Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 01, 2019 | Jun. 29, 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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Shell Company | false | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Ex Transition Period | false | ||
Entity Public Float | $ 265,014,000 | ||
Entity Common Stock, Shares Outstanding | 14,849,469 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Class A (voting) [Member] | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 2,615,339 | ||
Class B (nonvoting) [Member] | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 12,234,130 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Investments: | ||
Fixed income securities (Amortized cost: 2018, $600,504; 2017, $521,017) | $ 592,645 | $ 521,853 |
Equity securities | 66,422 | 201,763 |
Limited partnerships (Affiliated: 2018, $32,028; 2017, $43,586) | 55,044 | 70,806 |
Commercial mortgage loans | 6,672 | 0 |
Short-term and other | 1,000 | 1,000 |
Total Investments | 721,783 | 795,422 |
Cash and cash equivalents | 163,996 | 64,680 |
Restricted cash and cash equivalents | 6,815 | 4,033 |
Accounts receivable--less allowance (2018, $403; 2017, $484) | 102,972 | 87,551 |
Accrued investment income | 4,358 | 4,159 |
Reinsurance recoverable | 392,436 | 318,331 |
Prepaid reinsurance premiums | 6,095 | 4,578 |
Deferred policy acquisition costs | 6,568 | 5,608 |
Property and equipment--less accumulated depreciation (2018, $19,531; 2017, $16,614) | 46,645 | 47,317 |
Other assets | 24,760 | 18,399 |
Current federal income taxes recoverable | 7,441 | 6,938 |
Deferred federal income taxes | 6,262 | 0 |
Total Assets | 1,490,131 | 1,357,016 |
Reserves: | ||
Losses and loss expenses | 865,339 | 680,274 |
Unearned premiums | 71,625 | 53,085 |
Total Reserves | 936,964 | 733,359 |
Reinsurance payable | 66,632 | 62,308 |
Short-term borrowings | 20,000 | 20,000 |
Depository liabilities | 173 | 3,050 |
Accounts payable and other liabilities | 110,280 | 105,130 |
Deferred federal income taxes | 0 | 14,358 |
Total Liabilities | 1,134,049 | 938,205 |
Shareholders' equity: | ||
Additional paid-in capital | 54,720 | 55,078 |
Accumulated other comprehensive income (loss) | (7,347) | 46,391 |
Retained earnings | 308,075 | 316,700 |
Shareholders' equity | 356,082 | 418,811 |
Total liabilities and shareholders' equity | 1,490,131 | 1,357,016 |
Class A Voting [Member] | ||
Shareholders' equity: | ||
Common stock | 112 | 112 |
Class B Non-voting [Member] | ||
Shareholders' equity: | ||
Common stock | $ 522 | $ 530 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Fixed maturities, amortized cost | $ 600,504 | $ 521,017 |
Limited partnerships, affiliated | 32,028 | 43,586 |
Account receivable, allowance | 403 | 484 |
Property and equipment, accumulated depreciation | $ 19,531 | $ 16,614 |
Class A Voting [Member] | ||
Shareholders' equity: | ||
Common stock, shares authorized (in shares) | 3,000,000 | 3,000,000 |
Common stock, shares outstanding (in shares) | 2,615,339 | 2,623,109 |
Class B Non-voting [Member] | ||
Shareholders' equity: | ||
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares outstanding (in shares) | 12,253,922 | 12,423,518 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Revenue: | ||||
Net premiums earned | [1] | $ 432,880 | $ 328,145 | $ 276,011 |
Net investment income | 22,048 | 18,095 | 14,483 | |
Commissions and other income | 9,932 | 5,308 | 5,275 | |
Net realized gains (losses) on investments, excluding impairment losses | (6,632) | 7,366 | 26,498 | |
Other-than-temporary impairment losses on investments | (19) | (149) | (5,743) | |
Net unrealized gains (losses) on equity securities and limited partnership investments | (19,040) | 12,469 | 2,473 | |
Net realized and unrealized gains (losses) on investments | (25,691) | 19,686 | 23,228 | |
Total revenues | 439,169 | 371,234 | 318,997 | |
Expenses: | ||||
Losses and loss expenses incurred | 345,864 | 247,518 | 186,481 | |
Other operating expenses | 137,177 | 113,594 | 89,462 | |
Total expenses | 483,041 | 361,112 | 275,943 | |
Income (loss) before federal income tax expense (benefit) | (43,872) | 10,122 | 43,054 | |
Federal income tax expense (benefit) | (9,797) | (8,201) | 14,109 | |
Net income (loss) | $ (34,075) | $ 18,323 | $ 28,945 | |
Per share data: | ||||
Basic and diluted earnings (loss) (in dollars per share) | $ (2.28) | $ 1.21 | $ 1.92 | |
Dividends paid to shareholders (in dollars per share) | $ 1.12 | $ 1.08 | $ 1.04 | |
[1] | Included in Ceded to Other Companies is $0, $0 and $86 for 2018, 2017 and 2016, respectively, relating to retrocessions associated with premiums assumed from other companies. percentage of Amount Assumed to Net above considers the impact of this retrocession. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Consolidated Statements of Comprehensive Income (Loss) [Abstract] | |||||||||||
Net income (loss) | $ (24,567) | $ (12,325) | $ 2,487 | $ 330 | $ 16,476 | $ 7,434 | $ (12,343) | $ 6,756 | $ (34,075) | $ 18,323 | $ 28,945 |
Unrealized net gains (losses) on fixed income securities: | |||||||||||
Unrealized net gains (losses) arising during the period | (9,680) | 17,340 | 8,618 | ||||||||
Less: reclassification adjustment for net gains (losses) included in net income (loss) | (2,812) | 4,691 | 13,491 | ||||||||
Change in unrealized gains (losses) on investments | (6,868) | 12,649 | (4,873) | ||||||||
Foreign currency translation adjustments | (830) | 522 | 235 | ||||||||
Other comprehensive income (loss) | (7,698) | 13,171 | (4,638) | ||||||||
Comprehensive income (loss) | $ (41,773) | $ 31,494 | $ 24,307 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Retained Earnings [Member] | Total | Class A [Member]Common Stock [Member] | Class A [Member] | Class B [Member]Common Stock [Member] | Class B [Member] |
Beginning balance at Dec. 31, 2015 | $ 52,946 | $ 37,858 | $ 303,053 | $ 394,498 | $ 112 | $ 529 | ||
Beginning balance (in shares) at Dec. 31, 2015 | 2,623,000 | 12,403,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 0 | 0 | 28,945 | 28,945 | $ 0 | $ 0 | ||
Foreign currency translation adjustment, net of tax | 0 | 235 | 0 | 235 | 0 | 0 | ||
Change in unrealized gain (loss) on investments, net of tax | 0 | (4,873) | 0 | (4,873) | 0 | 0 | ||
Common stock dividends | 0 | 0 | (15,803) | (15,803) | 0 | 0 | ||
Repurchase of common stock | 0 | 0 | 0 | 0 | $ 0 | $ 0 | ||
Repurchase of common stock (in shares) | 0 | 0 | ||||||
Restricted stock grants | 1,340 | 0 | 0 | 1,343 | $ 0 | $ 3 | ||
Restricted stock grants (in shares) | 0 | 58,000 | ||||||
Ending balance at Dec. 31, 2016 | 54,286 | 33,220 | 316,195 | 404,345 | $ 112 | $ 532 | ||
Ending balance (in shares) at Dec. 31, 2016 | 2,623,000 | 12,461,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 0 | 0 | 18,323 | 18,323 | $ 0 | $ 0 | ||
Foreign currency translation adjustment, net of tax | 0 | 522 | 0 | 522 | 0 | 0 | ||
Change in unrealized gain (loss) on investments, net of tax | 0 | 12,649 | 0 | 12,649 | 0 | 0 | ||
Common stock dividends | 0 | 0 | (16,302) | (16,302) | 0 | 0 | ||
Repurchase of common stock | (360) | 0 | (1,516) | (1,880) | $ 0 | $ (4) | ||
Repurchase of common stock (in shares) | 0 | (85,000) | ||||||
Restricted stock grants | 1,152 | 0 | 0 | 1,154 | $ 0 | $ 2 | ||
Restricted stock grants (in shares) | 0 | 48,000 | ||||||
Ending balance at Dec. 31, 2017 | 55,078 | 46,391 | 316,700 | 418,811 | $ 112 | $ 530 | ||
Ending balance (in shares) at Dec. 31, 2017 | 2,623,000 | 12,424,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cumulative effect of adoption, net of tax | ASU 2016-01 [Member] | 0 | (46,157) | 46,157 | 0 | $ 0 | $ 0 | ||
Cumulative effect of adoption, net of tax | ASU 2018-02 [Member] | 0 | 117 | (117) | 0 | 0 | 0 | ||
Net income (loss) | 330 | |||||||
Beginning balance at Dec. 31, 2017 | 55,078 | 46,391 | 316,700 | 418,811 | $ 112 | $ 530 | ||
Beginning balance (in shares) at Dec. 31, 2017 | 2,623,000 | 12,424,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 0 | 0 | (34,075) | (34,075) | $ 0 | $ 0 | ||
Foreign currency translation adjustment, net of tax | 0 | (830) | 0 | (830) | 0 | 0 | ||
Change in unrealized gain (loss) on investments, net of tax | 0 | (6,868) | 0 | (6,868) | 0 | 0 | ||
Common stock dividends | 0 | 0 | (16,835) | (16,835) | 0 | 0 | ||
Repurchase of common stock | (832) | 0 | (3,755) | (4,596) | $ 0 | $ (9) | ||
Repurchase of common stock (in shares) | (8,000) | (7,770) | (192,000) | (191,898) | ||||
Restricted stock grants | 474 | 0 | 0 | 475 | $ 0 | $ 1 | ||
Restricted stock grants (in shares) | 0 | 22,000 | ||||||
Ending balance at Dec. 31, 2018 | $ 54,720 | (7,347) | $ 308,075 | 356,082 | $ 112 | $ 522 | ||
Ending balance (in shares) at Dec. 31, 2018 | 2,615,000 | 12,254,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cumulative effect of adoption, net of tax | ASU 2018-02 [Member] | $ 117 | $ (117) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities | |||
Net income (loss) | $ (34,075) | $ 18,323 | $ 28,945 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Change in accounts receivable and unearned premium | (3,904) | 2,678 | (2,721) |
Change in accrued investment income | (199) | (278) | 108 |
Change in reinsurance recoverable on paid losses | 956 | (446) | 692 |
Change in losses and loss expenses reserves, net of reinsurance | 117,027 | 47,229 | 23,568 |
Change in other assets, other liabilities and current income taxes | 8,204 | 49,221 | (8,063) |
Amortization of net policy acquisition costs | 54,981 | 47,387 | 18,085 |
Net policy acquisition costs deferred | (55,940) | (51,824) | (17,813) |
Provision for deferred income tax expense (benefit) | (18,794) | (3,866) | 2,838 |
Bond amortization | 184 | 1,865 | 3,030 |
Loss on sale of property and equipment | 0 | 235 | 63 |
Depreciation | 6,102 | 5,752 | 5,521 |
Net realized (gains) losses on investments | 25,691 | (19,686) | (23,228) |
Compensation expense related to restricted stock | 475 | 1,154 | 1,343 |
Net cash provided by operating activities | 100,708 | 97,744 | 32,368 |
Investing activities | |||
Purchases of fixed maturities and equity securities | (415,326) | (436,932) | (400,670) |
Purchases of limited partnership interests | (450) | (1,097) | 0 |
Distributions from limited partnerships | 6,869 | 19,230 | 1,462 |
Proceeds from maturities | 64,035 | 131,623 | 78,691 |
Proceeds from sales of fixed maturities | 241,429 | 148,652 | 199,790 |
Proceeds from sales of equity securities | 149,195 | 69,756 | 88,773 |
Net sales of short-term investments | 0 | 500 | 11,258 |
Purchase of insurance company-owned life insurance | (10,000) | 0 | 0 |
Purchase of commercial mortgage loans | (6,672) | 0 | 0 |
Purchases of property and equipment | (5,439) | (6,661) | (7,725) |
Proceeds from disposals of property and equipment | 10 | 582 | 1,059 |
Net cash provided by (used in) investing activities | 23,651 | (74,347) | (27,362) |
Financing activities | |||
Dividends paid to shareholders | (16,835) | (16,302) | (15,803) |
Repurchase of common shares | (4,596) | (1,880) | 0 |
Net cash used in financing activities | (21,431) | (18,182) | (15,803) |
Effect of foreign exchange rates on cash and cash equivalents | (830) | 522 | 235 |
Increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents | 102,098 | 5,737 | (10,562) |
Cash, cash equivalents and restricted cash and cash equivalents at beginning of year | 68,713 | 62,976 | 73,538 |
Cash, cash equivalents and restricted cash and cash equivalents at end of year | 170,811 | 68,713 | 62,976 |
Supplemental Disclosures of Cash Flow Information | |||
Cash paid for income taxes, net of refunds | 9,500 | 0 | 10,173 |
Cash paid for interest | $ 504 | $ 456 | $ 309 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note A - Summary of Significant Accounting Policies Description of Business: The term “Insurance Subsidiaries,” as used throughout these notes, refers to Protective Insurance Company, Protective Specialty Insurance Company, Sagamore Insurance Company and B&L Insurance, Ltd. Effective August 1, 2018, the Company changed its name to Protective Insurance Corporation to better align its holding company's and Insurance Subsidiaries' identities and to reflect its position within the insurance industry. Effective January 1, 2017, the Company determined that its business constituted one reportable property and casualty insurance segment. During 2016 and prior years, the Company had two reportable segments – property and casualty insurance and reinsurance. The Company moved to a single reportable segment based on how its operating results are regularly reviewed by the Company's chief operating decision maker when making decisions about how resources are allocated and assessing performance. Basis of Presentation: Use of Estimates: Cash and Cash Equivalents: Investments : The Company accounts for investments in limited partnerships using the equity method of accounting, which requires an investor in a limited partnership to record its proportionate share of the limited partnership's net income. To the extent the limited partnerships include both realized and unrealized investment gains or losses in the determination of net income or loss, then the Company would also recognize, through its consolidated statements of operations, its proportionate share of the investee's unrealized, as well as realized, investment gains or losses within net unrealized gains (losses) on equity securities and limited partnership investments. Short-term and other investments are carried at cost, which approximates their fair values. Fixed income securities are considered to be available-for-sale. The related unrealized net gains or losses (net of applicable tax effects) on fixed income securities are reflected directly in shareholders' equity. Included within available-for-sale fixed income 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 (losses) on investments, excluding impairment losses within the consolidated statements of operations. Realized gains and losses on disposals of fixed income securities are recorded on the trade date. Realized gains and losses on fixed income securities are determined by the specific identification of the cost of investments sold and are included in net realized gains (losses) on investments, excluding impairment losses. Effective January 1, 2018, 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 consolidated statements of operations. Realized gains and losses on disposals of equity securities are recorded on the trade date and included in net realized gains (losses) on investments, excluding impairment losses. Prior to adoption of the new accounting guidance, unrealized gains and losses related to equity securities were reflected directly in shareholders’ equity unless a decline in value was determined to be other-than-temporary, in which case the loss was charged to income. In accordance with the Financial Accounting Standards Board's ("FASB") other-than-temporary impairment guidance, if a fixed income security is in an unrealized loss position and the Company has the intent to sell the fixed income security, or it is more likely than not that the Company will have to sell the fixed income 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 consolidated statements of operations. For impaired fixed income 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 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 income 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. Property and Equipment: Goodwill and Other Intangible Assets: Reserves for Losses and Loss Expenses: Recognition of Revenue and Costs: Reinsurance Should impairment in the ability of a reinsurer to satisfy its obligations to the Company be determined to exist, current year operations would be charged in amounts sufficient to provide for the Company's additional liability. Such charges, when incurred, are included in other operating expenses, rather than losses and loss expenses incurred, because the inability of the Company to collect from reinsurers is a credit risk rather than a deficiency associated with the loss reserving process. Deferred Taxes: Restricted Stock: Earnings (Loss) Per Share: Comprehensive Income (Loss): Fair Value Measurements: Insurance Company-Owned Life Insurance: Recently Adopted Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606), or ASU 2014-09, as amended by subsequently issued ASUs, to clarify the principles for recognizing revenue. While insurance contracts are not within the scope of this updated guidance, the Company's commission and fee income, other than that directly associated with insurance contracts, is subject to this updated guidance. The updated guidance requires an entity to recognize revenue as performance obligations are met in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services. The following steps are applied in the updated guidance: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to the first quarter of 2018. 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 consolidated financial statements. The Company had no material contract assets, contract liabilities, or deferred contract costs recorded on its consolidated balance sheet at December 31, 2018. 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. The Company adopted ASU 2016-01 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 consolidated balance sheet as of December 31, 2018. Going forward, unrealized gains or losses on equity securities will be recognized in the 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. The Company adopted ASU 2016-15 as of January 1, 2018. The adoption of the new guidance did not have a material impact on the Company's consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This update amends 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. The Company adopted the new guidance as of January 1, 2018 and made an adjustment within net cash provided by operating activities on the consolidated statement of cash flows for the year ended December 31, 2017 to reflect $4,000 of restricted cash, which was classified within restricted cash and short-term investments on the December 31, 2017 consolidated balance sheet. The Company also changed the presentation of restricted cash and cash equivalents on its consolidated balance sheets to reflect this amount on a separate line. The adoption of the new guidance did not have an impact on the Company's consolidated statements of operations. 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 U.S. 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 was the difference between the historical corporate income tax rate and the newly enacted 21 percent corporate income tax rate. 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 income investments of $117 from other comprehensive income (loss) to retained earnings within the consolidated balance sheet as of December 31, 2018. 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, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for interim and annual reporting periods beginning after December 15, 2020, with early adoption permitted. The Company adopted the new guidance in the fourth quarter of 2018 and recognized an impairment charge of $3,152 related to the impairment of goodwill. See Note M for further discussion. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), or ASU 2016-02. ASU 2016-02 superseded the current lease guidance in ASC Topic 840, Leases. Under the new guidance, lessees are required to recognize for all leases, with the exception of short-term leases, a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis. Concurrently, lessees are required to recognize a right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. The guidance provides for a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative periods presented in the financial statements. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provided 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. The Company adopted the new guidance on January 1, 2019 utilizing the transition method allowed per ASU 2018-11, and accordingly, comparative period financial information will not be adjusted for the effects of the new guidance. No cumulative-effect adjustment was required to the opening balance of retained earnings on the adoption date. The Company has substantially completed an assessment of the new standard’s impact and determined the new standard will not have a material impact on the Company's consolidated statements of operations or cash flows; however, the estimated impact of adopting the new guidance will result in a right-of-use asset and lease liability being recorded on the consolidated balance sheets subsequent to December 31, 2018 of approximately $400 based on the lease portfolio existing as of the date of this Annual Report on Form 10-K. 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 July 2018, the FASB issued ASU No. 2018-09, Codification Improvements. This update provides clarification, corrects errors in and makes minor improvements to 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 were effective upon issuance of this update. The Company will adopt amendments as they become applicable. The Company has determined that 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 | 12 Months Ended |
Dec. 31, 2018 | |
Investments [Abstract] | |
Investments | Note B - Investments The following is a summary of available-for-sale securities at December 31: Fair Value Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Net Unrealized Gains (Losses) December 31, 2018 (1) Fixed income securities Agency collateralized mortgage obligations $ 10,687 $ 10,636 $ 145 $ (94 ) $ 51 Agency mortgage-backed securities 37,385 37,168 371 (154 ) 217 Asset-backed securities 64,422 66,241 14 (1,833 ) (1,819 ) Bank loans 9,750 10,208 27 (485 ) (458 ) Certificates of deposit 2,835 2,835 – – – Collateralized mortgage obligations 5,423 5,095 376 (48 ) 328 Corporate securities 190,450 196,925 127 (6,602 ) (6,475 ) Mortgage-backed securities 38,540 38,586 377 (423 ) (46 ) Municipal obligations 29,155 29,102 239 (186 ) 53 Non-U.S. government obligations 25,180 25,339 6 (165 ) (159 ) U.S. government obligations 178,818 178,369 1,252 (803 ) 449 Total fixed income securities $ 592,645 $ 600,504 $ 2,934 $ (10,793 ) $ (7,859 ) Fair Value Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Net Unrealized Gains (Losses) December 31, 2017 Fixed income securities 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 income securities 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 A – 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 December 31, 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. 2018 2017 Number of Securities Fair Value Gross Unrealized Loss Number of Securities Fair Value Gross Unrealized Loss Fixed income securities: 12 months or less 275 $ 282,646 $ (7,296 ) 459 $ 313,421 $ (2,683 ) Greater than 12 months 217 131,001 (3,497 ) 112 75,638 (2,155 ) Total fixed income securities 492 413,647 (10,793 ) 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 492 $ 413,647 $ (10,793 ) 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 A – Summary of Significant Accounting Policies — Recently Adopted Accounting Pronouncements for further discussion. Unrealized losses in the Company's fixed income portfolio are generally the result of interest rate or foreign currency fluctuations. The Company does not intend to sell any fixed income securities in an unrealized loss position at December 31, 2018, and it is not more likely than not that the Company will have to sell any such fixed income security before recovery of its amortized cost basis. Accordingly, the Company does not believe any unrealized losses represent other-than-temporary impairments as of December 31, 2018. The fair value and the cost or amortized cost of fixed income investments at December 31, 2018, organized by contractual maturity, are shown below. Actual maturities may 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 $ 45,858 7.7 % $ 46,150 7.7 % Excess of one year to five years 287,506 48.5 290,743 48.4 Excess of five years to ten years 101,605 17.1 104,571 17.4 Excess of ten years 6,641 1.2 6,410 1.1 Total contractual maturities 441,610 74.5 447,874 74.6 Asset-backed securities 151,035 25.5 152,630 25.4 Total $ 592,645 100.0 % $ 600,504 100.0 Major categories of investment income for the years ended December 31, are summarized as follows: 2018 2017 2016 Interest on fixed income securities $ 19,092 $ 15,340 $ 13,254 Dividends on equity securities 4,380 4,611 3,598 Money market funds, Short-term and other 1,529 471 128 25,001 20,422 16,980 Investment expenses (2,953 ) (2,327 ) (2,497 ) Net investment income $ 22,048 $ 18,095 $ 14,483 Gains and losses on investments, including equity method earnings from limited partnerships, for the years ended December 31 are summarized below: 2018 2017 2016 Gross gains on available-for-sale investments sold during the period: Fixed income securities $ 10,807 $ 9,135 $ 11,628 Equity securities (1) – 10,481 28,742 Total gains 10,807 19,616 40,370 Gross losses on available-for-sale investments sold during the period: Fixed income securities (14,367 ) (9,882 ) (10,940 ) Equity securities (1) – (2,368 ) (2,932 ) Total losses (14,367 ) (12,250 ) (13,872 ) Other-than-temporary impairments (19 ) (149 ) (5,743 ) Change in value of limited partnership investments (9,343 ) 12,469 2,473 Losses on equity securities: Realized losses on equity securities sold during the period (2) (3,072 ) – – Unrealized losses on equity securities held at the end of the period (9,697 ) – – Realized and unrealized losses on equity securities held at the end of the period (12,769 ) – – Net realized and unrealized gains (losses) on investments $ (25,691 ) $ 19,686 $ 23,228 (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 A – Summary of Significant Accounting Policies — Recently Adopted Accounting Pronouncements for further discussion. (2) During 2018, the Company sold $149,195 in equity securities, resulting in a gain on sale of $51,900. The majority of these gains were included in unrealized gains within other comprehensive income (loss) 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 consolidated statements of operations for the year ended December 31, 2018. Gain and loss activity for fixed income and equity security investments, as shown in the previous table, includes adjustments for other-than-temporary impairment for the years ended December 31 summarized as follows: 2018 2017 2016 Cumulative charges to income at beginning of year $ 4,209 $ 5,650 $ 10,513 Writedowns based on objective and subjective criteria 19 149 5,743 Recovery of prior writedowns upon sale or disposal (3,298 ) (1,590 ) (10,606 ) Net pre-tax realized gain 3,279 1,441 4,863 Cumulative charges to income at end of year $ 930 $ 4,209 $ 5,650 There is no primary market and only a limited secondary market for the Company's investments in limited partnerships and, in most cases, the Company is prohibited from disposing of its limited partnership interests for some period of time and generally must seek approval from the applicable general partner for any such disposal. Distributions of earnings from these partnerships are largely at the sole discretion of the general partners and distributions are generally not received by the Company for many years after the earnings have been reported. The Company has a commitment to contribute up to an additional $1,317 to a limited partnership as of December 31, 2018. The Company's limited partnerships include one investment which primarily invests in public and private equity markets in India. This limited partnership investment's value as of December 31, 2018 and 2017 was $26,344 and $29,817, respectively. At December 31, 2018, the Company's estimated ownership interest in this limited partnership investment was approximately 6%. The Company's share of income (losses), from both realized and unrealized appreciation (losses) from this limited partnership investment was ($3,473), $7,665 and ($1,117) in 2018, 2017 and 2016, respectively. The summarized financial information of this limited partnership investment as of and for the years ended December 31 is as follows: 2018 2017 2016 Investment income (loss) $ 4,298 $ 623 $ (5 ) Partnership expenses 6,874 2,206 2,426 Net investment loss (2,576 ) (1,583 ) (2,431 ) Realized gain on investments 12,314 8,723 7,754 Unrealized appreciation (depreciation) on investments (65,250 ) 133,807 (21,002 ) Net increase (decrease) in partners' capital resulting from operations $ (55,512 ) $ 140,947 $ (15,679 ) Total assets $ 462,058 $ 566,629 $ 448,263 Total liabilities 45,483 30,976 39,988 Total partners' capital 416,575 535,653 408,275 The Company's limited partnerships include an additional investment which primarily invests in public equity and fixed income markets. This limited partnership investment's value as of December 31, 2018 and 2017 was $14,975 and $19,380, respectively. At December 31, 2018, the Company's estimated ownership interest in this limited partnership investment was approximately 5%. The Company's share of income (losses) from both realized and unrealized appreciation (losses) from this limited partnership investment was ($4,404), $1,452 and $2,662 in 2018, 2017 and 2016, respectively. The summarized financial information of this limited partnership investment as of and for the years ended December 31 is as follows: 2018 2017 2016 Investment income $ 19,507 $ 14,524 $ 13,534 Partnership expenses 9,132 12,861 10,628 Net investment income 10,375 1,663 2,906 Realized gain (loss) on investments (37,143 ) (15,073 ) 830 Unrealized appreciation (depreciation) on investments (48,132 ) 49,847 46,685 Net increase (decrease) in partners' capital resulting from operations $ (74,900 ) $ 36,437 $ 50,421 Total assets $ 241,174 $ 354,709 $ 464,184 Total liabilities 20,020 2,000 14,555 Total partners' capital 221,154 352,709 449,629 The fair value of regulatory deposits with various insurance departments in the United States and Canada totaled $87,981 and $86,335 at December 31, 2018 and 2017, respectively. Short-term investments at December 31, 2018 included $1,000 in certificates of deposit issued by a Bermuda bank. The Company's fixed income securities are over 90% invested in investment grade fixed income investments. The Company has no fixed income investments that were originally issued with guarantees by a third-party insurance company nor does the Company have any direct exposure to any guarantor at December 31, 2018. Approximately $54,233 of fixed income investments (6.2% of the Company's consolidated investment portfolio, which includes money market instruments classified as cash equivalents) consists of non-rated bonds and bonds rated as less than investment grade at year-end. These investments include a diversified portfolio of over 40 issuers and have a $5,202 aggregate net unrealized loss position at December 31, 2018. |
Loss and Loss Expense Reserves
Loss and Loss Expense Reserves | 12 Months Ended |
Dec. 31, 2018 | |
Loss and Loss Expense Reserves [Abstract] | |
Loss and Loss Expense Reserves | Note C - Loss and Loss Expense Reserves Activity in the reserves for losses and loss expenses for the years ended December 31 is summarized as follows. All amounts are shown net of reinsurance, unless otherwise indicated. 2018 2017 2016 Reserves, gross of reinsurance recoverable, at the beginning of the year $ 680,274 $ 576,330 $ 513,596 Reinsurance recoverable on unpaid losses at the beginning of the year 308,143 251,563 211,843 Reserves at the beginning of the year 372,131 324,767 301,753 Provision for losses and loss expenses: Claims occurring during the current year 329,078 228,303 172,645 Claims occurring during prior years 16,786 19,215 13,836 Total incurred losses and loss expenses 345,864 247,518 186,481 Loss and loss expense payments: Claims occurring during the current year 84,738 67,234 54,239 Claims occurring during prior years 143,853 132,920 109,228 Total paid 228,591 200,154 163,467 Reserves at the end of the year 489,404 372,131 324,767 Reinsurance recoverable on unpaid losses at the end of the year 375,935 308,143 251,563 Reserves, gross of reinsurance recoverable, at the end of the year $ 865,339 $ 680,274 $ 576,330 The table above shows that a reserve deficiency of $16,786 developed during 2018 in the settlement of claims occurring on or before December 31, 2017, compared to reserve deficiencies of $19,215 in 2017 and $13,836 in 2016. The developments for each year are 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 as part of the normal reserving process. The $16,786 prior accident year deficiency that developed during 2018 primarily related 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 unexpected increase in the time to settle claims leading to an unfavorable change in claim settlement patterns. This 2018 deficiency compares to a deficiency of $19,215 for 2017, also related to unfavorable loss development from commercial automobile coverages, particularly from severe transportation loss events that occurred primarily during the first six months of 2017 and higher than expected loss development for discontinued lines of business. Losses and loss expenses for 2018 also reflected an increase in current accident year losses caused by severe commercial automobile losses, including continued emergence of severity. Loss reserves have been reduced by estimated salvage and subrogation recoverable of approximately $7,545 and $7,559 at December 31, 2018 and 2017, respectively. The following is information about incurred and paid claims development as of December 31, 2018, net of reinsurance, as well as cumulative claim frequency and the total of incurred ‐ ‐ ‐ Workers' Compensation As of December 31, 2018 Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Total of Incurred-but-Not- Reported Liabilities Plus Expected Development on Reported Claims Number of Reported Claims Per Year Accident Year For the Years Ended December 31 (2009-2017 is Supplementary Information and Unaudited) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 17,270 $ 20,931 $ 21,447 $ 21,261 $ 21,268 $ 20,767 $ 20,641 $ 20,817 $ 20,946 $ 21,153 $ 985 3,784 2010 20,644 20,111 19,400 19,300 18,849 18,344 19,195 19,541 19,819 1,098 4,223 2011 26,057 26,628 26,958 26,767 25,515 27,293 26,617 26,631 2,179 4,546 2012 23,965 25,544 24,887 24,485 25,616 27,020 26,775 2,824 4,481 2013 27,619 30,638 29,913 32,121 32,553 31,131 3,780 5,275 2014 36,768 36,968 34,009 33,427 31,031 4,482 5,406 2015 26,277 23,115 25,889 24,948 5,328 6,308 2016 35,240 29,757 29,317 6,740 6,059 2017 42,387 37,731 13,918 16,106 2018 62,973 36,250 12,893 Total $ 311,509 $ 77,584 Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance For the Years Ended December 31 (2009-2017 is Supplementary Information and Unaudited) Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 4,186 $ 10,073 $ 13,343 $ 15,576 $ 16,592 $ 17,448 $ 18,028 $ 18,514 $ 18,982 $ 19,261 2010 3,974 9,134 11,963 13,845 14,966 15,835 16,590 16,789 17,062 2011 4,916 11,912 15,973 18,884 20,617 21,622 22,569 22,991 2012 4,597 11,004 14,834 17,415 18,946 20,276 21,157 2013 4,880 12,792 18,065 21,655 23,643 24,968 2014 5,328 13,665 19,075 22,387 23,968 2015 2,918 10,128 15,020 17,487 2016 5,784 13,377 18,461 2017 6,150 15,811 2018 10,987 Total $ 192,153 Outstanding liabilities prior to 2009 net of reinsurance 12,640 Liabilities for claims and claims adjustment expenses, net of reinsurance $ 131,996 Commercial Liability As of December 31, 2018 Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Total of Incurred-but-Not- Reported Liabilities Plus Expected Development on Reported Claims Number of Reported Claims Per Year For the Years Ended December 31 (2009-2017 is Supplementary Information and Unaudited) Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 29,707 $ 30,406 $ 30,203 $ 26,280 $ 27,259 $ 25,872 $ 25,373 $ 25,320 $ 25,485 $ 25,761 $ 190 899 2010 31,124 22,161 21,899 19,139 20,300 19,764 19,377 19,081 19,985 112 2,403 2011 46,829 43,832 31,633 36,894 35,805 37,122 36,076 37,852 131 2,901 2012 49,743 54,269 49,743 51,367 48,708 51,475 51,648 135 3,130 2013 53,817 39,143 37,701 36,371 46,690 48,857 663 3,749 2014 49,971 52,254 52,483 52,964 64,372 307 3,320 2015 61,420 70,174 64,323 71,088 2,785 3,185 2016 61,638 68,974 77,362 7,048 3,707 2017 103,126 103,611 25,527 5,261 2018 179,589 70,070 6,870 Total $ 680,125 $ 106,968 Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance For the Years Ended December 31 (2009-2017 is Supplementary Information and Unaudited) Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 928 $ 17,880 $ 19,718 $ 23,521 $ 24,866 $ 25,066 $ 25,114 $ 25,125 $ 25,199 $ 25,391 2010 1,649 7,166 11,635 16,052 18,627 18,517 18,866 18,662 18,791 2011 1,809 11,350 23,615 30,795 33,255 34,009 35,561 36,400 2012 3,086 23,252 32,942 45,303 47,601 50,036 50,750 2013 5,167 15,772 25,270 34,481 44,865 46,084 2014 4,023 9,046 28,393 45,075 57,692 2015 10,923 27,582 49,267 63,133 2016 6,843 30,377 52,764 2017 11,415 46,529 2018 18,689 Total $ 416,223 Outstanding liabilities prior to 2009 net of reinsurance 4,621 Liabilities for claims and claims adjustment expenses, net of reinsurance $ 268,523 Professional Liability Reinsurance Assumed (in runoff) As of December 31, 2018 Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Total of Incurred-but-Not- Reported Liabilities Plus Expected Development on Reported Claims Number of Reported Claims Per Year Accident Year For the Years Ended December 31 (2009-2017 is Supplementary Information and Unaudited) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – N/A 2010 2,196 4,277 7,827 7,946 9,733 10,740 11,689 11,893 11,677 24 N/A 2011 10,492 8,314 9,017 9,859 10,779 12,735 12,744 12,725 116 N/A 2012 10,041 9,276 5,569 10,157 14,605 16,555 14,949 706 N/A 2013 14,370 13,034 11,618 17,694 23,256 22,213 1,847 N/A 2014 12,675 8,825 7,259 9,837 12,749 2,297 N/A 2015 11,638 7,859 7,147 10,422 5,422 N/A 2016 6,368 2,482 1,522 1,035 N/A 2017 – – – N/A 2018 – – N/A Total $ 86,257 $ 11,447 Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance For the Years Ended December 31 (2009-2017 is Supplementary Information and Unaudited) Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – 2010 41 729 3,505 5,844 7,758 9,904 11,132 11,334 11,334 2011 50 637 2,061 4,983 8,104 10,404 11,679 12,280 2012 103 992 2,388 5,077 8,355 11,239 13,091 2013 123 1,135 5,088 10,988 14,779 18,229 2014 723 761 2,241 3,999 6,627 2015 10 390 1,899 3,207 2016 – 5 99 2017 – – 2018 – Total $ 64,867 Outstanding liabilities prior to 2009 net of reinsurance – Liabilities for claims and claims adjustment expenses, net of reinsurance $ 21,390 Physical Damage (1) Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance As of December 31, 2018 For the Years Ended December 31 (2016-2017 is Supplementary Information and Unaudited) Total of Incurred-but-Not-Reported Liabilities Plus Expected Development on Reported Claims Number of Reported Claims Per Year Accident Year 2016 2017 2018 2016 and prior $ 40,651 $ 39,477 $ 39,658 $ 5 9,619 2017 48,440 47,193 512 10,517 2018 53,726 4,221 10,186 Total $ 140,577 $ 4,738 Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance For the Years Ended December 31 (2016-2017 is Supplementary Information and Unaudited) Accident Year 2016 2017 2018 2016 and prior $ 34,114 $ 39,354 $ 39,073 2017 39,517 46,554 2018 41,631 Total $ 127,258 Outstanding liabilities prior to 2016 net of reinsurance 10 Liabilities for claims and claims adjustment expenses, net of reinsurance $ 13,329 (1) The reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses in the consolidated balance sheet at December 31 is as follows. 2018 2017 Net outstanding liabilities Commercial Liability $ 268,523 $ 162,581 Workers' Compensation 131,996 113,751 Physical Damage 13,329 9,087 Professional Liability Assumed 21,390 28,980 Other short-duration insurance lines 33,716 39,883 Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance 468,954 354,282 Reinsurance recoverable on unpaid claims Commercial Liability 194,483 124,695 Workers' Compensation 172,869 170,394 Physical Damage 1,851 51 Other short-duration insurance lines 6,732 13,002 Reinsurance recoverable on unpaid losses at the end of the year 375,935 308,142 Unallocated claims adjustment expenses 20,450 17,850 Total gross liability for unpaid claims and claims adjustment expense $ 865,339 $ 680,274 The following is supplementary information about average historical claims duration as of December 31, 2018: Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Supplementary Information and Unaudited) Years 1 2 3 4 5 6 7 8 9 10 Commercial Liability 8.5 % 30.5 % 23.7 % 20.6 % 9.9 % 1.9 % 1.9 % 0.5 % 0.5 % 0.7 % Workers' Compensation 17.3 % 26.3 % 16.3 % 10.4 % 5.7 % 4.3 % 3.3 % 1.6 % 1.8 % 1.3 % Physical Damage 80.6 % 14.1 % 2.0 % N/A N/A N/A N/A N/A N/A N/A Professional Liability Assumed 1.1 % 3.6 % 13.5 % 19.0 % 18.3 % 17.8 % 11.0 % 1.7 % – N/A Reserve methodologies for incurred but not reported losses The Company uses both standard actuarial techniques common to most insurance companies as well as proprietary techniques developed by the Company in connection with its specialty business products. For its short-tail lines of The Company also uses the loss development factor approach for its long-tail lines of business, including workers' compensation. A minimum of 15 accident years is included in the loss development triangles used to calculate link ratios and the selected loss development factors used to determine the reserves for incurred but not reported losses. Significant emphasis is placed on the use of tail factors for the Company's long-tail lines of business. For the Company's commercial automobile risks, which are covered by regularly updated reinsurance agreements and which contain wide-ranging self-insured retentions ("SIR"), traditional actuarial methods are supplemented by other methods, as described below, in consideration of the Company's exposures to loss. In situations where the Company's reinsurance structure, the insured's SIR selections, policy volume, and other factors are changing, current accident period loss exposures may not be homogenous enough with historical loss data to allow for reliable projection of future developed losses. Therefore, the Company supplements the above-described actuarial methods with loss ratio reserving techniques developed from the Company's proprietary databases to arrive at the reserve for incurred but not reported losses for the calendar/accident period under review. As losses for a given calendar/accident period develop with the passage of time, management evaluates such development on a monthly and quarterly basis and adjusts reserve factors, as necessary, to reflect current judgment with regard to the anticipated ultimate incurred losses. This process continues until all losses are settled for each period subject to this method. Claim count methodology The Company uses a claim event and coverage combination to estimate frequency. For example, a single claim event involving loss for physical damage of a vehicle and personal injury to a claimant would be considered two claims for purposes of the calculation of frequency. A single claim event causing personal injury to two claimants would be considered a single claim under the methodology. Due to the number of reinsurance assumed treaties entered into (and the varying structures: both quota share and excess of loss) the Company deems it impractical to collect claim frequency information related to this business and this information has not been made available to the Company. |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2018 | |
Reinsurance [Abstract] | |
Reinsurance | Note D – Reinsurance The Insurance Subsidiaries cede portions of their gross premiums written to certain other insurers under excess of loss and quota share treaties and by facultative placements. Some reinsurance contracts provide that a loss be shared among the Company and its reinsurers on a predetermined pro-rata basis ("quota-share"), while other contracts provide that the Company keep a fixed amount of the loss, similar to a deductible, with reinsurers taking all losses above this fixed amount ("excess of loss"). Reinsurance treaties with other companies permit the recovery of a portion of related direct losses. Management determines the amount of net exposure it is willing to accept generally on a product-line basis. Certain historical treaties covering commercial automobile risks include annual deductibles which must be exceeded before the Company can recover under the terms of the treaty. The Company retains a higher percentage of the direct premium in consideration of these deductible provisions. The Company remains liable to the extent the reinsuring companies are unable to meet their obligations under reinsurance contracts. The Company also serves as an assuming reinsurer on treaties with direct writing insurance companies and, prior to June 30, 2015, under retrocessions from other reinsurers for catastrophic property coverages. Accordingly, for periods prior to that date, the occurrence of catastrophic events could have had a significant impact on the Company's operations. In addition, the Insurance Subsidiaries participate in certain mandatory residual market pools, which require insurance companies to provide coverages on assigned risks. The assigned risk pools allocate participation to all insurers based upon each insurer's portion of premium writings on a state or national level. Historically, the operation of these assigned risk pools has resulted in net losses being allocated to the Company, although such losses have not been material in relation to the Company's operations. The following table summarizes the impact of reinsurance ceded and assumed on the Company's net premiums written and earned for the most recent three years: Premiums Written Premiums Earned 2018 2017 2016 2018 2017 2016 Direct $ 581,070 $ 504,033 $ 395,625 $ 562,364 $ 470,158 $ 394,679 Ceded on direct (138,102 ) (151,348 ) (131,166 ) (131,080 ) (145,201 ) (129,926 ) Net direct 442,968 352,685 264,459 431,284 324,957 264,753 Assumed 1,430 704 7,379 1,596 3,188 11,344 Ceded on assumed – – (86 ) – – (86 ) Net assumed 1,430 704 7,293 1,596 3,188 11,258 Net $ 444,398 $ 353,389 $ 271,752 $ 432,880 $ 328,145 $ 276,011 Net losses and loss expenses incurred for 2018, 2017 and 2016 have been reduced by ceded reinsurance recoveries of approximately $148,173, $128,086 and $108,656, respectively. Ceded reinsurance premiums and loss recoveries for the purchase of catastrophe reinsurance coverage on the Company's net direct business were not material. Net losses and loss expenses incurred include a savings of $1,300 for 2018 and expenses of $5,223 and $14,746 for 2017 and 2016, relating to reinsurance assumed from non-affiliated insurance or reinsurance companies. Components of reinsurance recoverable at December 31, are as follows: 2018 2017 Case unpaid losses, net of valuation allowance $ 163,011 $ 119,615 Incurred but not reported unpaid losses and loss expenses 211,805 187,163 Paid losses and loss expenses 1,250 2,206 Unearned premiums 16,370 9,347 $ 392,436 $ 318,331 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
Income Taxes | Note E - Income Taxes On December 22, 2017, the U.S. Tax Act was signed into law, which lowered the U.S. corporate income tax rate from 35% to 21% effective January 1, 2018. As a result, the Company recorded a tax benefit of $9,572 related to the remeasurement of its deferred tax assets and liabilities at December 31, 2017. As of December 31, 2017, the Internal Revenue Service ("IRS") had not yet published all of the detailed regulations resulting from the enactment of the U.S. Tax Act; therefore, while the Company had not completed its accounting for the tax effects, it made a reasonable estimate of the tax effects on its existing deferred tax balances at December 31, 2017. The Company finalized its accounting for the tax effects of the U.S. Tax Act during 2018. No material adjustments to income tax expense (benefit) were recorded during 2018. The U.S. Tax Act provides for a change in the methodology employed to calculate reserves for tax purposes. Beginning January 1, 2018, a higher interest rate assumption and longer payout patterns are used to discount these reserves. In addition, companies are no longer able to elect to use their own experience to discount reserves, but instead are required to use the industry-based tables published by the IRS annually. During 2017, the Company estimated the provisional tax impacts related to the change in methodology as $1,696. During 2018, the IRS published the discount factor tables and the Company calculated the tax impact of the methodology change and recorded an updated amount for deferred tax assets and an offsetting deferred tax liability of $2,262 at December 31, 2018. The deferred tax liability was amortized into income in the amount of $323 during 2018 in accordance with the 8-year inclusion described in the U.S. Tax Act. Deferred income taxes are calculated to account for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities as of December 31 are as follows: 2018 2017 Deferred tax liabilities: Unrealized gain on fixed income and equity security investments $ 4,572 $ 15,086 Deferred acquisition costs 2,552 1,804 Loss and loss expense reserves 3,583 2,623 Limited partnership investments – 3,826 Accelerated depreciation 690 492 Other 1,509 1,791 Total deferred tax liabilities 12,906 25,622 Deferred tax assets: Loss and loss expense reserves 9,999 6,761 Limited partnership investments 3,498 – Unearned premiums discount 2,321 1,837 Other-than-temporary investment declines 625 815 Deferred compensation 580 885 Deferred ceding commission 1,173 627 Other 972 339 Total deferred tax assets 19,168 11,264 Net deferred tax (assets) liabilities $ (6,262 ) $ 14,358 A summary of the difference between federal income tax expense computed at the statutory rate and that reported in the consolidated financial statements as of December 31 is as follows: 2018 2017 2016 Statutory federal income rate applied to pre-tax income (loss) $ (9,213 ) $ 3,543 $ 15,069 Tax effect of (deduction): Tax-exempt investment income (253 ) (968 ) (938 ) Change in enacted tax rates – (9,572 ) – Other (331 ) (1,204 ) (22 ) Federal income tax expense (benefit) $ (9,797 ) $ (8,201 ) $ 14,109 Federal income tax expense (benefit) as of December 31 consists of the following: 2018 2017 2016 Tax expense (benefit) on pre-tax income (loss): Current $ 8,997 $ (4,335 ) $ 11,271 Deferred (18,794 ) (3,866 ) 2,838 $ (9,797 ) $ (8,201 ) $ 14,109 The provision for deferred federal income taxes as of December 31 consists of the following: 2018 2017 2016 Limited partnerships $ (2,383 ) $ 4,099 $ 503 Discounts of loss and loss expense reserves (2,704 ) 1,315 (114 ) Reserves - salvage and subrogation and other 427 56 (1,110 ) Unearned premium discount (484 ) (1,767 ) 298 Deferred compensation 305 (168 ) 595 Other-than-temporary investment declines 695 (127 ) 2,320 Deferred acquisitions costs and ceding commission 201 1,553 (95 ) Change in enacted tax rates – (9,572 ) – Unrealized gains / losses (13,876 ) – – Other (975 ) 745 441 Provision for deferred federal income taxes $ (18,794 ) $ (3,866 ) $ 2,838 The Company is required to establish a valuation allowance for any portion of the gross deferred tax asset that management believes will not be realized. Management has determined that no such valuation allowance is necessary at December 31, 2018 or 2017. As of December 31, 2018, calendar years 2017, 2016 and 2015 remain subject to examination by the IRS. The Company has no uncertain tax positions as of December 31, 2018 or 2017. The Company recognizes accrued interest and penalties, if any, related to unrecognized tax benefits in income tax expense (benefit) and changes in such accruals would impact the Company's effective tax rate. There were no amounts accrued for the payment of interest at December 31, 2018, 2017 and 2016. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Shareholders' Equity [Abstract] | |
Shareholders' Equity | Note F - Shareholders' Equity The Company's Class A and Class B Common Stock has a stated value of approximately $.04 per share. The Company paid a total of $16,835, or $1.12 per share, in dividends during 2018, $16,302, or $1.08 per share, during 2017 and $15,803, or $1.04 per share, during 2016. On August 31, 2017, the Company's Board of Directors authorized the reinstatement of its share repurchase program for up to 2,464,209 shares of the Company's Class A or Class B Common Stock. On August 7, 2018, the Company's Board of Directors reaffirmed its share repurchase program, but also provided that the aggregate dollar amount of shares of the Company's Common Stock that may be repurchased under the share repurchase program through August 8, 2019 may not exceed $25,000. Pursuant to this share repurchase program, the Company entered into a Rule 10b5-1 plan on September 24, 2018, which authorized the repurchase of up to $12,000 of the Company's outstanding common shares at various pricing thresholds, in accordance with guidelines specified under Rule 10b5-1 of the Securities Exchange Act of 1934. The Rule 10b5-1 plan expired on November 8, 2018. No duration has been placed on the Company's share repurchase program, and the Company reserves the right to amend, suspend or discontinue it at any time. The share repurchase program does not commit the Company to repurchase any shares of its Common Stock. During the year ended December 31, 2018, the Company paid $4,596 to repurchase 7,770 shares of Class A Common Stock at an average share price of $21.58 and 191,898 shares of Class B Common Stock at an average share price of $23.07 under the share repurchase program. Accumulated Other Comprehensive Income (Loss) A reconciliation of the components of accumulated other comprehensive income (loss) at December 31 is as follows: 2018 2017 Investments: Total unrealized gain (loss) before federal income tax expense (benefit) $ (7,859 ) $ 71,848 Deferred tax benefit (liability) 1,651 (25,148 ) Net unrealized gains (losses) on investments (6,208 ) 46,700 Foreign exchange adjustment: Total unrealized losses (1,442 ) (475 ) Deferred tax benefit 303 166 Net unrealized losses on foreign exchange adjustment (1,139 ) (309 ) Accumulated other comprehensive income (loss) $ (7,347 ) $ 46,391 Details of changes in net unrealized gains (losses) on investments for the years ended December 31 are as follows: 2018 2017 2016 Investments: Pre-tax holding gains (losses) on debt and equity securities arising during period (1) $ (12,253 ) $ 26,677 $ 13,259 Less: applicable federal income tax expense (benefit) (2,573 ) 9,337 4,641 (9,680 ) 17,340 8,618 Pre-tax gains (losses) on debt and equity securities included in net income (loss) during period (1) (3,560 ) 7,217 20,755 Less: applicable federal income tax expense (benefit) (748 ) 2,526 7,264 (2,812 ) 4,691 13,491 Change in unrealized gains (losses) on investments $ (6,868 ) $ 12,649 $ (4,873 ) (1) |
Other Operating Expenses
Other Operating Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Other Operating Expenses [Abstract] | |
Other Operating Expenses | Note G - Other Operating Expenses Details of other operating expenses for the years ended December 31: 2018 2017 2016 Amortization of gross deferred policy acquisition costs $ 78,105 $ 70,574 $ 51,597 Other underwriting expenses 46,638 37,230 41,692 Reinsurance ceded credits (23,124 ) (23,187 ) (33,512 ) Total underwriting expenses 101,619 84,617 59,777 Operating expenses of non-insurance companies 32,406 28,977 29,685 Goodwill impairment charge 3,152 – – Total other operating expenses $ 137,177 $ 113,594 $ 89,462 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2018 | |
Employee Benefit Plans [Abstract] | |
Employee Benefit Plans | Note H - Employee Benefit Plans The Company maintains a defined contribution 401(k) Employee Savings and Profit Sharing Plan (the "Plan") which covers nearly all employees. The Company's contributions are based on a set percentage and the contributions to the Plan for 2018, 2017 and 2016 were $3,486, $2,797 and $2,449, respectively. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Stock Based Compensation [Abstract] | |
Stock Based Compensation | Note I - Stock Based Compensation In accordance with the terms of the 1981 Stock Purchase Plan (the "1981 Plan"), the Company is obligated to repurchase shares issued under the 1981 Plan, at a price equal to 90% of the book value of the shares at the end of the quarter immediately preceding the date of repurchase from one outside director. A limited number of shares have ever been repurchased under the 1981 Plan. At December 31, 2018, there were 46,875 shares of Class A Common Stock and 187,500 shares of Class B Common Stock outstanding which remain eligible for repurchase by the Company. Restricted Stock: 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 details of the restricted stock issuances to directors for 2018, 2017 and 2016: Grant Date Number of Shares Issued Vesting Date Service Period Grant Date Fair Value Per Share 5/10/2016 17,677 5/10/2017 7/1/2016 - 6/30/2017 $ 24.89 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 the services. Director compensation expense associated with these restricted stock grants of $464, $454 and $460 was charged against income for the restricted stock awards granted in 2018, 2017 and 2016, respectively. On February 8, 2017, the Company issued 20,181 shares of restricted Class B Common Stock to certain of the Company's executives under the Company's Restricted Stock Compensation Plan. The shares of restricted stock represent a portion of the calendar year 2017 compensation earned by certain executives under the terms of the Company's Executive Incentive Bonus Plan. The shares of restricted stock will vest over a three-year period from the date of grant. The shares of restricted stock were valued based on the closing price of the Company's Class B Common Stock on February 8, 2017, the day the shares of restricted stock were granted. Each share of restricted stock was valued at $23.80 per share, representing a total value of $480. Non-vested shares of restricted stock will be forfeited should an executive's employment terminate for any reason other than death, disability or retirement, as defined by the Compensation Committee. 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 a cumulative 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 December 31, 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. No 2018 LTIP Awards were earned based on the Company's performance in 2018, and therefore no shares were issued pursuant to the 2018 LTIP Awards. 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 a cumulative 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. No shares are eligible to be issued under the 2018 VCIP Awards as of December 31, 2018. On November 13, 2018, the Company entered into an employment agreement (the "Agreement") with its Interim Chief Executive Officer, John D. Nichols, Jr. Pursuant to the terms of the Agreement, on November 13, 2018, Mr. Nichols was granted 85,000 restricted shares of the Company's Class B Common Stock (the "Stock Grant"), of which 42,500 shares will vest as of October 17, 2019; 21,250 shares will vest as of October 17, 2020, and 21,250 shares will vest as of October 17, 2021. The Company recorded $140 in expense in the fourth quarter of 2018 related to the Stock Grant. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Information [Abstract] | |
Segment Information | Note J – Segment Information Effective January 1, 2017, the Company determined that its business constituted one reportable property and casualty insurance segment based on how its operating results are regularly reviewed by the Company's chief operating decision maker when making decisions about how resources are allocated and assessing performance. The property and casualty insurance segment provides multiple lines of insurance coverage primarily to commercial automobile companies, as well as to independent contractors who contract with commercial automobile companies. In addition, the Company provides workers' compensation coverage for a variety of operations outside the transportation industry. The following table summarizes segment revenues for the years ended December 31: 2018 2017 2016 Revenues: Net premiums earned $ 432,880 $ 328,145 $ 276,011 Net investment income 22,048 18,095 14,483 Net realized and unrealized gains (losses) on investments (25,691 ) 19,686 23,228 Commissions and other income 9,932 5,308 5,275 Total revenues $ 439,169 $ 371,234 $ 318,997 |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings (Loss) Per Share [Abstract] | |
Earnings (Loss) Per Share | Note K - Earnings (Loss) Per Share The following is a reconciliation of the denominators used in the calculation of basic and diluted earnings (loss) per share for the years ended December 31: 2018 2017 2016 Average shares outstanding for basic earnings (loss) per share 14,964,812 15,065,216 15,071,900 Dilutive effect of share equivalents – 42,220 12,108 Average shares outstanding for diluted earnings (loss) per share 14,964,812 15,107,436 15,084,008 |
Concentrations of Credit Risk
Concentrations of Credit Risk | 12 Months Ended |
Dec. 31, 2018 | |
Concentrations of Credit Risk [Abstract] | |
Concentrations of Credit Risk | Note L - Concentrations of Credit Risk The Company writes policies of excess insurance attaching above SIRs and also writes policies that contain per-claim deductibles. Those losses and claims that fall within the SIR limits are obligations of the insured; however, the Company writes surety bonds in favor of various regulatory agencies guaranteeing the insureds' payment of claims within the SIR. Further, specified portions of losses and claims incurred under large deductible policies, while obligations of the Company, are contractually reimbursable to the Company from the insureds. The Company requires collateral from its insureds to serve as a source of reimbursement if the Company is obligated to pay claims within the SIR by reason of an insured's default or if the insured fails to reimburse the Company for deductible amounts paid by the Company. Acceptable collateral may be provided in the form of letters of credit on Company-approved banks, Company-approved marketable securities or cash. At December 31, 2018, the Company held collateral in the aggregate amount of $333,188. The amount of collateral required of an insured is determined by the financial condition of the insured, the type of obligations guaranteed by the Company, estimated reserves for incurred losses within the SIR or deductible that have been reported to the insured or the Company, estimated incurred but not reported losses, and estimated losses that are expected to occur within the SIR or deductible prior to the next collateral adjustment date. In general, the Company attempts to hold collateral equal to 100% of the ultimate losses that would be paid by or due the Company in the event of an insured's default. Periodic audits are conducted by the Company to evaluate its exposure and the collateral required. If a deficiency in collateral is noted as the result of an audit, additional collateral is requested immediately. Because collateral amounts contain numerous estimates of the Company's exposure, are adjusted only periodically and are sometimes reduced based on the superior financial condition of the insured, the amount of collateral held by the Company at a given point in time may not be sufficient to fully reimburse the Company for all of its guarantees or amounts due in the event of an insured's default. In that regard, the Company is not fully collateralized for the guarantees made for, or the deductible amounts that may be due from, FedEx Corporation and certain of its subsidiaries and related entities ("FedEx"), and in the event of their default, such default may have a material adverse impact on the Company. The Company estimates its uncollateralized exposure related to FedEx to be as much as 70% (after-tax) of shareholders' equity at December 31, 2018. The Company's balance sheet includes paid and estimated unpaid amounts recoverable from reinsurers under various agreements. These recoverables are only partially collateralized. The largest amount due from an individual reinsurer, net of collateral and offsets, was $48,473 at December 31, 2018. |
Acquisition and Related Goodwil
Acquisition and Related Goodwill and Intangibles | 12 Months Ended |
Dec. 31, 2018 | |
Acquisition and Related Goodwill and Intangibles [Abstract] | |
Acquisition and Related Goodwill and Intangibles | Note M – Acquisition and Related Goodwill and Intangibles On October 31, 2008, the Company purchased a commercial lines specialty insurance agency for a cash purchase price of $3,500. As part of the purchase, the Company recorded goodwill of $3,152 and intangible assets of $179. Accumulated amortization of intangible assets was $179 as of both December 31, 2018 and 2017. During the fourth quarter of 2018, the Company conducted its annual impairment review. Based on the results of that review, the Company concluded that its entire goodwill balance was impaired, resulting in an impairment loss of $3,152. The Company utilized a market approach, which considered revenue and earnings multiples of its own and comparable company information. In the analysis, the Company considered the significant decline in its stock price and the decline in overall financial performance during 2018, particularly in more recent periods, as well as the downgrade to its A.M. Best rating in late 2018. |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value [Abstract] | |
Fair Value | Note N – Fair Value Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The carrying amounts reported in the consolidated balance sheets for cash, accounts receivables, reinsurance recoverable, accounts payable and accrued expenses, income taxes payable, short-term borrowings and unearned premiums approximate fair value because of the short-term nature of these items. The following tables summarize fair value measurements by level for assets measured at fair value on a recurring basis: As of December 31, 2018: Description Total Level 1 Level 2 Level 3 Fixed income securities: Agency collateralized mortgage obligations $ 10,687 $ – $ 10,687 $ – Agency mortgage-backed securities 37,385 – 37,385 – Asset-backed securities 64,422 – 64,422 – Bank loans 9,750 – 9,750 – Certificates of deposit 2,835 2,835 – – Collateralized mortgage obligations 5,423 – 5,423 – Corporate securities 186,651 – 186,651 – Options embedded in convertible securities 3,799 – 3,799 – Mortgage-backed securities 38,540 – 38,540 – Municipal obligations 29,155 – 29,155 – Non-U.S. government obligations 25,180 – 25,180 – U.S. government obligations 178,818 – 178,818 – Total fixed income securities 592,645 2,835 589,810 – Equity securities: Consumer 17,945 17,945 – – Energy 3,179 3,179 – – Financial 25,253 25,253 – – Industrial 6,920 6,920 – – Technology 2,303 2,303 – – Funds (e.g. mutual funds, closed end funds, ETFs) 5,489 5,489 – – Other 5,333 5,333 – – Total equity securities 66,422 66,422 – – Short-term 1,000 1,000 – – Cash equivalents 156,855 – 156,855 – Total $ 816,922 $ 70,257 $ 746,665 $ – As of December 31, 2017: Description Total Level 1 Level 2 Level 3 Fixed income securities: 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 income securities 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 did not have any Level 3 assets at December 31, 2018 or 2017. Level 3 assets, when present, 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 years ended December 31: 2018 2017 Beginning of period balance $ – $ 25,218 Total gains or losses (realized) included in income – 406 Purchases – 81 Settlements – (9,123 ) Transfers into Level 3 – 144 Transfers out of Level 3 – (16,726 ) End of period balance $ – $ – 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 2018. In addition to the preceding disclosures on assets recorded at fair value in the 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 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. Commercial mortgage loans: Commercial mortgage loans are carried primarily at amortized cost along with a valuation allowance for losses when necessary. These investments represent interests in commercial mortgage loans originated and serviced by a third party of which the Company shares, on a pro-rata basis, in all related cash flows of the underlying mortgage loans. The fair value of the Company’s investment in these commercial mortgage loans is based on expected future cash flows discounted at the current interest rate for origination of similar quality loans, adjusted for specific loan risk. These investments 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 consolidated balance sheets at December 31, 2018 and 2017 is as follows: 2018: Carrying Fair Value Value Level 1 Level 2 Level 3 Total Assets: Limited partnerships $ 55,044 $ – $ – $ 55,044 $ 55,044 Commercial mortgage loans 6,672 – – 6,672 6,672 Liabilities: Short-term borrowings 20,000 – 20,000 – 20,000 2017: Assets: Limited partnerships $ 70,806 $ – $ – $ 70,806 $ 70,806 Commercial mortgage loans – – – – – Liabilities: Short-term borrowings 20,000 – 20,000 – 20,000 |
Quarterly Results of Operations
Quarterly Results of Operations (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Results of Operations (Unaudited) [Abstract] | |
Quarterly Results of Operations (Unaudited) | Note O - Quarterly Results of Operations (Unaudited) Quarterly results of operations are as follows: 2018 2017 1st 2nd 3rd 4th 1st 2nd 3rd 4th Net premiums earned $ 105,462 $ 111,940 $ 96,807 $ 118,671 $ 73,974 $ 67,996 $ 89,100 $ 97,075 Net investment income 4,636 5,796 5,578 6,038 3,692 4,716 4,027 5,661 Net realized and unrealized gains (losses) on investments (4,533 ) (3,435 ) 2,373 (20,096 ) 6,294 3,296 5,944 4,152 Losses and loss expenses incurred 72,298 77,488 94,540 101,537 48,599 71,754 60,673 66,492 Net income (loss) 330 2,487 (12,325 ) (24,567 ) 6,756 (12,343 ) 7,434 16,476 Net income (loss) per share $ 0.02 $ 0.17 $ (0.82 ) $ (1.65 ) $ 0.45 $ (0.82 ) $ 0.49 $ 1.10 |
Statutory
Statutory | 12 Months Ended |
Dec. 31, 2018 | |
Statutory [Abstract] | |
Statutory | Note P - Statutory Net income of the Insurance Subsidiaries, all of which are wholly-owned, as determined in accordance with statutory accounting practices, was $36,236, $22,000 and $31,647 for 2018, 2017 and 2016, respectively. Consolidated statutory capital and surplus for these Insurance Subsidiaries was $395,891 and $421,663 at December 31, 2018 and 2017, respectively, of which $64,134 may be transferred by dividend or loan to Protective during calendar year 2019 with proper notification to, but without approval from, regulatory authorities. State regulatory authorities prescribe calculations of the minimum amount of statutory capital and surplus necessary for each insurance company to remain authorized. These computations are referred to as risk-based capital requirements and are based on a number of complex factors taking into consideration the quality and nature of assets, the historical adequacy of recorded liabilities and the specific nature of business conducted. At December 31, 2018, the minimum statutory capital and surplus requirements of the Insurance Subsidiaries was $117,426. Actual consolidated statutory capital and surplus at December 31, 2018 exceeded this requirement by $278,464. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Leases | Note Q - Leases The Company leases certain computer and related equipment using noncancelable operating leases. Lease expense for 2018, 2017 and 2016 was $204, $417 and $157, respectively. At December 31, 2018, future lease payments for operating leases with initial or remaining noncancelable terms of one year or more consisted of the following: 2019 $ 342 2020 114 2021 15 2022 and thereafter 1 Total minimum payments required $ 472 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt [Abstract] | |
Debt | Note R – 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 the London Interbank Offered Rate 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 December 31, 2018. At December 31, 2018, the effective interest rate was 3.61%, and the Company had $20,000 remaining under the revolving credit facility. 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 December 31, 2018, requiring the Company to have a minimum U.S. generally accepted accounting principles net worth and a maximum consolidated leverage ratio of 0.35 to 1.00. |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2018 | |
Related Parties [Abstract] | |
Related Parties | Note S - Related Parties At December 31, 2018, the Company is invested in two limited partnerships with an aggregate estimated value of $32,028 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 December 31, 2018 was 6% for the New Vernon India Fund and 37% for the New Vernon Global Opportunity Fund. During 2018, the Company withdrew $4,229 from the New Vernon Global Opportunity Fund II, which liquidated its investment in this limited partnership. The Company also withdrew $2,271 from the New Vernon Global Opportunity Fund, which reduced its investment in this limited partnership. These limited partnerships contributed to or (reduced) investment gains, net of fees, in 2018, 2017 and 2016 by ($5,059), $9,549 and ($971), respectively. 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 income portfolios with an aggregate market value of approximately $17,065 at December 31, 2018. Total commissions and net fees earned by the investment firms and affiliates on these portfolios were $103, $97 and $207 for the years ended December 31, 2018, 2017 and 2016. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note T – Subsequent Events In January 2019, the Company withdrew $10,000 from the New Vernon India Fund limited partnership, which reduced the Company's investment in this limited partnership. The Company also withdew $5,684 from the New Vernon Global Opportunity Fund limited partnership, which liquidated the Company's investment in this limited partnership. On February 26, 2019, the Board of Directors of Protective Insurance Corporation declared a quarterly dividend of $0.10 per share on the Company's Class A and Class B Common Stock. The dividend per share will be payable March 26, 2019 to shareholders of record on March 12, 2019. |
SCHEDULE I --SUMMARY OF INVESTM
SCHEDULE I --SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | 12 Months Ended |
Dec. 31, 2018 | |
SCHEDULE I -- SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES [Abstract] | |
SCHEDULE I -- SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES | SCHEDULE I PROTECTIVE INSURANCE CORPORATION AND SUBSIDIARIES SUMMARY OF INVESTMENTS OTHER THAN INVESTMENTS IN RELATED PARTIES (in thousands) As of December 31, 2018 Type of Investment Cost Fair Value Amount at Which Shown in the Consolidated Balance Sheet (1) Fixed Income Securities: Bonds: Agency collateralized mortgage obligations $ 10,636 $ 10,687 $ 10,687 Agency mortgage-backed securities 37,168 37,385 37,385 Asset-backed securities 66,241 64,422 64,422 Bank loans 10,208 9,750 9,750 Certificates of deposit 2,835 2,835 2,835 Collateralized mortgage obligations 5,095 5,423 5,423 Corporate securities 196,925 190,450 190,450 Mortgage-backed securities 38,586 38,540 38,540 Municipal obligations 29,102 29,155 29,155 Non-U.S. government obligations 25,339 25,180 25,180 U.S. government obligations 178,369 178,818 178,818 Total fixed income securities 600,504 592,645 592,645 Equity Securities: Common Stocks: Consumer 15,963 17,945 17,945 Energy 3,981 3,179 3,179 Financial 23,111 25,253 25,253 Industrial 3,287 6,920 6,920 Technology 1,259 2,303 2,303 Funds (e.g. mutual funds, closed end funds, ETFs) 6,797 5,489 5,489 Other 5,032 5,333 5,333 Total equity securities 59,430 66,422 66,422 Commercial mortgage loans 6,672 6,672 6,672 Short-term: Certificates of deposit 1,000 1,000 1,000 Total short-term and other 1,000 1,000 1,000 Total investments $ 667,606 $ 666,739 $ 666,739 (1) Amounts presented above do not include investments of $156,855 classified as cash and cash equivalents in the consolidated balance sheet. |
SCHEDULE II CONDENSED FINANCIAL
SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT | 12 Months Ended |
Dec. 31, 2018 | |
SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT [Abstract] | |
SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT | SCHEDULE II PROTECTIVE INSURANCE CORPORATION AND SUBSIDIARIES CONDENSED FINANCIAL INFORMATION OF REGISTRANT BALANCE SHEETS - PARENT COMPANY ONLY (in thousands) December 31 2018 2017 Assets Investment in subsidiaries $ 401,260 $ 436,879 Due from affiliates 1,152 1,191 Investments other than subsidiaries: Fixed income securities 22,302 22,306 Limited partnerships 215 222 22,517 22,528 Cash and cash equivalents 15,185 26,496 Accounts receivable 2,276 6,833 Other assets 28,794 24,772 Total assets $ 471,184 $ 518,699 Liabilities and shareholders' equity Liabilities: Premiums payable $ 22,964 $ 14,046 Deposits from insureds 58,748 60,893 Short-term borrowings 20,000 20,000 Other liabilities 13,390 4,949 115,102 99,888 Shareholders' equity: Common stock: Class A 112 112 Class B 522 530 Additional paid-in capital 54,720 55,078 Accumulated other comprehensive income (loss) (7,347 ) 46,391 Retained earnings 308,075 316,700 356,082 418,811 Total liabilities and shareholders' equity $ 471,184 $ 518,699 SCHEDULE II PROTECTIVE INSURANCE CORPORATION AND SUBSIDIARIES CONDENSED FINANCIAL INFORMATION OF REGISTRANT STATEMENTS OF INCOME (LOSS) PARENT COMPANY ONLY (in thousands) Year Ended December 31 2018 2017 2016 Revenue: Commissions and service fees $ 17,456 $ 18,863 $ 27,736 Cash dividends from subsidiaries 5,000 10,000 20,000 Net investment income 569 348 134 Net realized gains (losses) on investments (192 ) 308 (3 ) Other 51 (106 ) (24 ) 22,884 29,413 47,843 Expenses: Salary and related items 20,158 18,140 17,462 Other 11,724 9,686 10,808 31,882 27,826 28,270 Income (loss) before federal income tax benefit and equity in undistributed income of subsidiaries (8,998 ) 1,587 19,573 Federal income tax benefit (2,862 ) (2,971 ) (69 ) (6,136 ) 4,558 19,642 Equity in undistributed income of subsidiaries (27,939 ) 13,765 9,303 Net income (loss) $ (34,075 ) $ 18,323 $ 28,945 SCHEDULE II PROTECTIVE INSURANCE CORPORATION AND SUBSIDIARIES CONDENSED FINANCIAL INFORMATION OF REGISTRANT STATEMENTS OF COMPREHENSIVE INCOME (LOSS) PARENT COMPANY ONLY (in thousands) Year Ended December 31 2018 2017 2016 Net income (loss) $ (34,075 ) $ 18,323 $ 28,945 Other comprehensive income (loss), net of tax: Unrealized net gains (losses) on fixed income securities: Unrealized net gains (losses) arising during the period (9,680 ) 17,340 8,618 Less: reclassification adjustment for net gains (losses) included in net income (loss) (2,812 ) 4,691 13,491 (6,868 ) 12,649 (4,873 ) Foreign currency translation adjustments (830 ) 522 235 Other comprehensive income (loss) (7,698 ) 13,171 (4,638 ) Comprehensive income (loss) $ (41,773 ) $ 31,494 $ 24,307 SCHEDULE II PROTECTIVE INSURANCE CORPORATION AND SUBSIDIARIES CONDENSED FINANCIAL INFORMATION OF REGISTRANT STATEMENTS OF CASH FLOWS - PARENT COMPANY ONLY (in thousands) Year Ended December 31 2018 2017 2016 Net cash provided by operating activities $ 14,019 $ 44,998 $ 15,484 Investing activities: Purchases of investments (11,435 ) (21,365 ) (4,000 ) Sales or maturities of investments 11,213 9,146 3,493 Net sales of short-term investments – – 2,165 Distributions from limited partnerships – 298 – Net purchases of property and equipment (3,677 ) (3,394 ) (4,278 ) Net cash used in investing activities (3,899 ) (15,315 ) (2,620 ) Financing activities: Dividends paid to shareholders (16,835 ) (16,302 ) (15,803 ) Repurchase of common shares (4,596 ) (1,880 ) – Net cash used in financing activities (21,431 ) (18,182 ) (15,803 ) Increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents (11,311 ) 11,501 (2,939 ) Cash, cash equivalents and restricted cash and cash equivalents at beginning of year 26,496 14,995 17,934 Cash, cash equivalents and restricted cash and cash equivalents at end of year $ 15,185 $ 26,496 $ 14,995 Note to Condensed Financial Statements -- Basis of Presentation The Company's investment in subsidiaries is stated at cost plus equity in the undistributed earnings of subsidiaries since the date of acquisition. The Company's share of net income of its subsidiaries is included in income using the equity method. These financial statements should be read in conjunction with the Company's consolidated financial statements. |
SCHEDULE III -- SUPPLEMENTARY I
SCHEDULE III -- SUPPLEMENTARY INSURANCE INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
SCHEDULE III -- SUPPLEMENTARY INSURANCE INFORMATION [Abstract] | |
SCHEDULE III -- SUPPLEMENTARY INSURANCE INFORMATION | SCHEDULE III PROTECTIVE INSURANCE CORPORATION AND SUBSIDIARIES SUPPLEMENTARY INSURANCE INFORMATION (in thousands) As of December 31 Year Ended December 31 Segment Deferred Policy Acquisition Costs Reserves for Unpaid Claims and Claim Adjustment Expenses Unearned Premiums Other Policy Claims and Benefits Payable Net Premium Earned Net Investment Income Benefits, Claims, Losses and Settlement Expenses Amortization of Deferred Policy Acquisition Costs Other Operating Expenses Net Premiums Written (A) (A) (A) (B) Property/Casualty Insurance 2018 $ 6,568 $ 865,339 $ 71,625 – $ 432,880 $ 22,048 $ 345,864 $ 78,105 $ 23,514 $ 444,398 2017 5,608 680,274 53,085 – 328,145 18,095 247,518 70,574 14,043 353,389 2016 1,172 576,330 21,694 – 276,011 14,483 186,481 51,597 8,180 271,752 (A) Allocations of certain expenses have been made to investment income, settlement expenses and other operating expenses and are based on a number of assumptions and estimates. Results among these categories would change if different methods were applied. (B) Commission allowances relating to reinsurance ceded are offset against other operating expenses. |
SCHEDULE IV -- REINSURANCE
SCHEDULE IV -- REINSURANCE | 12 Months Ended |
Dec. 31, 2018 | |
SCHEDULE IV -- REINSURANCE [Abstract] | |
SCHEDULE IV -- REINSURANCE | SCHEDULE IV PROTECTIVE INSURANCE CORPORATION AND SUBSIDIARIES REINSURANCE ( (in thousands) Direct Premiums Ceded to Other Companies Assumed from Other Companies Net Amount % of Amount Assumed to Net Premiums Earned - Years Ended December 31: 2018 $ 562,364 $ 131,080 $ 1,596 $ 432,880 0.4 % 2017 470,158 145,201 3,188 328,145 1.0 % 2016 394,679 130,012 11,344 276,011 4.1 % Note: Included in Ceded to Other Companies is $0, $0 and $86 for 2018, 2017 and 2016, respectively, relating to retrocessions associated with premiums assumed from other companies. Percentage of Amount Assumed to Net above considers the impact of this retrocession. |
SCHEDULE VI--SUPPLEMENTAL INFOR
SCHEDULE VI--SUPPLEMENTAL INFORMATION CONCERNING PROPERTY/CASUALTY INSURANCE OPERATIONS | 12 Months Ended |
Dec. 31, 2018 | |
SCHEDULE VI--SUPPLEMENTAL INFORMATION CONCERNING PROPERTY/CASUALTY INSURANCE OPERATIONS [Abstract] | |
SCHEDULE VI--SUPPLEMENTAL INFORMATION CONCERNING PROPERTY/CASUALTY INSURANCE OPERATIONS | SCHEDULE VI PROTECTIVE INSURANCE CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION CONCERNING PROPERTY/CASUALTY INSURANCE OPERATIONS (in thousands) As of December 31 Year Ended December 31 Deferred Policy Reserves for Unpaid Claims Discount, if any Deducted Net Claims and Claim Adjustment Expenses Incurred Related to Amortization of Deferred Policy Paid Claims and Claims Net Affiliation with Registrant Acquisition Costs Adjustment Expenses from Reserves Unearned Premiums Earned Premiums Investment Income Current Year Prior Years Acquisition Costs Adjustment Expenses Premiums Written Consolidated Property/Casualty Subsidiaries: 2018 $ 6,568 $ 865,339 $ – $ 71,625 $ 432,880 $ 22,048 $ 329,078 $ 16,786 $ 78,105 $ 228,591 $ 444,398 2017 5,608 680,274 – 53,085 328,145 18,095 228,303 19,215 70,574 200,154 353,389 2016 1,172 576,330 – 21,694 276,011 14,483 172,645 13,836 51,597 163,467 271,752 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Description of Business | Description of Business: The term “Insurance Subsidiaries,” as used throughout these notes, refers to Protective Insurance Company, Protective Specialty Insurance Company, Sagamore Insurance Company and B&L Insurance, Ltd. Effective August 1, 2018, the Company changed its name to Protective Insurance Corporation to better align its holding company's and Insurance Subsidiaries' identities and to reflect its position within the insurance industry. Effective January 1, 2017, the Company determined that its business constituted one reportable property and casualty insurance segment. During 2016 and prior years, the Company had two reportable segments – property and casualty insurance and reinsurance. The Company moved to a single reportable segment based on how its operating results are regularly reviewed by the Company's chief operating decision maker when making decisions about how resources are allocated and assessing performance. |
Basis of Presentation | Basis of Presentation: |
Use of Estimates | Use of Estimates: |
Cash and Cash Equivalents | Cash and Cash Equivalents: |
Investments | Investments : The Company accounts for investments in limited partnerships using the equity method of accounting, which requires an investor in a limited partnership to record its proportionate share of the limited partnership's net income. To the extent the limited partnerships include both realized and unrealized investment gains or losses in the determination of net income or loss, then the Company would also recognize, through its consolidated statements of operations, its proportionate share of the investee's unrealized, as well as realized, investment gains or losses within net unrealized gains (losses) on equity securities and limited partnership investments. Short-term and other investments are carried at cost, which approximates their fair values. Fixed income securities are considered to be available-for-sale. The related unrealized net gains or losses (net of applicable tax effects) on fixed income securities are reflected directly in shareholders' equity. Included within available-for-sale fixed income 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 (losses) on investments, excluding impairment losses within the consolidated statements of operations. Realized gains and losses on disposals of fixed income securities are recorded on the trade date. Realized gains and losses on fixed income securities are determined by the specific identification of the cost of investments sold and are included in net realized gains (losses) on investments, excluding impairment losses. Effective January 1, 2018, 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 consolidated statements of operations. Realized gains and losses on disposals of equity securities are recorded on the trade date and included in net realized gains (losses) on investments, excluding impairment losses. Prior to adoption of the new accounting guidance, unrealized gains and losses related to equity securities were reflected directly in shareholders’ equity unless a decline in value was determined to be other-than-temporary, in which case the loss was charged to income. In accordance with the Financial Accounting Standards Board's ("FASB") other-than-temporary impairment guidance, if a fixed income security is in an unrealized loss position and the Company has the intent to sell the fixed income security, or it is more likely than not that the Company will have to sell the fixed income 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 consolidated statements of operations. For impaired fixed income 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 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 income 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. |
Property and Equipment | Property and Equipment: |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets: |
Reserves for Losses and Loss Expenses | Reserves for Losses and Loss Expenses: |
Recognition of Revenue and Costs | Recognition of Revenue and Costs: |
Reinsurance | Reinsurance Should impairment in the ability of a reinsurer to satisfy its obligations to the Company be determined to exist, current year operations would be charged in amounts sufficient to provide for the Company's additional liability. Such charges, when incurred, are included in other operating expenses, rather than losses and loss expenses incurred, because the inability of the Company to collect from reinsurers is a credit risk rather than a deficiency associated with the loss reserving process. |
Deferred Taxes | Deferred Taxes: |
Restricted Stock | Restricted Stock: |
Earnings (Loss) Per Share | Earnings (Loss) Per Share: |
Comprehensive Income (Loss) | Comprehensive Income (Loss): |
Fair Value Measurements | Fair Value Measurements: |
Insurance Company-Owned Life Insurance | Insurance Company-Owned Life Insurance: |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606), or ASU 2014-09, as amended by subsequently issued ASUs, to clarify the principles for recognizing revenue. While insurance contracts are not within the scope of this updated guidance, the Company's commission and fee income, other than that directly associated with insurance contracts, is subject to this updated guidance. The updated guidance requires an entity to recognize revenue as performance obligations are met in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services. The following steps are applied in the updated guidance: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to the first quarter of 2018. 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 consolidated financial statements. The Company had no material contract assets, contract liabilities, or deferred contract costs recorded on its consolidated balance sheet at December 31, 2018. 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. The Company adopted ASU 2016-01 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 consolidated balance sheet as of December 31, 2018. Going forward, unrealized gains or losses on equity securities will be recognized in the 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. The Company adopted ASU 2016-15 as of January 1, 2018. The adoption of the new guidance did not have a material impact on the Company's consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This update amends 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. The Company adopted the new guidance as of January 1, 2018 and made an adjustment within net cash provided by operating activities on the consolidated statement of cash flows for the year ended December 31, 2017 to reflect $4,000 of restricted cash, which was classified within restricted cash and short-term investments on the December 31, 2017 consolidated balance sheet. The Company also changed the presentation of restricted cash and cash equivalents on its consolidated balance sheets to reflect this amount on a separate line. The adoption of the new guidance did not have an impact on the Company's consolidated statements of operations. 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 U.S. 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 was the difference between the historical corporate income tax rate and the newly enacted 21 percent corporate income tax rate. 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 income investments of $117 from other comprehensive income (loss) to retained earnings within the consolidated balance sheet as of December 31, 2018. 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, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for interim and annual reporting periods beginning after December 15, 2020, with early adoption permitted. The Company adopted the new guidance in the fourth quarter of 2018 and recognized an impairment charge of $3,152 related to the impairment of goodwill. See Note M for further discussion. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), or ASU 2016-02. ASU 2016-02 superseded the current lease guidance in ASC Topic 840, Leases. Under the new guidance, lessees are required to recognize for all leases, with the exception of short-term leases, a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis. Concurrently, lessees are required to recognize a right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. The guidance provides for a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative periods presented in the financial statements. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provided 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. The Company adopted the new guidance on January 1, 2019 utilizing the transition method allowed per ASU 2018-11, and accordingly, comparative period financial information will not be adjusted for the effects of the new guidance. No cumulative-effect adjustment was required to the opening balance of retained earnings on the adoption date. The Company has substantially completed an assessment of the new standard’s impact and determined the new standard will not have a material impact on the Company's consolidated statements of operations or cash flows; however, the estimated impact of adopting the new guidance will result in a right-of-use asset and lease liability being recorded on the consolidated balance sheets subsequent to December 31, 2018 of approximately $400 based on the lease portfolio existing as of the date of this Annual Report on Form 10-K. 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 July 2018, the FASB issued ASU No. 2018-09, Codification Improvements. This update provides clarification, corrects errors in and makes minor improvements to 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 were effective upon issuance of this update. The Company will adopt amendments as they become applicable. The Company has determined that 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) | 12 Months Ended |
Dec. 31, 2018 | |
Investments [Abstract] | |
Available-for-Sale Securities | The following is a summary of available-for-sale securities at December 31: Fair Value Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Net Unrealized Gains (Losses) December 31, 2018 (1) Fixed income securities Agency collateralized mortgage obligations $ 10,687 $ 10,636 $ 145 $ (94 ) $ 51 Agency mortgage-backed securities 37,385 37,168 371 (154 ) 217 Asset-backed securities 64,422 66,241 14 (1,833 ) (1,819 ) Bank loans 9,750 10,208 27 (485 ) (458 ) Certificates of deposit 2,835 2,835 – – – Collateralized mortgage obligations 5,423 5,095 376 (48 ) 328 Corporate securities 190,450 196,925 127 (6,602 ) (6,475 ) Mortgage-backed securities 38,540 38,586 377 (423 ) (46 ) Municipal obligations 29,155 29,102 239 (186 ) 53 Non-U.S. government obligations 25,180 25,339 6 (165 ) (159 ) U.S. government obligations 178,818 178,369 1,252 (803 ) 449 Total fixed income securities $ 592,645 $ 600,504 $ 2,934 $ (10,793 ) $ (7,859 ) Fair Value Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Net Unrealized Gains (Losses) December 31, 2017 Fixed income securities 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 income securities 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 A – 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 December 31, 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. 2018 2017 Number of Securities Fair Value Gross Unrealized Loss Number of Securities Fair Value Gross Unrealized Loss Fixed income securities: 12 months or less 275 $ 282,646 $ (7,296 ) 459 $ 313,421 $ (2,683 ) Greater than 12 months 217 131,001 (3,497 ) 112 75,638 (2,155 ) Total fixed income securities 492 413,647 (10,793 ) 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 492 $ 413,647 $ (10,793 ) 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 A – 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 | The fair value and the cost or amortized cost of fixed income investments at December 31, 2018, organized by contractual maturity, are shown below. Actual maturities may 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 $ 45,858 7.7 % $ 46,150 7.7 % Excess of one year to five years 287,506 48.5 290,743 48.4 Excess of five years to ten years 101,605 17.1 104,571 17.4 Excess of ten years 6,641 1.2 6,410 1.1 Total contractual maturities 441,610 74.5 447,874 74.6 Asset-backed securities 151,035 25.5 152,630 25.4 Total $ 592,645 100.0 % $ 600,504 100.0 |
Major Categories of Investment Income | Major categories of investment income for the years ended December 31, are summarized as follows: 2018 2017 2016 Interest on fixed income securities $ 19,092 $ 15,340 $ 13,254 Dividends on equity securities 4,380 4,611 3,598 Money market funds, Short-term and other 1,529 471 128 25,001 20,422 16,980 Investment expenses (2,953 ) (2,327 ) (2,497 ) Net investment income $ 22,048 $ 18,095 $ 14,483 |
Realized Gains (Losses) on Investments | Gains and losses on investments, including equity method earnings from limited partnerships, for the years ended December 31 are summarized below: 2018 2017 2016 Gross gains on available-for-sale investments sold during the period: Fixed income securities $ 10,807 $ 9,135 $ 11,628 Equity securities (1) – 10,481 28,742 Total gains 10,807 19,616 40,370 Gross losses on available-for-sale investments sold during the period: Fixed income securities (14,367 ) (9,882 ) (10,940 ) Equity securities (1) – (2,368 ) (2,932 ) Total losses (14,367 ) (12,250 ) (13,872 ) Other-than-temporary impairments (19 ) (149 ) (5,743 ) Change in value of limited partnership investments (9,343 ) 12,469 2,473 Losses on equity securities: Realized losses on equity securities sold during the period (2) (3,072 ) – – Unrealized losses on equity securities held at the end of the period (9,697 ) – – Realized and unrealized losses on equity securities held at the end of the period (12,769 ) – – Net realized and unrealized gains (losses) on investments $ (25,691 ) $ 19,686 $ 23,228 (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 A – Summary of Significant Accounting Policies — Recently Adopted Accounting Pronouncements for further discussion. (2) During 2018, the Company sold $149,195 in equity securities, resulting in a gain on sale of $51,900. The majority of these gains were included in unrealized gains within other comprehensive income (loss) 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 consolidated statements of operations for the year ended December 31, 2018. |
Realized Gains (Loss) | Gain and loss activity for fixed income and equity security investments, as shown in the previous table, includes adjustments for other-than-temporary impairment for the years ended December 31 summarized as follows: 2018 2017 2016 Cumulative charges to income at beginning of year $ 4,209 $ 5,650 $ 10,513 Writedowns based on objective and subjective criteria 19 149 5,743 Recovery of prior writedowns upon sale or disposal (3,298 ) (1,590 ) (10,606 ) Net pre-tax realized gain 3,279 1,441 4,863 Cumulative charges to income at end of year $ 930 $ 4,209 $ 5,650 |
Financial Information of Significant Limited Partnership Investment | The summarized financial information of this limited partnership investment as of and for the years ended December 31 is as follows: 2018 2017 2016 Investment income (loss) $ 4,298 $ 623 $ (5 ) Partnership expenses 6,874 2,206 2,426 Net investment loss (2,576 ) (1,583 ) (2,431 ) Realized gain on investments 12,314 8,723 7,754 Unrealized appreciation (depreciation) on investments (65,250 ) 133,807 (21,002 ) Net increase (decrease) in partners' capital resulting from operations $ (55,512 ) $ 140,947 $ (15,679 ) Total assets $ 462,058 $ 566,629 $ 448,263 Total liabilities 45,483 30,976 39,988 Total partners' capital 416,575 535,653 408,275 2018 2017 2016 Investment income $ 19,507 $ 14,524 $ 13,534 Partnership expenses 9,132 12,861 10,628 Net investment income 10,375 1,663 2,906 Realized gain (loss) on investments (37,143 ) (15,073 ) 830 Unrealized appreciation (depreciation) on investments (48,132 ) 49,847 46,685 Net increase (decrease) in partners' capital resulting from operations $ (74,900 ) $ 36,437 $ 50,421 Total assets $ 241,174 $ 354,709 $ 464,184 Total liabilities 20,020 2,000 14,555 Total partners' capital 221,154 352,709 449,629 |
Loss and Loss Expense Reserves
Loss and Loss Expense Reserves (Tables) | 12 Months Ended |
Dec. 31, 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 years ended December 31 is summarized as follows. All amounts are shown net of reinsurance, unless otherwise indicated. 2018 2017 2016 Reserves, gross of reinsurance recoverable, at the beginning of the year $ 680,274 $ 576,330 $ 513,596 Reinsurance recoverable on unpaid losses at the beginning of the year 308,143 251,563 211,843 Reserves at the beginning of the year 372,131 324,767 301,753 Provision for losses and loss expenses: Claims occurring during the current year 329,078 228,303 172,645 Claims occurring during prior years 16,786 19,215 13,836 Total incurred losses and loss expenses 345,864 247,518 186,481 Loss and loss expense payments: Claims occurring during the current year 84,738 67,234 54,239 Claims occurring during prior years 143,853 132,920 109,228 Total paid 228,591 200,154 163,467 Reserves at the end of the year 489,404 372,131 324,767 Reinsurance recoverable on unpaid losses at the end of the year 375,935 308,143 251,563 Reserves, gross of reinsurance recoverable, at the end of the year $ 865,339 $ 680,274 $ 576,330 |
Incurred Claims Development Net of Reinsurance | The following is information about incurred and paid claims development as of December 31, 2018, net of reinsurance, as well as cumulative claim frequency and the total of incurred ‐ ‐ ‐ Workers' Compensation As of December 31, 2018 Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Total of Incurred-but-Not- Reported Liabilities Plus Expected Development on Reported Claims Number of Reported Claims Per Year Accident Year For the Years Ended December 31 (2009-2017 is Supplementary Information and Unaudited) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 17,270 $ 20,931 $ 21,447 $ 21,261 $ 21,268 $ 20,767 $ 20,641 $ 20,817 $ 20,946 $ 21,153 $ 985 3,784 2010 20,644 20,111 19,400 19,300 18,849 18,344 19,195 19,541 19,819 1,098 4,223 2011 26,057 26,628 26,958 26,767 25,515 27,293 26,617 26,631 2,179 4,546 2012 23,965 25,544 24,887 24,485 25,616 27,020 26,775 2,824 4,481 2013 27,619 30,638 29,913 32,121 32,553 31,131 3,780 5,275 2014 36,768 36,968 34,009 33,427 31,031 4,482 5,406 2015 26,277 23,115 25,889 24,948 5,328 6,308 2016 35,240 29,757 29,317 6,740 6,059 2017 42,387 37,731 13,918 16,106 2018 62,973 36,250 12,893 Total $ 311,509 $ 77,584 Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance For the Years Ended December 31 (2009-2017 is Supplementary Information and Unaudited) Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 4,186 $ 10,073 $ 13,343 $ 15,576 $ 16,592 $ 17,448 $ 18,028 $ 18,514 $ 18,982 $ 19,261 2010 3,974 9,134 11,963 13,845 14,966 15,835 16,590 16,789 17,062 2011 4,916 11,912 15,973 18,884 20,617 21,622 22,569 22,991 2012 4,597 11,004 14,834 17,415 18,946 20,276 21,157 2013 4,880 12,792 18,065 21,655 23,643 24,968 2014 5,328 13,665 19,075 22,387 23,968 2015 2,918 10,128 15,020 17,487 2016 5,784 13,377 18,461 2017 6,150 15,811 2018 10,987 Total $ 192,153 Outstanding liabilities prior to 2009 net of reinsurance 12,640 Liabilities for claims and claims adjustment expenses, net of reinsurance $ 131,996 Commercial Liability As of December 31, 2018 Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Total of Incurred-but-Not- Reported Liabilities Plus Expected Development on Reported Claims Number of Reported Claims Per Year For the Years Ended December 31 (2009-2017 is Supplementary Information and Unaudited) Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 29,707 $ 30,406 $ 30,203 $ 26,280 $ 27,259 $ 25,872 $ 25,373 $ 25,320 $ 25,485 $ 25,761 $ 190 899 2010 31,124 22,161 21,899 19,139 20,300 19,764 19,377 19,081 19,985 112 2,403 2011 46,829 43,832 31,633 36,894 35,805 37,122 36,076 37,852 131 2,901 2012 49,743 54,269 49,743 51,367 48,708 51,475 51,648 135 3,130 2013 53,817 39,143 37,701 36,371 46,690 48,857 663 3,749 2014 49,971 52,254 52,483 52,964 64,372 307 3,320 2015 61,420 70,174 64,323 71,088 2,785 3,185 2016 61,638 68,974 77,362 7,048 3,707 2017 103,126 103,611 25,527 5,261 2018 179,589 70,070 6,870 Total $ 680,125 $ 106,968 Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance For the Years Ended December 31 (2009-2017 is Supplementary Information and Unaudited) Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ 928 $ 17,880 $ 19,718 $ 23,521 $ 24,866 $ 25,066 $ 25,114 $ 25,125 $ 25,199 $ 25,391 2010 1,649 7,166 11,635 16,052 18,627 18,517 18,866 18,662 18,791 2011 1,809 11,350 23,615 30,795 33,255 34,009 35,561 36,400 2012 3,086 23,252 32,942 45,303 47,601 50,036 50,750 2013 5,167 15,772 25,270 34,481 44,865 46,084 2014 4,023 9,046 28,393 45,075 57,692 2015 10,923 27,582 49,267 63,133 2016 6,843 30,377 52,764 2017 11,415 46,529 2018 18,689 Total $ 416,223 Outstanding liabilities prior to 2009 net of reinsurance 4,621 Liabilities for claims and claims adjustment expenses, net of reinsurance $ 268,523 Professional Liability Reinsurance Assumed (in runoff) As of December 31, 2018 Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance Total of Incurred-but-Not- Reported Liabilities Plus Expected Development on Reported Claims Number of Reported Claims Per Year Accident Year For the Years Ended December 31 (2009-2017 is Supplementary Information and Unaudited) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – N/A 2010 2,196 4,277 7,827 7,946 9,733 10,740 11,689 11,893 11,677 24 N/A 2011 10,492 8,314 9,017 9,859 10,779 12,735 12,744 12,725 116 N/A 2012 10,041 9,276 5,569 10,157 14,605 16,555 14,949 706 N/A 2013 14,370 13,034 11,618 17,694 23,256 22,213 1,847 N/A 2014 12,675 8,825 7,259 9,837 12,749 2,297 N/A 2015 11,638 7,859 7,147 10,422 5,422 N/A 2016 6,368 2,482 1,522 1,035 N/A 2017 – – – N/A 2018 – – N/A Total $ 86,257 $ 11,447 Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance For the Years Ended December 31 (2009-2017 is Supplementary Information and Unaudited) Accident Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – 2010 41 729 3,505 5,844 7,758 9,904 11,132 11,334 11,334 2011 50 637 2,061 4,983 8,104 10,404 11,679 12,280 2012 103 992 2,388 5,077 8,355 11,239 13,091 2013 123 1,135 5,088 10,988 14,779 18,229 2014 723 761 2,241 3,999 6,627 2015 10 390 1,899 3,207 2016 – 5 99 2017 – – 2018 – Total $ 64,867 Outstanding liabilities prior to 2009 net of reinsurance – Liabilities for claims and claims adjustment expenses, net of reinsurance $ 21,390 Physical Damage (1) Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance As of December 31, 2018 For the Years Ended December 31 (2016-2017 is Supplementary Information and Unaudited) Total of Incurred-but-Not-Reported Liabilities Plus Expected Development on Reported Claims Number of Reported Claims Per Year Accident Year 2016 2017 2018 2016 and prior $ 40,651 $ 39,477 $ 39,658 $ 5 9,619 2017 48,440 47,193 512 10,517 2018 53,726 4,221 10,186 Total $ 140,577 $ 4,738 Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance For the Years Ended December 31 (2016-2017 is Supplementary Information and Unaudited) Accident Year 2016 2017 2018 2016 and prior $ 34,114 $ 39,354 $ 39,073 2017 39,517 46,554 2018 41,631 Total $ 127,258 Outstanding liabilities prior to 2016 net of reinsurance 10 Liabilities for claims and claims adjustment expenses, net of reinsurance $ 13,329 (1) |
Reconciliation of Net Incurred and Paid Claims Development | The reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses in the consolidated balance sheet at December 31 is as follows. 2018 2017 Net outstanding liabilities Commercial Liability $ 268,523 $ 162,581 Workers' Compensation 131,996 113,751 Physical Damage 13,329 9,087 Professional Liability Assumed 21,390 28,980 Other short-duration insurance lines 33,716 39,883 Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance 468,954 354,282 Reinsurance recoverable on unpaid claims Commercial Liability 194,483 124,695 Workers' Compensation 172,869 170,394 Physical Damage 1,851 51 Other short-duration insurance lines 6,732 13,002 Reinsurance recoverable on unpaid losses at the end of the year 375,935 308,142 Unallocated claims adjustment expenses 20,450 17,850 Total gross liability for unpaid claims and claims adjustment expense $ 865,339 $ 680,274 |
Supplementary Information about Average Historical Claims Duration | The following is supplementary information about average historical claims duration as of December 31, 2018: Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Supplementary Information and Unaudited) Years 1 2 3 4 5 6 7 8 9 10 Commercial Liability 8.5 % 30.5 % 23.7 % 20.6 % 9.9 % 1.9 % 1.9 % 0.5 % 0.5 % 0.7 % Workers' Compensation 17.3 % 26.3 % 16.3 % 10.4 % 5.7 % 4.3 % 3.3 % 1.6 % 1.8 % 1.3 % Physical Damage 80.6 % 14.1 % 2.0 % N/A N/A N/A N/A N/A N/A N/A Professional Liability Assumed 1.1 % 3.6 % 13.5 % 19.0 % 18.3 % 17.8 % 11.0 % 1.7 % – N/A |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Reinsurance [Abstract] | |
Impact of Reinsurance Ceded and Assumed on the Company's Net Premium Written and Earned | The following table summarizes the impact of reinsurance ceded and assumed on the Company's net premiums written and earned for the most recent three years: Premiums Written Premiums Earned 2018 2017 2016 2018 2017 2016 Direct $ 581,070 $ 504,033 $ 395,625 $ 562,364 $ 470,158 $ 394,679 Ceded on direct (138,102 ) (151,348 ) (131,166 ) (131,080 ) (145,201 ) (129,926 ) Net direct 442,968 352,685 264,459 431,284 324,957 264,753 Assumed 1,430 704 7,379 1,596 3,188 11,344 Ceded on assumed – – (86 ) – – (86 ) Net assumed 1,430 704 7,293 1,596 3,188 11,258 Net $ 444,398 $ 353,389 $ 271,752 $ 432,880 $ 328,145 $ 276,011 |
Components of Reinsurance Recoverable | Components of reinsurance recoverable at December 31, are as follows: 2018 2017 Case unpaid losses, net of valuation allowance $ 163,011 $ 119,615 Incurred but not reported unpaid losses and loss expenses 211,805 187,163 Paid losses and loss expenses 1,250 2,206 Unearned premiums 16,370 9,347 $ 392,436 $ 318,331 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
Significant Components of Deferred Tax Assets and Liabilities | Significant components of the Company's deferred tax assets and liabilities as of December 31 are as follows: 2018 2017 Deferred tax liabilities: Unrealized gain on fixed income and equity security investments $ 4,572 $ 15,086 Deferred acquisition costs 2,552 1,804 Loss and loss expense reserves 3,583 2,623 Limited partnership investments – 3,826 Accelerated depreciation 690 492 Other 1,509 1,791 Total deferred tax liabilities 12,906 25,622 Deferred tax assets: Loss and loss expense reserves 9,999 6,761 Limited partnership investments 3,498 – Unearned premiums discount 2,321 1,837 Other-than-temporary investment declines 625 815 Deferred compensation 580 885 Deferred ceding commission 1,173 627 Other 972 339 Total deferred tax assets 19,168 11,264 Net deferred tax (assets) liabilities $ (6,262 ) $ 14,358 |
Summary of Difference between Federal Income Taxes Expense Computed at Statutory Rate | A summary of the difference between federal income tax expense computed at the statutory rate and that reported in the consolidated financial statements as of December 31 is as follows: 2018 2017 2016 Statutory federal income rate applied to pre-tax income (loss) $ (9,213 ) $ 3,543 $ 15,069 Tax effect of (deduction): Tax-exempt investment income (253 ) (968 ) (938 ) Change in enacted tax rates – (9,572 ) – Other (331 ) (1,204 ) (22 ) Federal income tax expense (benefit) $ (9,797 ) $ (8,201 ) $ 14,109 |
Federal Income Tax Expense (Benefit) | Federal income tax expense (benefit) as of December 31 consists of the following: 2018 2017 2016 Tax expense (benefit) on pre-tax income (loss): Current $ 8,997 $ (4,335 ) $ 11,271 Deferred (18,794 ) (3,866 ) 2,838 $ (9,797 ) $ (8,201 ) $ 14,109 |
Provision for Deferred Federal Income Tax | The provision for deferred federal income taxes as of December 31 consists of the following: 2018 2017 2016 Limited partnerships $ (2,383 ) $ 4,099 $ 503 Discounts of loss and loss expense reserves (2,704 ) 1,315 (114 ) Reserves - salvage and subrogation and other 427 56 (1,110 ) Unearned premium discount (484 ) (1,767 ) 298 Deferred compensation 305 (168 ) 595 Other-than-temporary investment declines 695 (127 ) 2,320 Deferred acquisitions costs and ceding commission 201 1,553 (95 ) Change in enacted tax rates – (9,572 ) – Unrealized gains / losses (13,876 ) – – Other (975 ) 745 441 Provision for deferred federal income taxes $ (18,794 ) $ (3,866 ) $ 2,838 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Shareholders' Equity [Abstract] | |
Reconciliation of Components of Accumulated Other Comprehensive Income (Loss) | A reconciliation of the components of accumulated other comprehensive income (loss) at December 31 is as follows: 2018 2017 Investments: Total unrealized gain (loss) before federal income tax expense (benefit) $ (7,859 ) $ 71,848 Deferred tax benefit (liability) 1,651 (25,148 ) Net unrealized gains (losses) on investments (6,208 ) 46,700 Foreign exchange adjustment: Total unrealized losses (1,442 ) (475 ) Deferred tax benefit 303 166 Net unrealized losses on foreign exchange adjustment (1,139 ) (309 ) Accumulated other comprehensive income (loss) $ (7,347 ) $ 46,391 |
Details of Changes in Net Unrealized Gains (Losses) on Investments | Details of changes in net unrealized gains (losses) on investments for the years ended December 31 are as follows: 2018 2017 2016 Investments: Pre-tax holding gains (losses) on debt and equity securities arising during period (1) $ (12,253 ) $ 26,677 $ 13,259 Less: applicable federal income tax expense (benefit) (2,573 ) 9,337 4,641 (9,680 ) 17,340 8,618 Pre-tax gains (losses) on debt and equity securities included in net income (loss) during period (1) (3,560 ) 7,217 20,755 Less: applicable federal income tax expense (benefit) (748 ) 2,526 7,264 (2,812 ) 4,691 13,491 Change in unrealized gains (losses) on investments $ (6,868 ) $ 12,649 $ (4,873 ) (1) |
Other Operating Expenses (Table
Other Operating Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Operating Expenses [Abstract] | |
Details of Other Operating Expenses | Details of other operating expenses for the years ended December 31: 2018 2017 2016 Amortization of gross deferred policy acquisition costs $ 78,105 $ 70,574 $ 51,597 Other underwriting expenses 46,638 37,230 41,692 Reinsurance ceded credits (23,124 ) (23,187 ) (33,512 ) Total underwriting expenses 101,619 84,617 59,777 Operating expenses of non-insurance companies 32,406 28,977 29,685 Goodwill impairment charge 3,152 – – Total other operating expenses $ 137,177 $ 113,594 $ 89,462 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stock Based Compensation [Abstract] | |
Detail of Restricted Stock Issuances | The table below provides details of the restricted stock issuances to directors for 2018, 2017 and 2016: Grant Date Number of Shares Issued Vesting Date Service Period Grant Date Fair Value Per Share 5/10/2016 17,677 5/10/2017 7/1/2016 - 6/30/2017 $ 24.89 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 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Information [Abstract] | |
Segment Revenues | The following table summarizes segment revenues for the years ended December 31: 2018 2017 2016 Revenues: Net premiums earned $ 432,880 $ 328,145 $ 276,011 Net investment income 22,048 18,095 14,483 Net realized and unrealized gains (losses) on investments (25,691 ) 19,686 23,228 Commissions and other income 9,932 5,308 5,275 Total revenues $ 439,169 $ 371,234 $ 318,997 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings (Loss) Per Share [Abstract] | |
Reconciliation of the Denominators used in the Calculation of Basic and Diluted Earnings (Loss) per Share | The following is a reconciliation of the denominators used in the calculation of basic and diluted earnings (loss) per share for the years ended December 31: 2018 2017 2016 Average shares outstanding for basic earnings (loss) per share 14,964,812 15,065,216 15,071,900 Dilutive effect of share equivalents – 42,220 12,108 Average shares outstanding for diluted earnings (loss) per share 14,964,812 15,107,436 15,084,008 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 2018: Description Total Level 1 Level 2 Level 3 Fixed income securities: Agency collateralized mortgage obligations $ 10,687 $ – $ 10,687 $ – Agency mortgage-backed securities 37,385 – 37,385 – Asset-backed securities 64,422 – 64,422 – Bank loans 9,750 – 9,750 – Certificates of deposit 2,835 2,835 – – Collateralized mortgage obligations 5,423 – 5,423 – Corporate securities 186,651 – 186,651 – Options embedded in convertible securities 3,799 – 3,799 – Mortgage-backed securities 38,540 – 38,540 – Municipal obligations 29,155 – 29,155 – Non-U.S. government obligations 25,180 – 25,180 – U.S. government obligations 178,818 – 178,818 – Total fixed income securities 592,645 2,835 589,810 – Equity securities: Consumer 17,945 17,945 – – Energy 3,179 3,179 – – Financial 25,253 25,253 – – Industrial 6,920 6,920 – – Technology 2,303 2,303 – – Funds (e.g. mutual funds, closed end funds, ETFs) 5,489 5,489 – – Other 5,333 5,333 – – Total equity securities 66,422 66,422 – – Short-term 1,000 1,000 – – Cash equivalents 156,855 – 156,855 – Total $ 816,922 $ 70,257 $ 746,665 $ – As of December 31, 2017: Description Total Level 1 Level 2 Level 3 Fixed income securities: 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 income securities 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 years ended December 31: 2018 2017 Beginning of period balance $ – $ 25,218 Total gains or losses (realized) included in income – 406 Purchases – 81 Settlements – (9,123 ) Transfers into Level 3 – 144 Transfers out of Level 3 – (16,726 ) End of period balance $ – $ – |
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 consolidated balance sheets at December 31, 2018 and 2017 is as follows: 2018: Carrying Fair Value Value Level 1 Level 2 Level 3 Total Assets: Limited partnerships $ 55,044 $ – $ – $ 55,044 $ 55,044 Commercial mortgage loans 6,672 – – 6,672 6,672 Liabilities: Short-term borrowings 20,000 – 20,000 – 20,000 2017: Assets: Limited partnerships $ 70,806 $ – $ – $ 70,806 $ 70,806 Commercial mortgage loans – – – – – Liabilities: Short-term borrowings 20,000 – 20,000 – 20,000 |
Quarterly Results of Operatio_2
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Results of Operations (Unaudited) [Abstract] | |
Quarterly Results of Operations | Quarterly results of operations are as follows: 2018 2017 1st 2nd 3rd 4th 1st 2nd 3rd 4th Net premiums earned $ 105,462 $ 111,940 $ 96,807 $ 118,671 $ 73,974 $ 67,996 $ 89,100 $ 97,075 Net investment income 4,636 5,796 5,578 6,038 3,692 4,716 4,027 5,661 Net realized and unrealized gains (losses) on investments (4,533 ) (3,435 ) 2,373 (20,096 ) 6,294 3,296 5,944 4,152 Losses and loss expenses incurred 72,298 77,488 94,540 101,537 48,599 71,754 60,673 66,492 Net income (loss) 330 2,487 (12,325 ) (24,567 ) 6,756 (12,343 ) 7,434 16,476 Net income (loss) per share $ 0.02 $ 0.17 $ (0.82 ) $ (1.65 ) $ 0.45 $ (0.82 ) $ 0.49 $ 1.10 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Future Lease Payments for Operating Leases with Initial or Remaining Noncancelable Terms of One Year or More | At December 31, 2018, future lease payments for operating leases with initial or remaining noncancelable terms of one year or more consisted of the following: 2019 $ 342 2020 114 2021 15 2022 and thereafter 1 Total minimum payments required $ 472 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018USD ($) | Dec. 31, 2018USD ($)Segment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)Segment | |
Description of Business [Abstract] | ||||
Number of reportable segments | Segment | 1 | 2 | ||
Goodwill and Other Intangible Assets [Abstract] | ||||
Goodwill impairment loss | $ 3,152 | $ 3,152 | $ 0 | $ 0 |
Insurance Company-Owned Life Insurance [Abstract] | ||||
Insurance company-owned life insurance | 10,000 | 10,000 | ||
Commercial Mortgage Loans [Member] | ||||
Investments [Abstract] | ||||
Commercial mortgage loans, valuation allowance | $ 0 | $ 0 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies, Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2018 | |
Recently Adopted Accounting Pronouncements [Abstract] | |||||
Restricted cash | $ 6,815 | $ 6,815 | $ 4,033 | ||
Corporate income tax rate | 21.00% | 35.00% | |||
Goodwill, Impairment Loss | 3,152 | $ 3,152 | $ 0 | $ 0 | |
ASU 2016-01 [Member] | |||||
Recently Adopted Accounting Pronouncements [Abstract] | |||||
Cumulative-effect adjustment to reclassify unrealized gains on equity securities after tax | 0 | ||||
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 | 0 | $ (117) | |||
ASU 2017-04 [Member] | |||||
Recently Adopted Accounting Pronouncements [Abstract] | |||||
Goodwill, Impairment Loss | 3,152 | ||||
ASU 2016-02 [Member] | Plan [Member] | |||||
Recently Issued Accounting Pronouncements [Abstract] | |||||
Right-of-use asset | 400 | 400 | |||
Lease liability | $ 400 | $ 400 | |||
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 | $ 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, Summary of Availab
Investments, Summary of Available-for-sale Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
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 | ||
Fixed Income Securities [Member] | |||
Available-for-sale Debt Securities [Abstract] | |||
Fair value | $ 592,645 | ||
Cost or amortized cost | 600,504 | ||
Agency Collateralized Mortgage Obligations [Member] | |||
Available-for-sale Debt Securities [Abstract] | |||
Fair value | 10,687 | [1] | 16,586 |
Cost or amortized cost | 10,636 | [1] | 15,839 |
Gross unrealized gains | 145 | [1] | 818 |
Gross unrealized losses | (94) | [1] | (71) |
Net unrealized gains (losses) | 51 | [1] | 747 |
Agency Mortgage Backed Securities [Member] | |||
Available-for-sale Debt Securities [Abstract] | |||
Fair value | 37,385 | [1] | 27,075 |
Cost or amortized cost | 37,168 | [1] | 27,180 |
Gross unrealized gains | 371 | [1] | 47 |
Gross unrealized losses | (154) | [1] | (152) |
Net unrealized gains (losses) | 217 | [1] | (105) |
Asset-backed Securities [Member] | |||
Available-for-sale Debt Securities [Abstract] | |||
Fair value | 64,422 | [1] | 43,469 |
Cost or amortized cost | 66,241 | [1] | 42,861 |
Gross unrealized gains | 14 | [1] | 749 |
Gross unrealized losses | (1,833) | [1] | (141) |
Net unrealized gains (losses) | (1,819) | [1] | 608 |
Bank Loans [Member] | |||
Available-for-sale Debt Securities [Abstract] | |||
Fair value | 9,750 | [1] | 19,488 |
Cost or amortized cost | 10,208 | [1] | 19,271 |
Gross unrealized gains | 27 | [1] | 266 |
Gross unrealized losses | (485) | [1] | (49) |
Net unrealized gains (losses) | (458) | [1] | 217 |
Certificates of Deposit [Member] | |||
Available-for-sale Debt Securities [Abstract] | |||
Fair value | 2,835 | [1] | 3,135 |
Cost or amortized cost | 2,835 | [1] | 3,124 |
Gross unrealized gains | 0 | [1] | 11 |
Gross unrealized losses | 0 | [1] | 0 |
Net unrealized gains (losses) | 0 | [1] | 11 |
Collateralized Mortgage Obligations [Member] | |||
Available-for-sale Debt Securities [Abstract] | |||
Fair value | 5,423 | [1] | 6,492 |
Cost or amortized cost | 5,095 | [1] | 6,079 |
Gross unrealized gains | 376 | [1] | 451 |
Gross unrealized losses | (48) | [1] | (38) |
Net unrealized gains (losses) | 328 | [1] | 413 |
Corporate Securities [Member] | |||
Available-for-sale Debt Securities [Abstract] | |||
Fair value | 190,450 | [1] | 198,349 |
Cost or amortized cost | 196,925 | [1] | 198,419 |
Gross unrealized gains | 127 | [1] | 1,602 |
Gross unrealized losses | (6,602) | [1] | (1,672) |
Net unrealized gains (losses) | (6,475) | [1] | (70) |
Mortgage-backed Securities [Member] | |||
Available-for-sale Debt Securities [Abstract] | |||
Fair value | 38,540 | [1] | 24,204 |
Cost or amortized cost | 38,586 | [1] | 23,656 |
Gross unrealized gains | 377 | [1] | 933 |
Gross unrealized losses | (423) | [1] | (385) |
Net unrealized gains (losses) | (46) | [1] | 548 |
Municipal Obligations [Member] | |||
Available-for-sale Debt Securities [Abstract] | |||
Fair value | 29,155 | [1] | 96,650 |
Cost or amortized cost | 29,102 | [1] | 97,059 |
Gross unrealized gains | 239 | [1] | 322 |
Gross unrealized losses | (186) | [1] | (731) |
Net unrealized gains (losses) | 53 | [1] | (409) |
Non-U.S. Government Obligations [Member] | |||
Available-for-sale Debt Securities [Abstract] | |||
Fair value | 25,180 | [1] | 37,394 |
Cost or amortized cost | 25,339 | [1] | 37,971 |
Gross unrealized gains | 6 | [1] | 475 |
Gross unrealized losses | (165) | [1] | (1,052) |
Net unrealized gains (losses) | (159) | [1] | (577) |
U.S. Government Obligations [Member] | |||
Available-for-sale Debt Securities [Abstract] | |||
Fair value | 178,818 | [1] | 49,011 |
Cost or amortized cost | 178,369 | [1] | 49,558 |
Gross unrealized gains | 1,252 | [1] | 0 |
Gross unrealized losses | (803) | [1] | (547) |
Net unrealized gains (losses) | 449 | [1] | (547) |
Total Fixed Income Securities [Member] | |||
Available-for-sale Debt Securities [Abstract] | |||
Fair value | 592,645 | [1] | 521,853 |
Cost or amortized cost | 600,504 | [1] | 521,017 |
Gross unrealized gains | 2,934 | [1] | 5,674 |
Gross unrealized losses | (10,793) | [1] | (4,838) |
Net unrealized gains (losses) | $ (7,859) | [1] | 836 |
Consumer [Member] | |||
Available-for-sale Equity Securities [Abstract] | |||
Fair value | 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 | 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 | 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 | 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 | 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 | 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 | 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 | ||
[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 A - Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements for further discussion. |
Investments, Continuous Unreali
Investments, Continuous Unrealized Loss Position (Details) $ in Thousands | Dec. 31, 2018USD ($)Security | Dec. 31, 2017USD ($)Security | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||||
Number of securities, total | Security | 492 | 636 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||||
Fair value, total | $ 413,647 | $ 435,713 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses [Abstract] | ||||
Gross unrealized loss, total | (10,793) | $ (7,056) | ||
Fixed Income Securities [Member] | ||||
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract] | ||||
One year or less, Fair Value | 45,858 | |||
Excess of one year to five years, Fair Value | 287,506 | |||
Excess of five years to ten years, Fair Value | 101,605 | |||
Excess of ten years, Fair Value | 6,641 | |||
Total contractual maturities, Fair Value | 441,610 | |||
Asset-backed securities, Fair Value | 151,035 | |||
Total, Fair Value | $ 592,645 | |||
Percentage of Available for sale Securities, Debt Maturities, Fair Value [Abstract] | ||||
One year or less, Fair Value | 7.70% | |||
Excess of one year to five years, Fair Value | 48.50% | |||
Excess of five years to ten years, Fair Value | 17.10% | |||
Excess of ten years, Fair Value | 1.20% | |||
Total contractual maturities, Fair Value | 74.50% | |||
Asset-backed securities, Fair Value | 25.50% | |||
Total, Fair Value | 100.00% | |||
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis [Abstract] | ||||
One year or less, Cost or Amortized Cost | $ 46,150 | |||
Excess of one year to five years, Cost or Amortized Cost | 290,743 | |||
Excess of five years to ten years, Cost or Amortized Cost | 104,571 | |||
Excess of ten years, Cost or Amortized Cost | 6,410 | |||
Total contractual maturities, Cost or Amortized Cost | 447,874 | |||
Asset-backed securities, Cost or Amortized Cost | 152,630 | |||
Cost or amortized cost | $ 600,504 | |||
Percentage of Available for sale Securities, Debt Maturities, Amortized Cost Basis, Fiscal Year Maturity [Abstract] | ||||
One year or less, Cost or Amortized Cost | 7.70% | |||
Excess of one year to five years, Cost or Amortized Cost | 48.40% | |||
Excess of five years to ten years, Cost or Amortized Cost | 17.40% | |||
Excess of ten years, Cost or Amortized Cost | 1.10% | |||
Total contractual maturities, Cost or Amortized Cost | 74.60% | |||
Asset-backed securities, Cost or Amortized Cost | 25.40% | |||
Cost or amortized cost | 100.00% | |||
Total Fixed Income Securities [Member] | ||||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||||
Number of Securities 12 months or less | Security | 275 | 459 | ||
Number of securities, Greater than 12 months | Security | 217 | 112 | ||
Number of securities, total | Security | 492 | 571 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||||
Fair value, 12 months or less | $ 282,646 | $ 313,421 | ||
Fair value, Greater than 12 months | 131,001 | 75,638 | ||
Fair value, total | 413,647 | 389,059 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses [Abstract] | ||||
Gross unrealized loss, less than 12 months | (7,296) | (2,683) | ||
Gross unrealized loss, 12 months or longer | (3,497) | (2,155) | ||
Gross unrealized loss, total | (10,793) | (4,838) | ||
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract] | ||||
Total, Fair Value | 592,645 | [1] | 521,853 | |
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis [Abstract] | ||||
Cost or amortized cost | $ 600,504 | [1] | $ 521,017 | |
Total Equity Securities [Member] | ||||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||||
Number of Securities 12 months or less | Security | [1] | 0 | 65 | |
Number of securities, Greater than 12 months | Security | [1] | 0 | 0 | |
Number of securities, total | Security | [1] | 0 | 65 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||||
Fair value, 12 months or less | [1] | $ 0 | $ 46,654 | |
Fair value, Greater than 12 months | [1] | 0 | 0 | |
Fair value, total | [1] | 0 | 46,654 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses [Abstract] | ||||
Gross unrealized loss, less than 12 months | [1] | 0 | (2,218) | |
Gross unrealized loss, 12 months or longer | [1] | 0 | 0 | |
Gross unrealized loss, total | [1] | $ 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 A - Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements for further discussion. |
Investments, Major Categories o
Investments, Major Categories of Investment Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Investment Income, Net [Abstract] | |||
Investment Income | $ 25,001 | $ 20,422 | $ 16,980 |
Investment expenses | (2,953) | (2,327) | (2,497) |
Net investment income | 22,048 | 18,095 | 14,483 |
Interest on Fixed Income Securities [Member] | |||
Investment Income, Net [Abstract] | |||
Investment Income | 19,092 | 15,340 | 13,254 |
Dividends on Equity Securities [Member] | |||
Investment Income, Net [Abstract] | |||
Investment Income | 4,380 | 4,611 | 3,598 |
Money Market Funds, Short term and Other [Member] | |||
Investment Income, Net [Abstract] | |||
Investment Income | $ 1,529 | $ 471 | $ 128 |
Investments, Gains Losses on In
Investments, Gains Losses on Investments, Including Equity Method Earnings from Limited Partnerships (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Gross gains on available-for-sale investments sold during the period [Abstract] | ||||||||||||||
Total gains | $ 10,807 | $ 19,616 | $ 40,370 | |||||||||||
Gross losses on available-for-sale investments sold during the period [Abstract] | ||||||||||||||
Total losses | (14,367) | (12,250) | (13,872) | |||||||||||
Other-than-temporary impairments | (19) | (149) | (5,743) | |||||||||||
Change in value of limited partnership investments | (9,343) | 12,469 | 2,473 | |||||||||||
Losses on equity securities [Abstract] | ||||||||||||||
Realized losses on equity securities sold during the period | (3,072) | [1] | 0 | [1] | 0 | |||||||||
Unrealized losses on equity securities held at the end of the period | (9,697) | 0 | 0 | |||||||||||
Realized and unrealized losses on equity securities held at the end of the period | (12,769) | 0 | 0 | |||||||||||
Net realized and unrealized gains (losses) on investments | $ (20,096) | $ 2,373 | $ (3,435) | $ (4,533) | $ 4,152 | $ 5,944 | $ 3,296 | $ 6,294 | (25,691) | 19,686 | 23,228 | |||
Proceeds from sales of equity securities | 149,195 | 69,756 | 88,773 | |||||||||||
Realized gains on equity securities | 51,900 | |||||||||||||
Fixed Income Securities [Member] | ||||||||||||||
Gross gains on available-for-sale investments sold during the period [Abstract] | ||||||||||||||
Total gains | 10,807 | 9,135 | 11,628 | |||||||||||
Gross losses on available-for-sale investments sold during the period [Abstract] | ||||||||||||||
Total losses | (14,367) | (9,882) | (10,940) | |||||||||||
Equity Securities [Member] | ||||||||||||||
Gross gains on available-for-sale investments sold during the period [Abstract] | ||||||||||||||
Total gains | [2] | 0 | 10,481 | 28,742 | ||||||||||
Gross losses on available-for-sale investments sold during the period [Abstract] | ||||||||||||||
Total losses | [2] | $ 0 | $ (2,368) | $ (2,932) | ||||||||||
[1] | During 2018, the Company sold $149,195 in equity securities, resulting in a gain on sale of $51,900. The majority of these gains were included in unrealized gains within other comprehensive income (loss) at December 31, 2017 and, as a result of the adoption of ASU 2016-01, were reclassified to retained earnings as of January 1, 2018 and were therefore not recognized in the consolidated statements of operations for the year ended December 31, 2018. | |||||||||||||
[2] | Effective January 1, 2018, the Company adopted ASU 2016-01 and equity securities are no longer classified as available-for-sale. Prior periods have not been restated to conform to the current presentation. See Note A - Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements for further discussion. |
Investments, Gain and Loss for
Investments, Gain and Loss for Fixed Income and Equity Security Investments Including Adjustments for OTTI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Adjustments for other-than-temporary impairment [Roll Forward] | |||
Cumulative charges to income at beginning of year | $ 4,209 | $ 5,650 | $ 10,513 |
Writedowns based on objective and subjective criteria | 19 | 149 | 5,743 |
Recovery of prior writedowns upon sale or disposal | (3,298) | (1,590) | (10,606) |
Net pre-tax realized gain | 3,279 | 1,441 | 4,863 |
Cumulative charges to income at end of year | $ 930 | $ 4,209 | $ 5,650 |
Investments, Limited Partnershi
Investments, Limited Partnerships (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)Investment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Summarized financial information of significant limited partnership investments [Abstract] | |||
Total assets | $ 1,490,131 | $ 1,357,016 | |
Total liabilities | 1,134,049 | 938,205 | |
Total partners' capital | 32,028 | 43,586 | |
Regulatory deposits with various insurance departments in United States and Canada, fair value | 87,981 | 86,335 | |
Time certificate of deposit included in short-term investments | $ 1,000 | ||
Percentage of fixed income securities invested in investment grade fixed income | 90.00% | ||
Number of fixed income investments issued with guarantees | Investment | 0 | ||
Fixed income investment below investment grade | $ 54,233 | ||
Percentage of fixed income investment to total invested assets | 6.20% | ||
Number of investments in diversified portfolio including catastrophe bonds | Investment | 40 | ||
Net unrealized loss position of diversified portfolio | $ 5,202 | ||
Limited Partnership Investment, Public Equity and Fixed Markets [Member] | |||
Summarized financial information of significant limited partnership investments [Abstract] | |||
Investment income (loss) | 19,507 | 14,524 | $ 13,534 |
Partnership expenses | 9,132 | 12,861 | 10,628 |
Net investment income (loss) | 10,375 | 1,663 | 2,906 |
Realized gain (loss) on investments | (37,143) | (15,073) | 830 |
Unrealized appreciation (depreciation) on investments | (48,132) | 49,847 | 46,685 |
Net increase (decrease) in partners' capital resulting from operations | (74,900) | 36,437 | 50,421 |
Total assets | 241,174 | 354,709 | 464,184 |
Total liabilities | 20,020 | 2,000 | 14,555 |
Total partners' capital | 221,154 | 352,709 | 449,629 |
Limited Partnerships [Member] | |||
Limited Partners' Capital Account [Abstract] | |||
Commitment to make additional contributions to various limited partnerships | 1,317 | ||
Summarized financial information of significant limited partnership investments [Abstract] | |||
Investment income (loss) | 4,298 | 623 | (5) |
Partnership expenses | 6,874 | 2,206 | 2,426 |
Net investment income (loss) | (2,576) | (1,583) | (2,431) |
Realized gain (loss) on investments | 12,314 | 8,723 | 7,754 |
Unrealized appreciation (depreciation) on investments | (65,250) | 133,807 | (21,002) |
Net increase (decrease) in partners' capital resulting from operations | (55,512) | 140,947 | (15,679) |
Total assets | 462,058 | 566,629 | 448,263 |
Total liabilities | 45,483 | 30,976 | 39,988 |
Total partners' capital | $ 416,575 | 535,653 | 408,275 |
Limited Partnerships [Member] | Limited Partnership Investment, India [Member] | |||
Limited Partners' Capital Account [Abstract] | |||
Number of significant investments in public and private equity markets in India | Investment | 1 | ||
Significant investment in public and private equity markets in India, value | $ 26,344 | 29,817 | |
Estimated ownership interest in significant limited partnership investment | 6.00% | ||
Income (loss) from limited partnership investment | $ (3,473) | 7,665 | (1,117) |
Limited Partnerships [Member] | Limited Partnership Investment, Public Equity and Fixed Markets [Member] | |||
Limited Partners' Capital Account [Abstract] | |||
Significant investment in public and private equity markets in India, value | $ 14,975 | 19,380 | |
Estimated ownership interest in significant limited partnership investment | 5.00% | ||
Income (loss) from limited partnership investment | $ (4,404) | $ 1,452 | $ 2,662 |
Loss and Loss Expense Reserves,
Loss and Loss Expense Reserves, Activity in Reserves for Losses and Major Components (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
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 | $ 513,596 |
Reinsurance recoverable on unpaid losses at the beginning of the year | 308,143 | 251,563 | 211,843 |
Reserves at the beginning of the year | 372,131 | 324,767 | 301,753 |
Provision for losses and loss expenses [Abstract] | |||
Claims occurring during the current year | 329,078 | 228,303 | 172,645 |
Claims occurring during prior years | 16,786 | 19,215 | 13,836 |
Total incurred losses and loss expenses | 345,864 | 247,518 | 186,481 |
Loss and loss expense payments [Abstract] | |||
Claims occurring during the current year | 84,738 | 67,234 | 54,239 |
Claims occurring during prior years | 143,853 | 132,920 | 109,228 |
Total paid | 228,591 | 200,154 | 163,467 |
Reserves at the end of the year | 489,404 | 372,131 | 324,767 |
Reinsurance recoverable on unpaid losses at the end of the year | 375,935 | 308,143 | 251,563 |
Reserves, gross of reinsurance recoverable, at the end of the year | 865,339 | 680,274 | $ 576,330 |
Salvage and Subrogation Recoveries [Abstract] | |||
Estimated salvage and subrogation recoverable | $ 7,545 | $ 7,559 |
Loss and Loss Expense Reserve_2
Loss and Loss Expense Reserves, Incurred Claims Development (Details) $ in Thousands | 12 Months Ended | |||||||||||
Dec. 31, 2018USD ($)Claim | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) | Dec. 31, 2010USD ($) | Dec. 31, 2009USD ($) | |||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Liabilities for claims and claims adjustment expenses, net of reinsurance | $ 468,954 | $ 354,282 | ||||||||||
Workers' Compensation [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 311,509 | |||||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | 77,584 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | 192,153 | |||||||||||
Outstanding liabilities prior to 2009 net of reinsurance | 12,640 | |||||||||||
Liabilities for claims and claims adjustment expenses, net of reinsurance | 131,996 | 113,751 | ||||||||||
Commercial Liability [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 680,125 | |||||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | 106,968 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | 416,223 | |||||||||||
Outstanding liabilities prior to 2009 net of reinsurance | 4,621 | |||||||||||
Liabilities for claims and claims adjustment expenses, net of reinsurance | 268,523 | 162,581 | ||||||||||
Professional Liability Reinsurance Assumed [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 86,257 | |||||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | 11,447 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | 64,867 | |||||||||||
Outstanding liabilities prior to 2009 net of reinsurance | 0 | |||||||||||
Liabilities for claims and claims adjustment expenses, net of reinsurance | 21,390 | 28,980 | ||||||||||
Physical Damage [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | [1] | 140,577 | ||||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 4,738 | |||||||||||
Short-duration Insurance Contract, Claims Settlement Period | 2 years | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | [1] | $ 127,258 | ||||||||||
Outstanding liabilities prior to 2009 net of reinsurance | [1] | 10 | ||||||||||
Liabilities for claims and claims adjustment expenses, net of reinsurance | 13,329 | [1] | 9,087 | |||||||||
Accident Year 2009 [Member] | Workers' Compensation [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 21,153 | 20,946 | $ 20,817 | $ 20,641 | $ 20,767 | $ 21,268 | $ 21,261 | $ 21,447 | $ 20,931 | $ 17,270 | ||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 985 | |||||||||||
Number of reported claims per year | Claim | 3,784 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 19,261 | 18,982 | 18,514 | 18,028 | 17,448 | 16,592 | 15,576 | 13,343 | 10,073 | 4,186 | ||
Accident Year 2009 [Member] | Commercial Liability [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 25,761 | 25,485 | 25,320 | 25,373 | 25,872 | 27,259 | 26,280 | 30,203 | 30,406 | 29,707 | ||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 190 | |||||||||||
Number of reported claims per year | Claim | 899 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 25,391 | 25,199 | 25,125 | 25,114 | 25,066 | 24,866 | 23,521 | 19,718 | 17,880 | 928 | ||
Accident Year 2009 [Member] | Professional Liability Reinsurance Assumed [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | 0 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | $ 0 | ||
Accident Year 2009 [Member] | Physical Damage [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 0 | |||||||||||
Number of reported claims per year | Claim | 0 | |||||||||||
Accident Year 2010 [Member] | Workers' Compensation [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | $ 19,819 | 19,541 | 19,195 | 18,344 | 18,849 | 19,300 | 19,400 | 20,111 | 20,644 | |||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 1,098 | |||||||||||
Number of reported claims per year | Claim | 4,223 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 17,062 | 16,789 | 16,590 | 15,835 | 14,966 | 13,845 | 11,963 | 9,134 | 3,974 | |||
Accident Year 2010 [Member] | Commercial Liability [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 19,985 | 19,081 | 19,377 | 19,764 | 20,300 | 19,139 | 21,899 | 22,161 | 31,124 | |||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 112 | |||||||||||
Number of reported claims per year | Claim | 2,403 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 18,791 | 18,662 | 18,866 | 18,517 | 18,627 | 16,052 | 11,635 | 7,166 | 1,649 | |||
Accident Year 2010 [Member] | Professional Liability Reinsurance Assumed [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 11,677 | 11,893 | 11,689 | 10,740 | 9,733 | 7,946 | 7,827 | 4,277 | 2,196 | |||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | 24 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | 11,334 | 11,334 | 11,132 | 9,904 | 7,758 | 5,844 | 3,505 | 729 | $ 41 | |||
Accident Year 2010 [Member] | Physical Damage [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 0 | |||||||||||
Number of reported claims per year | Claim | 0 | |||||||||||
Accident Year 2011 [Member] | Workers' Compensation [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | $ 26,631 | 26,617 | 27,293 | 25,515 | 26,767 | 26,958 | 26,628 | 26,057 | ||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 2,179 | |||||||||||
Number of reported claims per year | Claim | 4,546 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 22,991 | 22,569 | 21,622 | 20,617 | 18,884 | 15,973 | 11,912 | 4,916 | ||||
Accident Year 2011 [Member] | Commercial Liability [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 37,852 | 36,076 | 37,122 | 35,805 | 36,894 | 31,633 | 43,832 | 46,829 | ||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 131 | |||||||||||
Number of reported claims per year | Claim | 2,901 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 36,400 | 35,561 | 34,009 | 33,255 | 30,795 | 23,615 | 11,350 | 1,809 | ||||
Accident Year 2011 [Member] | Professional Liability Reinsurance Assumed [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 12,725 | 12,744 | 12,735 | 10,779 | 9,859 | 9,017 | 8,314 | 10,492 | ||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | 116 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | 12,280 | 11,679 | 10,404 | 8,104 | 4,983 | 2,061 | 637 | $ 50 | ||||
Accident Year 2011 [Member] | Physical Damage [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 0 | |||||||||||
Number of reported claims per year | Claim | 0 | |||||||||||
Accident Year 2012 [Member] | Workers' Compensation [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | $ 26,775 | 27,020 | 25,616 | 24,485 | 24,887 | 25,544 | 23,965 | |||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 2,824 | |||||||||||
Number of reported claims per year | Claim | 4,481 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 21,157 | 20,276 | 18,946 | 17,415 | 14,834 | 11,004 | 4,597 | |||||
Accident Year 2012 [Member] | Commercial Liability [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 51,648 | 51,475 | 48,708 | 51,367 | 49,743 | 54,269 | 49,743 | |||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 135 | |||||||||||
Number of reported claims per year | Claim | 3,130 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 50,750 | 50,036 | 47,601 | 45,303 | 32,942 | 23,252 | 3,086 | |||||
Accident Year 2012 [Member] | Professional Liability Reinsurance Assumed [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 14,949 | 16,555 | 14,605 | 10,157 | 5,569 | 9,276 | 10,041 | |||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | 706 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | 13,091 | 11,239 | 8,355 | 5,077 | 2,388 | 992 | $ 103 | |||||
Accident Year 2012 [Member] | Physical Damage [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 0 | |||||||||||
Number of reported claims per year | Claim | 0 | |||||||||||
Accident Year 2013 [Member] | Workers' Compensation [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | $ 31,131 | 32,553 | 32,121 | 29,913 | 30,638 | 27,619 | ||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 3,780 | |||||||||||
Number of reported claims per year | Claim | 5,275 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 24,968 | 23,643 | 21,655 | 18,065 | 12,792 | 4,880 | ||||||
Accident Year 2013 [Member] | Commercial Liability [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 48,857 | 46,690 | 36,371 | 37,701 | 39,143 | 53,817 | ||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 663 | |||||||||||
Number of reported claims per year | Claim | 3,749 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 46,084 | 44,865 | 34,481 | 25,270 | 15,772 | 5,167 | ||||||
Accident Year 2013 [Member] | Professional Liability Reinsurance Assumed [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 22,213 | 23,256 | 17,694 | 11,618 | 13,034 | 14,370 | ||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | 1,847 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | 18,229 | 14,779 | 10,988 | 5,088 | 1,135 | $ 123 | ||||||
Accident Year 2013 [Member] | Physical Damage [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 0 | |||||||||||
Number of reported claims per year | Claim | 0 | |||||||||||
Accident Year 2014 [Member] | Workers' Compensation [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | $ 31,031 | 33,427 | 34,009 | 36,968 | 36,768 | |||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 4,482 | |||||||||||
Number of reported claims per year | Claim | 5,406 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 23,968 | 22,387 | 19,075 | 13,665 | 5,328 | |||||||
Accident Year 2014 [Member] | Commercial Liability [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 64,372 | 52,964 | 52,483 | 52,254 | 49,971 | |||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 307 | |||||||||||
Number of reported claims per year | Claim | 3,320 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 57,692 | 45,075 | 28,393 | 9,046 | 4,023 | |||||||
Accident Year 2014 [Member] | Professional Liability Reinsurance Assumed [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 12,749 | 9,837 | 7,259 | 8,825 | 12,675 | |||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | 2,297 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | 6,627 | 3,999 | 2,241 | 761 | $ 723 | |||||||
Accident Year 2014 [Member] | Physical Damage [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 0 | |||||||||||
Number of reported claims per year | Claim | 0 | |||||||||||
Accident Year 2015 [Member] | Workers' Compensation [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | $ 24,948 | 25,889 | 23,115 | 26,277 | ||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 5,328 | |||||||||||
Number of reported claims per year | Claim | 6,308 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 17,487 | 15,020 | 10,128 | 2,918 | ||||||||
Accident Year 2015 [Member] | Commercial Liability [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 71,088 | 64,323 | 70,174 | 61,420 | ||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 2,785 | |||||||||||
Number of reported claims per year | Claim | 3,185 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 63,133 | 49,267 | 27,582 | 10,923 | ||||||||
Accident Year 2015 [Member] | Professional Liability Reinsurance Assumed [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 10,422 | 7,147 | 7,859 | 11,638 | ||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | 5,422 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | 3,207 | 1,899 | 390 | $ 10 | ||||||||
Accident Year 2015 [Member] | Physical Damage [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 0 | |||||||||||
Number of reported claims per year | Claim | 0 | |||||||||||
Accident Year 2016 [Member] | Workers' Compensation [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | $ 29,317 | 29,757 | 35,240 | |||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 6,740 | |||||||||||
Number of reported claims per year | Claim | 6,059 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 18,461 | 13,377 | 5,784 | |||||||||
Accident Year 2016 [Member] | Commercial Liability [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 77,362 | 68,974 | 61,638 | |||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 7,048 | |||||||||||
Number of reported claims per year | Claim | 3,707 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 52,764 | 30,377 | 6,843 | |||||||||
Accident Year 2016 [Member] | Professional Liability Reinsurance Assumed [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 1,522 | 2,482 | 6,368 | |||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | 1,035 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | 99 | 5 | 0 | |||||||||
Accident Year 2016 [Member] | Physical Damage [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | [1] | 39,658 | 39,477 | 40,651 | ||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 5 | |||||||||||
Number of reported claims per year | Claim | 9,619 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | [1] | $ 39,073 | 39,354 | $ 34,114 | ||||||||
Accident Year 2017 [Member] | Workers' Compensation [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 37,731 | 42,387 | ||||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 13,918 | |||||||||||
Number of reported claims per year | Claim | 16,106 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 15,811 | 6,150 | ||||||||||
Accident Year 2017 [Member] | Commercial Liability [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 103,611 | 103,126 | ||||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 25,527 | |||||||||||
Number of reported claims per year | Claim | 5,261 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 46,529 | 11,415 | ||||||||||
Accident Year 2017 [Member] | Professional Liability Reinsurance Assumed [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 0 | 0 | ||||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | 0 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | 0 | 0 | ||||||||||
Accident Year 2017 [Member] | Physical Damage [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | [1] | 47,193 | 48,440 | |||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 512 | |||||||||||
Number of reported claims per year | Claim | 10,517 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | [1] | $ 46,554 | $ 39,517 | |||||||||
Accident Year 2018 [Member] | Workers' Compensation [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 62,973 | |||||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 36,250 | |||||||||||
Number of reported claims per year | Claim | 12,893 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 10,987 | |||||||||||
Accident Year 2018 [Member] | Commercial Liability [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 179,589 | |||||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 70,070 | |||||||||||
Number of reported claims per year | Claim | 6,870 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | $ 18,689 | |||||||||||
Accident Year 2018 [Member] | Professional Liability Reinsurance Assumed [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 0 | |||||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | 0 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | 0 | |||||||||||
Accident Year 2018 [Member] | Physical Damage [Member] | ||||||||||||
Incurred Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | [1] | 53,726 | ||||||||||
Total of incurred-but-not-reported liabilities plus expected development on reported claims | $ 4,221 | |||||||||||
Number of reported claims per year | Claim | 10,186 | |||||||||||
Cumulative Paid Claims Development, Net of Reinsurance [Abstract] | ||||||||||||
Cumulative paid claims and allocated claim adjustment expense, net of reinsurance | [1] | $ 41,631 | ||||||||||
[1] | The majority of physical damage claims settle within a two-year period. The triangles above have been abbreviated to reflect the short-tail nature of this business. |
Loss and Loss Expense Reserve_3
Loss and Loss Expense Reserves, Incurred Paid Claims Reconciliation (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Net outstanding liabilities [Abstract] | |||
Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance | $ 468,954 | $ 354,282 | |
Reinsurance recoverable on unpaid claims [Abstract] | |||
Reinsurance recoverable on unpaid losses | 375,935 | 308,142 | |
Unallocated claims adjustment expenses | 20,450 | 17,850 | |
Total gross liability for unpaid claims and claims adjustment expense | 865,339 | 680,274 | |
Workers' Compensation [Member] | |||
Net outstanding liabilities [Abstract] | |||
Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance | 131,996 | 113,751 | |
Reinsurance recoverable on unpaid claims [Abstract] | |||
Reinsurance recoverable on unpaid losses | 172,869 | 170,394 | |
Physical Damage [Member] | |||
Net outstanding liabilities [Abstract] | |||
Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance | 13,329 | [1] | 9,087 |
Reinsurance recoverable on unpaid claims [Abstract] | |||
Reinsurance recoverable on unpaid losses | 1,851 | 51 | |
Commercial Liability [Member] | |||
Net outstanding liabilities [Abstract] | |||
Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance | 268,523 | 162,581 | |
Reinsurance recoverable on unpaid claims [Abstract] | |||
Reinsurance recoverable on unpaid losses | 194,483 | 124,695 | |
Professional Liability Assumed [Member] | |||
Net outstanding liabilities [Abstract] | |||
Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance | 21,390 | 28,980 | |
Other Short-duration Insurance Lines [Member] | |||
Net outstanding liabilities [Abstract] | |||
Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance | 33,716 | 39,883 | |
Reinsurance recoverable on unpaid claims [Abstract] | |||
Reinsurance recoverable on unpaid losses | $ 6,732 | $ 13,002 | |
[1] | The majority of physical damage claims settle within a two-year period. The triangles above have been abbreviated to reflect the short-tail nature of this business. |
Loss and Loss Expense Reserve_4
Loss and Loss Expense Reserves, Average Historical Claims Duration (Details) | 12 Months Ended |
Dec. 31, 2018Quarteryr | |
Minimum [Member] | |
Reserve Methodologies for Incurred But Not Reported Losses [Abstract] | |
Number of running accident quarters used | Quarter | 12 |
Number of accident years included in loss development triangles | yr | 15 |
Workers' Compensation [Member] | |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance [Abstract] | |
Year One | 17.30% |
Year Two | 26.30% |
Year Three | 16.30% |
Year Four | 10.40% |
Year Five | 5.70% |
Year Six | 4.30% |
Year Seven | 3.30% |
Year Eight | 1.60% |
Year Nine | 1.80% |
Year Ten | 1.30% |
Physical Damage [Member] | |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance [Abstract] | |
Year One | 80.60% |
Year Two | 14.10% |
Year Three | 2.00% |
Commercial Liability [Member] | |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance [Abstract] | |
Year One | 8.50% |
Year Two | 30.50% |
Year Three | 23.70% |
Year Four | 20.60% |
Year Five | 9.90% |
Year Six | 1.90% |
Year Seven | 1.90% |
Year Eight | 0.50% |
Year Nine | 0.50% |
Year Ten | 0.70% |
Professional Liability Assumed [Member] | |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance [Abstract] | |
Year One | 1.10% |
Year Two | 3.60% |
Year Three | 13.50% |
Year Four | 19.00% |
Year Five | 18.30% |
Year Six | 17.80% |
Year Seven | 11.00% |
Year Eight | 1.70% |
Year Nine | 0.00% |
Reinsurance (Details)
Reinsurance (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||||
Premiums Written [Abstract] | |||||||||||||||
Direct | $ 581,070 | $ 504,033 | $ 395,625 | ||||||||||||
Ceded on direct | (138,102) | (151,348) | (131,166) | ||||||||||||
Net direct | 442,968 | 352,685 | 264,459 | ||||||||||||
Assumed | 1,430 | 704 | 7,379 | ||||||||||||
Ceded on assumed | 0 | 0 | (86) | ||||||||||||
Net assumed | 1,430 | 704 | 7,293 | ||||||||||||
Net | 444,398 | 353,389 | 271,752 | ||||||||||||
Premiums Earned [Abstract] | |||||||||||||||
Direct | [1] | 562,364 | 470,158 | 394,679 | |||||||||||
Ceded on direct | (131,080) | (145,201) | (129,926) | ||||||||||||
Net direct | 431,284 | 324,957 | 264,753 | ||||||||||||
Assumed | [1] | 1,596 | 3,188 | 11,344 | |||||||||||
Ceded on assumed | 0 | 0 | (86) | ||||||||||||
Net assumed | 1,596 | 3,188 | 11,258 | ||||||||||||
Net | $ 118,671 | $ 96,807 | $ 111,940 | $ 105,462 | $ 97,075 | $ 89,100 | $ 67,996 | $ 73,974 | 432,880 | [1] | 328,145 | [1] | 276,011 | [1] | |
Net losses and loss expenses incurred reduced by ceded reinsurance recoveries | 148,173 | 128,086 | 108,656 | ||||||||||||
Net losses and loss (benefit) expense incurred from reinsurance assumed from non-affiliates | (1,300) | 5,223 | $ 14,746 | ||||||||||||
Components of reinsurance recoverable [Abstract] | |||||||||||||||
Case unpaid losses, net of valuation allowance | 163,011 | 119,615 | 163,011 | 119,615 | |||||||||||
Incurred but not reported unpaid losses and loss expenses | 211,805 | 187,163 | 211,805 | 187,163 | |||||||||||
Paid losses and loss expenses | 1,250 | 2,206 | 1,250 | 2,206 | |||||||||||
Unearned premiums | 16,370 | 9,347 | 16,370 | 9,347 | |||||||||||
Reinsurance recoverable | $ 392,436 | $ 318,331 | $ 392,436 | $ 318,331 | |||||||||||
[1] | Included in Ceded to Other Companies is $0, $0 and $86 for 2018, 2017 and 2016, respectively, relating to retrocessions associated with premiums assumed from other companies. percentage of Amount Assumed to Net above considers the impact of this retrocession. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes [Abstract] | |||
Corporate income tax rate | 21.00% | 35.00% | |
Tax benefit related to remeasurement of deferred tax assets and liabilities | $ 9,572 | ||
Tax Cuts and Jobs Act of 2017, change in methodology, provisional income tax impact | 1,696 | ||
Tax Cuts and Jobs Act of 2017, offsetting deferred tax liability | $ 2,262 | ||
Deferred tax liabilities amortized amount into income | 323 | ||
Deferred tax liabilities [Abstract] | |||
Unrealized gain on fixed income and equity security investments | 4,572 | 15,086 | |
Deferred acquisition costs | 2,552 | 1,804 | |
Loss and loss expense reserves | 3,583 | 2,623 | |
Limited partnership investments | 0 | 3,826 | |
Accelerated depreciation | 690 | 492 | |
Other | 1,509 | 1,791 | |
Total deferred tax liabilities | 12,906 | 25,622 | |
Deferred tax assets [Abstract] | |||
Loss and loss expense reserves | 9,999 | 6,761 | |
Limited partnership investments | 3,498 | 0 | |
Unearned premiums discount | 2,321 | 1,837 | |
Other-than-temporary investment declines | 625 | 815 | |
Deferred compensation | 580 | 885 | |
Deferred ceding commission | 1,173 | 627 | |
Other | 972 | 339 | |
Total deferred tax assets | 19,168 | 11,264 | |
Net deferred tax liabilities | 0 | 14,358 | |
Net deferred tax assets | (6,262) | 0 | |
Summary of the difference between federal income tax expense computed at statutory rate [Abstract] | |||
Statutory federal income rate applied to pre-tax income (loss) | (9,213) | 3,543 | $ 15,069 |
Tax effect of (deduction) [Abstract] | |||
Tax-exempt investment income | (253) | (968) | (938) |
Change in enacted tax rates | 0 | (9,572) | 0 |
Other | (331) | (1,204) | (22) |
Federal income tax expense (benefit) | (9,797) | (8,201) | 14,109 |
Taxes (benefit) on pre-tax income (loss) [Abstract] | |||
Current | 8,997 | (4,335) | 11,271 |
Deferred | (18,794) | (3,866) | 2,838 |
Federal income tax expense (benefit) | (9,797) | (8,201) | 14,109 |
Provisions for deferred federal income taxes [Abstract] | |||
Limited partnerships | (2,383) | 4,099 | 503 |
Discounts of loss and loss expense reserves | (2,704) | 1,315 | (114) |
Reserves - salvage and subrogation and other | 427 | 56 | (1,110) |
Unearned premium discount | (484) | (1,767) | 298 |
Deferred compensation | 305 | (168) | 595 |
Other-than-temporary investment declines | 695 | (127) | 2,320 |
Deferred acquisitions costs and ceding commission | 201 | 1,553 | (95) |
Change in enacted tax rates | 0 | (9,572) | 0 |
Unrealized gains / losses | (13,876) | 0 | 0 |
Other | (975) | 745 | 441 |
Provision for deferred federal income taxes | (18,794) | (3,866) | 2,838 |
Deferred tax assets, valuation allowance | 0 | 0 | |
Uncertain tax positions | 0 | 0 | |
Accrued interest | $ 0 | $ 0 | $ 0 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 24, 2018 | Aug. 07, 2018 | Aug. 31, 2017 | ||
Increase (Decrease) in Common Stock Outstanding and Additional Paid-In Capital [Roll Forward] | |||||||
Dividends paid to shareholders | $ 16,835 | $ 16,302 | $ 15,803 | ||||
Cash dividends paid (in dollars per share) | $ 1.12 | $ 1.08 | $ 1.04 | ||||
Stock repurchase program, shares authorized (in shares) | 2,464,209 | ||||||
Repurchase of common shares amount paid | $ 4,596 | $ 1,880 | $ 0 | ||||
Investments [Abstract] | |||||||
Total unrealized gain (loss) before federal income tax expense (benefit) | (7,859) | 71,848 | |||||
Deferred tax benefit (liability) | 1,651 | (25,148) | |||||
Net unrealized gains (losses) on investments | (6,208) | 46,700 | |||||
Foreign exchange adjustment [Abstract] | |||||||
Total unrealized losses | (1,442) | (475) | |||||
Deferred tax benefit | 303 | 166 | |||||
Net unrealized losses on foreign exchange adjustment | (1,139) | (309) | |||||
Accumulated other comprehensive income (loss) | (7,347) | 46,391 | |||||
Investments [Abstract] | |||||||
Pre-tax holding gains (losses) on debt and equity securities arising during period | (12,253) | [1] | 26,677 | 13,259 | |||
Less: applicable federal income tax expense (benefit) | (2,573) | 9,337 | 4,641 | ||||
Net unrealized gains (losses) on investments | (9,680) | 17,340 | 8,618 | ||||
Pre-tax gains (losses) on debt and equity securities included in net income (loss) during period | (3,560) | [1] | 7,217 | 20,755 | |||
Less: applicable federal income tax expense (benefit) | (748) | 2,526 | 7,264 | ||||
Other comprehensive income (loss), reclassification adjustment for sale of securities included in net income, net of tax | (2,812) | 4,691 | 13,491 | ||||
Change in unrealized gains (losses) on investments | $ (6,868) | $ 12,649 | $ (4,873) | ||||
Maximum [Member] | |||||||
Increase (Decrease) in Common Stock Outstanding and Additional Paid-In Capital [Roll Forward] | |||||||
Stock repurchase program, authorized amount | $ 12,000 | $ 25,000 | |||||
Class A [Member] | |||||||
Increase (Decrease) in Common Stock Outstanding and Additional Paid-In Capital [Roll Forward] | |||||||
Stated value of common stock (in dollars per share) | $ 0.04 | ||||||
Repurchase of common stock (in shares) | 7,770 | ||||||
Average share price (in dollars per share) | $ 21.58 | ||||||
Class B [Member] | |||||||
Increase (Decrease) in Common Stock Outstanding and Additional Paid-In Capital [Roll Forward] | |||||||
Stated value of common stock (in dollars per share) | $ 0.04 | ||||||
Repurchase of common stock (in shares) | 191,898 | ||||||
Average share price (in dollars per share) | $ 23.07 | ||||||
[1] | Effective January 1, 2018, the Company adopted ASU 2016-01 and unrealized gains (losses) related to equity securities are no longer reflected in accumulated other comprehensive income (loss). Prior periods have not been restated to conform to the current presentation. |
Other Operating Expenses (Detai
Other Operating Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Operating Expenses [Abstract] | ||||
Amortization of gross deferred policy acquisition costs | $ 78,105 | $ 70,574 | $ 51,597 | |
Other underwriting expenses | 46,638 | 37,230 | 41,692 | |
Reinsurance ceded credits | (23,124) | (23,187) | (33,512) | |
Total underwriting expenses | 101,619 | 84,617 | 59,777 | |
Operating expenses of non-insurance companies | 32,406 | 28,977 | 29,685 | |
Goodwill impairment charge | $ 3,152 | 3,152 | 0 | 0 |
Total other operating expenses | $ 137,177 | $ 113,594 | $ 89,462 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - 401(k) Employee Savings and Profit Sharing Plan [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Contribution Plan [Abstract] | |||
Requisite service period | 1 year | ||
Company's contribution to the plan | $ 3,486 | $ 2,797 | $ 2,449 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 13, 2018 | Feb. 08, 2017 | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Summary of stock Issuances [Abstract] | ||||||
Stock based compensation expense | $ 140 | $ 475 | $ 1,154 | $ 1,343 | ||
Class B [Member] | ||||||
Share-based Compensation [Abstract] | ||||||
Shares distribution period from grant date | 1 year | |||||
Summary of stock Issuances [Abstract] | ||||||
Vesting period | 3 years | |||||
Class B [Member] | 5/10/2016 [Member] | ||||||
Summary of stock Issuances [Abstract] | ||||||
Number of shares issued (in shares) | 17,677 | |||||
Vesting date | May 10, 2017 | |||||
Service period | 7/1/2016 - 6/30/2017 | |||||
Grant date fair value per share (in dollars per share) | $ 24.89 | |||||
Class B [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) | $ 24.20 | |||||
Class B [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) | $ 21.90 | |||||
Class B [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) | $ 24.20 | |||||
Class B [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) | $ 23.05 | |||||
Class B [Member] | Outside Director [Member] | ||||||
Summary of stock Issuances [Abstract] | ||||||
Compensation cost charged against income | $ 464 | $ 454 | $ 460 | |||
Class B [Member] | Executives [Member] | ||||||
Summary of stock Issuances [Abstract] | ||||||
Grant date fair value per share (in dollars per share) | $ 23.80 | |||||
Shares awarded (in shares) | 20,181 | |||||
Total value of shares issued | $ 480 | |||||
Restricted [Member] | Class B [Member] | Chief Executive Officer [Member] | ||||||
Summary of stock Issuances [Abstract] | ||||||
Number of shares issued (in shares) | 85,000 | |||||
Restricted [Member] | Class B [Member] | Chief Executive Officer [Member] | 10/17/2019 [Member] | ||||||
Summary of stock Issuances [Abstract] | ||||||
Number of shares vested (in shares) | 42,500 | |||||
Restricted [Member] | Class B [Member] | Chief Executive Officer [Member] | 10/17/2020 [Member] | ||||||
Summary of stock Issuances [Abstract] | ||||||
Number of shares vested (in shares) | 21,250 | |||||
Restricted [Member] | Class B [Member] | Chief Executive Officer [Member] | 10/17/2021 [Member] | ||||||
Summary of stock Issuances [Abstract] | ||||||
Number of shares vested (in shares) | 21,250 | |||||
1981 Stock Purchase Plan [Member] | ||||||
Share-based Compensation [Abstract] | ||||||
Purchase price of shares obligated to be repurchased, percentage of book value | 90.00% | |||||
1981 Stock Purchase Plan [Member] | Class A [Member] | ||||||
Share-based Compensation [Abstract] | ||||||
Number of outstanding shares eligible for repurchase (in shares) | 46,875 | 46,875 | ||||
1981 Stock Purchase Plan [Member] | Class B [Member] | ||||||
Share-based Compensation [Abstract] | ||||||
Number of outstanding shares eligible for repurchase (in shares) | 187,500 | 187,500 | ||||
2017 LTIP Awards [Member] | Performance Based Equity Award [Member] | Class B [Member] | ||||||
Summary of stock Issuances [Abstract] | ||||||
Number of shares issued (in shares) | 0 | |||||
2017 VCIP Awards [Member] | Performance Based Equity Award [Member] | Class B [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] | Class B [Member] | ||||||
Summary of stock Issuances [Abstract] | ||||||
Number of shares issued (in shares) | 0 | |||||
2018 VCIP Awards [Member] | Performance Based Equity Award [Member] | Class B [Member] | ||||||
Summary of stock Issuances [Abstract] | ||||||
Number of shares issued (in shares) | 0 | |||||
Performance period | 3 years |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($)Segment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)Segment | ||||
Segment Information [Abstract] | ||||||||||||||
Number of reportable segments | Segment | 1 | 2 | ||||||||||||
Revenues [Abstract] | ||||||||||||||
Net premiums earned | $ 118,671 | $ 96,807 | $ 111,940 | $ 105,462 | $ 97,075 | $ 89,100 | $ 67,996 | $ 73,974 | $ 432,880 | [1] | $ 328,145 | [1] | $ 276,011 | [1] |
Net investment income | 6,038 | 5,578 | 5,796 | 4,636 | 5,661 | 4,027 | 4,716 | 3,692 | 22,048 | 18,095 | 14,483 | |||
Net realized and unrealized gains (losses) on investments | $ (20,096) | $ 2,373 | $ (3,435) | $ (4,533) | $ 4,152 | $ 5,944 | $ 3,296 | $ 6,294 | (25,691) | 19,686 | 23,228 | |||
Commissions and other income | 9,932 | 5,308 | 5,275 | |||||||||||
Total revenues | 439,169 | 371,234 | 318,997 | |||||||||||
Property and Casualty Insurance [Member] | ||||||||||||||
Revenues [Abstract] | ||||||||||||||
Net premiums earned | 432,880 | 328,145 | 276,011 | |||||||||||
Net investment income | 22,048 | 18,095 | 14,483 | |||||||||||
Net realized and unrealized gains (losses) on investments | (25,691) | 19,686 | 23,228 | |||||||||||
Commissions and other income | 9,932 | 5,308 | 5,275 | |||||||||||
Total revenues | $ 439,169 | $ 371,234 | $ 318,997 | |||||||||||
[1] | Included in Ceded to Other Companies is $0, $0 and $86 for 2018, 2017 and 2016, respectively, relating to retrocessions associated with premiums assumed from other companies. percentage of Amount Assumed to Net above considers the impact of this retrocession. |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of the denominators used in the calculation of basic and diluted earnings (loss) per share [Abstract] | |||
Average shares outstanding for basic earnings (loss) per share (in shares) | 14,964,812 | 15,065,216 | 15,071,900 |
Dilutive effect of share equivalents (in shares) | 0 | 42,220 | 12,108 |
Average shares outstanding for diluted earnings (loss) per share (in shares) | 14,964,812 | 15,107,436 | 15,084,008 |
Concentrations of Credit Risk (
Concentrations of Credit Risk (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Concentrations of Credit Risk [Abstract] | |
Guarantor obligations, aggregate amount of collateral held | $ 333,188 |
Collateral held that is equal to the ultimate losses that would be paid or due in the event of insured's default | 100.00% |
Uncollateralized exposure as a percentage of shareholder's equity | 70.00% |
Largest estimated amounts due from individual reinsurers | $ 48,473 |
Acquisition and Related Goodw_2
Acquisition and Related Goodwill and Intangibles (Details) - USD ($) $ in Thousands | Oct. 31, 2008 | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Combination [Abstract] | |||||
Goodwill impairment loss | $ 3,152 | $ 3,152 | $ 0 | $ 0 | |
Commercial Lines Specialty Insurance Agency [Member] | |||||
Business Combination [Abstract] | |||||
Cash purchase price | $ 3,500 | ||||
Recorded goodwill | 3,152 | ||||
Intangible assets acquired | $ 179 | ||||
Accumulated amortization on intangible assets | $ 179 | 179 | $ 179 | ||
Goodwill impairment loss | $ 3,152 |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fixed income securities [Abstract] | ||
Total fixed income securities | $ 592,645 | $ 521,853 |
Equity securities [Abstract] | ||
Total equity securities | 66,422 | 201,763 |
Recurring [Member] | ||
Fixed income securities [Abstract] | ||
Agency collateralized mortgage obligations | 10,687 | 16,586 |
Agency mortgage-backed securities | 37,385 | 27,075 |
Asset-backed securities | 64,422 | 43,469 |
Bank loans | 9,750 | 19,488 |
Certificates of deposit | 2,835 | 3,135 |
Collateralized mortgage obligations | 5,423 | 6,492 |
Corporate securities | 186,651 | 193,058 |
Options embedded in convertible securities | 3,799 | 5,291 |
Mortgage-backed securities | 38,540 | 24,204 |
Municipal obligations | 29,155 | 96,650 |
Non-U.S. government obligations | 25,180 | 37,394 |
U.S. government obligations | 178,818 | 49,011 |
Total fixed income securities | 592,645 | 521,853 |
Equity securities [Abstract] | ||
Consumer | 17,945 | 46,578 |
Energy | 3,179 | 10,278 |
Financial | 25,253 | 45,470 |
Industrial | 6,920 | 25,402 |
Technology | 2,303 | 13,061 |
Funds (e.g. mutual funds, closed end funds, ETFs) | 5,489 | 50,291 |
Other | 5,333 | 10,683 |
Total equity securities | 66,422 | 201,763 |
Short-term | 1,000 | 1,000 |
Cash equivalents | 156,855 | 59,173 |
Total | 816,922 | 783,789 |
Recurring [Member] | Level 1 [Member] | ||
Fixed income securities [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 | 2,835 | 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 income securities | 2,835 | 3,135 |
Equity securities [Abstract] | ||
Consumer | 17,945 | 46,578 |
Energy | 3,179 | 10,278 |
Financial | 25,253 | 45,470 |
Industrial | 6,920 | 25,402 |
Technology | 2,303 | 13,061 |
Funds (e.g. mutual funds, closed end funds, ETFs) | 5,489 | 45,276 |
Other | 5,333 | 10,683 |
Total equity securities | 66,422 | 196,748 |
Short-term | 1,000 | 1,000 |
Cash equivalents | 0 | 0 |
Total | 70,257 | 200,883 |
Recurring [Member] | Level 2 [Member] | ||
Fixed income securities [Abstract] | ||
Agency collateralized mortgage obligations | 10,687 | 16,586 |
Agency mortgage-backed securities | 37,385 | 27,075 |
Asset-backed securities | 64,422 | 43,469 |
Bank loans | 9,750 | 19,488 |
Certificates of deposit | 0 | 0 |
Collateralized mortgage obligations | 5,423 | 6,492 |
Corporate securities | 186,651 | 193,058 |
Options embedded in convertible securities | 3,799 | 5,291 |
Mortgage-backed securities | 38,540 | 24,204 |
Municipal obligations | 29,155 | 96,650 |
Non-U.S. government obligations | 25,180 | 37,394 |
U.S. government obligations | 178,818 | 49,011 |
Total fixed income securities | 589,810 | 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 | 156,855 | 59,173 |
Total | 746,665 | 582,906 |
Recurring [Member] | Level 3 [Member] | ||
Fixed income securities [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 | 0 | 0 |
Municipal obligations | 0 | 0 |
Non-U.S. government obligations | 0 | 0 |
U.S. government obligations | 0 | 0 |
Total fixed income securities | 0 | 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 | $ 0 | $ 0 |
Fair Value, Unobservable Input
Fair Value, Unobservable Input Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 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 | 0 | 81 |
Settlements | 0 | (9,123) |
Transfers into Level 3 | 0 | 144 |
Transfers out of Level 3 | 0 | (16,726) |
End of period balance | $ 0 | $ 0 |
Fair Value, Balance Sheet Group
Fair Value, Balance Sheet Grouping (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets [Abstract] | ||
Limited partnerships | $ 55,044 | $ 70,806 |
Carrying Value [Member] | ||
Assets [Abstract] | ||
Limited partnerships | 55,044 | 70,806 |
Commercial mortgage loans | 6,672 | 0 |
Liabilities [Abstract] | ||
Short-term borrowings | 20,000 | 20,000 |
Fair Value [Member] | ||
Assets [Abstract] | ||
Limited partnerships | 55,044 | 70,806 |
Commercial mortgage loans | 6,672 | 0 |
Liabilities [Abstract] | ||
Short-term borrowings | 20,000 | 20,000 |
Fair Value [Member] | Level 1 [Member] | ||
Assets [Abstract] | ||
Limited partnerships | 0 | 0 |
Commercial mortgage loans | 0 | 0 |
Liabilities [Abstract] | ||
Short-term borrowings | 0 | 0 |
Fair Value [Member] | Level 2 [Member] | ||
Assets [Abstract] | ||
Limited partnerships | 0 | 0 |
Commercial mortgage loans | 0 | 0 |
Liabilities [Abstract] | ||
Short-term borrowings | 20,000 | 20,000 |
Fair Value [Member] | Level 3 [Member] | ||
Assets [Abstract] | ||
Limited partnerships | 55,044 | 70,806 |
Commercial mortgage loans | 6,672 | 0 |
Liabilities [Abstract] | ||
Short-term borrowings | $ 0 | $ 0 |
Quarterly Results of Operatio_3
Quarterly Results of Operations (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Quarterly Results of Operations (Unaudited) [Abstract] | ||||||||||||||
Net premiums earned | $ 118,671 | $ 96,807 | $ 111,940 | $ 105,462 | $ 97,075 | $ 89,100 | $ 67,996 | $ 73,974 | $ 432,880 | [1] | $ 328,145 | [1] | $ 276,011 | [1] |
Net investment income | 6,038 | 5,578 | 5,796 | 4,636 | 5,661 | 4,027 | 4,716 | 3,692 | 22,048 | 18,095 | 14,483 | |||
Net realized and unrealized gains (losses) on investments | (20,096) | 2,373 | (3,435) | (4,533) | 4,152 | 5,944 | 3,296 | 6,294 | (25,691) | 19,686 | 23,228 | |||
Losses and loss expenses incurred | 101,537 | 94,540 | 77,488 | 72,298 | 66,492 | 60,673 | 71,754 | 48,599 | 345,864 | 247,518 | 186,481 | |||
Net income (loss) | $ (24,567) | $ (12,325) | $ 2,487 | $ 330 | $ 16,476 | $ 7,434 | $ (12,343) | $ 6,756 | $ (34,075) | $ 18,323 | $ 28,945 | |||
Net income (loss) per share (in dollars per share) | $ (1.65) | $ (0.82) | $ 0.17 | $ 0.02 | $ 1.10 | $ 0.49 | $ (0.82) | $ 0.45 | $ (2.28) | $ 1.21 | $ 1.92 | |||
[1] | Included in Ceded to Other Companies is $0, $0 and $86 for 2018, 2017 and 2016, respectively, relating to retrocessions associated with premiums assumed from other companies. percentage of Amount Assumed to Net above considers the impact of this retrocession. |
Statutory (Details)
Statutory (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statutory [Abstract] | |||
Net income of the insurance subsidiaries in accordance with statutory accounting practices | $ 36,236 | $ 22,000 | $ 31,647 |
Consolidated statutory capital and surplus for subsidiaries | 395,891 | $ 421,663 | |
Amount of statutory surplus transferred by dividend or loan to the parent company | 64,134 | ||
Minimum statutory surplus necessary for the insurance subsidiaries to satisfy statutory risk based capital requirements | 117,426 | ||
Consolidated statutory capital and surplus exceeded requirement | $ 278,464 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Leases [Abstract] | |||
Lease expense | $ 204 | $ 417 | $ 157 |
Future lease payments for operating leases with initial or remaining noncancelable term of one year or more [Abstract] | |||
2,019 | 342 | ||
2,020 | 114 | ||
2,021 | 15 | ||
2022 and thereafter | 1 | ||
Total minimum payments required | $ 472 |
Debt (Details)
Debt (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)Covenant | Aug. 09, 2018USD ($) | |
Debt [Abstract] | ||
Maximum credit limit | $ 40,000 | |
Additional incremental loans limit | $ 35,000 | |
Line of credit maturity date | Aug. 9, 2022 | |
Period of fixed interest on line of credit at company's options | 1 year | |
Outstanding drawings on line of credit | $ 20,000 | |
Effective interest rate | 3.61% | |
Remaining amount under line of credit | $ 20,000 | |
Number of financial covenants | Covenant | 2 | |
Net worth and maximum consolidated leverage ratio | 0.35 |
Related Parties (Details)
Related Parties (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)InvestmentDirector | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
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% | ||
Amount withdrawn from partnership | $ 2,271 | ||
New Vernon Global Opportunity Fund II [Member] | |||
Related Party [Abstract] | |||
Amount withdrawn from partnership | 4,229 | ||
Limited Partnerships [Member] | |||
Related Party [Abstract] | |||
Net investment income (loss), net of fees | $ (5,059) | $ 9,549 | $ (971) |
Director [Member] | Investment Firm Services [Member] | |||
Related Party [Abstract] | |||
Number of investments | Investment | 2 | ||
Estimated aggregate value of investment in limited partnerships | $ 32,028 | ||
Number of related parties | Director | 1 | ||
Market value of equity and fixed maturity securities portfolio | $ 17,065 | ||
Management fees and commissions | $ 103 | $ 97 | $ 207 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 26, 2019 | Jan. 31, 2019 | Dec. 31, 2018 |
New Vernon Global Opportunity Fund [Member] | |||
Subsequent Event [Abstract] | |||
Amount withdrawn from partnership | $ 2,271 | ||
Subsequent Event [Member] | Dividend Declared Q1-2019 [Member] | |||
Subsequent Event [Abstract] | |||
Dividend payable, date declared | Feb. 26, 2019 | ||
Dividend payable, date to be paid | Mar. 26, 2019 | ||
Dividend payable, date of record | Mar. 12, 2019 | ||
Subsequent Event [Member] | Class A [Member] | Dividend Declared Q1-2019 [Member] | |||
Subsequent Event [Abstract] | |||
Dividend payable (in dollars per share) | $ 0.10 | ||
Subsequent Event [Member] | Class B [Member] | Dividend Declared Q1-2019 [Member] | |||
Subsequent Event [Abstract] | |||
Dividend payable (in dollars per share) | $ 0.10 | ||
Subsequent Event [Member] | New Vernon India Fund [Member] | |||
Subsequent Event [Abstract] | |||
Amount withdrawn from partnership | $ 10,000 | ||
Subsequent Event [Member] | New Vernon Global Opportunity Fund [Member] | |||
Subsequent Event [Abstract] | |||
Amount withdrawn from partnership | $ 5,684 |
SCHEDULE I -- SUMMARY OF INVEST
SCHEDULE I -- SUMMARY OF INVESTMENTS-OTHER THAN INVESTMENTS IN RELATED PARTIES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | $ 600,504 | $ 521,017 | |
Investments classified as cash and cash equivalents | 156,855 | ||
Total Investments [Member] | |||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | 667,606 | ||
Fair value | 666,739 | ||
Amount at which shown in the balance sheet | [1] | 666,739 | |
Bonds [Member] | Total Fixed Maturities [Member] | |||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | 600,504 | ||
Fair value | 592,645 | ||
Amount at which shown in the balance sheet | [1] | 592,645 | |
Bonds [Member] | Agency Collateralized Mortgage Obligations [Member] | |||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | 10,636 | ||
Fair value | 10,687 | ||
Amount at which shown in the balance sheet | [1] | 10,687 | |
Bonds [Member] | Agency Mortgage-backed Securities [Member] | |||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | 37,168 | ||
Fair value | 37,385 | ||
Amount at which shown in the balance sheet | [1] | 37,385 | |
Bonds [Member] | Asset-backed Securities [Member] | |||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | 66,241 | ||
Fair value | 64,422 | ||
Amount at which shown in the balance sheet | [1] | 64,422 | |
Bonds [Member] | Bank Loans [Member] | |||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | 10,208 | ||
Fair value | 9,750 | ||
Amount at which shown in the balance sheet | [1] | 9,750 | |
Bonds [Member] | Certificates of Deposit [Member] | |||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | 2,835 | ||
Fair value | 2,835 | ||
Amount at which shown in the balance sheet | [1] | 2,835 | |
Bonds [Member] | Collateralized Mortgage Obligations [Member] | |||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | 5,095 | ||
Fair value | 5,423 | ||
Amount at which shown in the balance sheet | [1] | 5,423 | |
Bonds [Member] | Corporate Securities [Member] | |||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | 196,925 | ||
Fair value | 190,450 | ||
Amount at which shown in the balance sheet | [1] | 190,450 | |
Bonds [Member] | Mortgage-backed Securities [Member] | |||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | 38,586 | ||
Fair value | 38,540 | ||
Amount at which shown in the balance sheet | [1] | 38,540 | |
Bonds [Member] | Municipal Obligations [Member] | |||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | 29,102 | ||
Fair value | 29,155 | ||
Amount at which shown in the balance sheet | [1] | 29,155 | |
Bonds [Member] | Non-U.S. Government Obligations [Member] | |||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | 25,339 | ||
Fair value | 25,180 | ||
Amount at which shown in the balance sheet | [1] | 25,180 | |
Bonds [Member] | U.S. Government Obligations [Member] | |||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | 178,369 | ||
Fair value | 178,818 | ||
Amount at which shown in the balance sheet | [1] | 178,818 | |
Common Stocks [Member] | Total Equity Securities [Member] | |||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | 59,430 | ||
Fair value | 66,422 | ||
Amount at which shown in the balance sheet | [1] | 66,422 | |
Common Stocks [Member] | Consumer [Member] | |||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | 15,963 | ||
Fair value | 17,945 | ||
Amount at which shown in the balance sheet | [1] | 17,945 | |
Common Stocks [Member] | Energy [Member] | |||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | 3,981 | ||
Fair value | 3,179 | ||
Amount at which shown in the balance sheet | [1] | 3,179 | |
Common Stocks [Member] | Financial [Member] | |||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | 23,111 | ||
Fair value | 25,253 | ||
Amount at which shown in the balance sheet | [1] | 25,253 | |
Common Stocks [Member] | Industrial [Member] | |||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | 3,287 | ||
Fair value | 6,920 | ||
Amount at which shown in the balance sheet | [1] | 6,920 | |
Common Stocks [Member] | Technology [Member] | |||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | 1,259 | ||
Fair value | 2,303 | ||
Amount at which shown in the balance sheet | [1] | 2,303 | |
Common Stocks [Member] | Funds (e.g. mutual funds, closed end funds, ETFs) [Member] | |||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | 6,797 | ||
Fair value | 5,489 | ||
Amount at which shown in the balance sheet | [1] | 5,489 | |
Common Stocks [Member] | Other [Member] | |||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | 5,032 | ||
Fair value | 5,333 | ||
Amount at which shown in the balance sheet | [1] | 5,333 | |
Commercial Mortgage Loans [Member] | |||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | 6,672 | ||
Fair value | 6,672 | ||
Amount at which shown in the balance sheet | 6,672 | ||
Short-term [Member] | Total Short-term and Other [Member] | |||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | 1,000 | ||
Fair value | 1,000 | ||
Amount at which shown in the balance sheet | [1] | 1,000 | |
Short-term [Member] | Certificates of Deposit [Member] | |||
Summary of Investments, Other than Investments in Related Parties [Abstract] | |||
Cost | 1,000 | ||
Fair value | 1,000 | ||
Amount at which shown in the balance sheet | [1] | $ 1,000 | |
[1] | Amounts presented above do not include investments of $156,855 classified as cash and cash equivalents in the consolidated balance sheet. |
SCHEDULE II CONDENSED FINANCI_2
SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Investments other than subsidiaries [Abstract] | |||||||||||||||
Fixed income securities | $ 592,645 | $ 521,853 | |||||||||||||
Limited partnerships | 55,044 | 70,806 | |||||||||||||
Total Investments | 721,783 | 795,422 | |||||||||||||
Cash and cash equivalents | $ 163,996 | $ 64,680 | $ 64,680 | $ 163,996 | $ 64,680 | 163,996 | 64,680 | ||||||||
Accounts receivable | 102,972 | 87,551 | |||||||||||||
Other assets | 24,760 | 18,399 | |||||||||||||
Total Assets | 1,490,131 | 1,357,016 | |||||||||||||
Liabilities [Abstract] | |||||||||||||||
Short-term borrowings | 20,000 | 20,000 | |||||||||||||
Total Liabilities | 1,134,049 | 938,205 | |||||||||||||
Shareholders' equity [Abstract] | |||||||||||||||
Additional paid-in capital | 54,720 | 55,078 | |||||||||||||
Accumulated other comprehensive income (loss) | (7,347) | 46,391 | |||||||||||||
Retained earnings | 308,075 | 316,700 | |||||||||||||
Shareholders' equity | 356,082 | 418,811 | $ 404,345 | $ 394,498 | |||||||||||
Total liabilities and shareholders' equity | 1,490,131 | 1,357,016 | |||||||||||||
Revenue [Abstract] | |||||||||||||||
Net investment income | 6,038 | $ 5,578 | $ 5,796 | 4,636 | 5,661 | $ 4,027 | $ 4,716 | $ 3,692 | 22,048 | 18,095 | $ 14,483 | ||||
Net realized gains (losses) on investments | (20,096) | 2,373 | (3,435) | (4,533) | 4,152 | 5,944 | 3,296 | 6,294 | (25,691) | 19,686 | 23,228 | ||||
Total revenues | 439,169 | 371,234 | 318,997 | ||||||||||||
Expenses [Abstract] | |||||||||||||||
Other | 137,177 | 113,594 | 89,462 | ||||||||||||
Total expenses | 483,041 | 361,112 | 275,943 | ||||||||||||
Federal income tax benefit | (9,797) | (8,201) | 14,109 | ||||||||||||
Net income (loss) | (24,567) | (12,325) | 2,487 | 330 | 16,476 | 7,434 | (12,343) | 6,756 | (34,075) | 18,323 | 28,945 | ||||
Condensed Statements of Comprehensive Income [Abstract] | |||||||||||||||
Net income (loss) | (24,567) | $ (12,325) | $ 2,487 | 330 | 16,476 | $ 7,434 | $ (12,343) | 6,756 | (34,075) | 18,323 | 28,945 | ||||
Unrealized net gains (losses) on fixed income securities: | |||||||||||||||
Unrealized net gains (losses) arising during the period | (9,680) | 17,340 | 8,618 | ||||||||||||
Less: reclassification adjustment for net gains (losses) included in net income (loss) | (2,812) | 4,691 | 13,491 | ||||||||||||
Change in unrealized gains (losses) on investments | (6,868) | 12,649 | (4,873) | ||||||||||||
Foreign currency translation adjustments | (830) | 522 | 235 | ||||||||||||
Other comprehensive income (loss) | (7,698) | 13,171 | (4,638) | ||||||||||||
Comprehensive income (loss) | (41,773) | 31,494 | 24,307 | ||||||||||||
Condensed Statements of Cash Flows [Abstract] | |||||||||||||||
Net cash provided by operating activities | 100,708 | 97,744 | 32,368 | ||||||||||||
Investing activities [Abstract] | |||||||||||||||
Net sales of short-term investments | 0 | 500 | 11,258 | ||||||||||||
Distributions from limited partnerships | 6,869 | 19,230 | 1,462 | ||||||||||||
Net purchases of property and equipment | (5,439) | (6,661) | (7,725) | ||||||||||||
Net cash provided by (used in) investing activities | 23,651 | (74,347) | (27,362) | ||||||||||||
Financing activities [Abstract] | |||||||||||||||
Dividends paid to shareholders | (16,835) | (16,302) | (15,803) | ||||||||||||
Repurchase of common shares | (4,596) | (1,880) | 0 | ||||||||||||
Net cash used in financing activities | (21,431) | (18,182) | (15,803) | ||||||||||||
Increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents | 102,098 | 5,737 | (10,562) | ||||||||||||
Cash, cash equivalents and restricted cash and cash equivalents at beginning of year | 64,680 | 64,680 | |||||||||||||
Cash, cash equivalents and restricted cash and cash equivalents at end of year | 163,996 | 64,680 | 163,996 | 64,680 | |||||||||||
Class A [Member] | |||||||||||||||
Shareholders' equity [Abstract] | |||||||||||||||
Common stock | 112 | 112 | |||||||||||||
Class B [Member] | |||||||||||||||
Shareholders' equity [Abstract] | |||||||||||||||
Common stock | 522 | 530 | |||||||||||||
Baldwin & Lyons, Inc. [Member] | |||||||||||||||
Assets [Abstract] | |||||||||||||||
Investment in subsidiaries | 401,260 | 436,879 | |||||||||||||
Due from affiliates | 1,152 | 1,191 | |||||||||||||
Investments other than subsidiaries [Abstract] | |||||||||||||||
Fixed income securities | 22,302 | 22,306 | |||||||||||||
Limited partnerships | 215 | 222 | |||||||||||||
Total Investments | 22,517 | 22,528 | |||||||||||||
Cash and cash equivalents | 15,185 | 26,496 | 26,496 | 14,995 | 15,185 | 26,496 | 14,995 | 15,185 | 26,496 | $ 14,995 | $ 17,934 | ||||
Accounts receivable | 2,276 | 6,833 | |||||||||||||
Other assets | 28,794 | 24,772 | |||||||||||||
Total Assets | 471,184 | 518,699 | |||||||||||||
Liabilities [Abstract] | |||||||||||||||
Premiums payable | 22,964 | 14,046 | |||||||||||||
Deposits from insureds | 58,748 | 60,893 | |||||||||||||
Short-term borrowings | 20,000 | 20,000 | |||||||||||||
Other liabilities | 13,390 | 4,949 | |||||||||||||
Total Liabilities | 115,102 | 99,888 | |||||||||||||
Shareholders' equity [Abstract] | |||||||||||||||
Additional paid-in capital | 54,720 | 55,078 | |||||||||||||
Accumulated other comprehensive income (loss) | (7,347) | 46,391 | |||||||||||||
Retained earnings | 308,075 | 316,700 | |||||||||||||
Shareholders' equity | 356,082 | 418,811 | |||||||||||||
Total liabilities and shareholders' equity | 471,184 | 518,699 | |||||||||||||
Revenue [Abstract] | |||||||||||||||
Commissions and service fees | 17,456 | 18,863 | 27,736 | ||||||||||||
Cash dividends from subsidiaries | 5,000 | 10,000 | 20,000 | ||||||||||||
Net investment income | 569 | 348 | 134 | ||||||||||||
Net realized gains (losses) on investments | (192) | 308 | (3) | ||||||||||||
Other | 51 | (106) | (24) | ||||||||||||
Total revenues | 22,884 | 29,413 | 47,843 | ||||||||||||
Expenses [Abstract] | |||||||||||||||
Salary and related items | 20,158 | 18,140 | 17,462 | ||||||||||||
Other | 11,724 | 9,686 | 10,808 | ||||||||||||
Total expenses | 31,882 | 27,826 | 28,270 | ||||||||||||
Income (loss) before federal income tax benefit and equity in undistributed income of subsidiaries | (8,998) | 1,587 | 19,573 | ||||||||||||
Federal income tax benefit | (2,862) | (2,971) | (69) | ||||||||||||
Income after federal income taxes and equity in undistributed income of subsidiaries | (6,136) | 4,558 | 19,642 | ||||||||||||
Equity in undistributed income of subsidiaries | (27,939) | 13,765 | 9,303 | ||||||||||||
Net income (loss) | (34,075) | 18,323 | 28,945 | ||||||||||||
Condensed Statements of Comprehensive Income [Abstract] | |||||||||||||||
Net income (loss) | (34,075) | 18,323 | 28,945 | ||||||||||||
Unrealized net gains (losses) on fixed income securities: | |||||||||||||||
Unrealized net gains (losses) arising during the period | (9,680) | 17,340 | 8,618 | ||||||||||||
Less: reclassification adjustment for net gains (losses) included in net income (loss) | (2,812) | 4,691 | 13,491 | ||||||||||||
Change in unrealized gains (losses) on investments | (6,868) | 12,649 | (4,873) | ||||||||||||
Foreign currency translation adjustments | (830) | 522 | 235 | ||||||||||||
Other comprehensive income (loss) | (7,698) | 13,171 | (4,638) | ||||||||||||
Comprehensive income (loss) | (41,773) | 31,494 | 24,307 | ||||||||||||
Condensed Statements of Cash Flows [Abstract] | |||||||||||||||
Net cash provided by operating activities | 14,019 | 44,998 | 15,484 | ||||||||||||
Investing activities [Abstract] | |||||||||||||||
Purchases of investments | (11,435) | (21,365) | (4,000) | ||||||||||||
Sales or maturities of investments | 11,213 | 9,146 | 3,493 | ||||||||||||
Net sales of short-term investments | 0 | 0 | 2,165 | ||||||||||||
Distributions from limited partnerships | 0 | 298 | 0 | ||||||||||||
Net purchases of property and equipment | (3,677) | (3,394) | (4,278) | ||||||||||||
Net cash provided by (used in) investing activities | (3,899) | (15,315) | (2,620) | ||||||||||||
Financing activities [Abstract] | |||||||||||||||
Dividends paid to shareholders | (16,835) | (16,302) | (15,803) | ||||||||||||
Repurchase of common shares | (4,596) | (1,880) | 0 | ||||||||||||
Net cash used in financing activities | (21,431) | (18,182) | (15,803) | ||||||||||||
Increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents | (11,311) | 11,501 | (2,939) | ||||||||||||
Cash, cash equivalents and restricted cash and cash equivalents at beginning of year | $ 26,496 | $ 14,995 | 26,496 | 14,995 | 17,934 | ||||||||||
Cash, cash equivalents and restricted cash and cash equivalents at end of year | $ 15,185 | $ 26,496 | $ 15,185 | $ 26,496 | $ 14,995 | ||||||||||
Baldwin & Lyons, Inc. [Member] | Class A [Member] | |||||||||||||||
Shareholders' equity [Abstract] | |||||||||||||||
Common stock | 112 | 112 | |||||||||||||
Baldwin & Lyons, Inc. [Member] | Class B [Member] | |||||||||||||||
Shareholders' equity [Abstract] | |||||||||||||||
Common stock | $ 522 | $ 530 |
SCHEDULE III -- SUPPLEMENTARY_2
SCHEDULE III -- SUPPLEMENTARY INSURANCE INFORMATION (Details) - Property/Casualty Insurance [Member] - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Supplementary Insurance Information [Abstract] | ||||
Deferred policy acquisition costs | $ 6,568 | $ 5,608 | $ 1,172 | |
Reserves for unpaid claims and claim adjustment expenses | 865,339 | 680,274 | 576,330 | |
Unearned premiums | 71,625 | 53,085 | 21,694 | |
Other policy claims and benefits payable | 0 | 0 | 0 | |
Net premium earned | 432,880 | 328,145 | 276,011 | |
Net investment income | [1] | 22,048 | 18,095 | 14,483 |
Benefits, claims, losses and settlement expenses | [1] | 345,864 | 247,518 | 186,481 |
Amortization of deferred policy acquisition costs | 78,105 | 70,574 | 51,597 | |
Other operating expenses | [1],[2] | 23,514 | 14,043 | 8,180 |
Net premiums written | $ 444,398 | $ 353,389 | $ 271,752 | |
[1] | Allocations of certain expenses have been made to investment income, settlement expenses and other operating expenses and are based on a number of assumptions and estimates. Results among these categories would change if different methods were applied. | |||
[2] | Commission allowances relating to reinsurance ceded are offset against other operating expenses. |
SCHEDULE IV -- REINSURANCE (Det
SCHEDULE IV -- REINSURANCE (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||||
SCHEDULE IV -- REINSURANCE [Abstract] | |||||||||||||||
Direct premiums | [1] | $ 562,364 | $ 470,158 | $ 394,679 | |||||||||||
Ceded to other companies | [1] | 131,080 | 145,201 | 130,012 | |||||||||||
Assumed from other companies | [1] | 1,596 | 3,188 | 11,344 | |||||||||||
Net | $ 118,671 | $ 96,807 | $ 111,940 | $ 105,462 | $ 97,075 | $ 89,100 | $ 67,996 | $ 73,974 | $ 432,880 | [1] | $ 328,145 | [1] | $ 276,011 | [1] | |
% of amount assumed to net | [1] | 0.40% | 1.00% | 4.10% | |||||||||||
Retrocessions associated with premiums assumed from other companies | $ 0 | $ 0 | $ 86 | ||||||||||||
[1] | Included in Ceded to Other Companies is $0, $0 and $86 for 2018, 2017 and 2016, respectively, relating to retrocessions associated with premiums assumed from other companies. percentage of Amount Assumed to Net above considers the impact of this retrocession. |
SCHEDULE VI--SUPPLEMENTAL INF_2
SCHEDULE VI--SUPPLEMENTAL INFORMATION CONCERNING PROPERTY/CASUALTY INSURANCE OPERATIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Supplemental Information, Property-Casualty Insurance [Abstract] | |||
Deferred policy acquisition costs | $ 6,568 | $ 5,608 | $ 1,172 |
Reserves for unpaid claims and claim adjustment expenses | 865,339 | 680,274 | 576,330 |
Discount if any deducted in Column C | 0 | 0 | 0 |
Unearned premiums | 71,625 | 53,085 | 21,694 |
Earned premiums | 432,880 | 328,145 | 276,011 |
Net investment income | 22,048 | 18,095 | 14,483 |
Claims and claim adjustment expenses incurred related to current year | 329,078 | 228,303 | 172,645 |
Claims and claim adjustment expenses incurred related to prior years | 16,786 | 19,215 | 13,836 |
Amortization of deferred policy acquisition costs | 78,105 | 70,574 | 51,597 |
Paid claims and claim adjustment expenses | 228,591 | 200,154 | 163,467 |
Net premiums written | $ 444,398 | $ 353,389 | $ 271,752 |
Loss reserve discounted present value cash flow pretax interest rate utilized | 3.50% |