0 |
Non-U.S. government obligations | 0 | 0 |
U.S. government obligations | 0 | 0 |
Total fixed maturities | 3,126 | 3,135 |
Equity securities [Abstract] | ||
Consumer | 25,632 | 46,578 |
Energy | 6,438 | 10,278 |
Financial | 39,917 | 45,470 |
Industrial | 12,011 | 25,402 |
Technology | 3,657 | 13,061 |
Funds (e.g. mutual funds, closed end funds, ETFs) | 9,587 | 45,276 |
Other | 11,857 | 10,683 |
Total equity securities | 109,099 | 196,748 |
Short-term | 1,000 | 1,000 |
Cash equivalents | 0 | 0 |
Total fair value | 113,225 | 200,883 |
Recurring [Member] | Level 2 [Member] | ||
Fixed maturities [Abstract] | ||
Agency collateralized mortgage obligations | 10,471 | 16,586 |
Agency mortgage-backed securities | 36,181 | 27,075 |
Asset-backed securities | 53,881 | 43,469 |
Bank loans | 17,067 | 19,488 |
Certificates of deposit | 0 | 0 |
Collateralized mortgage obligations | 5,131 | 6,492 |
Corporate securities | 193,325 | 193,058 |
Options embedded in convertible securities | 5,373 | 5,291 |
Mortgage-backed securities | 29,162 | 24,204 |
Municipal obligations | 30,594 | 96,650 |
Non-U.S. government obligations | 39,750 | 37,394 |
U.S. government obligations | 163,272 | 49,011 |
Total fixed maturities | 584,207 | 518,718 |
Equity securities [Abstract] | ||
Consumer | 0 | 0 |
Energy | 0 | 0 |
Financial | 0 | 0 |
Industrial | 0 | 0 |
Technology | 0 | 0 |
Funds (e.g. mutual funds, closed end funds, ETFs) | 0 | 5,015 |
Other | 0 | 0 |
Total equity securities | 0 | 5,015 |
Short-term | 0 | 0 |
Cash equivalents | 104,662 | 59,173 |
Total fair value | 688,869 | 582,906 |
Recurring [Member] | Level 3 [Member] | ||
Fixed maturities [Abstract] | ||
Agency collateralized mortgage obligations | 0 | 0 |
Agency mortgage-backed securities | 0 | 0 |
Asset-backed securities | 0 | 0 |
Bank loans | 0 | 0 |
Certificates of deposit | 0 | 0 |
Collateralized mortgage obligations | 0 | 0 |
Corporate securities | 0 | 0 |
Options embedded in convertible securities | 0 | 0 |
Mortgage-backed securities | 3,628 | 0 |
Municipal obligations | 0 | 0 |
Non-U.S. government obligations | 0 | 0 |
U.S. government obligations | 0 | 0 |
Total fixed maturities | 3,628 | 0 |
Equity securities [Abstract] | ||
Consumer | 0 | 0 |
Energy | 0 | 0 |
Financial | 0 | 0 |
Industrial | 0 | 0 |
Technology | 0 | 0 |
Funds (e.g. mutual funds, closed end funds, ETFs) | 0 | 0 |
Other | 0 | 0 |
Total equity securities | 0 | 0 |
Short-term | 0 | 0 |
Cash equivalents | 0 | 0 |
Total fair value | $ 3,628 | $ 0 |
Fair Value, Unobservable Input
Fair Value, Unobservable Input Reconciliation (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Fair Value Assets Measured on Recurring Basis Unobservable Input Reconciliation Calculation [Roll Forward] | ||
Beginning of period balance | $ 0 | $ 25,218 |
Total gains or losses (realized) included in income | 0 | 406 |
Purchases | 3,628 | 81 |
Settlements | 0 | (9,123) |
Transfers into Level 3 | 0 | 144 |
Transfers out of Level 3 | 0 | (16,726) |
End of period balance | $ 3,628 | $ 0 |
Fair Value, Balance Sheet Group
Fair Value, Balance Sheet Grouping (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets [Abstract] | ||
Limited partnerships | $ 64,369 | $ 70,806 |
Carrying Value [Member] | ||
Assets [Abstract] | ||
Limited partnerships | 64,369 | 70,806 |
Liabilities [Abstract] | ||
Short-term borrowings | 20,000 | 20,000 |
Fair Value [Member] | ||
Assets [Abstract] | ||
Limited partnerships | 64,369 | 70,806 |
Liabilities [Abstract] | ||
Short-term borrowings | 20,000 | 20,000 |
Fair Value [Member] | Level 1 [Member] | ||
Assets [Abstract] | ||
Limited partnerships | 0 | 0 |
Liabilities [Abstract] | ||
Short-term borrowings | 0 | 0 |
Fair Value [Member] | Level 2 [Member] | ||
Assets [Abstract] | ||
Limited partnerships | 0 | 0 |
Liabilities [Abstract] | ||
Short-term borrowings | 20,000 | 20,000 |
Fair Value [Member] | Level 3 [Member] | ||
Assets [Abstract] | ||
Limited partnerships | 64,369 | 70,806 |
Liabilities [Abstract] | ||
Short-term borrowings | $ 0 | $ 0 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - Class B [Member] $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | |
Restricted [Member] | |
Stock Based Compensation [Abstract] | |
Shares distribution period from grant date | 1 year |
Restricted [Member] | 5/9/2017 [Member] | |
Summary of stock Issuances [Abstract] | |
Number of shares issued (in shares) | 18,183 |
Vesting date | May 9, 2018 |
Service period | 7/1/2017 - 6/30/2018 |
Grant date fair value per share (in dollars per share) | $ / shares | $ 24.20 |
Restricted [Member] | 8/31/2017 [Member] | |
Summary of stock Issuances [Abstract] | |
Number of shares issued (in shares) | 1,257 |
Vesting date | May 9, 2018 |
Service period | 8/31/2017 - 6/30/2018 |
Grant date fair value per share (in dollars per share) | $ / shares | $ 21.90 |
Restricted [Member] | 2/9/2018 [Member] | |
Summary of stock Issuances [Abstract] | |
Number of shares issued (in shares) | 408 |
Vesting date | May 9, 2018 |
Service period | 2/9/2018 - 6/30/2018 |
Grant date fair value per share (in dollars per share) | $ / shares | $ 24.20 |
Restricted [Member] | 5/8/2018 [Member] | |
Summary of stock Issuances [Abstract] | |
Number of shares issued (in shares) | 19,085 |
Vesting date | May 8, 2019 |
Service period | 7/1/2018 - 6/30/2019 |
Grant date fair value per share (in dollars per share) | $ / shares | $ 23.05 |
2017 LTIP Awards [Member] | Performance Based Equity Award [Member] | |
Summary of stock Issuances [Abstract] | |
Number of shares issued (in shares) | 0 |
Vesting period | 3 years |
2017 VCIP Awards [Member] | Performance Based Equity Award [Member] | |
Summary of stock Issuances [Abstract] | |
Number of shares issued (in shares) | 0 |
Performance period | 3 years |
2018 LTIP Awards [Member] | Performance Based Equity Award [Member] | |
Summary of stock Issuances [Abstract] | |
Performance period | 1 year |
Vesting period | 3 years |
2018 VCIP Awards [Member] | Performance Based Equity Award [Member] | |
Summary of stock Issuances [Abstract] | |
Performance period | 3 years |
Vesting period | 3 years |
Stock based compensation expense | $ | $ 103 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Amount [Abstract] | ||||
Restricted stock grants | $ 521 | $ 920 | ||
Repurchase of common shares | (2,620) | (1,880) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 418,811 | 404,345 | ||
Net income (loss) | $ (12,325) | $ 7,434 | (9,508) | 1,847 |
Other comprehensive income (loss) | (949) | 2,679 | (6,507) | 11,947 |
Cash dividends paid to shareholders | (12,652) | (12,249) | ||
Restricted stock grants | 521 | 920 | ||
Repurchase of common shares | (2,620) | (1,880) | ||
Ending balance | $ 388,045 | $ 404,930 | $ 388,045 | $ 404,930 |
Class A [Member] | ||||
Shares [Abstract] | ||||
Balance, Beginning period (in shares) | 2,623,109 | |||
Balance, Period end (in shares) | 2,622,809 | 2,622,809 | ||
Class B [Member] | ||||
Shares [Abstract] | ||||
Balance, Beginning period (in shares) | 12,423,518 | |||
Balance, Period end (in shares) | 12,323,845 | 12,323,845 | ||
Common Stock [Member] | Class A [Member] | ||||
Shares [Abstract] | ||||
Balance, Beginning period (in shares) | 2,623,109 | |||
Restricted stock grants (in shares) | 0 | |||
Repurchase of common shares (in shares) | (300) | |||
Balance, Period end (in shares) | 2,622,809 | 2,622,809 | ||
Amount [Abstract] | ||||
Balance, Beginning period | $ 112 | |||
Restricted stock grants | 0 | |||
Repurchase of common shares | 0 | |||
Balance, Period end | $ 112 | 112 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Restricted stock grants | 0 | |||
Repurchase of common shares | $ 0 | |||
Common Stock [Member] | Class B [Member] | ||||
Shares [Abstract] | ||||
Balance, Beginning period (in shares) | 12,423,518 | |||
Restricted stock grants (in shares) | 12,502 | |||
Repurchase of common shares (in shares) | (112,175) | |||
Balance, Period end (in shares) | 12,323,845 | 12,323,845 | ||
Amount [Abstract] | ||||
Balance, Beginning period | $ 530 | |||
Restricted stock grants | 1 | |||
Repurchase of common shares | (5) | |||
Balance, Period end | $ 526 | 526 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Restricted stock grants | 1 | |||
Repurchase of common shares | (5) | |||
Additional Paid-in Capital [Member] | ||||
Amount [Abstract] | ||||
Balance, Beginning period | 55,078 | |||
Restricted stock grants | 521 | |||
Repurchase of common shares | (484) | |||
Balance, Period end | $ 55,115 | 55,115 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Restricted stock grants | 521 | |||
Repurchase of common shares | $ (484) |
Shareholders' Equity, Changes i
Shareholders' Equity, Changes in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | $ 418,811 | $ 404,345 | ||||
Other comprehensive income (loss) before reclassifications | (5,024) | 16,509 | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | (1,483) | (4,562) | ||||
Other comprehensive income (loss) | $ (949) | $ 2,679 | (6,507) | 11,947 | ||
Ending balance | 388,045 | 404,930 | 388,045 | 404,930 | ||
ASU 2016-01 [Member] | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Cumulative effect of adoption | $ (46,157) | |||||
ASU 2018-02 [Member] | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Cumulative effect of adoption | 117 | |||||
Other Comprehensive Income (Loss) [Member] | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | 46,391 | 33,220 | ||||
Ending balance | (6,156) | 45,167 | (6,156) | 45,167 | ||
Other Comprehensive Income (Loss) [Member] | ASU 2016-01 [Member] | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Cumulative effect of adoption | 46,157 | |||||
Adjusted beginning balance | 234 | |||||
Other Comprehensive Income (Loss) [Member] | ASU 2018-02 [Member] | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Cumulative effect of adoption | $ 117 | |||||
Foreign Currency [Member] | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | (309) | (831) | ||||
Other comprehensive income (loss) before reclassifications | (209) | 510 | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 | ||||
Other comprehensive income (loss) | (209) | 510 | ||||
Ending balance | (518) | (321) | (518) | (321) | ||
Foreign Currency [Member] | ASU 2016-01 [Member] | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Cumulative effect of adoption | 0 | |||||
Adjusted beginning balance | (309) | |||||
Foreign Currency [Member] | ASU 2018-02 [Member] | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Cumulative effect of adoption | 0 | |||||
Unrealized Holding Gains on Available-for-sale Securities [Member] | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | 46,700 | 34,051 | ||||
Other comprehensive income (loss) before reclassifications | (4,815) | 15,999 | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | (1,483) | (4,562) | ||||
Other comprehensive income (loss) | (6,298) | 11,437 | ||||
Ending balance | $ (5,638) | $ 45,488 | (5,638) | $ 45,488 | ||
Unrealized Holding Gains on Available-for-sale Securities [Member] | ASU 2016-01 [Member] | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Cumulative effect of adoption | (46,157) | |||||
Adjusted beginning balance | $ 543 | |||||
Unrealized Holding Gains on Available-for-sale Securities [Member] | ASU 2018-02 [Member] | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Cumulative effect of adoption | $ 117 |
Related Parties (Details)
Related Parties (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018USD ($)PartnershipDirector | Sep. 30, 2017USD ($) | |
New Vernon India Fund [Member] | ||
Related Party [Abstract] | ||
Ownership interest in limited partnership | 6.00% | |
New Vernon Global Opportunity Fund [Member] | ||
Related Party [Abstract] | ||
Ownership interest in limited partnership | 37.00% | |
New Vernon Global Opportunity Fund II [Member] | ||
Related Party [Abstract] | ||
Ownership interest in limited partnership | 27.00% | |
Director [Member] | Limited Partnerships [Member] | ||
Related Party [Abstract] | ||
Number of investments | Partnership | 3 | |
Estimated aggregate value of investment in limited partnerships | $ 39,190 | |
Number of related parties | Director | 1 | |
Management fees and commissions | $ 479 | $ 553 |
Director [Member] | Investment Firm Services [Member] | ||
Related Party [Abstract] | ||
Number of related parties | Director | 1 | |
Management fees and commissions | $ 81 | $ 70 |
Market value of equity and fixed maturity securities portfolio | $ 24,871 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] | Nov. 06, 2018$ / shares |
Subsequent Event [Abstract] | |
Dividend payable, date declared | Nov. 6, 2018 |
Dividend payable, date to be paid | Dec. 4, 2018 |
Dividend payable, date of record | Nov. 20, 2018 |
Class A [Member] | |
Subsequent Event [Abstract] | |
Dividend payable (in dollars per share) | $ 0.28 |
Class B [Member] | |
Subsequent Event [Abstract] | |
Dividend payable (in dollars per share) | $ 0.28 |