Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 01, 2019 | |
Entity Information [Line Items] | ||
Entity Registrant Name | Protective Insurance Corp | |
Entity Central Index Key | 0000009346 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 14,692,214 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Class A (voting) [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 2,615,216 | |
Class B (nonvoting) [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 12,076,998 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Investments: | ||
Fixed income securities | $ 671,973 | $ 592,645 |
Equity securities | 68,956 | 66,422 |
Limited partnerships | 38,239 | 55,044 |
Commercial mortgage loans | 7,844 | 6,672 |
Short-term and other | 1,000 | 1,000 |
Total Investments | 788,012 | 721,783 |
Cash and cash equivalents | 117,418 | 163,996 |
Restricted cash and cash equivalents | 15,888 | 6,815 |
Accounts receivable | 108,974 | 102,972 |
Reinsurance recoverable | 404,424 | 392,436 |
Other assets | 95,572 | 88,426 |
Current federal income taxes recoverable | 6,025 | 7,441 |
Deferred federal income taxes | 3,478 | 6,262 |
Total Assets | 1,539,791 | 1,490,131 |
Liabilities and shareholders' equity | ||
Reserves for losses and loss expenses | 894,221 | 865,339 |
Reserves for unearned premiums | 80,332 | 71,625 |
Reinsurance payable | 62,802 | 66,632 |
Short-term borrowings | 20,000 | 20,000 |
Accounts payable and other liabilities | 116,366 | 110,453 |
Total Liabilities | 1,173,721 | 1,134,049 |
Shareholders' equity: | ||
Additional paid-in capital | 55,049 | 54,720 |
Accumulated other comprehensive income (loss) | 1,416 | (7,347) |
Retained earnings | 308,971 | 308,075 |
Shareholders' equity | 366,070 | 356,082 |
Total liabilities and shareholders' equity | 1,539,791 | 1,490,131 |
Class A Voting [Member] | ||
Shareholders' equity: | ||
Common stock | 112 | 112 |
Class B Non-voting [Member] | ||
Shareholders' equity: | ||
Common stock | $ 522 | $ 522 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Class A Voting [Member] | ||
Shareholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 3,000,000 | 3,000,000 |
Common stock, shares outstanding (in shares) | 2,615,239 | 2,615,339 |
Class B Non-voting [Member] | ||
Shareholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares outstanding (in shares) | 12,249,414 | 12,253,922 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues | ||
Net premiums earned | $ 110,013 | $ 105,462 |
Net investment income | 6,232 | 4,636 |
Commissions and other income | 2,064 | 1,814 |
Net realized gains (losses) on investments, excluding impairment losses | (39) | 376 |
Other-than-temporary impairment losses on investments | (260) | 0 |
Net unrealized gains (losses) on equity securities and limited partnership investments | 6,327 | (4,909) |
Net realized and unrealized gains (losses) on investments | 6,028 | (4,533) |
Total revenues | 124,337 | 107,379 |
Expenses | ||
Losses and loss expenses incurred | 87,122 | 72,298 |
Other operating expenses | 33,701 | 34,767 |
Total expenses | 120,823 | 107,065 |
Income before federal income tax expense (benefit) | 3,514 | 314 |
Federal income tax expense (benefit) | 766 | (16) |
Net income | $ 2,748 | $ 330 |
Per share data: | ||
Basic and diluted earnings (in dollars per share) | $ 0.18 | $ 0.02 |
Dividends paid to shareholders (in dollars per share) | $ 0.10 | $ 0.28 |
Reconciliation of shares outstanding: | ||
Average shares outstanding - basic (in shares) | 14,848 | 15,010 |
Dilutive effect of share equivalents (in shares) | 30 | 24 |
Average shares outstanding - diluted (in shares) | 14,878 | 15,034 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) [Abstract] | ||
Net income | $ 2,748 | $ 330 |
Other comprehensive income (loss), net of tax: | ||
Unrealized net gains (losses) on fixed income securities | 8,456 | (3,121) |
Foreign currency translation adjustments | 307 | (223) |
Other comprehensive income (loss) | 8,763 | (3,344) |
Comprehensive income (loss) | $ 11,511 | $ (3,014) |
Unaudited Condensed Consolida_5
Unaudited Condensed 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] |
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 | ||
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 | 0 | 0 | 330 | 330 | $ 0 | $ 0 | ||
Foreign currency translation adjustment, net of tax | 0 | (223) | 0 | (223) | 0 | 0 | ||
Change in unrealized gain (loss) on investments, net of tax | 0 | (3,121) | 0 | (3,121) | 0 | 0 | ||
Common stock dividends | 0 | 0 | (4,229) | (4,229) | 0 | 0 | ||
Repurchase of common stock | (45) | 0 | (190) | (235) | 0 | $ 0 | ||
Repurchase of common stock (in shares) | (11,000) | |||||||
Restricted stock grants | 478 | 0 | 0 | 478 | $ 0 | $ 0 | ||
Restricted stock grants (in shares) | 0 | 5,000 | ||||||
Ending balance at Mar. 31, 2018 | 55,511 | (2,993) | 358,651 | 411,811 | $ 112 | $ 530 | ||
Ending balance (in shares) at Mar. 31, 2018 | 2,623,000 | 12,418,000 | ||||||
Beginning balance at Dec. 31, 2018 | 54,720 | (7,347) | 308,075 | 356,082 | $ 112 | $ 522 | ||
Beginning balance (in shares) at Dec. 31, 2018 | 2,615,000 | 12,254,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 0 | 0 | 2,748 | 2,748 | $ 0 | $ 0 | ||
Foreign currency translation adjustment, net of tax | 0 | 307 | 0 | 307 | 0 | 0 | ||
Change in unrealized gain (loss) on investments, net of tax | 0 | 8,456 | 0 | 8,456 | 0 | 0 | ||
Common stock dividends | 0 | 0 | (1,493) | (1,493) | 0 | 0 | ||
Repurchase of common stock | (108) | 0 | (359) | (468) | $ 0 | $ (1) | ||
Repurchase of common stock (in shares) | 0 | (100) | (25,000) | (24,858) | ||||
Restricted stock grants | 437 | 0 | 0 | 438 | $ 0 | $ 1 | ||
Restricted stock grants (in shares) | 0 | 20,000 | ||||||
Ending balance at Mar. 31, 2019 | $ 55,049 | $ 1,416 | $ 308,971 | $ 366,070 | $ 112 | $ 522 | ||
Ending balance (in shares) at Mar. 31, 2019 | 2,615,000 | 12,249,000 |
Unaudited Condensed Consolida_6
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating activities | ||
Net income | $ 2,748 | $ 330 |
Adjustments to reconcile net income to net cash provided by operating activities | 8,657 | 7,697 |
Net cash provided by operating activities | 11,405 | 8,027 |
Investing activities | ||
Purchases of fixed income and equity securities | (140,645) | (140,820) |
Purchases of limited partnership interests | 0 | (200) |
Distributions from limited partnerships | 17,214 | 0 |
Proceeds from maturities | 16,776 | 14,021 |
Proceeds from sales of fixed income securities | 52,199 | 89,636 |
Proceeds from sales of equity securities | 9,169 | 59,757 |
Purchase of insurance company-owned life insurance | 0 | (10,000) |
Purchase of commercial mortgage loans | (1,172) | 0 |
Purchases of property and equipment | (797) | (1,218) |
Proceeds from disposals of property and equipment | 0 | 4 |
Net cash provided by (used in) investing activities | (47,256) | 11,180 |
Financing activities | ||
Dividends paid to shareholders | (1,493) | (4,229) |
Repurchase of common shares | (468) | (235) |
Net cash used in financing activities | (1,961) | (4,464) |
Effect of foreign exchange rates on cash and cash equivalents | 307 | (223) |
Increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents | (37,505) | 14,520 |
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period | 170,811 | 68,713 |
Cash, cash equivalents and restricted cash and cash equivalents at end of period | $ 133,306 | $ 83,233 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | (1) Summary of Significant Accounting Policies: Description of Business: The term “Insurance Subsidiaries,” as used throughout this document, refers to Protective Insurance Company, Protective Specialty Insurance Company, Sagamore Insurance Company and B&L Insurance, Ltd. Basis of Presentation: 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 condensed 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 condensed 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 condensed 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 condensed 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 condensed consolidated statements of operations and the non-credit component of the other-than-temporary impairment is recognized directly in shareholders' equity. The credit component of an other-than-temporary impairment is determined by comparing the net present value of projected future cash flows with the amortized cost basis of the fixed 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. Recognition of Revenue and Costs: Premiums are earned over the period for which insurance protection is provided. A reserve for unearned premiums, computed by the daily pro-rata method, is established to reflect amounts applicable to subsequent accounting periods. Commissions to unaffiliated companies and premium taxes applicable to unearned premiums are deferred and expensed as the related premiums are earned. The Company does not defer acquisition costs that are not directly variable with the production of premium. If it is determined that expected losses and deferred expenses will likely exceed the related unearned premiums, the asset representing deferred policy acquisition costs is reduced and an expense is charged against current operations to reflect any such premium deficiency. In the event that the expected premium deficiency exceeds deferred policy acquisition costs, an additional liability would be recorded with a corresponding expense to current operations for the amount of the excess premium deficiency. Anticipated investment income is considered in determining recoverability of deferred acquisition costs. The Company had no material contract assets, contract liabilities, or deferred contract costs recorded on its condensed consolidated balance sheet at March 31, 2019. Recently Adopted Accounting Pronouncements: In February 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842), or ASU 2016-02. ASU 2016-02 superseded the current lease guidance in Accounting Standards Codification ("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, or ASU 2018-11, 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 was not 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's adoption of the new standard did not have any impact on the Company's condensed consolidated statements of operations or cash flows; however, the impact of adopting the new guidance resulted in a right-of-use asset and lease liability being recorded on the condensed consolidated balance sheet as of March 31, 2019 of approximately $400, which is included within other assets and accounts payable and other liabilities. 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 adoption of this standard did not have a material impact on the Company's condensed consolidated financial statements. Recently Issued Accounting Pronouncements: 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 | 3 Months Ended |
Mar. 31, 2019 | |
Investments [Abstract] | |
Investments | (2) Investments: The following is a summary of available-for-sale securities at March 31, 2019 and December 31, 2018: Fair Value Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Net Unrealized Gains (Losses) March 31, 2019 Fixed income securities Agency collateralized mortgage obligations $ 15,773 $ 15,567 $ 265 $ (59 ) $ 206 Agency mortgage-backed securities 41,283 40,486 849 (52 ) 797 Asset-backed securities 77,307 77,890 180 (763 ) (583 ) Bank loans 11,284 11,372 38 (126 ) (88 ) Certificates of deposit 2,835 2,835 – – – Collateralized mortgage obligations 5,433 5,072 433 (72 ) 361 Corporate securities 227,529 227,017 2,110 (1,598 ) 512 Mortgage-backed securities 37,984 37,699 588 (303 ) 285 Municipal obligations 30,357 30,056 383 (82 ) 301 Non-U.S. government obligations 30,879 30,810 162 (93 ) 69 U.S. government obligations 191,309 190,324 1,469 (484 ) 985 Total fixed income securities $ 671,973 $ 669,128 $ 6,477 $ (3,632 ) $ 2,845 Fair Value Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Net Unrealized Gains (Losses) December 31, 2018 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 ) The following table summarizes, for available-for-sale fixed income securities in an unrealized loss position at March 31, 2019 and December 31, 2018, the aggregate fair value and gross unrealized loss categorized by the duration individual securities have been continuously in an unrealized loss position. March 31, 2019 December 31, 2018 Number of Securities Fair Value Gross Unrealized Loss Number of Securities Fair Value Gross Unrealized Loss Fixed income securities: 12 months or less 85 $ 96,462 $ (1,570 ) 275 $ 282,646 $ (7,296 ) Greater than 12 months 253 208,253 (2,062 ) 217 131,001 (3,497 ) Total fixed income securities 338 $ 304,715 $ (3,632 ) 492 $ 413,647 $ (10,793 ) The fair value and the cost or amortized costs of fixed income investments at March 31, 2019, organized by contractual maturity, are shown below. Actual maturities may ultimately differ from contractual maturities because borrowers have, in some cases, the right to call or prepay obligations with or without call or prepayment penalties. Pre-refunded municipal bonds are classified based on their pre-refunded call dates. Fair Value Cost or Amortized Cost One year or less $ 95,201 $ 95,347 Excess of one year to five years 315,983 314,909 Excess of five years to ten years 81,812 80,997 Excess of ten years 6,630 6,233 Contractual maturities 499,626 497,486 Asset-backed securities 172,347 171,642 Total $ 671,973 $ 669,128 Following is a summary of the components of net realized and unrealized gains (losses) on investments for the periods presented in the accompanying condensed consolidated statements of operations. Three Months Ended March 31 2019 2018 Gross gains on available-for-sale fixed income securities sold during the period $ 3,171 $ 2,443 Gross losses on available-for-sale fixed income securities sold during the period (3,527 ) (2,708 ) Other-than-temporary impairments (260 ) – Change in value of limited partnership investments 408 (2,603 ) Gains (losses) on equity securities: Realized gains on equity securities sold during the period 317 641 Unrealized gains (losses) on equity securities held at the end of the period 5,919 (2,306 ) Realized and unrealized gains (losses) on equity securities during the period 6,236 (1,665 ) Net realized and unrealized gains (losses) on investments $ 6,028 $ (4,533 ) Shareholders' equity at March 31, 2019 included approximately $27,203, net of federal income tax expense, of reported earnings that remain undistributed by limited partnerships. |
Reinsurance
Reinsurance | 3 Months Ended |
Mar. 31, 2019 | |
Reinsurance [Abstract] | |
Reinsurance | (3) Reinsurance: The following table summarizes the Company's transactions with reinsurers for the three months ended March 31, 2019 and 2018. 2019 2018 Three months ended March 31: Premiums ceded to reinsurers $ 30,173 $ 32,442 Losses and loss expenses ceded to reinsurers 30,789 26,661 Commissions from reinsurers 7,233 7,880 |
Loss and Loss Expense Reserves
Loss and Loss Expense Reserves | 3 Months Ended |
Mar. 31, 2019 | |
Loss and Loss Expense Reserves [Abstract] | |
Loss and Loss Expense Reserves | (4) Loss and Loss Expense Reserves: Activity in the reserves for losses and loss expenses for the three months ended March 31, 2019 and 2018 is summarized as follows. All amounts are shown net of reinsurance, unless otherwise indicated. Three Months Ended March 31 2019 2018 Reserves, gross of reinsurance recoverable, at the beginning of the year $ 865,339 $ 680,274 Reinsurance recoverable on unpaid losses at the beginning of the year 375,935 308,143 Reserves at the beginning of the year 489,404 372,131 Provision for losses and loss expenses: Claims occurring during the current period 88,180 73,899 Claims occurring during prior periods (1,058 ) (1,601 ) Total incurred 87,122 72,298 Loss and loss expense payments: Claims occurring during the current period 8,708 10,683 Claims occurring during prior periods 56,747 48,655 Total paid 65,455 59,338 Reserves at the end of the period 511,071 385,091 Reinsurance recoverable on unpaid losses at the end of the period 383,150 309,359 Reserves, gross of reinsurance recoverable, at the end of the period $ 894,221 $ 694,450 The table above shows a reserve savings of $1,058 that developed during the three months ended March 31, 2019 in the settlement of claims occurring on or before December 31, 2018. Losses incurred from claims occurring during prior years reflect the development from prior accident years, composed of individual claim savings and deficiencies which, in the aggregate, have resulted from the settlement of claims at amounts higher or lower than previously reserved and from changes in estimates of losses incurred but not reported. The $1,058 prior accident year savings that developed during the three months ended March 31, 2019 was primarily due to favorable loss development in workers' compensation and independent contractor coverages. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2019 | |
Segment Information [Abstract] | |
Segment Information | (5) Segment Information: The Company has one reportable business segment in its operations: Property and Casualty Insurance. The property and casualty insurance segment provides multiple lines of insurance coverage primarily to 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 three months ended March 31, 2019 and 2018: Three Months Ended March 31 2019 2018 Revenues: Net premiums earned $ 110,013 $ 105,462 Net investment income 6,232 4,636 Net realized and unrealized gains (losses) on investments 6,028 (4,533 ) Commissions and other income 2,064 1,814 Total revenues $ 124,337 $ 107,379 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt [Abstract] | |
Debt | (6) Debt: On August 9, 2018, the Company entered into a credit agreement providing a revolving credit facility with a $40,000 limit, with the option for up to an additional $35,000 in incremental loans at the discretion of the lenders. This credit agreement has an expiration date of August 9, 2022. 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 March 31, 2019. At March 31, 2019, the effective interest rate was 3.59%, and the Company had $20,000 remaining under the revolving credit facility as of March 31, 2019. The current outstanding borrowings were used to repay the Company's previous line of credit. The Company's revolving credit facility has two financial covenants, each of which were met as of March 31, 2019, 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. |
Taxes
Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Taxes [Abstract] | |
Taxes | (7) Taxes: The effective federal tax rate on consolidated income for the three months ended March 31, 2019 was 21.8% compared to (5.1%) for the three months ended March 31, 2018. The effective federal income tax rate differs from the normal statutory rate in part as a result of tax-exempt investment income. The effective tax rate for the three months ended March 31, 2018 was also impacted by the change in accounting for unrealized gains and losses on equity securities related to the Company's adoption of ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, where changes in unrealized gains and losses, and the corresponding tax effects, are now recorded in the condensed consolidated statement of operations. The Company recorded an unrealized loss, and corresponding tax benefit, related to equity securities during the three months ended March 31, 2019. As of March 31, 2019, the Company's calendar years 2017, 2016 and 2015 r |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value [Abstract] | |
Fair Value | (8) Fair Value: Assets and liabilities recorded at fair value in the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The following tables summarize fair value measurements by level for assets measured at fair value on a recurring basis: As of March 31, 2019: Description Total Level 1 Level 2 Level 3 Fixed income securities: Agency collateralized mortgage obligations $ 15,773 $ – $ 15,773 $ – Agency mortgage-backed securities 41,283 – 41,283 – Asset-backed securities 77,307 – 77,307 – Bank loans 11,284 – 11,284 – Certificates of deposit 2,835 2,835 – – Collateralized mortgage obligations 5,433 – 5,433 – Corporate securities 222,853 – 222,853 – Options embedded in convertible securities 4,676 – 4,676 – Mortgage-backed securities 37,984 – 37,984 – Municipal obligations 30,357 – 30,357 – Non-U.S. government obligations 30,879 – 30,879 – U.S. government obligations 191,309 – 191,309 – Total fixed income securities 671,973 2,835 669,138 – Equity securities: Consumer 15,862 15,862 – – Energy 3,534 3,534 – – Financial 24,814 24,814 – – Industrial 7,412 7,412 – – Technology 2,631 2,631 – – Funds (e.g. mutual funds, closed end funds, ETFs) 6,324 6,324 – – Other 8,379 8,379 – – Total equity securities 68,956 68,956 – – Short-term 1,000 1,000 – – Cash equivalents 113,377 504 112,873 – Total $ 855,306 $ 73,295 $ 782,011 $ – 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 $ – 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 March 31, 2019 or December 31, 2018. Level 3 assets, when present, are valued using various unobservable inputs including extrapolated data, proprietary models and indicative quotes. Quoted market prices are obtained whenever possible. Where quoted market prices are not available, fair values are estimated using broker/dealer quotes for specific securities. These techniques are significantly affected by the Company's assumptions, including discount rates and estimates of future cash flows. Potential taxes and other transaction costs have not been considered in estimating fair values. Transfers between levels, if any, are recorded as of the beginning of the reporting period. There were no significant transfers of assets between Level 1 and Level 2 during the three months ended March 31, 2019 and 2018. In addition to the preceding disclosures on assets recorded at fair value in the condensed consolidated balance sheets, FASB guidance also requires the disclosure of fair values for certain other financial instruments for which it is practicable to estimate fair value, whether or not such values are recognized in the condensed consolidated balance sheets. Non-financial instruments such as real estate, property and equipment, other assets, deferred income taxes and intangible assets, and certain financial instruments such as policy reserve liabilities are excluded from the fair value disclosures. Therefore, the fair value amounts cannot be aggregated to determine the underlying economic value of the Company. The following methods, assumptions and inputs were used to estimate the fair value of each class of financial instrument: Limited partnerships: The Company accounts for investments in limited partnerships using the equity method of accounting, which requires an investor in a limited partnership to carry the investment at its proportionate share of the limited partnership's equity. The underlying assets of the Company's investments in limited partnerships are carried primarily at fair value, and, therefore, the Company's carrying value of limited partnerships approximates fair value. As these investments are not actively traded and the corresponding inputs are based on data provided by the investees, they are classified as Level 3. 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 condensed consolidated balance sheets at March 31, 2019 and December 31, 2018 is as follows: Carrying Fair Value Value Level 1 Level 2 Level 3 Total March 31, 2019 Assets: Limited partnerships $ 38,239 $ – $ – $ 38,239 $ 38,239 Commercial mortgage loans 7,844 – – 7,844 7,844 Liabilities: Short-term borrowings 20,000 – 20,000 – 20,000 December 31, 2018 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 |
Stock Based Compensation
Stock Based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Stock Based Compensation [Abstract] | |
Stock Based Compensation | (9) Stock Based Compensation: The Company issues shares of restricted Class B Common Stock to the Company's outside directors, which serve as the annual retainer compensation for the outside directors. The shares are distributed to the outside directors on the vesting date, which, with the exception of pro-rated annual retainers granted to outside directors, is one year following the date of grant. The table below provides detail of the restricted stock issuances to directors for 2018 and 2019: Grant Date Number of Shares Issued Vesting Date Service Period Grant Date Fair Value Per Share 5/9/2017 18,183 5/9/2018 7/1/2017 - 6/30/2018 $ 24.20 8/31/2017 1,257 5/9/2018 8/31/2017 - 6/30/2018 $ 21.90 2/9/2018 408 5/9/2018 2/9/2018 - 6/30/2018 $ 24.20 5/8/2018 19,085 5/8/2019 7/1/2018 - 6/30/2019 $ 23.05 5/7/2019 29,536 5/7/2020 7/1/2019 - 6/30/2020 $ 16.25 Compensation expense related to the above stock grants is recognized over the period in which the directors render services. In May 2017, the Company's Compensation Committee granted equity-based awards pursuant to the Company's Long-Term Incentive Plan (the "Long-Term Incentive Plan"), which was approved by the Company's shareholders at the 2017 Annual Meeting of Shareholders. Certain participants under the Long-Term Incentive Plan were granted Value Creation Incentive Plan awards (the "2017 VCIP Awards"). 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 March 31, 2019. 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. 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 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. I 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 $309 of expense during the three months ended March 31, 2019 related to the Stock Grant. In March 2019, 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 "2019 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 corporate performance component as well as a personal performance component. The corporate performance component of the 2019 LTIP Awards will be determined based on the Company's achievement of 2019 underwriting income compared to the plan target. The Company's underwriting income will be calculated as income (loss) before federal income tax expense (benefit), less net realized gains (losses) on investments, less net unrealized gains (losses) on equity securities and limited partnerships, less net investment income. The personal performance component of the 2019 LTIP Awards will be determined based on the achievement of personal goals that align with departmental and corporate objectives for 2019. Any 2019 LTIP Awards earned will be paid in shares of restricted Class B Common Stock in early 2020. One-third of such shares will vest annually over the three-year period beginning one year from the date of issue. The Company recorded $24 of expense during the three months ended March 31, 2019 related to the 2019 LTIP Awards. |
Litigation, Commitments and Con
Litigation, Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Litigation, Commitments and Contingencies [Abstract] | |
Litigation, Commitments and Contingencies | (10) Litigation, Commitments and Contingencies: In the ordinary, regular and routine course of their business, the Company and its insurance subsidiaries are frequently involved in various matters of litigation relating principally to claims for insurance coverage provided. No currently pending matter is deemed by management to be material to the Company. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2019 | |
Shareholders' Equity [Abstract] | |
Shareholders' Equity | (11) Shareholders' Equity: 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 March 22, 2019, which authorized the repurchase of up to $3,500 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 expires on May 9, 2019. 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 three months ended March 31, 2019, the Company paid $468 to repurchase 100 shares of Class A and 24,858 shares of Class B Common Stock under the share repurchase program. The following table illustrates changes in accumulated other comprehensive income by component for the three months ended March 31, 2019: Foreign Currency Unrealized Holding Gains (Losses) on Available-for-sale Securities Total Beginning balance at December 31, 2018 $ (1,139 ) $ (6,208 ) $ (7,347 ) Other comprehensive income before reclassifications 307 7,671 7,978 Amounts reclassified from accumulated other comprehensive income (loss) – 785 785 Net current-period other comprehensive income 307 8,456 8,763 Ending balance at March 31, 2019 $ (832 ) $ 2,248 $ 1,416 The following table illustrates changes in accumulated other comprehensive income (loss) by component for the three months ended March 31, 2018: Foreign Currency Unrealized Holding Gains (Losses) on Available-for-sale Securities Total Beginning balance at December 31, 2017 $ (309 ) $ 46,700 $ 46,391 Cumulative effect of adoption of ASU 2016-01, net of tax – (46,157 ) (46,157 ) Balance at January 1, 2018 (309 ) 543 234 Cumulative effect of adoption of ASU 2018-02 – 117 117 Other comprehensive loss before reclassifications (223 ) (2,998 ) (3,221 ) Amounts reclassified from accumulated other comprehensive income (loss) – (123 ) (123 ) Net current-period other comprehensive loss (223 ) (3,121 ) (3,344 ) Ending balance at March 31, 2018 $ (532 ) $ (2,461 ) $ (2,993 ) |
Related Parties
Related Parties | 3 Months Ended |
Mar. 31, 2019 | |
Related Parties [Abstract] | |
Related Parties | (12) Related Parties: At March 31, 2019, the Company was invested in one limited partnership, the New Vernon India Fund, with an aggregate estimated value of $17,313, that is managed by an organization in which one director of the Company is an executive officer and owner. The Company's ownership interest in this limited partnership at March 31, 2019 was 4%. For the three months ended March 31, 2019 and 2018, the Company recorded $48 and $142 of fees related to the management of this limited partnership investment. In January 2019, the Company withdrew $5,684 from the New Vernon Global Opportunity Fund, which liquidated its investment in this limited partnership. 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 $7,899 at March 31, 2019. Total commissions and net fees earned by the investment firms and affiliates on these portfolios were $5 and $27 for the three months ended March 31, 2019 and 2018. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | ( 13) Subsequent Events: In April 2019, the Company withdrew $3,000 from the Arbiter Partners limited partnership, which reduced the Company's investment in this limited partnership. On May 7, 2019, the Company's Board of Directors declared a regular 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 June 4, 2019 to shareholders of record on May 21, 2019. Pursuant to the Rule 10b5-1 plan entered into on March 22, 2019, the Company paid $3,031 to repurchase 23 shares of Class A and 172,416 shares of Class B Common Stock between April 1, 2019 and the date of this Quarterly Report on Form 10-Q. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Description of Business | Description of Business: The term “Insurance Subsidiaries,” as used throughout this document, refers to Protective Insurance Company, Protective Specialty Insurance Company, Sagamore Insurance Company and B&L Insurance, Ltd. |
Basis of Presentation | Basis of Presentation: |
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 condensed 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 condensed 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 condensed 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 condensed 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 condensed consolidated statements of operations and the non-credit component of the other-than-temporary impairment is recognized directly in shareholders' equity. The credit component of an other-than-temporary impairment is determined by comparing the net present value of projected future cash flows with the amortized cost basis of the fixed 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. |
Recognition of Revenue and Costs | Recognition of Revenue and Costs: Premiums are earned over the period for which insurance protection is provided. A reserve for unearned premiums, computed by the daily pro-rata method, is established to reflect amounts applicable to subsequent accounting periods. Commissions to unaffiliated companies and premium taxes applicable to unearned premiums are deferred and expensed as the related premiums are earned. The Company does not defer acquisition costs that are not directly variable with the production of premium. If it is determined that expected losses and deferred expenses will likely exceed the related unearned premiums, the asset representing deferred policy acquisition costs is reduced and an expense is charged against current operations to reflect any such premium deficiency. In the event that the expected premium deficiency exceeds deferred policy acquisition costs, an additional liability would be recorded with a corresponding expense to current operations for the amount of the excess premium deficiency. Anticipated investment income is considered in determining recoverability of deferred acquisition costs. The Company had no material contract assets, contract liabilities, or deferred contract costs recorded on its condensed consolidated balance sheet at March 31, 2019. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements: In February 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842), or ASU 2016-02. ASU 2016-02 superseded the current lease guidance in Accounting Standards Codification ("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, or ASU 2018-11, 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 was not 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's adoption of the new standard did not have any impact on the Company's condensed consolidated statements of operations or cash flows; however, the impact of adopting the new guidance resulted in a right-of-use asset and lease liability being recorded on the condensed consolidated balance sheet as of March 31, 2019 of approximately $400, which is included within other assets and accounts payable and other liabilities. 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 adoption of this standard did not have a material impact on the Company's condensed consolidated financial statements. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements: 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) | 3 Months Ended |
Mar. 31, 2019 | |
Investments [Abstract] | |
Available-for-Sale Securities | The following is a summary of available-for-sale securities at March 31, 2019 and December 31, 2018: Fair Value Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Net Unrealized Gains (Losses) March 31, 2019 Fixed income securities Agency collateralized mortgage obligations $ 15,773 $ 15,567 $ 265 $ (59 ) $ 206 Agency mortgage-backed securities 41,283 40,486 849 (52 ) 797 Asset-backed securities 77,307 77,890 180 (763 ) (583 ) Bank loans 11,284 11,372 38 (126 ) (88 ) Certificates of deposit 2,835 2,835 – – – Collateralized mortgage obligations 5,433 5,072 433 (72 ) 361 Corporate securities 227,529 227,017 2,110 (1,598 ) 512 Mortgage-backed securities 37,984 37,699 588 (303 ) 285 Municipal obligations 30,357 30,056 383 (82 ) 301 Non-U.S. government obligations 30,879 30,810 162 (93 ) 69 U.S. government obligations 191,309 190,324 1,469 (484 ) 985 Total fixed income securities $ 671,973 $ 669,128 $ 6,477 $ (3,632 ) $ 2,845 Fair Value Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Net Unrealized Gains (Losses) December 31, 2018 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 ) |
Fixed Maturity and Equity Security Investments in Unrealized Loss Position | The following table summarizes, for available-for-sale fixed income securities in an unrealized loss position at March 31, 2019 and December 31, 2018, the aggregate fair value and gross unrealized loss categorized by the duration individual securities have been continuously in an unrealized loss position. March 31, 2019 December 31, 2018 Number of Securities Fair Value Gross Unrealized Loss Number of Securities Fair Value Gross Unrealized Loss Fixed income securities: 12 months or less 85 $ 96,462 $ (1,570 ) 275 $ 282,646 $ (7,296 ) Greater than 12 months 253 208,253 (2,062 ) 217 131,001 (3,497 ) Total fixed income securities 338 $ 304,715 $ (3,632 ) 492 $ 413,647 $ (10,793 ) |
Fair Value and Cost or Amortized Cost of Fixed Maturity Investments by Contractual Maturity | The fair value and the cost or amortized costs of fixed income investments at March 31, 2019, organized by contractual maturity, are shown below. Actual maturities may ultimately differ from contractual maturities because borrowers have, in some cases, the right to call or prepay obligations with or without call or prepayment penalties. Pre-refunded municipal bonds are classified based on their pre-refunded call dates. Fair Value Cost or Amortized Cost One year or less $ 95,201 $ 95,347 Excess of one year to five years 315,983 314,909 Excess of five years to ten years 81,812 80,997 Excess of ten years 6,630 6,233 Contractual maturities 499,626 497,486 Asset-backed securities 172,347 171,642 Total $ 671,973 $ 669,128 |
Net Realized and Unrealized Gains (Losses) on Investments | Following is a summary of the components of net realized and unrealized gains (losses) on investments for the periods presented in the accompanying condensed consolidated statements of operations. Three Months Ended March 31 2019 2018 Gross gains on available-for-sale fixed income securities sold during the period $ 3,171 $ 2,443 Gross losses on available-for-sale fixed income securities sold during the period (3,527 ) (2,708 ) Other-than-temporary impairments (260 ) – Change in value of limited partnership investments 408 (2,603 ) Gains (losses) on equity securities: Realized gains on equity securities sold during the period 317 641 Unrealized gains (losses) on equity securities held at the end of the period 5,919 (2,306 ) Realized and unrealized gains (losses) on equity securities during the period 6,236 (1,665 ) Net realized and unrealized gains (losses) on investments $ 6,028 $ (4,533 ) |
Reinsurance (Tables)
Reinsurance (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Reinsurance [Abstract] | |
Reinsurance | The following table summarizes the Company's transactions with reinsurers for the three months ended March 31, 2019 and 2018. 2019 2018 Three months ended March 31: Premiums ceded to reinsurers $ 30,173 $ 32,442 Losses and loss expenses ceded to reinsurers 30,789 26,661 Commissions from reinsurers 7,233 7,880 |
Loss and Loss Expense Reserves
Loss and Loss Expense Reserves (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 three months ended March 31, 2019 and 2018 is summarized as follows. All amounts are shown net of reinsurance, unless otherwise indicated. Three Months Ended March 31 2019 2018 Reserves, gross of reinsurance recoverable, at the beginning of the year $ 865,339 $ 680,274 Reinsurance recoverable on unpaid losses at the beginning of the year 375,935 308,143 Reserves at the beginning of the year 489,404 372,131 Provision for losses and loss expenses: Claims occurring during the current period 88,180 73,899 Claims occurring during prior periods (1,058 ) (1,601 ) Total incurred 87,122 72,298 Loss and loss expense payments: Claims occurring during the current period 8,708 10,683 Claims occurring during prior periods 56,747 48,655 Total paid 65,455 59,338 Reserves at the end of the period 511,071 385,091 Reinsurance recoverable on unpaid losses at the end of the period 383,150 309,359 Reserves, gross of reinsurance recoverable, at the end of the period $ 894,221 $ 694,450 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Information [Abstract] | |
Segment Revenues | The following table summarizes segment revenues for the three months ended March 31, 2019 and 2018: Three Months Ended March 31 2019 2018 Revenues: Net premiums earned $ 110,013 $ 105,462 Net investment income 6,232 4,636 Net realized and unrealized gains (losses) on investments 6,028 (4,533 ) Commissions and other income 2,064 1,814 Total revenues $ 124,337 $ 107,379 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019: Description Total Level 1 Level 2 Level 3 Fixed income securities: Agency collateralized mortgage obligations $ 15,773 $ – $ 15,773 $ – Agency mortgage-backed securities 41,283 – 41,283 – Asset-backed securities 77,307 – 77,307 – Bank loans 11,284 – 11,284 – Certificates of deposit 2,835 2,835 – – Collateralized mortgage obligations 5,433 – 5,433 – Corporate securities 222,853 – 222,853 – Options embedded in convertible securities 4,676 – 4,676 – Mortgage-backed securities 37,984 – 37,984 – Municipal obligations 30,357 – 30,357 – Non-U.S. government obligations 30,879 – 30,879 – U.S. government obligations 191,309 – 191,309 – Total fixed income securities 671,973 2,835 669,138 – Equity securities: Consumer 15,862 15,862 – – Energy 3,534 3,534 – – Financial 24,814 24,814 – – Industrial 7,412 7,412 – – Technology 2,631 2,631 – – Funds (e.g. mutual funds, closed end funds, ETFs) 6,324 6,324 – – Other 8,379 8,379 – – Total equity securities 68,956 68,956 – – Short-term 1,000 1,000 – – Cash equivalents 113,377 504 112,873 – Total $ 855,306 $ 73,295 $ 782,011 $ – 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 $ – |
Carrying Value and Fair Value by Level of Financial Instruments | A summary of the carrying value and fair value by level of financial instruments not recorded at fair value on the Company's condensed consolidated balance sheets at March 31, 2019 and December 31, 2018 is as follows: Carrying Fair Value Value Level 1 Level 2 Level 3 Total March 31, 2019 Assets: Limited partnerships $ 38,239 $ – $ – $ 38,239 $ 38,239 Commercial mortgage loans 7,844 – – 7,844 7,844 Liabilities: Short-term borrowings 20,000 – 20,000 – 20,000 December 31, 2018 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 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Stock Based Compensation [Abstract] | |
Detail of Restricted Stock Issuances | The table below provides detail of the restricted stock issuances to directors for 2018 and 2019: Grant Date Number of Shares Issued Vesting Date Service Period Grant Date Fair Value Per Share 5/9/2017 18,183 5/9/2018 7/1/2017 - 6/30/2018 $ 24.20 8/31/2017 1,257 5/9/2018 8/31/2017 - 6/30/2018 $ 21.90 2/9/2018 408 5/9/2018 2/9/2018 - 6/30/2018 $ 24.20 5/8/2018 19,085 5/8/2019 7/1/2018 - 6/30/2019 $ 23.05 5/7/2019 29,536 5/7/2020 7/1/2019 - 6/30/2020 $ 16.25 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Shareholders' Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Income (Loss) by Component | The following table illustrates changes in accumulated other comprehensive income by component for the three months ended March 31, 2019: Foreign Currency Unrealized Holding Gains (Losses) on Available-for-sale Securities Total Beginning balance at December 31, 2018 $ (1,139 ) $ (6,208 ) $ (7,347 ) Other comprehensive income before reclassifications 307 7,671 7,978 Amounts reclassified from accumulated other comprehensive income (loss) – 785 785 Net current-period other comprehensive income 307 8,456 8,763 Ending balance at March 31, 2019 $ (832 ) $ 2,248 $ 1,416 The following table illustrates changes in accumulated other comprehensive income (loss) by component for the three months ended March 31, 2018: Foreign Currency Unrealized Holding Gains (Losses) on Available-for-sale Securities Total Beginning balance at December 31, 2017 $ (309 ) $ 46,700 $ 46,391 Cumulative effect of adoption of ASU 2016-01, net of tax – (46,157 ) (46,157 ) Balance at January 1, 2018 (309 ) 543 234 Cumulative effect of adoption of ASU 2018-02 – 117 117 Other comprehensive loss before reclassifications (223 ) (2,998 ) (3,221 ) Amounts reclassified from accumulated other comprehensive income (loss) – (123 ) (123 ) Net current-period other comprehensive loss (223 ) (3,121 ) (3,344 ) Ending balance at March 31, 2018 $ (532 ) $ (2,461 ) $ (2,993 ) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($)Segment | |
Description of Business [Abstract] | |
Number of reportable segments | Segment | 1 |
ASU 2016-02 [Member] | |
Recently Issued Accounting Pronouncements [Abstract] | |
Right-of-use asset | $ 400 |
Lease liability | $ 400 |
Investments, Summary of Availab
Investments, Summary of Available-for-sale Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Available-for-sale Debt Securities [Abstract] | ||
Fair value | $ 671,973 | $ 592,645 |
Cost or amortized cost | 669,128 | 600,504 |
Gross unrealized gains | 6,477 | 2,934 |
Gross unrealized losses | (3,632) | (10,793) |
Net unrealized gains (losses) | 2,845 | (7,859) |
Agency Collateralized Mortgage Obligations [Member] | ||
Available-for-sale Debt Securities [Abstract] | ||
Fair value | 15,773 | 10,687 |
Cost or amortized cost | 15,567 | 10,636 |
Gross unrealized gains | 265 | 145 |
Gross unrealized losses | (59) | (94) |
Net unrealized gains (losses) | 206 | 51 |
Agency Mortgage-backed Securities [Member] | ||
Available-for-sale Debt Securities [Abstract] | ||
Fair value | 41,283 | 37,385 |
Cost or amortized cost | 40,486 | 37,168 |
Gross unrealized gains | 849 | 371 |
Gross unrealized losses | (52) | (154) |
Net unrealized gains (losses) | 797 | 217 |
Asset-backed Securities [Member] | ||
Available-for-sale Debt Securities [Abstract] | ||
Fair value | 77,307 | 64,422 |
Cost or amortized cost | 77,890 | 66,241 |
Gross unrealized gains | 180 | 14 |
Gross unrealized losses | (763) | (1,833) |
Net unrealized gains (losses) | (583) | (1,819) |
Bank Loans [Member] | ||
Available-for-sale Debt Securities [Abstract] | ||
Fair value | 11,284 | 9,750 |
Cost or amortized cost | 11,372 | 10,208 |
Gross unrealized gains | 38 | 27 |
Gross unrealized losses | (126) | (485) |
Net unrealized gains (losses) | (88) | (458) |
Certificates of Deposit [Member] | ||
Available-for-sale Debt Securities [Abstract] | ||
Fair value | 2,835 | 2,835 |
Cost or amortized cost | 2,835 | 2,835 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Net unrealized gains (losses) | 0 | 0 |
Collateralized Mortgage Obligations [Member] | ||
Available-for-sale Debt Securities [Abstract] | ||
Fair value | 5,433 | 5,423 |
Cost or amortized cost | 5,072 | 5,095 |
Gross unrealized gains | 433 | 376 |
Gross unrealized losses | (72) | (48) |
Net unrealized gains (losses) | 361 | 328 |
Corporate Securities [Member] | ||
Available-for-sale Debt Securities [Abstract] | ||
Fair value | 227,529 | 190,450 |
Cost or amortized cost | 227,017 | 196,925 |
Gross unrealized gains | 2,110 | 127 |
Gross unrealized losses | (1,598) | (6,602) |
Net unrealized gains (losses) | 512 | (6,475) |
Mortgage-backed Securities [Member] | ||
Available-for-sale Debt Securities [Abstract] | ||
Fair value | 37,984 | 38,540 |
Cost or amortized cost | 37,699 | 38,586 |
Gross unrealized gains | 588 | 377 |
Gross unrealized losses | (303) | (423) |
Net unrealized gains (losses) | 285 | (46) |
Municipal Obligations [Member] | ||
Available-for-sale Debt Securities [Abstract] | ||
Fair value | 30,357 | 29,155 |
Cost or amortized cost | 30,056 | 29,102 |
Gross unrealized gains | 383 | 239 |
Gross unrealized losses | (82) | (186) |
Net unrealized gains (losses) | 301 | 53 |
Non-U.S. Government Obligations [Member] | ||
Available-for-sale Debt Securities [Abstract] | ||
Fair value | 30,879 | 25,180 |
Cost or amortized cost | 30,810 | 25,339 |
Gross unrealized gains | 162 | 6 |
Gross unrealized losses | (93) | (165) |
Net unrealized gains (losses) | 69 | (159) |
U.S. Government Obligations [Member] | ||
Available-for-sale Debt Securities [Abstract] | ||
Fair value | 191,309 | 178,818 |
Cost or amortized cost | 190,324 | 178,369 |
Gross unrealized gains | 1,469 | 1,252 |
Gross unrealized losses | (484) | (803) |
Net unrealized gains (losses) | $ 985 | $ 449 |
Investments, Continuous Unreali
Investments, Continuous Unrealized Loss Position (Details) $ in Thousands | Mar. 31, 2019USD ($)Security | Dec. 31, 2018USD ($)Security |
Available-for-sale Securities Continuous Unrealized Loss Position [Abstract] | ||
Number of securities, 12 months or less | Security | 85 | 275 |
Number of securities, Greater than 12 months | Security | 253 | 217 |
Number of securities, total | Security | 338 | 492 |
Available-for-sale Securities Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Fair value, 12 months or less | $ 96,462 | $ 282,646 |
Fair value, Greater than 12 months | 208,253 | 131,001 |
Fair value, total | 304,715 | 413,647 |
Available-for-sale Securities Continuous Unrealized Loss Position, Aggregate Losses [Abstract] | ||
Gross unrealized loss, 12 months or less | (1,570) | (7,296) |
Gross unrealized loss, Greater than 12 months | (2,062) | (3,497) |
Gross unrealized loss, total | (3,632) | (10,793) |
Available-for-sale Securities Debt Maturities Fair Value [Abstract] | ||
One year or less, Fair Value | 95,201 | |
Excess of one year to five years, Fair Value | 315,983 | |
Excess of five years to ten years, Fair Value | 81,812 | |
Excess of ten years, Fair Value | 6,630 | |
Total contractual maturities, Fair Value | 499,626 | |
Asset-backed securities, Fair Value | 172,347 | |
Total, Fair Value | 671,973 | 592,645 |
Available-for-sale Securities Debt Maturities Amortized Cost Basis [Abstract] | ||
One year or less, Cost or Amortized Cost | 95,347 | |
Excess of one year to five years, Cost or Amortized Cost | 314,909 | |
Excess of five years to ten years, Cost or Amortized Cost | 80,997 | |
Excess of ten years, Cost or Amortized Cost | 6,233 | |
Total contractual maturities, Cost or Amortized Cost | 497,486 | |
Asset-backed securities, Cost or Amortized Cost | 171,642 | |
Cost or amortized cost | $ 669,128 | $ 600,504 |
Investments, Net Realized and U
Investments, Net Realized and Unrealized Gains (Losses) on Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Components of net realized and unrealized gains (losses) on investments [Abstract] | ||
Gross gains on available-for-sale fixed income securities sold during the period | $ 3,171 | $ 2,443 |
Gross losses on available-for-sale fixed income securities sold during the period | (3,527) | (2,708) |
Other-than-temporary impairments | (260) | 0 |
Change in value of limited partnership investments | 408 | (2,603) |
Gains (losses) on equity securities [Abstract] | ||
Realized gains on equity securities sold during the period | 317 | 641 |
Unrealized gains (losses) on equity securities held at the end of the period | 5,919 | (2,306) |
Realized and unrealized gains (losses) on equity securities during the period | 6,236 | (1,665) |
Net realized and unrealized gains (losses) on investments | 6,028 | $ (4,533) |
Federal income taxes | $ 27,203 |
Reinsurance (Details)
Reinsurance (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Reinsurance [Abstract] | ||
Premiums ceded to reinsurers | $ 30,173 | $ 32,442 |
Losses and loss expenses ceded to reinsurers | 30,789 | 26,661 |
Commissions from reinsurers | $ 7,233 | $ 7,880 |
Loss and Loss Expense Reserve_2
Loss and Loss Expense Reserves (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Activity in the reserve for losses and loss expenses [Roll Forward] | ||
Reserves, gross of reinsurance recoverable, at the beginning of the year | $ 865,339 | $ 680,274 |
Reinsurance recoverable on unpaid losses at the beginning of the year | 375,935 | 308,143 |
Reserves at the beginning of the year | 489,404 | 372,131 |
Provision for losses and loss expenses [Abstract] | ||
Claims occurring during the current period | 88,180 | 73,899 |
Claims occurring during prior periods | (1,058) | (1,601) |
Total incurred | 87,122 | 72,298 |
Loss and loss expense payments [Abstract] | ||
Claims occurring during the current period | 8,708 | 10,683 |
Claims occurring during prior periods | 56,747 | 48,655 |
Total paid | 65,455 | 59,338 |
Reserves at the end of the period | 511,071 | 385,091 |
Reinsurance recoverable on unpaid losses at the end of the period | 383,150 | 309,359 |
Reserves, gross of reinsurance recoverable, at the end of the period | $ 894,221 | $ 694,450 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)Segment | Mar. 31, 2018USD ($) | |
Segment Information [Abstract] | ||
Number of reportable segments | Segment | 1 | |
Summary of Segment Revenue [Abstract] | ||
Net premiums earned | $ 110,013 | $ 105,462 |
Net investment income | 6,232 | 4,636 |
Net realized and unrealized gains (losses) on investments | 6,028 | (4,533) |
Commissions and other income | 2,064 | 1,814 |
Total revenues | 124,337 | 107,379 |
Property and Casualty Insurance [Member] | ||
Summary of Segment Revenue [Abstract] | ||
Net premiums earned | 110,013 | 105,462 |
Net investment income | 6,232 | 4,636 |
Net realized and unrealized gains (losses) on investments | 6,028 | (4,533) |
Commissions and other income | 2,064 | 1,814 |
Total revenues | $ 124,337 | $ 107,379 |
Debt (Details)
Debt (Details) - Revolving Credit Facility [Member] $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)Covenant | Aug. 09, 2018USD ($) | |
Credit Agreement [Abstract] | ||
Maximum credit limit | $ 40,000 | |
Additional incremental loans limit | $ 35,000 | |
Expiration date | Aug. 9, 2022 | |
Optional period of fixed interest | 1 year | |
Outstanding drawings | $ 20,000 | |
Effective interest rate | 3.59% | |
Amount remaining on credit facility | $ 20,000 | |
Number of financial covenants | Covenant | 2 | |
Net worth and maximum consolidated leverage ratio | 0.35 |
Taxes (Details)
Taxes (Details) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Taxes [Abstract] | ||
Effective federal tax rate on consolidated loss | 21.80% | (5.10%) |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fixed income securities [Abstract] | ||
Total fixed income securities | $ 671,973 | $ 592,645 |
Equity securities [Abstract] | ||
Total equity securities | 68,956 | 66,422 |
Recurring [Member] | ||
Fixed income securities [Abstract] | ||
Agency collateralized mortgage obligations | 15,773 | 10,687 |
Agency mortgage-backed securities | 41,283 | 37,385 |
Asset-backed securities | 77,307 | 64,422 |
Bank loans | 11,284 | 9,750 |
Certificates of deposit | 2,835 | 2,835 |
Collateralized mortgage obligations | 5,433 | 5,423 |
Corporate securities | 222,853 | 186,651 |
Options embedded in convertible securities | 4,676 | 3,799 |
Mortgage-backed securities | 37,984 | 38,540 |
Municipal obligations | 30,357 | 29,155 |
Non-U.S. government obligations | 30,879 | 25,180 |
U.S. government obligations | 191,309 | 178,818 |
Total fixed income securities | 671,973 | 592,645 |
Equity securities [Abstract] | ||
Consumer | 15,862 | 17,945 |
Energy | 3,534 | 3,179 |
Financial | 24,814 | 25,253 |
Industrial | 7,412 | 6,920 |
Technology | 2,631 | 2,303 |
Funds (e.g. mutual funds, closed end funds, ETFs) | 6,324 | 5,489 |
Other | 8,379 | 5,333 |
Total equity securities | 68,956 | 66,422 |
Short-term | 1,000 | 1,000 |
Cash equivalents | 113,377 | 156,855 |
Total | 855,306 | 816,922 |
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 | 2,835 |
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 | 2,835 |
Equity securities [Abstract] | ||
Consumer | 15,862 | 17,945 |
Energy | 3,534 | 3,179 |
Financial | 24,814 | 25,253 |
Industrial | 7,412 | 6,920 |
Technology | 2,631 | 2,303 |
Funds (e.g. mutual funds, closed end funds, ETFs) | 6,324 | 5,489 |
Other | 8,379 | 5,333 |
Total equity securities | 68,956 | 66,422 |
Short-term | 1,000 | 1,000 |
Cash equivalents | 504 | 0 |
Total | 73,295 | 70,257 |
Recurring [Member] | Level 2 [Member] | ||
Fixed income securities [Abstract] | ||
Agency collateralized mortgage obligations | 15,773 | 10,687 |
Agency mortgage-backed securities | 41,283 | 37,385 |
Asset-backed securities | 77,307 | 64,422 |
Bank loans | 11,284 | 9,750 |
Certificates of deposit | 0 | 0 |
Collateralized mortgage obligations | 5,433 | 5,423 |
Corporate securities | 222,853 | 186,651 |
Options embedded in convertible securities | 4,676 | 3,799 |
Mortgage-backed securities | 37,984 | 38,540 |
Municipal obligations | 30,357 | 29,155 |
Non-U.S. government obligations | 30,879 | 25,180 |
U.S. government obligations | 191,309 | 178,818 |
Total fixed income securities | 669,138 | 589,810 |
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 | 112,873 | 156,855 |
Total | 782,011 | 746,665 |
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, Balance Sheet Group
Fair Value, Balance Sheet Grouping (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Assets [Abstract] | ||
Limited partnerships | $ 38,239 | $ 55,044 |
Carrying Value [Member] | ||
Assets [Abstract] | ||
Limited partnerships | 38,239 | 55,044 |
Commercial mortgage loans | 7,844 | 6,672 |
Liabilities [Abstract] | ||
Short-term borrowings | 20,000 | 20,000 |
Fair Value [Member] | ||
Assets [Abstract] | ||
Limited partnerships | 38,239 | 55,044 |
Commercial mortgage loans | 7,844 | 6,672 |
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 | 38,239 | 55,044 |
Commercial mortgage loans | 7,844 | 6,672 |
Liabilities [Abstract] | ||
Short-term borrowings | $ 0 | $ 0 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - Class B [Member] - USD ($) $ / shares in Units, $ in Thousands | Nov. 13, 2018 | Mar. 31, 2019 |
Stock Based Compensation [Abstract] | ||
Shares distribution period from grant date | 1 year | |
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 | |
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 | |
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 | |
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 | |
5/7/2019 [Member] | ||
Summary of stock Issuances [Abstract] | ||
Number of shares issued (in shares) | 29,536 | |
Vesting date | May 7, 2020 | |
Service period | 7/1/2019 - 6/30/2020 | |
Grant date fair value per share (in dollars per share) | $ 16.25 | |
Restricted [Member] | Chief Executive Officer [Member] | ||
Summary of stock Issuances [Abstract] | ||
Number of shares issued (in shares) | 85,000 | |
Stock based compensation expense | $ 309 | |
Restricted [Member] | Chief Executive Officer [Member] | 10/17/2019 [Member] | ||
Summary of stock Issuances [Abstract] | ||
Number of shares vested (in shares) | 42,500 | |
Restricted [Member] | Chief Executive Officer [Member] | 10/17/2020 [Member] | ||
Summary of stock Issuances [Abstract] | ||
Number of shares vested (in shares) | 21,250 | |
Restricted [Member] | Chief Executive Officer [Member] | 10/17/2021 [Member] | ||
Summary of stock Issuances [Abstract] | ||
Number of shares vested (in shares) | 21,250 | |
2017 VCIP Awards [Member] | Performance Based Equity Award [Member] | ||
Summary of stock Issuances [Abstract] | ||
Number of shares issued (in shares) | 0 | |
Performance period | 3 years | |
2018 LTIP Awards [Member] | Performance Based Equity Award [Member] | ||
Summary of stock Issuances [Abstract] | ||
Number of shares issued (in shares) | 0 | |
2018 VCIP Awards [Member] | Performance Based Equity Award [Member] | ||
Summary of stock Issuances [Abstract] | ||
Number of shares issued (in shares) | 0 | |
Performance period | 3 years | |
2019 LTIP Awards [Member] | Performance Based Equity Award [Member] | ||
Summary of stock Issuances [Abstract] | ||
Number of shares issued (in shares) | 0 | |
Vesting period | 3 years | |
Stock based compensation expense | $ 24 | |
Annual vesting percentage of shares in year one | 33.30% | |
Annual vesting percentage of shares in year two | 33.30% | |
Annual vesting percentage of shares in year three | 33.30% |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||
May 08, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 22, 2019 | Aug. 07, 2018 | Aug. 31, 2017 | |
Stock Repurchase Program [Abstract] | ||||||
Stock repurchase program, shares authorized (in shares) | 2,464,209 | |||||
Stock repurchase program, authorized amount | $ 3,500 | |||||
Repurchase of common shares amount paid | $ 3,031 | $ 468 | $ 235 | |||
Maximum [Member] | ||||||
Stock Repurchase Program [Abstract] | ||||||
Stock repurchase program, authorized amount | $ 25,000 | |||||
Class A [Member] | ||||||
Stock Repurchase Program [Abstract] | ||||||
Repurchase of common stock (in shares) | 100 | |||||
Class A [Member] | Subsequent Event [Member] | ||||||
Stock Repurchase Program [Abstract] | ||||||
Repurchase of common stock (in shares) | 23 | |||||
Class B [Member] | ||||||
Stock Repurchase Program [Abstract] | ||||||
Repurchase of common stock (in shares) | 24,858 | |||||
Class B [Member] | Subsequent Event [Member] | ||||||
Stock Repurchase Program [Abstract] | ||||||
Repurchase of common stock (in shares) | 172,416 |
Shareholders' Equity, Changes i
Shareholders' Equity, Changes in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2017 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ 356,082 | $ 418,811 | |
Other comprehensive income (loss) | 8,763 | (3,344) | |
Ending balance | 366,070 | 411,811 | |
ASU 2016-01 [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Cumulative effect of adoption, net of tax | $ 0 | ||
ASU 2018-02 [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Cumulative effect of adoption, net of tax | 0 | ||
Other Comprehensive Income (Loss) [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (7,347) | 46,391 | |
Other comprehensive income before reclassifications | 7,978 | (3,221) | |
Amounts reclassified from accumulated other comprehensive income (loss) | 785 | (123) | |
Other comprehensive income (loss) | 8,763 | (3,344) | |
Ending balance | 1,416 | (2,993) | |
Other Comprehensive Income (Loss) [Member] | ASU 2016-01 [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Cumulative effect of adoption, net of tax | (46,157) | ||
Adjusted beginning balance | 234 | ||
Other Comprehensive Income (Loss) [Member] | ASU 2018-02 [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Cumulative effect of adoption, net of tax | 117 | ||
Foreign Currency [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (1,139) | (309) | |
Other comprehensive income before reclassifications | 307 | (223) | |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 | |
Other comprehensive income (loss) | 307 | (223) | |
Ending balance | (832) | (532) | |
Foreign Currency [Member] | ASU 2016-01 [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Cumulative effect of adoption, net of tax | 0 | ||
Adjusted beginning balance | (309) | ||
Foreign Currency [Member] | ASU 2018-02 [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Cumulative effect of adoption, net of tax | 0 | ||
Unrealized Holding Gains on Available-for-sale Securities [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (6,208) | 46,700 | |
Other comprehensive income before reclassifications | 7,671 | (2,998) | |
Amounts reclassified from accumulated other comprehensive income (loss) | 785 | (123) | |
Other comprehensive income (loss) | 8,456 | (3,121) | |
Ending balance | $ 2,248 | (2,461) | |
Unrealized Holding Gains on Available-for-sale Securities [Member] | ASU 2016-01 [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Cumulative effect of adoption, net of tax | (46,157) | ||
Adjusted beginning balance | $ 543 | ||
Unrealized Holding Gains on Available-for-sale Securities [Member] | ASU 2018-02 [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Cumulative effect of adoption, net of tax | $ 117 |
Related Parties (Details)
Related Parties (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)PartnershipDirector | Mar. 31, 2018USD ($) | |
Related Party [Abstract] | ||
Amount withdrawn from partnership | $ 17,214 | $ 0 |
New Vernon India Fund [Member] | ||
Related Party [Abstract] | ||
Ownership interest in limited partnership | 4.00% | |
Amount withdrawn from partnership | $ 5,684 | |
Director [Member] | New Vernon India Fund [Member] | ||
Related Party [Abstract] | ||
Number of investments | Partnership | 1 | |
Estimated aggregate value of investment in limited partnerships | $ 17,313 | |
Number of related parties | Director | 1 | |
Director [Member] | Limited Partnerships [Member] | ||
Related Party [Abstract] | ||
Management fees and commissions | $ 48 | 142 |
Director [Member] | Investment Firm Services [Member] | ||
Related Party [Abstract] | ||
Number of related parties | Director | 1 | |
Management fees and commissions | $ 5 | $ 27 |
Market value of equity and fixed maturity securities portfolio | $ 7,899 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | May 07, 2019 | Apr. 30, 2019 | May 08, 2019 | Mar. 31, 2019 | Mar. 31, 2018 |
Subsequent Event [Abstract] | |||||
Amount withdrawn from partnership | $ 17,214 | $ 0 | |||
Repurchase of common shares amount paid | $ 3,031 | $ 468 | $ 235 | ||
Arbiter Partners Limited [Member] | |||||
Subsequent Event [Abstract] | |||||
Amount withdrawn from partnership | $ 3,000 | ||||
Class A [Member] | |||||
Subsequent Event [Abstract] | |||||
Repurchase of common stock (in shares) | 100 | ||||
Class B [Member] | |||||
Subsequent Event [Abstract] | |||||
Repurchase of common stock (in shares) | 24,858 | ||||
Subsequent Event [Member] | |||||
Subsequent Event [Abstract] | |||||
Dividend payable, date declared | May 7, 2019 | ||||
Dividend payable, date to be paid | Jun. 4, 2019 | ||||
Dividend payable, date of record | May 21, 2019 | ||||
Subsequent Event [Member] | Class A [Member] | |||||
Subsequent Event [Abstract] | |||||
Dividend payable (in dollars per share) | $ 0.10 | ||||
Repurchase of common stock (in shares) | 23 | ||||
Subsequent Event [Member] | Class B [Member] | |||||
Subsequent Event [Abstract] | |||||
Dividend payable (in dollars per share) | $ 0.10 | ||||
Repurchase of common stock (in shares) | 172,416 |