☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Indiana | 35-0160330 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
111 Congressional Boulevard, Carmel, Indiana | 46032 | |
(Address of Principal Executive Offices) | (Zip Code) |
Trading Symbol(s) | Name of | |||
Class A Common Stock, No Par Value | PTVCA | The Nasdaq Stock Market LLC | ||
Class B Common Stock, No Par Value | PTVCB | The Nasdaq Stock Market LLC |
Large accelerated filer ☐ | Accelerated filer ☒ |
Non-accelerated filer ☐ | Smaller reporting company ☐ |
Emerging growth company ☐ |
Common Stock, No Par Value: | Class A (voting) | ||
Class B (nonvoting) | |||
Page | |||
Part I | Item 1. | Business | 4 |
Item 1A. | Risk Factors | 17 | |
Item 1B. | Unresolved Staff Comments | 23 | |
Item 2. | Properties | 23 | |
Item 3. | Legal Proceedings | 23 | |
Item 4. | Mine Safety Disclosures | 23 | |
Information About our Executive Officers | 24 | ||
Part II | Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 25 |
Item 6. | Selected Financial Data | 27 | |
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 28 | |
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 43 | |
Item 8. | Financial Statements and Supplementary Data | 46 | |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 82 | |
Item 9A. | Controls and Procedures | 82 | |
Item 9B. | Other Information | 84 | |
Part III | Item 10. | Directors, Executive Officers and Corporate Governance | 84 |
Item 11. | Executive Compensation | 85 | |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 85 | |
Item 13. | Certain Relationships and Related Transactions, and Director Independence | 85 | |
Item 14. | Principal Accountant Fees and Services | 85 | |
Part IV | Item 15. | Exhibits and Financial Statement Schedules | 85 |
Item 16. | Form 10-K Summary | 87 | |
Signatures | 97 |
● | general economic conditions, including |
● | the risks related to our proposed merger with The Progressive Corporation (“Progressive”), and Carnation Merger Sub Inc. (“Merger Sub”) described under “Proposed Merger with The Progressive Corporation” in Part I, Item 1, “Business” hereof, including: |
• | the inability to complete the proposed transaction due to the failure to obtain approval by our Class A shareholders of the proposed transaction or the failure to satisfy any of the other conditions to completion of the proposed transaction, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transaction; |
● | the effects of the novel coronavirus ("COVID-19") pandemic and associated government actions on our operating and financial performance; |
● | our ability to obtain adequate premium rates and manage our growth strategy; |
● | increasing competition in the sale of our insurance products and services resulting from the entrance of new competitors into, or the expansion of the operations of existing competitors in, our markets and our ability to retain existing customers; |
● | other changes in the markets for our insurance products; |
● | the impact of technological advances, including those specific to the transportation industry; |
● | changes in the legal or regulatory environment, which may affect the manner in which claims are adjusted or litigated, including loss and loss adjustment expense; |
● | legal or regulatory changes or actions, including those relating to the regulation of the sale, underwriting and pricing of insurance products and services and capital requirements; |
● | the impact of a downgrade in our financial strength rating; |
● | technology or network security disruptions or breaches; |
● | adequacy of insurance reserves; |
● | availability of reinsurance and ability of reinsurers to pay their obligations; |
● | our ability to attract and retain qualified |
● | tax law and accounting changes; and |
● | legal actions brought against us. |
1. | Protective Insurance Company (referred to herein as "Protective Insurance Co."), which is licensed by insurance authorities in all 50 states, the District of Columbia, all Canadian provinces and Puerto Rico; |
2. | Protective Specialty Insurance Company (referred to herein as "Protective Specialty"), which is currently approved for excess and surplus lines business by insurance authorities in 48 states and the District of Columbia and licensed in Indiana; |
3. | Sagamore Insurance Company (referred to herein as "Sagamore"), which is licensed by insurance authorities in 49 states and the District of Columbia and approved for excess and surplus lines business in one additional state; |
4. | B&L Brokerage Services, Inc. (referred to herein as "BLBS"), an Indiana-domiciled insurance broker licensed in all 50 states and the District of Columbia; and |
5. | B&L Insurance, Ltd. (referred to herein as "BLI"), which is domiciled and licensed in Bermuda. |
● | Commercial motor vehicle liability, physical damage and general liability insurance; |
● | Workers' compensation insurance; |
● | Specialized accident (medical and indemnity) insurance for independent contractors in the trucking industry; |
● | Non-trucking motor vehicle liability insurance for independent contractors; |
● | Fidelity and surety bonds; and |
● | Inland |
2018 | 2017 | 2016 | ||||||||||||||||||||||
(dollars in thousands) | 2020 | 2019 | 2018 | |||||||||||||||||||||
Reserves, gross of reinsurance recoverable, at the beginning of the year | $ | 680,274 | $ | 576,330 | $ | 513,596 | $ | 988,305 | $ | 865,339 | $ | 680,274 | ||||||||||||
Reinsurance recoverable on unpaid losses at the beginning of the year | 308,143 | 251,563 | 211,843 | 398,305 | 375,935 | 308,143 | ||||||||||||||||||
Reserves at the beginning of the year | 372,131 | 324,767 | 301,753 | 590,000 | 489,404 | 372,131 | ||||||||||||||||||
Provision for losses and loss expenses: | ||||||||||||||||||||||||
Claims occurring during the current year | 329,078 | 228,303 | 172,645 | 319,269 | 349,018 | 329,078 | ||||||||||||||||||
Claims occurring during prior years | 16,786 | 19,215 | 13,836 | (311 | ) | (550 | ) | 16,786 | ||||||||||||||||
Total incurred losses and loss expenses | 345,864 | 247,518 | 186,481 | 318,958 | 348,468 | 345,864 | ||||||||||||||||||
Loss and loss expense payments: | ||||||||||||||||||||||||
Claims occurring during the current year | 84,738 | 67,234 | 54,239 | 77,880 | 90,364 | 84,738 | ||||||||||||||||||
Claims occurring during prior years | 143,853 | 132,920 | 109,228 | 165,777 | 157,508 | 143,853 | ||||||||||||||||||
Total paid | 228,591 | 200,154 | 163,467 | 243,657 | 247,872 | 228,591 | ||||||||||||||||||
Reserves at the end of the year | 489,404 | 372,131 | 324,767 | 665,301 | 590,000 | 489,404 | ||||||||||||||||||
Reinsurance recoverable on unpaid losses at the end of the year | 375,935 | 308,143 | 251,563 | 424,368 | 398,305 | 375,935 | ||||||||||||||||||
Reserves, gross of reinsurance recoverable, at the end of the year | $ | 865,339 | $ | 680,274 | $ | 576,330 | $ | 1,089,669 | $ | 988,305 | $ | 865,339 |
Years in Which Losses Were Incurred | Reserve at December 31, 2017 | (Savings) Deficiency Recorded During 2018 (1) | % (Savings) Deficiency | Reserve at December 31, 2019 | (Savings) Deficiency Recorded During 2020 (1) | % (Savings) Deficiency | ||||||||||||||||||
2019 | $ | 258,655 | $ | (1,743 | ) | (.7 | )% | |||||||||||||||||
2018 | 158,311 | 4,017 | 2.5 | % | ||||||||||||||||||||
2017 | $ | 161,069 | $ | (8,902 | ) | (5.5 | )% | 65,516 | (3,997 | ) | (6.1 | )% | ||||||||||||
2016 | 66,652 | 4,259 | 6.4 | % | 21,374 | 392 | 1.8 | % | ||||||||||||||||
2015 | 34,530 | 9,707 | 28.1 | % | 16,377 | 858 | 5.2 | % | ||||||||||||||||
2014 | 30,129 | 11,970 | 39.7 | % | ||||||||||||||||||||
2013 | 22,423 | (1,382 | ) | (6.2 | )% | |||||||||||||||||||
2012 and prior | 57,328 | 1,134 | 2.0 | % | ||||||||||||||||||||
2014 and prior | 69,767 | 162 | .2 | % | ||||||||||||||||||||
$ | 590,000 | $ | (311 | ) | (.1 | )% | ||||||||||||||||||
$ | 372,131 | $ | 16,786 | 4.5 | % |
(1) | Consists of development on cases known at December 31, |
Year Ended December 31 | Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liability for Unpaid Losses and Loss Adjustment Expenses (1) | $ | 231,633 | $ | 203,253 | $ | 218,629 | $ | 290,092 | $ | 289,236 | $ | 288,088 | $ | 295,583 | $ | 301,753 | $ | 324,767 | $ | 372,131 | $ | 489,404 | $ | 218,629 | $ | 290,092 | $ | 289,236 | $ | 288,088 | $ | 295,583 | $ | 301,753 | $ | 324,767 | $ | 372,131 | $ | 489,404 | $ | 590,000 | $ | 665,301 | ||||||||||||||||||||||||||||||||||||||||||||
Liability Reestimated as of: (2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
One Year Later | 222,049 | 194,430 | 208,933 | 280,217 | 283,673 | 277,734 | 285,521 | 315,589 | 343,982 | 388,917 | $ | 208,933 | 280,217 | 283,673 | 277,734 | 285,521 | 315,589 | 343,982 | 388,917 | 488,853 | 589,689 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Two Years Later | 208,702 | 198,220 | 201,745 | 272,285 | 282,381 | 268,757 | 303,540 | 340,361 | 369,670 | 201,745 | 272,285 | 282,381 | 268,757 | 303,540 | 340,361 | 369,670 | 393,536 | 490,320 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three Years Later | 210,562 | 188,110 | 204,243 | 276,525 | 279,685 | 288,862 | 332,175 | 361,791 | 204,243 | 276,525 | 279,685 | 288,862 | 332,175 | 361,791 | 382,982 | 390,951 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Four Years Later | 205,519 | 192,195 | 202,078 | 268,299 | 291,332 | 313,909 | 343,898 | 202,078 | 268,299 | 291,332 | 313,909 | 343,898 | 373,454 | 384,394 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Five Years Later | 208,398 | 187,792 | 198,518 | 275,517 | 298,861 | 313,662 | 198,518 | 275,517 | 298,861 | 313,662 | 352,873 | 374,475 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six Years Later | 205,986 | 181,547 | 200,922 | 276,812 | 299,996 | 200,922 | 276,812 | 299,996 | 317,621 | 353,036 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Seven Years Later | 200,460 | 181,998 | 203,692 | 279,598 | 203,692 | 279,598 | 300,450 | 316,504 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Eight Years Later | 200,808 | 184,122 | 204,769 | 204,769 | 279,926 | 299,830 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nine Years Later | 202,565 | 183,693 | 205,047 | 278,192 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ten Years Later | 201,673 | 202,278 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative Redundancy (Deficiency) (3) | $ | 29,960 | $ | 19,560 | $ | 13,860 | $ | 10,494 | $ | (10,760 | ) | $ | (25,574 | ) | $ | (48,315 | ) | $ | (60,038 | ) | $ | (44,903 | ) | $ | (16,786 | ) | $ | 16,351 | $ | 11,900 | $ | (10,594 | ) | $ | (28,416 | ) | $ | (57,453 | ) | $ | (72,722 | ) | $ | (59,627 | ) | $ | (18,820 | ) | $ | (916 | ) | $ | 311 | |||||||||||||||||||||||||||||||||||
Cumulative Amount of Liability Paid Through: (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
One Year Later | $ | 84,777 | $ | 74,182 | $ | 72,393 | $ | 94,003 | $ | 103,941 | $ | 92,275 | $ | 92,870 | $ | 109,228 | $ | 132,920 | $ | 143,853 | $ | 72,393 | $ | 94,003 | $ | 103,941 | $ | 92,275 | $ | 92,870 | $ | 109,228 | $ | 132,920 | $ | 143,853 | $ | 157,508 | $ | 165,776 | ||||||||||||||||||||||||||||||||||||||||||||||||
Two Years Later | 120,628 | 107,413 | 109,382 | 156,271 | 162,087 | 159,282 | 166,642 | 195,951 | 217,376 | 109,382 | 156,271 | 162,087 | 159,282 | 166,642 | 195,951 | 217,376 | 220,502 | 243,766 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three Years Later | 142,731 | 125,038 | 133,507 | 193,566 | 205,452 | 166,642 | 222,295 | 250,924 | 133,507 | 193,566 | 205,452 | 166,642 | 222,295 | 250,924 | 275,464 | 260,136 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Four Years Later | 152,679 | 137,460 | 147,462 | 214,873 | 202,803 | 234,158 | 258,576 | 147,462 | 214,873 | 202,803 | 234,158 | 258,576 | 287,311 | 295,576 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Five Years Later | 161,834 | 143,461 | 158,172 | 227,359 | 241,533 | 251,696 | 158,172 | 227,359 | 241,533 | 251,696 | 283,107 | 301,159 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six Years Later | 166,290 | 148,101 | 166,112 | 234,578 | 252,648 | 166,112 | 234,578 | 252,648 | 263,194 | 292,069 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Seven Years Later | 170,126 | 152,375 | 168,524 | 241,383 | 168,524 | 241,383 | 258,630 | 269,206 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Eight Years Later | 173,867 | 153,999 | 173,015 | 173,015 | 246,052 | 262,371 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nine Years Later | 174,902 | 157,297 | 176,204 | 248,812 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ten Years Later | 177,677 | 178,577 |
(1) | Represents the estimated liability for unpaid losses and LAE recorded at the balance sheet date for each of the indicated years. This liability represents the estimated amount of losses and LAE for claims arising in all prior years that were unpaid at the respective balance sheet date, including incurred but not reported ("IBNR") losses, to the Company. |
(2) | Represents the re-estimated amount of the previously recorded liability based on additional information available to the Company as of the end of each succeeding year. The estimate is increased or decreased as more information becomes known about the frequency and severity of individual claims and as claims are settled and paid. |
(3) | Represents the aggregate change in the estimates of each calendar year-end reserve through December 31, |
(4) | Represents the cumulative amount paid with respect to the previously recorded calendar year-end liability as of the end of each succeeding year. The payment patterns shown in this table demonstrate the "long-tail" nature of much of the Company's business, whereby portions of claims, principally in workers' compensation coverages, do not fully pay out for more than ten years. |
Year Ended December 31 | Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Direct and Assumed: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liability for Unpaid Losses and Loss Adjustment Expenses | $ | 389,558 | $ | 359,030 | $ | 344,520 | $ | 421,556 | $ | 455,454 | $ | 474,470 | $ | 506,102 | $ | 513,596 | $ | 576,330 | $ | 680,274 | $ | 865,339 | $ | 344,520 | $ | 421,556 | $ | 455,454 | $ | 474,470 | $ | 506,102 | $ | 513,596 | $ | 576,330 | $ | 680,274 | $ | 865,339 | $ | 988,305 | $ | 1,089,669 | ||||||||||||||||||||||||||||||||||||||||||||
Liability Reestimated as of December 31, 2018 | 312,965 | 289,679 | 301,700 | 395,271 | 450,713 | 519,189 | 599,457 | 633,660 | 647,807 | 709,523 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liability Reestimated as of December 31, 2020 | 341,571 | 434,106 | 496,856 | 547,749 | 632,297 | 672,667 | 686,485 | 735,058 | 892,796 | 1,010,036 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative Redundancy (Deficiency) | $ | 76,593 | $ | 69,351 | $ | 42,820 | $ | 26,285 | $ | 4,741 | $ | (44,719 | ) | $ | (93,355 | ) | $ | (120,064 | ) | $ | (71,477 | ) | $ | (29,249 | ) | $ | 2,949 | $ | (12,550 | ) | $ | (41,402 | ) | $ | (73,279 | ) | $ | (126,195 | ) | $ | (159,071 | ) | $ | (110,155 | ) | $ | (54,784 | ) | $ | (27,457 | ) | $ | (21,731 | ) | ||||||||||||||||||||||||||||||||||
Ceded: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liability for Unpaid Losses and Loss Adjustment Expenses | $ | 157,925 | $ | 155,777 | $ | 125,891 | $ | 131,464 | $ | 166,218 | $ | 186,382 | $ | 210,519 | $ | 211,843 | $ | 251,563 | $ | 308,143 | $ | 375,935 | $ | 140,401 | $ | 54,428 | $ | 132,320 | $ | 167,366 | $ | 178,887 | $ | 204,349 | $ | 188,829 | $ | 204,199 | $ | 190,870 | $ | 275,339 | $ | 424,368 | ||||||||||||||||||||||||||||||||||||||||||||
Liability Reestimated as of December 31, 2018 | 111,292 | 105,986 | 96,931 | 115,673 | 150,717 | 205,527 | 255,559 | 271,869 | 278,137 | 320,606 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liability Reestimated as of December 31, 2020 | 153,803 | 78,878 | 163,128 | 212,229 | 247,629 | 290,699 | 239,357 | 240,163 | 217,410 | 297,381 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative Redundancy (Deficiency) | $ | 46,633 | $ | 49,791 | $ | 28,960 | $ | 15,791 | $ | 15,501 | $ | (19,145 | ) | $ | (45,040 | ) | $ | (60,026 | ) | $ | (26,574 | ) | $ | (12,463 | ) | $ | (13,402 | ) | $ | (24,450 | ) | $ | (30,808 | ) | $ | (44,863 | ) | $ | (68,742 | ) | $ | (86,350 | ) | $ | (50,528 | ) | $ | (35,964 | ) | $ | (26,540 | ) | $ | (22,042 | ) | |||||||||||||||||||||||||||||||||
Net: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liability for Unpaid Losses and Loss Adjustment Expenses | $ | 231,633 | $ | 203,253 | $ | 218,629 | $ | 290,092 | $ | 289,236 | $ | 288,088 | $ | 295,583 | $ | 301,753 | $ | 324,767 | $ | 372,131 | $ | 489,404 | $ | 218,629 | $ | 290,092 | $ | 289,236 | $ | 288,088 | $ | 295,583 | $ | 301,753 | $ | 324,767 | $ | 372,131 | $ | 489,404 | $ | 590,000 | $ | 665,301 | ||||||||||||||||||||||||||||||||||||||||||||
Liability Reestimated as of December 31, 2018 | 201,673 | 183,693 | 204,769 | 279,598 | 299,996 | 313,662 | 343,898 | 361,791 | 369,670 | 388,917 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liability Reestimated as of December 31, 2020 | 202,278 | 278,192 | 299,830 | 316,504 | 353,036 | 374,475 | 384,394 | 390,951 | 490,320 | 589,689 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative Redundancy (Deficiency) | $ | 29,960 | $ | 19,560 | $ | 13,860 | $ | 10,494 | $ | (10,760 | ) | $ | (25,574 | ) | $ | (48,315 | ) | $ | (60,038 | ) | $ | (44,903 | ) | $ | (16,786 | ) | $ | 16,351 | $ | 11,900 | $ | (10,594 | ) | $ | (28,416 | ) | $ | (57,453 | ) | $ | (72,722 | ) | $ | (59,627 | ) | $ | (18,820 | ) | $ | (916 | ) | $ | 311 |
2018 | 2017 | 2020 | 2019 | |||||||||||||
Fixed income securities | 67.5 | % | 61.1 | % | 88.1 | % | 82.2 | % | ||||||||
Short-term | 0.1 | 0.1 | 0.1 | 0.1 | ||||||||||||
Cash equivalents | 17.8 | 6.9 | 4.5 | 6.2 | ||||||||||||
Total fixed income securities and short-term | 85.4 | 68.1 | ||||||||||||||
Total fixed income and short-term securities | 92.7 | 88.5 | ||||||||||||||
Limited partnerships (equity basis) | 6.3 | 8.3 | 0.7 | 2.4 | ||||||||||||
Commercial mortgage loans (amortized cost basis) | 0.8 | 0.0 | 1.0 | 1.2 | ||||||||||||
Equity securities | 7.5 | 23.6 | 5.6 | 7.9 | ||||||||||||
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
2018 | 2017 | 2020 | 2019 | |||||||||||||
Before federal tax: | ||||||||||||||||
Investment income | 3.0 | % | 3.2 | % | 2.9 | % | 3.3 | % | ||||||||
Investment income plus investment gains (losses) | (0.1 | ) | 6.2 | |||||||||||||
After federal tax: | ||||||||||||||||
Investment income | 2.7 | 2.3 | 2.8 | 3.3 | ||||||||||||
Investment income plus investment gains (losses) | (0.6 | ) | 5.4 |
• | Net premiums earned. We experienced an effect on our net premiums earned in the second and third quarters of 2020 primarily due to the reduction in miles driven during that time, which is the basis of premiums we receive, by our commercial automobile insureds, as well as an overall reduction in public transportation units insured. During the fourth quarter of 2020, we saw a partial recovery of premium volume when miles driven increased as a result of increased shipping around the holidays. |
• | Losses and loss expenses incurred. We saw a favorable impact on our losses and loss expenses incurred in commercial automobile during 2020 as a result of declines in accident frequency due to lower traffic density, but in the future we may incur higher claim and claim adjustment expenses in certain lines of business as a result of COVID-19 due to increases in frequency and/or severity of claims. For example, we may experience elevated frequency and severity in our workers’ compensation lines related to compensable claims by workers who demonstrate that the injury or illness arose both out of and in the course of their employment. We may also experience elevated frequency and severity in our liability coverages as a result of plaintiffs’ lawyers seeking to generate COVID-19-related claim activity against our insureds. Additionally, the anticipated and unknown risks related to COVID-19 may cause additional uncertainty in the process of estimating claims and claim adjustment expense reserves. For example, the behavior of claimants and policyholders may change in unexpected ways, the disruption to the court system may impact the timing and amounts of claims settlements and the actions taken by governmental bodies, both legislative and regulatory, in reaction to COVID-19 and their related impacts are hard to predict. As a result, our estimated level of claims and claim adjustment expense reserves may change. We are also subject to credit risk in our insurance operations, which may be exacerbated in times of economic distress. |
• | Investments. The volatility in the global financial markets related to COVID-19 has contributed to net realized and unrealized investment losses, primarily due to the impact of changes in fair value on our equity investments. Our corporate fixed income portfolio may be adversely impacted by ratings downgrades, increased bankruptcies and credit spread widening in distressed industries, such as energy, gaming, lodging and leisure, autos, airlines and retail. Our money market investments have been impacted by lower interest rates and may continue to be impacted by these lower rates. Our investment portfolio also includes commercial mortgage-backed securities, which could be adversely impacted by declines in real estate valuations and/or financial market disruption. Further volatility in the global financial markets due to the continuing impact of COVID-19 could result in future net realized and unrealized investment losses, including potential impairments in our fixed income portfolio. In addition, further declines in fixed income yields would result in decreases in net investment income from future investment activity, including re-investments. |
• | Liquidity. Collection of premiums, deductibles or self-insured retentions from our policyholders and reinsurance recoverables from our reinsurers may become increasingly difficult. At the state level, insurance departments throughout the country have issued bulletins and regulations urging or requiring insurers to extend grace periods for the payment of policy premiums and to refrain from canceling or non-renewing policies for the non-payment of policy premiums for policyholders adversely affected by COVID-19. It is uncertain what impact these government mandates may have on our ability to recover unpaid premiums on the affected policies or what our obligations may be for the payment of claims made under policies for which we have not received premium payments. |
• | Adverse Legislative and/or Regulatory Action. Federal, state and local government actions to address and contain the impact of COVID-19 may adversely affect us. A number of states have instituted, and other states are considering instituting, changes designed to effectively expand workers' compensation coverage by creating presumptions of compensability of claims for certain types of workers. Regulatory restrictions or requirements could also impact pricing, risk selection and our rights and obligations with respect to our policies and insureds, including our ability to cancel policies or our right to collect premiums. |
• | Operational Disruptions and Heightened Cybersecurity Risks. Our operations could be disrupted if key members of our senior management or a significant percentage of our workforce or the workforce of our agents, brokers, suppliers or outsourcing providers are unable to continue to work because of illness, government directives or otherwise. In addition, the interruption of our or their system capabilities could result in a deterioration of our ability to write and process new and renewal business, provide customer service, pay claims in a timely manner or perform other necessary business functions. Having shifted to primarily remote working arrangements, we also face a heightened risk of cybersecurity attacks or data security incidents and are more dependent on internet and telecommunications access and capabilities. To date, we have not experienced any such operational interruptions or cybersecurity disruptions during this time. |
• | the attention of our management and our employees may be directed to Merger-related considerations and may be diverted from the day-to-day operations of our business; |
• | our employees may experience uncertainty about their future roles with us, which might adversely affect our ability to retain and recruit key employees; |
• | customers, suppliers or other parties with whom we maintain business relationships may experience uncertainty about our future and seek alternative relationships with third parties or seek to alter their business relationships with us; and |
• | legal proceedings may be instituted against us, our directors and/or our officers with respect to the Merger. |
Name | Age | Title | Served in Such Capacity Since | |||
Jeremy D. Edgecliffe-Johnson | 50 | Chief Executive Officer | 2019 (1) | |||
John R. Barnett | 53 | Chief Financial Officer | 2019 (2) | |||
Bahr D. Omidfar | 60 | Chief Information Officer | 2019 (3) | |||
Jeremy F. Goldstein | 49 | Executive Vice President | 2017 (4) | |||
Patrick S. Schmiedt | 40 | Chief Underwriting Officer | 2018 (5) |
(1) | Mr. Edgecliffe-Johnson joined the Company in May 2019 as Chief Executive Officer. Prior to joining the Company, Mr. Edgecliffe-Johnson served as President, U.S. Commercial of American International Group, Inc. (“AIG”) from February 2016 to December 2017, with responsibility for underwriting, operations, claims and distribution in the U.S., Canada, Brazil, Mexico and Puerto Rico. He served as Chief Executive Officer and President of Lexington Insurance Company, AIG’s excess and surplus lines unit, from February 2013 to December 2017. Mr. Edgecliffe-Johnson served in various executive leadership roles at AIG between 2000 and 2013, including Specialty Product Line Executive, U.S. & Canada; President of Cat Excess Liability; U.S. Executive for Energy Excess Casualty; and Regional Vice President for the Mid-Atlantic territory. Prior to joining AIG, Mr. Edgecliffe-Johnson served as a broker for Sedgwick, Inc. and Marsh, Inc. |
(2) | Mr. Barnett joined the Company in September 2019 as Chief Financial Officer. Prior to joining the Company, Mr. Barnett served as Chief Financial Officer and Executive Vice President of First Acceptance Corporation, a non-standard auto insurance underwriter (“First Acceptance”), since October 2018 and served as Senior Vice President, Finance of First Acceptance from May 2007 to March 2013. Mr. Barnett’s responsibilities at First Acceptance included financial reporting, accounting, planning and analysis, investments, actuarial, and treasury operations. From March 2013 to October 2018, Mr. Barnett served as Vice President, Finance of Broadcast Music, Inc., a music rights management company. Prior to his time at First Acceptance, Mr. Barnett served in various management and manufacturing roles during his career, including as Senior Manager, Planning and Analysis of Anheuser-Busch Companies from 1999 to 2007. |
(3) | Mr. Omidfar joined the Company in September 2019 as Chief Information Officer. Prior to joining the Company, Mr. Omidfar most recently served as Chief Technology Officer at CNA Financial Corporation from January 2018 to April 2019, where he developed, executed and led various initiatives, including the implementation of a new operating model; led strategic partnerships; and created a technology strategy and roadmap for the enterprise. Mr. Omidfar served in various Senior Vice President roles with Fidelity Investments, Inc. from August 2013 until January 2018, including SVP, Technology and Software Security from May 2015 to January 2018, SVP, Quality Assurance Testing and Software Security from October 2014 to April 2015 and SVP, Quality Assurance and Testing from August 2013 to September 2014. Mr. Omidfar also held roles at Rockwell Automation, Inc., Raytheon Company, Motorola, Inc., Deloitte LLP and Northrop Grumman Corporation and holds multiple certifications, including a Six Sigma Black Belt. |
(4) | Mr. Goldstein was appointed Executive Vice President in November 2017. He previously served as Senior Vice President of the Company from 2015 to 2017, as Vice President from 2011 to 2015 and as Corporate Secretary from 2016 to 2018. |
(5) | Mr. Schmiedt was appointed Chief Underwriting Officer in October 2018. He previously served as Senior Vice President of Underwriting from 2016 to 2018, as Vice President of Underwriting from 2015 to 2016 and as Assistant Vice President of Underwriting from 2013 to 2015. |
Period | Total number of shares purchased (1) | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs (2) | Maximum number of shares that may yet be purchased under the plans or programs (2) | ||||||||||||
October 1 - October 31, 2020 | 8,737 | $ | 14.17 | - | 1,375,729 | |||||||||||
November 1 - November 30, 2020 | - | - | 1,375,729 | |||||||||||||
December 1 - December 31, 2020 | 4,921 | 13.71 | - | 1,375,729 | ||||||||||||
Total | 13,658 | - |
(1) | Amounts represent shares withheld by the Company in connection with employee payroll tax withholding upon the vesting of stock awards. Stock amounts in the consolidated statements of shareholders’ equity are shown net of these shares withheld. |
Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs (1) | Maximum number of shares that may yet be purchased under the plans or programs (1) | ||||||||||||
October 1 - October 31, 2018 | 72,108 | $ | 22.64 | 72,108 | 2,194,666 | |||||||||||
November 1 - November 30, 2018 | 15,085 | 22.79 | 15,085 | 2,179,581 | ||||||||||||
December 1 - December 31, 2018 | - | - | - | 2,179,581 | ||||||||||||
Total | 87,193 | 87,193 |
(2) | On August 31, 2017, our Board of Directors authorized the reinstatement of the Company's share repurchase program for up to 2,464,209 shares of its Class A or Class B Common Stock. The repurchases may be made in the open market or through privately negotiated transactions, from time-to-time, and in accordance with applicable laws, rules and regulations. The share repurchase program may be amended, suspended or discontinued at any time and does not commit the Company to repurchase any shares of its common stock. The Company has funded, and intends to continue to fund, the share repurchase program from cash on hand. No share repurchases have been made by the Company under the program since March 20, 2020. Additionally, in connection with the Merger Agreement with Progressive, the Company is prohibited from repurchasing any of its Class A or Class B Common Stock under the repurchase program. |
Year Ended December 31 | Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||
Index | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||||||||||||||||||||||||||||
Protective Insurance Corporation | $ | 100.00 | $ | 98.17 | $ | 95.51 | $ | 104.38 | $ | 103.91 | $ | 75.93 | $ | 100.00 | $ | 109.25 | $ | 108.82 | $ | 79.54 | $ | 78.68 | $ | 68.98 | ||||||||||||||||||||||||
Russell 2000 Index | 100.00 | 104.89 | 100.26 | 121.63 | 139.44 | 124.09 | 100.00 | 121.31 | 139.08 | 123.76 | 155.35 | 186.36 | ||||||||||||||||||||||||||||||||||||
PTVCB Peer Group | 100.00 | 104.36 | 113.12 | 136.57 | 148.11 | 154.20 | 100.00 | 120.65 | 131.77 | 136.11 | 152.67 | 123.13 |
PTVCB Peer Group | ||
Amerisafe, Inc. | ||
Atlas Financial Holdings, | ||
James River Group Holdings, Ltd. | ||
NMI Holdings, Inc. | ||
Employers Holdings, Inc. | Safety Insurance Group, Inc. | |
FedNat Holding Company | United Insurance Holdings Corp. | |
Hallmark Financial Services, Inc. | Universal Insurance Holdings, Inc. | |
HCI Group, Inc. |
Year Ended December 31 | Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||
(Dollars in thousands, except per share data) | (Dollars in thousands, except per share data) | |||||||||||||||||||||||||||||||||||||||
Gross premiums written | $ | 582,500 | $ | 504,737 | $ | 403,004 | $ | 383,553 | $ | 382,388 | $ | 547,561 | $ | 574,918 | $ | 582,500 | $ | 504,737 | $ | 403,004 | ||||||||||||||||||||
Net premiums earned | 432,880 | 328,145 | 276,011 | 263,335 | 261,627 | 445,515 | 447,288 | 432,880 | 328,145 | 276,011 | ||||||||||||||||||||||||||||||
Net investment income | 22,048 | 18,095 | 14,483 | 12,498 | 9,055 | 25,422 | 26,249 | 22,048 | 18,095 | 14,483 | ||||||||||||||||||||||||||||||
Net realized and unrealized gains (losses) on investments | (25,691 | ) | 19,686 | 23,228 | (1,261 | ) | 14,930 | (9,236 | ) | 12,889 | (25,691 | ) | 19,686 | 23,228 | ||||||||||||||||||||||||||
Losses and loss expenses incurred | 345,864 | 247,518 | 186,481 | 155,750 | 159,596 | 318,958 | 348,468 | 345,864 | 247,518 | 186,481 | ||||||||||||||||||||||||||||||
Net income (loss) | (34,075 | ) | 18,323 | 28,945 | 23,283 | 29,717 | 4,463 | 7,347 | (34,075 | ) | 18,323 | 28,945 | ||||||||||||||||||||||||||||
Earnings (loss) per share -- net income (loss) (1) | (2.28 | ) | 1.21 | 1.92 | 1.55 | 1.98 | 0.31 | 0.50 | (2.28 | ) | 1.21 | 1.92 | ||||||||||||||||||||||||||||
Cash dividends per share | 1.12 | 1.08 | 1.04 | 1.00 | 1.00 | 0.40 | 0.40 | 1.12 | 1.08 | 1.04 | ||||||||||||||||||||||||||||||
Investment portfolio (2) | 878,638 | 854,595 | 749,501 | 729,877 | 757,421 | 1,043,704 | 968,205 | 878,638 | 854,595 | 749,501 | ||||||||||||||||||||||||||||||
Total assets | 1,490,131 | 1,357,016 | 1,154,137 | 1,085,771 | 1,144,247 | 1,722,827 | 1,634,360 | 1,490,131 | 1,357,016 | 1,154,137 | ||||||||||||||||||||||||||||||
Shareholders' equity | 356,082 | 418,811 | 404,345 | 394,498 | 399,496 | 363,082 | 364,316 | 356,082 | 418,811 | 404,345 | ||||||||||||||||||||||||||||||
Book value per share | 23.95 | 27.83 | 26.81 | 26.25 | 26.67 | 25.43 | 25.51 | 23.95 | 27.83 | 26.81 |
(1) | Earnings (loss) per share are adjusted for the dilutive effect of restricted stock outstanding for |
(2) | Includes money market instruments classified as cash equivalents in the consolidated balance sheets. |
2018 | 2017 | 2016 | ||||||||||||||||||||||
(dollars in thousands) | 2020 | 2019 | 2018 | |||||||||||||||||||||
Income (loss) before federal income tax expense (benefit) | $ | (43,872 | ) | $ | 10,122 | $ | 43,054 | $ | 6,363 | $ | 8,673 | $ | (43,872 | ) | ||||||||||
Less: Net realized and unrealized gains (losses) on investments | (25,691 | ) | 19,686 | 23,228 | (9,236 | ) | 12,889 | (25,691 | ) | |||||||||||||||
Less: Net investment income | 22,048 | 18,095 | 14,483 | 25,422 | 26,249 | 22,048 | ||||||||||||||||||
Less: Goodwill impairment charge included in other operating expenses (see below) | (3,152 | ) | – | – | ||||||||||||||||||||
Underwriting income (loss) | $ | (37,077 | ) | $ | (27,659 | ) | $ | 5,343 | ||||||||||||||||
Less: Corporate charges and CECL allowance adjustment included in other operating expenses 1 | (4,422 | ) | – | – | ||||||||||||||||||||
Less: Goodwill impairment charge included in other operating expenses | – | – | (3,152 | ) | ||||||||||||||||||||
Underwriting loss | $ | (5,401 | ) | $ | (30,465 | ) | $ | (37,077 | ) | |||||||||||||||
Other operating expenses | $ | 137,177 | $ | 113,594 | $ | 89,462 | $ | 143,428 | $ | 138,456 | $ | 137,177 | ||||||||||||
Less: Corporate charges and CECL allowance adjustment 1 | 4,422 | – | – | |||||||||||||||||||||
Less: Goodwill impairment charge | 3,152 | – | – | – | – | 3,152 | ||||||||||||||||||
Other operating expenses, excluding goodwill impairment charge | $ | 134,025 | $ | 113,594 | $ | 89,462 | ||||||||||||||||||
Other operating expenses, excluding corporate charges, CECL allowance adjustment and goodwill impairment charge | $ | 139,006 | $ | 138,456 | $ | 134,025 | ||||||||||||||||||
Ratios | ||||||||||||||||||||||||
Losses and loss expenses incurred | $ | 345,864 | $ | 247,518 | $ | 186,481 | $ | 318,958 | $ | 348,468 | $ | 345,864 | ||||||||||||
Net premiums earned | 432,880 | 328,145 | 276,011 | 445,515 | 447,288 | 432,880 | ||||||||||||||||||
Loss ratio | 79.9 | % | 75.4 | % | 67.6 | % | 71.6 | % | 77.9 | % | 79.9 | % | ||||||||||||
Other operating expenses | $ | 137,177 | $ | 113,594 | $ | 89,462 | $ | 143,428 | $ | 138,456 | $ | 137,177 | ||||||||||||
Less: Commissions and other income | 9,932 | 5,308 | 5,275 | 7,048 | 9,171 | 9,932 | ||||||||||||||||||
Other operating expenses, less commissions and other income | 127,245 | 108,286 | 84,187 | 136,380 | 129,285 | 127,245 | ||||||||||||||||||
Net premiums earned | 432,880 | 328,145 | 276,011 | 445,515 | 447,288 | 432,880 | ||||||||||||||||||
Expense ratio | 29.4 | % | 33.0 | % | 30.5 | % | 30.6 | % | 28.9 | % | 29.4 | % | ||||||||||||
Impact of corporate charges and CECL allowance adjustment 1 | (1.0 | )% | – | – | ||||||||||||||||||||
Impact of goodwill impairment charge | (0.7 | )% | – | – | – | 0.0 | % | (0.7 | )% | |||||||||||||||
Expense ratio, excluding goodwill impairment charge | 28.7 | % | 33.0 | % | 30.5 | % | ||||||||||||||||||
Expense ratio, excluding corporate charges, CECL allowance adjustment and goodwill impairment charge | 29.6 | % | 28.9 | % | 28.7 | % | ||||||||||||||||||
Combined ratio | 109.3 | % | 108.4 | % | 98.1 | % | 102.2 | % | 106.8 | % | 109.3 | % | ||||||||||||
Combined ratio, excluding goodwill impairment charge | 108.6 | % | 108.4 | % | 98.1 | % | ||||||||||||||||||
Combined ratio, excluding corporate charges, CECL allowance adjustment and goodwill impairment charge | 101.2 | % | 106.8 | % | 108.6 | % |
1 | Represents the corporate charges incurred in conjunction with the Board's review of the Contingent Sale Agreement, activities of the Special Committee and an adjustment to our CECL allowance related to the PSG litigation matter discussed above. |
2018 | 2017 | Change | % Change | 2020 | 2019 | Change | % Change | |||||||||||||||||||||||||
Gross premiums written | $ | 582,500 | $ | 504,737 | $ | 77,763 | 15.4 | % | $ | 547,561 | $ | 574,918 | $ | (27,357 | ) | (4.8 | )% | |||||||||||||||
Ceded premiums written | (138,102 | ) | (151,348 | ) | 13,246 | (8.8 | )% | (106,561 | ) | (122,676 | ) | 16,115 | (13.1 | )% | ||||||||||||||||||
Net premiums written | $ | 444,398 | $ | 353,389 | $ | 91,009 | 25.8 | % | $ | 441,000 | $ | 452,242 | $ | (11,242 | ) | (2.5 | )% | |||||||||||||||
Net premiums earned | $ | 432,880 | $ | 328,145 | $ | 104,735 | 31.9 | % | $ | 445,515 | $ | 447,288 | $ | (1,773 | ) | (0.4 | )% | |||||||||||||||
Net investment income | 22,048 | 18,095 | 3,953 | 21.8 | % | 25,422 | 26,249 | (827 | ) | (3.2 | )% | |||||||||||||||||||||
Commissions and other income | 9,932 | 5,308 | 4,624 | 87.1 | % | 7,048 | 9,171 | (2,123 | ) | (23.1 | )% | |||||||||||||||||||||
Net realized and unrealized gains (losses) on investments | (25,691 | ) | 19,686 | (45,377 | ) | (230.5 | )% | (9,236 | ) | 12,889 | (22,125 | ) | (171.7 | )% | ||||||||||||||||||
Total revenue | 439,169 | 371,234 | 468,749 | 495,597 | ||||||||||||||||||||||||||||
Losses and loss expenses incurred | 345,864 | 247,518 | 98,346 | 39.7 | % | 318,958 | 348,468 | (29,510 | ) | (8.5 | )% | |||||||||||||||||||||
Other operating expenses | 137,177 | 113,594 | 23,583 | 20.8 | % | 143,428 | 138,456 | 4,972 | 3.6 | % | ||||||||||||||||||||||
Total expenses | 483,041 | 361,112 | 462,386 | 486,924 | ||||||||||||||||||||||||||||
Income (loss) before federal income tax benefit | (43,872 | ) | 10,122 | (53,994 | ) | |||||||||||||||||||||||||||
Federal income tax benefit | (9,797 | ) | (8,201 | ) | (1,596 | ) | ||||||||||||||||||||||||||
Income (loss) before federal income tax expense (benefit) | 6,363 | 8,673 | (2,310 | ) | ||||||||||||||||||||||||||||
Federal income tax expense (benefit) | 1,900 | 1,326 | 574 | |||||||||||||||||||||||||||||
Net income (loss) | $ | (34,075 | ) | $ | 18,323 | $ | (52,398 | ) | $ | 4,463 | $ | 7,347 | $ | (2,884 | ) | |||||||||||||||||
5% Increase in Ultimate Loss Ratio | 10% Increase in Ultimate Loss Ratio | |||||||
Gross loss expense from further strengthening current reserve position | $ | 34.3 | $ | 68.7 | ||||
Net financial loss | $ | 9.0 | $ | 17.6 | ||||
$/share (after tax) | $ | 0.48 | $ | 0.94 |
2019 | 2018 | Change | % Change | |||||||||||||
Gross premiums written | $ | 574,918 | $ | 582,500 | $ | (7,582 | ) | (1.3 | )% | |||||||
Ceded premiums written | (122,676 | ) | (138,102 | ) | 15,426 | (11.2 | )% | |||||||||
Net premiums written | $ | 452,242 | $ | 444,398 | $ | 7,844 | 1.8 | % | ||||||||
Net premiums earned | $ | 447,288 | $ | 432,880 | $ | 14,408 | 3.3 | % | ||||||||
Net investment income | 26,249 | 22,048 | 4,201 | 19.1 | % | |||||||||||
Commissions and other income | 9,171 | 9,932 | (761 | ) | (7.7 | )% | ||||||||||
Net realized and unrealized gains (losses) on investments | 12,889 | (25,691 | ) | 38,580 | (150.2 | )% | ||||||||||
Total revenue | 495,597 | 439,169 | ||||||||||||||
Losses and loss expenses incurred | 348,468 | 345,864 | 2,604 | 0.8 | % | |||||||||||
Other operating expenses | 138,456 | 137,177 | 1,279 | 0.9 | % | |||||||||||
Total expenses | 486,924 | 483,041 | ||||||||||||||
Income (loss) before federal income tax expense (benefit) | 8,673 | (43,872 | ) | 52,545 | ||||||||||||
Federal income tax expense (benefit) | 1,326 | (9,797 | ) | 11,123 | ||||||||||||
Net income (loss) | $ | 7,347 | $ | (34,075 | ) | $ | 41,422 |
2017 | 2016 | Change | % Change | |||||||||||||
Gross premiums written | $ | 504,737 | $ | 403,004 | $ | 101,733 | 25.2 | % | ||||||||
Ceded premiums written | (151,348 | ) | (131,252 | ) | (20,096 | ) | 15.3 | % | ||||||||
Net premiums written | $ | 353,389 | $ | 271,752 | $ | 81,637 | 30.0 | % | ||||||||
Net premiums earned | $ | 328,145 | $ | 276,011 | $ | 52,134 | 18.9 | % | ||||||||
Net investment income | 18,095 | 14,483 | 3,612 | 24.9 | % | |||||||||||
Commissions and other income | 5,308 | 5,275 | 33 | 0.6 | % | |||||||||||
Net realized and unrealized gains (losses) on investments | 19,686 | 23,228 | (3,542 | ) | (15.2 | )% | ||||||||||
Total revenue | 371,234 | 318,997 | ||||||||||||||
Losses and loss expenses incurred | 247,518 | 186,481 | 61,037 | 32.7 | % | |||||||||||
Other operating expenses | 113,594 | 89,462 | 24,132 | 27.0 | % | |||||||||||
Total expenses | 361,112 | 275,943 | ||||||||||||||
Income before federal income tax expense (benefit) | 10,122 | 43,054 | (32,932 | ) | ||||||||||||
Federal income tax expense (benefit) | (8,201 | ) | 14,109 | (22,310 | ) | |||||||||||
Net income | $ | 18,323 | $ | 28,945 | $ | (10,622 | ) | |||||||||
5% Increase in Ultimate Loss Ratio | 10% Increase in Ultimate Loss Ratio | |||||||
Gross loss expense from further strengthening current reserve position | $ | 47.2 | $ | 94.5 | ||||
Net financial loss | $ | 11.8 | $ | 23.6 | ||||
$/share (after tax) | $ | 0.64 | $ | 1.28 |
2018 | 2017 | 2016 | 2020 | 2019 | 2018 | |||||||||||||||||||
Reinsurance recoverable | $ | 392,436 | $ | 318,331 | $ | 255,024 | $ | 455,564 | $ | 432,067 | $ | 392,436 | ||||||||||||
Premium ceded (reduction to premium earned) | 131,080 | 145,201 | 130,012 | 113,125 | 124,446 | 131,080 | ||||||||||||||||||
Losses ceded (reduction to losses incurred) | 148,285 | 128,086 | 108,656 | 105,895 | 121,963 | 148,285 | ||||||||||||||||||
Reinsurance ceded credits (reduction to operating expenses) | 23,124 | 23,187 | 33,512 | 24,764 | 25,932 | 23,124 |
● | Consistency in the individual case reserving processes; |
● | The selection of loss development factors in the establishment of bulk reserves for incurred but not reported losses and loss expenses; |
● | Projected future loss trend; and |
● | Expected loss ratios for the current book of business, particularly the Company's commercial automobile products, where the number of accounts insured, selected SIRs, policy limits and reinsurance structures may vary widely from period to period. |
10% Loss Ratio Increase | 10% Loss Ratio Decrease | 20% Loss Ratio Increase | 20% Loss Ratio Decrease | 10% Loss Ratio Increase | 10% Loss Ratio Decrease | 20% Loss Ratio Increase | 20% Loss Ratio Decrease | |||||||||||||||||||||||||
Gross Reserves | $ | 72.0 | $ | (72.0 | ) | $ | 144.1 | $ | (144.1 | ) | $ | 114.2 | $ | (114.2 | ) | $ | 228.3 | $ | (220.0 | ) | ||||||||||||
Net Reserves | $ | 18.0 | $ | (19.5 | ) | $ | 36.0 | $ | (49.5 | ) | $ | 39.4 | $ | (40.8 | ) | $ | 78.8 | $ | (98.7 | ) | ||||||||||||
Net premiums earned | $ | (0.4 | ) | $ | 16.5 | $ | (0.4 | ) | $ | 41.1 | $ | (2.9 | ) | $ | 16.6 | $ | (2.9 | ) | $ | 35.7 | ||||||||||||
Cumulative Net Underwriting Income (Loss) | $ | (18.4 | ) | $ | 36.0 | $ | (36.4 | ) | $ | 90.6 | $ | (42.3 | ) | $ | 57.4 | $ | (81.7 | ) | $ | 134.4 |
2018 | 2017 | 2020 | 2019 | |||||||||||||
Total deferred tax liabilities | $ | (12,906 | ) | $ | (23,836 | ) | $ | (15,083 | ) | $ | (15,484 | ) | ||||
Total deferred tax assets | 19,168 | 9,478 | 24,063 | 17,519 | ||||||||||||
Net deferred tax assets (liabilities) | $ | 6,262 | $ | (14,358 | ) | $ | 8,980 | $ | 2,035 |
Payments Due by Period | Payments Due by Period | |||||||||||||||||||||||||||||||||||||||
Total | Less than 1 year | 1 - 3 Years | 3 - 5 Years | More Than 5 Years | Total | Less than 1 year | 1 - 3 Years | 3 - 5 Years | More Than 5 Years | |||||||||||||||||||||||||||||||
(dollars in millions) | (dollars in millions) | |||||||||||||||||||||||||||||||||||||||
Loss and loss expense reserves | $ | 865.3 | $ | 302.9 | $ | 285.6 | $ | 103.8 | $ | 173.0 | $ | 1,089.7 | $ | 381.4 | $ | 359.6 | $ | 130.8 | $ | 217.9 | ||||||||||||||||||||
Investment commitment | 1.3 | 1.3 | – | – | – | 0.4 | 0.4 | – | – | – | ||||||||||||||||||||||||||||||
Operating leases | 0.5 | 0.4 | 0.1 | – | – | 0.1 | 0.1 | – | – | – | ||||||||||||||||||||||||||||||
Borrowings | 20.0 | 20.0 | – | – | – | 20.0 | 20.0 | – | – | – | ||||||||||||||||||||||||||||||
Total | $ | 887.1 | $ | 324.6 | $ | 285.7 | $ | 103.8 | $ | 173.0 | $ | 1,110.2 | $ | 401.9 | $ | 359.6 | $ | 130.8 | $ | 217.9 |
● |
● |
Increase (Decrease) | Increase (Decrease) | |||||||||||||||||||||||
Fair Value | Interest Rate Risk | Equity Risk | Fair Value | Interest Rate Risk | Equity Risk | |||||||||||||||||||
2018 | ||||||||||||||||||||||||
2020 | ||||||||||||||||||||||||
Fixed income securities | ||||||||||||||||||||||||
Agency collateralized mortgage obligations | $ | 11,931 | $ | (495 | ) | $ | – | |||||||||||||||||
Agency mortgage-backed securities | 102,107 | (2,076 | ) | – | ||||||||||||||||||||
Asset-backed securities | 107,696 | (1,703 | ) | – | ||||||||||||||||||||
Bank loans | 11,361 | (57 | ) | – | ||||||||||||||||||||
Collateralized mortgage obligations | 5,118 | (219 | ) | – | ||||||||||||||||||||
Corporate securities | 360,241 | (11,804 | ) | – | ||||||||||||||||||||
Mortgage-backed securities | 38,056 | (1,104 | ) | – | ||||||||||||||||||||
Municipal obligations | 45,143 | (2,137 | ) | – | ||||||||||||||||||||
Non-U.S. government obligations | 30,600 | (422 | ) | – | ||||||||||||||||||||
U.S. government obligations | 207,439 | (6,969 | ) | – | ||||||||||||||||||||
Total fixed income securities | 919,692 | (26,986 | ) | – | ||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||
Consumer | 11,598 | – | (1,160 | ) | ||||||||||||||||||||
Energy | 1,227 | – | (123 | ) | ||||||||||||||||||||
Financial | 29,064 | – | (2,906 | ) | ||||||||||||||||||||
Industrial | 5,180 | – | (518 | ) | ||||||||||||||||||||
Technology | 2,851 | – | (285 | ) | ||||||||||||||||||||
Other | 8,249 | – | (825 | ) | ||||||||||||||||||||
Total equity securities | 58,169 | – | (5,817 | ) | ||||||||||||||||||||
Limited partnerships | 7,214 | – | (494 | ) | ||||||||||||||||||||
Short-term | 1,000 | – | – | |||||||||||||||||||||
Total | $ | 986,075 | $ | (26,986 | ) | $ | (6,311 | ) | ||||||||||||||||
2019 | ||||||||||||||||||||||||
Fixed income securities | ||||||||||||||||||||||||
Agency collateralized mortgage obligations | $ | 10,687 | $ | (404 | ) | $ | – | $ | 12,093 | $ | (414 | ) | $ | – | ||||||||||
Agency mortgage-backed securities | 37,385 | (2,012 | ) | – | 56,280 | (607 | ) | – | ||||||||||||||||
Asset-backed securities | 64,422 | (2,612 | ) | – | 106,397 | (691 | ) | – | ||||||||||||||||
Bank loans | 9,750 | (49 | ) | – | 14,568 | (73 | ) | – | ||||||||||||||||
Certificates of deposit | 2,835 | (48 | ) | – | 2,835 | (18 | ) | – | ||||||||||||||||
Collateralized mortgage obligations | 5,423 | (176 | ) | – | 5,616 | (166 | ) | – | ||||||||||||||||
Corporate securities | 190,450 | (5,417 | ) | – | 281,381 | (8,735 | ) | – | ||||||||||||||||
Mortgage-backed securities | 38,540 | (1,270 | ) | – | 47,463 | (1,682 | ) | – | ||||||||||||||||
Municipal obligations | 29,155 | (769 | ) | – | 36,286 | (1,618 | ) | – | ||||||||||||||||
Non-U.S. government obligations | 25,180 | (549 | ) | – | 24,179 | (480 | ) | – | ||||||||||||||||
U.S. government obligations | 178,818 | (5,864 | ) | – | 208,440 | (7,082 | ) | – | ||||||||||||||||
Total fixed income securities | 592,645 | (19,170 | ) | – | 795,538 | (21,566 | ) | – | ||||||||||||||||
Equity securities: | ||||||||||||||||||||||||
Consumer | 17,945 | – | (1,795 | ) | 16,707 | – | (1,671 | ) | ||||||||||||||||
Energy | 3,179 | – | (318 | ) | 3,074 | – | (307 | ) | ||||||||||||||||
Financial | 25,253 | – | (2,525 | ) | 31,577 | – | (3,158 | ) | ||||||||||||||||
Industrial | 6,920 | – | (692 | ) | 4,927 | – | (493 | ) | ||||||||||||||||
Technology | 2,303 | – | (230 | ) | 2,817 | – | (282 | ) | ||||||||||||||||
Funds (e.g. mutual funds, closed end funds, ETFs) | 5,489 | – | (549 | ) | ||||||||||||||||||||
Funds (e.g., mutual funds, closed end funds, ETFs) | 9,460 | – | (946 | ) | ||||||||||||||||||||
Other | 5,333 | – | (533 | ) | 8,250 | – | (825 | ) | ||||||||||||||||
Total equity securities | 66,422 | – | (6,642 | ) | 76,812 | – | (7,682 | ) | ||||||||||||||||
Limited partnerships | 55,044 | – | (4,022 | ) | 23,292 | – | (1,670 | ) | ||||||||||||||||
Short-term | 1,000 | – | – | 1,000 | – | – | ||||||||||||||||||
Total | $ | 715,111 | $ | (19,170 | ) | $ | (10,664 | ) | $ | 896,642 | $ | (21,566 | ) | $ | (9,352 | ) | ||||||||
2017 | ||||||||||||||||||||||||
Fixed income securities | ||||||||||||||||||||||||
Agency collateralized mortgage obligations | $ | 16,586 | $ | (820 | ) | $ | – | |||||||||||||||||
Agency mortgage-backed securities | 27,075 | (1,103 | ) | – | ||||||||||||||||||||
Asset-backed securities | 43,469 | (1,381 | ) | – | ||||||||||||||||||||
Bank loans | 19,488 | (794 | ) | – | ||||||||||||||||||||
Certificates of deposit | 3,135 | (83 | ) | – | ||||||||||||||||||||
Collateralized mortgage obligations | 6,492 | (200 | ) | – | ||||||||||||||||||||
Corporate securities | 198,349 | (5,126 | ) | – | ||||||||||||||||||||
Mortgage-backed securities | 24,204 | (772 | ) | – | ||||||||||||||||||||
Municipal obligations | 96,650 | (1,861 | ) | – | ||||||||||||||||||||
Non-U.S. government obligations | 37,394 | (959 | ) | – | ||||||||||||||||||||
U.S. government obligations | 49,011 | (886 | ) | – | ||||||||||||||||||||
Total fixed income securities | 521,853 | (13,985 | ) | – | ||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||
Consumer | 46,578 | – | (4,658 | ) | ||||||||||||||||||||
Energy | 10,278 | – | (1,028 | ) | ||||||||||||||||||||
Financial | 45,470 | – | (4,547 | ) | ||||||||||||||||||||
Industrial | 25,402 | – | (2,540 | ) | ||||||||||||||||||||
Technology | 13,061 | – | (1,306 | ) | ||||||||||||||||||||
Funds (e.g. mutual funds, closed end funds, ETFs) | 50,291 | – | (5,029 | ) | ||||||||||||||||||||
Other | 10,683 | – | (1,068 | ) | ||||||||||||||||||||
Total equity securities | 201,763 | – | (20,176 | ) | ||||||||||||||||||||
Limited partnerships | 70,806 | – | (5,278 | ) | ||||||||||||||||||||
Short-term | 1,000 | – | – | |||||||||||||||||||||
Total | $ | 795,422 | $ | (13,985 | ) | $ | (25,454 | ) |
Increase (Decrease) | Increase (Decrease) | |||||||||||||||||||||||
Fair Value | Interest Rate Risk | Equity Risk | Fair Value | Interest Rate Risk | Equity Risk | |||||||||||||||||||
2018 | ||||||||||||||||||||||||
2020 | ||||||||||||||||||||||||
Fixed income securities | ||||||||||||||||||||||||
Agency collateralized mortgage obligations | $ | 11,931 | $ | (744 | ) | $ | – | |||||||||||||||||
Agency mortgage-backed securities | 102,107 | (3,114 | ) | – | ||||||||||||||||||||
Asset-backed securities | 107,696 | (2,554 | ) | – | ||||||||||||||||||||
Bank loans | 11,361 | (85 | ) | – | ||||||||||||||||||||
Collateralized mortgage obligations | 5,118 | (328 | ) | – | ||||||||||||||||||||
Corporate securities | 360,241 | (17,708 | ) | – | ||||||||||||||||||||
Mortgage-backed securities | 38,056 | (1,655 | ) | – | ||||||||||||||||||||
Municipal obligations | 45,143 | (3,205 | ) | – | ||||||||||||||||||||
Non-U.S. government obligations | 30,600 | (633 | ) | – | ||||||||||||||||||||
U.S. government obligations | 207,439 | (10,454 | ) | – | ||||||||||||||||||||
Total fixed income securities | 919,692 | (40,480 | ) | – | ||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||
Consumer | 11,598 | – | (1,740 | ) | ||||||||||||||||||||
Energy | 1,227 | – | (184 | ) | ||||||||||||||||||||
Financial | 29,064 | – | (4,360 | ) | ||||||||||||||||||||
Industrial | 5,180 | – | (777 | ) | ||||||||||||||||||||
Technology | 2,851 | – | (428 | ) | ||||||||||||||||||||
Other | 8,249 | – | (1,237 | ) | ||||||||||||||||||||
Total equity securities | 58,169 | – | (8,726 | ) | ||||||||||||||||||||
Limited partnerships | 7,214 | – | (741 | ) | ||||||||||||||||||||
Short-term | 1,000 | – | – | |||||||||||||||||||||
Total | $ | 986,075 | $ | (40,480 | ) | $ | (9,467 | ) | ||||||||||||||||
2019 | ||||||||||||||||||||||||
Fixed income securities | ||||||||||||||||||||||||
Agency collateralized mortgage obligations | $ | 10,687 | $ | (607 | ) | $ | – | $ | 12,093 | $ | (622 | ) | $ | – | ||||||||||
Agency mortgage-backed securities | 37,385 | (3,021 | ) | – | 56,280 | (911 | ) | – | ||||||||||||||||
Asset-backed securities | 64,422 | (3,917 | ) | – | 106,397 | (1,037 | ) | – | ||||||||||||||||
Bank loans | 9,750 | (73 | ) | – | 14,568 | (109 | ) | – | ||||||||||||||||
Certificates of deposit | 2,835 | (71 | ) | – | 2,835 | (27 | ) | – | ||||||||||||||||
Collateralized mortgage obligations | 5,423 | (263 | ) | – | 5,616 | (248 | ) | – | ||||||||||||||||
Corporate securities | 190,450 | (8,125 | ) | – | 281,381 | (13,103 | ) | – | ||||||||||||||||
Mortgage-backed securities | 38,540 | (1,904 | ) | – | 47,463 | (2,523 | ) | – | ||||||||||||||||
Municipal obligations | 29,155 | (1,154 | ) | – | 36,286 | (2,426 | ) | – | ||||||||||||||||
Non-U.S. government obligations | 25,180 | (824 | ) | – | 24,179 | (720 | ) | – | ||||||||||||||||
U.S. government obligations | 178,818 | (8,794 | ) | – | 208,440 | (10,623 | ) | – | ||||||||||||||||
Total fixed income securities | 592,645 | (28,753 | ) | – | 795,538 | (32,349 | ) | – | ||||||||||||||||
Equity securities: | ||||||||||||||||||||||||
Consumer | 17,945 | – | (2,692 | ) | 16,707 | – | (2,506 | ) | ||||||||||||||||
Energy | 3,179 | – | (477 | ) | 3,074 | – | (461 | ) | ||||||||||||||||
Financial | 25,253 | – | (3,788 | ) | 31,577 | – | (4,737 | ) | ||||||||||||||||
Industrial | 6,920 | – | (1,038 | ) | 4,927 | – | (739 | ) | ||||||||||||||||
Technology | 2,303 | – | (345 | ) | 2,817 | – | (423 | ) | ||||||||||||||||
Funds (e.g. mutual funds, closed end funds, ETFs) | 5,489 | – | (823 | ) | ||||||||||||||||||||
Funds (e.g., mutual funds, closed end funds, ETFs) | 9,460 | – | (1,419 | ) | ||||||||||||||||||||
Other | 5,333 | – | (800 | ) | 8,250 | – | (1,238 | ) | ||||||||||||||||
Total equity securities | 66,422 | – | (9,963 | ) | 76,812 | – | (11,523 | ) | ||||||||||||||||
Limited partnerships | 55,044 | – | (6,034 | ) | 23,292 | – | (2,506 | ) | ||||||||||||||||
Short-term | 1,000 | – | – | 1,000 | – | – | ||||||||||||||||||
Total | $ | 715,111 | $ | (28,753 | ) | $ | (15,997 | ) | $ | 896,642 | $ | (32,349 | ) | $ | (14,029 | ) | ||||||||
2017 | ||||||||||||||||||||||||
Fixed income securities | ||||||||||||||||||||||||
Agency collateralized mortgage obligations | $ | 16,586 | $ | (1,229 | ) | $ | – | |||||||||||||||||
Agency mortgage-backed securities | 27,075 | (1,657 | ) | – | ||||||||||||||||||||
Asset-backed securities | 43,469 | (2,072 | ) | – | ||||||||||||||||||||
Bank loans | 19,488 | (1,192 | ) | – | ||||||||||||||||||||
Certificates of deposit | 3,135 | (125 | ) | – | ||||||||||||||||||||
Collateralized mortgage obligations | 6,492 | (299 | ) | – | ||||||||||||||||||||
Corporate securities | 198,349 | (7,690 | ) | – | ||||||||||||||||||||
Mortgage-backed securities | 24,204 | (1,158 | ) | – | ||||||||||||||||||||
Municipal obligations | 96,650 | (2,791 | ) | – | ||||||||||||||||||||
Non-U.S. government obligations | 37,394 | (1,438 | ) | – | ||||||||||||||||||||
U.S. government obligations | 49,011 | (1,329 | ) | – | ||||||||||||||||||||
Total fixed income securities | 521,853 | (20,980 | ) | – | ||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||
Consumer | 46,578 | – | (6,987 | ) | ||||||||||||||||||||
Energy | 10,278 | – | (1,542 | ) | ||||||||||||||||||||
Financial | 45,470 | – | (6,821 | ) | ||||||||||||||||||||
Industrial | 25,402 | – | (3,810 | ) | ||||||||||||||||||||
Technology | 13,061 | – | (1,959 | ) | ||||||||||||||||||||
Funds (e.g. mutual funds, closed end funds, ETFs) | 50,291 | – | (7,544 | ) | ||||||||||||||||||||
Other | 10,683 | – | (1,602 | ) | ||||||||||||||||||||
Total equity securities | 201,763 | – | (30,265 | ) | ||||||||||||||||||||
Limited partnerships | 70,806 | – | (7,916 | ) | ||||||||||||||||||||
Short-term | 1,000 | – | – | |||||||||||||||||||||
Total | $ | 795,422 | $ | (20,980 | ) | $ | (38,181 | ) |
Valuation of Incurred but Not Reported Loss and Loss Expense Reserves | ||
Description of the Matter | As of December 31, 2020, the liability for incurred but not reported loss and loss expense reserves, net of reinsurance (“IBNR”), represented a significant portion of the loss and loss expense reserve, net of reinsurance. As discussed in Note A and Note C to the consolidated financial statements, the carrying amount of the loss and loss expense reserve, net of reinsurance, is management’s best estimate of the ultimate liability for indemnity costs and related adjustment expense necessary to investigate and settle claims and is based upon individual case estimates for reported claims and actuarial estimates for IBNR. The estimate for IBNR is determined based on evaluations of individual reported claims and by actuarial estimation processes considering historical experience, relevant economic information, and available industry statistics. The IBNR estimate is driven by management’s expected loss ratio assumption, which is comprised of various factors, including historical payment patterns and expected future trends in claim severity and frequency. Auditing management’s best estimate of IBNR was complex and required the involvement of our actuarial specialists due to the significant measurement uncertainty associated with the estimation and high degree of subjectivity in management’s determination of the expected loss ratio assumption. Management’s expected loss ratio assumption has a significant effect on the valuation of IBNR. | |
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the process for estimating IBNR. These audit procedures included, among others, testing management’s review and approval controls over the expected loss ratio assumption for estimating IBNR. With the assistance of actuarial specialists, our audit procedures included, among others, an evaluation of the Company’s expected loss ratio assumption, which included a comparison of historical payment patterns, expected future trends in claim severity and frequency, and consideration of relevant economic information and other industry factors to our prior year analysis and actual current year loss activity. To evaluate the expected loss ratio assumption, we developed an independent range of reasonable reserve estimates that we compared to management’s best estimate of IBNR. We also analyzed year-to-year movements within our independently developed range. Additionally, we performed a review of the development of prior years’ reserve estimates. | |
Personnel Staffing Group Recoverable Allowance | ||
Description of the Matter | As of December 31, 2020, the Company has a recoverable due from a single customer, Personnel Staffing Group, for $47.3 million related to claims that have been paid or will be paid on behalf of Personnel Staffing Group by the Company for which the Company has recorded a $16.5 million credit impairment allowance. As discussed above and in Note A and Note T to the consolidated financial statements, the allowance amount is management’s best estimate of the ultimate credit impairment for the recoverable based on the expected timing and amount of cash flows from Personnel Staffing Group. This estimate is particularly sensitive to the default and recovery in default assumptions which have a significant impact on the allowance. These assumptions involve significant uncertainty and management judgment. Auditing management’s best estimate of the Personnel Staffing Group recoverable allowance (the allowance) required the involvement of our valuation specialists due to the significant measurement uncertainty associated with management’s estimation. The uncertainty is primarily driven by the high degree of subjectivity in management’s determination of the default and recovery in default assumptions. | |
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the process for estimating the allowance. These audit procedures included, among others, testing management review and approval controls over the assumptions for estimating the allowance. With the assistance of our valuation specialists, our audit procedures included, among others, reviewing contract terms between Personnel Staffing Group and the Company, reading minutes of the meetings of the committees of the board of directors, reading summaries of the lawsuits with Personnel Staffing Group, reviewing legal letters pertinent to the matter, reviewing historical bankruptcy data from similar entities within the industry, and evaluating the Company’s selection of methods used to estimate the allowance compared with those methods used in the industry for similar types of analyses. To evaluate the significant assumptions used by management, we compared the significant assumptions to industry data for entities with similar characteristics to Personnel Staffing Group and financial data specific to Personnel Staffing Group. With the assistance of the valuation specialists, we developed an independent range of reasonable allowance estimates that we compared to management’s best estimate. |
December 31 | December 31 | |||||||||||||||
2018 | 2017 | 2020 | 2019 | |||||||||||||
Assets | ||||||||||||||||
Investments: | ||||||||||||||||
Fixed income securities (Amortized cost: 2018, $600,504; 2017, $521,017) | $ | 592,645 | $ | 521,853 | ||||||||||||
Fixed income securities (Amortized cost: $894,468, $783,047; allowance for credit losses of $1,035 and $0) | $ | 919,692 | $ | 795,538 | ||||||||||||
Equity securities | 66,422 | 201,763 | 58,169 | 76,812 | ||||||||||||
Limited partnerships (Affiliated: 2018, $32,028; 2017, $43,586) | 55,044 | 70,806 | ||||||||||||||
Commercial mortgage loans | 6,672 | – | ||||||||||||||
Limited partnerships | 7,214 | 23,292 | ||||||||||||||
Commercial mortgage loans (less allowance of $195 and $0) | 10,602 | 11,782 | ||||||||||||||
Short-term and other | 1,000 | 1,000 | 1,000 | 1,000 | ||||||||||||
721,783 | 795,422 | 996,677 | 908,424 | |||||||||||||
Cash and cash equivalents | 163,996 | 64,680 | 58,301 | 67,851 | ||||||||||||
Restricted cash and cash equivalents | 6,815 | 4,033 | 12,128 | 21,037 | ||||||||||||
Accounts receivable--less allowance (2018, $403; 2017, $484) | 102,972 | 87,551 | ||||||||||||||
Accounts receivable (less allowance of $19,960 and $2,233) | 100,921 | 111,762 | ||||||||||||||
Accrued investment income | 4,358 | 4,159 | 4,816 | 4,882 | ||||||||||||
Reinsurance recoverable | 392,436 | 318,331 | ||||||||||||||
Reinsurance recoverable (less allowance of $972 and $1,171) | 455,564 | 432,067 | ||||||||||||||
Prepaid reinsurance premiums | 6,095 | 4,578 | 11,747 | 5,820 | ||||||||||||
Deferred policy acquisition costs | 6,568 | 5,608 | 9,744 | 8,496 | ||||||||||||
Property and equipment--less accumulated depreciation (2018, $19,531; 2017, $16,614) | 46,645 | 47,317 | ||||||||||||||
Property and equipment (less accumulated depreciation of $25,959 and $20,091) | 38,144 | 42,542 | ||||||||||||||
Other assets | 24,760 | 18,399 | 25,805 | 24,566 | ||||||||||||
Current federal income taxes recoverable | 7,441 | 6,938 | ||||||||||||||
Current federal income taxes | 0 | 4,878 | ||||||||||||||
Deferred federal income taxes | 6,262 | – | 8,980 | 2,035 | ||||||||||||
$ | 1,490,131 | $ | 1,357,016 | $ | 1,722,827 | $ | 1,634,360 | |||||||||
Liabilities and Shareholders' Equity | ||||||||||||||||
Reserves: | ||||||||||||||||
Losses and loss expenses | $ | 865,339 | $ | 680,274 | $ | 1,089,669 | $ | 988,305 | ||||||||
Unearned premiums | 71,625 | 53,085 | 63,731 | 74,810 | ||||||||||||
936,964 | 733,359 | 1,153,400 | 1,063,115 | |||||||||||||
Reinsurance payable | 66,632 | 62,308 | 76,617 | 65,835 | ||||||||||||
Short-term borrowings | 20,000 | 20,000 | 20,000 | 20,000 | ||||||||||||
Depository liabilities | 173 | 3,050 | 110 | 18 | ||||||||||||
Accounts payable and other liabilities | 110,280 | 105,130 | 108,852 | 121,076 | ||||||||||||
Deferred federal income taxes | – | 14,358 | ||||||||||||||
Current federal income taxes payable | 766 | 0 | ||||||||||||||
1,134,049 | 938,205 | 1,359,745 | 1,270,044 | |||||||||||||
Shareholders' equity: | ||||||||||||||||
Common stock: | ||||||||||||||||
Class A voting -- authorized 3,000,000 shares; outstanding -- 2018 - 2,615,339; 2017 - 2,623,109 shares | 112 | 112 | ||||||||||||||
Class B non-voting -- authorized 20,000,000 shares; outstanding -- 2018 - 12,253,922; 2017 - 12,423,518 shares | 522 | 530 | ||||||||||||||
Class A voting -- authorized 3,000,000 shares; outstanding -- 2020 - 2,603,350; 2019 - 2,603,350 shares | 111 | 111 | ||||||||||||||
Class B non-voting -- authorized 20,000,000 shares; outstanding -- 2020 - 11,674,345; 2019 - 11,675,956 shares | 498 | 499 | ||||||||||||||
Additional paid-in capital | 54,720 | 55,078 | 54,571 | 53,349 | ||||||||||||
Accumulated other comprehensive income (loss) | (7,347 | ) | 46,391 | |||||||||||||
Accumulated other comprehensive income | 21,759 | 9,369 | ||||||||||||||
Retained earnings | 308,075 | 316,700 | 286,143 | 300,988 | ||||||||||||
356,082 | 418,811 | 363,082 | 364,316 | |||||||||||||
$ | 1,490,131 | $ | 1,357,016 | $ | 1,722,827 | $ | 1,634,360 |
Year Ended December 31 | Year Ended December 31 | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2020 | 2019 | 2018 | |||||||||||||||||||
Revenue: | ||||||||||||||||||||||||
Net premiums earned | $ | 432,880 | $ | 328,145 | $ | 276,011 | $ | 445,515 | $ | 447,288 | $ | 432,880 | ||||||||||||
Net investment income | 22,048 | 18,095 | 14,483 | 25,422 | 26,249 | 22,048 | ||||||||||||||||||
Commissions and other income | 9,932 | 5,308 | 5,275 | 7,048 | 9,171 | 9,932 | ||||||||||||||||||
Net realized gains (losses) on investments, excluding impairment losses | (6,632 | ) | 7,366 | 26,498 | (6,876 | ) | 2,455 | (6,632 | ) | |||||||||||||||
Other-than-temporary impairment losses on investments | (19 | ) | (149 | ) | (5,743 | ) | ||||||||||||||||||
Impairment losses on investments | (2,861 | ) | (497 | ) | (19 | ) | ||||||||||||||||||
Net unrealized gains (losses) on equity securities and limited partnership investments | (19,040 | ) | 12,469 | 2,473 | 501 | 10,931 | (19,040 | ) | ||||||||||||||||
Net realized and unrealized gains (losses) on investments | (25,691 | ) | 19,686 | 23,228 | (9,236 | ) | 12,889 | (25,691 | ) | |||||||||||||||
439,169 | 371,234 | 318,997 | 468,749 | 495,597 | 439,169 | |||||||||||||||||||
Expenses: | ||||||||||||||||||||||||
Losses and loss expenses incurred | 345,864 | 247,518 | 186,481 | 318,958 | 348,468 | 345,864 | ||||||||||||||||||
Other operating expenses | 137,177 | 113,594 | 89,462 | 143,428 | 138,456 | 137,177 | ||||||||||||||||||
483,041 | 361,112 | 275,943 | 462,386 | 486,924 | 483,041 | |||||||||||||||||||
Income (loss) before federal income tax expense (benefit) | (43,872 | ) | 10,122 | 43,054 | 6,363 | 8,673 | (43,872 | ) | ||||||||||||||||
Federal income tax expense (benefit) | (9,797 | ) | (8,201 | ) | 14,109 | 1,900 | 1,326 | (9,797 | ) | |||||||||||||||
Net income (loss) | $ | (34,075 | ) | $ | 18,323 | $ | 28,945 | $ | 4,463 | $ | 7,347 | $ | (34,075 | ) | ||||||||||
Per share data: | ||||||||||||||||||||||||
Basic and diluted earnings (loss) | $ | (2.28 | ) | $ | 1.21 | $ | 1.92 | |||||||||||||||||
Net income (loss) per share: | ||||||||||||||||||||||||
Basic | $ | 0.32 | $ | 0.51 | $ | (2.28 | ) | |||||||||||||||||
Diluted | $ | 0.31 | $ | 0.50 | $ | (2.28 | ) | |||||||||||||||||
Dividends paid to shareholders | $ | $ 1.12 | $ | $ 1.08 | $ | $ 1.04 | ||||||||||||||||||
Weighted average number of shares outstanding: | �� | |||||||||||||||||||||||
Basic | 14,140 | 14,521 | 14,965 | |||||||||||||||||||||
Dilutive effect of share equivalents | 130 | 99 | n/a | |||||||||||||||||||||
Diluted | 14,270 | 14,620 | 14,965 |
Year Ended December 31 | Year Ended December 31 | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2020 | 2019 | 2018 | |||||||||||||||||||
Net income (loss) | $ | (34,075 | ) | $ | 18,323 | $ | 28,945 | $ | 4,463 | $ | 7,347 | $ | (34,075 | ) | ||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||
Unrealized net gains (losses) on fixed income securities: | ||||||||||||||||||||||||
Unrealized net gains (losses) arising during the period | (9,680 | ) | 17,340 | 8,618 | ||||||||||||||||||||
Less: reclassification adjustment for net gains (losses) included in net income (loss) | (2,812 | ) | 4,691 | 13,491 | ||||||||||||||||||||
(6,868 | ) | 12,649 | (4,873 | ) | ||||||||||||||||||||
Unrealized net gains (losses) on fixed income securities | 12,141 | 16,071 | (6,868 | ) | ||||||||||||||||||||
Foreign currency translation adjustments | (830 | ) | 522 | 235 | 249 | 645 | (830 | ) | ||||||||||||||||
Other comprehensive income (loss) | (7,698 | ) | 13,171 | (4,638 | ) | 12,390 | 16,716 | (7,698 | ) | |||||||||||||||
Comprehensive income (loss) | $ | (41,773 | ) | $ | 31,494 | $ | 24,307 | $ | 16,853 | $ | 24,063 | $ | (41,773 | ) |
Common Stock | Additional | Accumulated Other | Common Stock | Additional | Accumulated Other | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A | Class B | Paid-In | Comprehensive | Retained | Total | Class A | Class B | Paid-In | Comprehensive | Retained | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Income (Loss) | Earnings | Equity | Shares | Amount | Shares | Amount | Capital | Income (Loss) | Earnings | Equity | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2016 | 2,623 | $ | 112 | 12,403 | $ | 529 | $ | 52,946 | $ | 37,858 | $ | 303,053 | $ | 394,498 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | – | – | – | – | – | – | 28,945 | 28,945 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment, net of tax | – | – | – | – | – | 235 | – | 235 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in unrealized gain (loss) on investments, net of tax | – | – | – | – | – | (4,873 | ) | – | (4,873 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock dividends | – | – | – | – | – | – | (15,803 | ) | (15,803 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock grants | – | – | 58 | 3 | 1,340 | – | – | 1,343 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2016 | 2,623 | 112 | 12,461 | 532 | 54,286 | 33,220 | 316,195 | 404,345 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | – | – | – | – | – | – | 18,323 | 18,323 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment, net of tax | – | – | – | – | – | 522 | – | 522 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in unrealized gain (loss) on investments, net of tax | – | – | – | – | – | 12,649 | – | 12,649 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock dividends | – | – | – | – | – | – | (16,302 | ) | (16,302 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | – | – | (85 | ) | (4 | ) | (360 | ) | – | (1,516 | ) | (1,880 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock grants | – | – | 48 | 2 | 1,152 | – | – | 1,154 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2017 | 2,623 | 112 | 12,424 | 530 | 55,078 | 46,391 | 316,700 | 418,811 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2018 | 2,623 | $ | 112 | 12,424 | $ | 530 | $ | 55,078 | $ | 46,391 | $ | 316,700 | $ | 418,811 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative effect of adoption of ASU 2016-01, net of tax | – | – | – | – | – | (46,157 | ) | 46,157 | – | 0 | 0 | 0 | 0 | 0 | (46,157 | ) | 46,157 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||
Cumulative effect of adoption of ASU 2018-02 | – | – | – | – | – | 117 | (117 | ) | – | 0 | 0 | 0 | 0 | 0 | 117 | (117 | ) | 0 | ||||||||||||||||||||||||||||||||||||||||||||||
Net loss | – | – | – | – | – | – | (34,075 | ) | (34,075 | ) | – | 0 | – | 0 | 0 | 0 | (34,075 | ) | (34,075 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment, net of tax | – | – | – | – | – | (830 | ) | – | (830 | ) | – | 0 | – | 0 | 0 | (830 | ) | 0 | (830 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Change in unrealized gain (loss) on investments, net of tax | – | – | – | – | – | (6,868 | ) | – | (6,868 | ) | – | 0 | – | 0 | 0 | (6,868 | ) | 0 | (6,868 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Common stock dividends | – | – | – | – | – | – | (16,835 | ) | (16,835 | ) | – | 0 | – | 0 | 0 | 0 | (16,835 | ) | (16,835 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (8 | ) | – | (192 | ) | (9 | ) | (832 | ) | – | (3,755 | ) | (4,596 | ) | (8 | ) | 0 | (192 | ) | (9 | ) | (832 | ) | 0 | (3,755 | ) | (4,596 | ) | ||||||||||||||||||||||||||||||||||||
Restricted stock grants | – | – | 22 | 1 | 474 | – | – | 475 | 0 | 0 | 22 | 1 | 474 | 0 | 0 | 475 | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | 2,615 | $ | 112 | 12,254 | $ | 522 | $ | 54,720 | $ | (7,347 | ) | $ | 308,075 | $ | 356,082 | 2,615 | $ | 112 | 12,254 | $ | 522 | $ | 54,720 | $ | (7,347 | ) | $ | 308,075 | $ | 356,082 | ||||||||||||||||||||||||||||||||||
Net income | – | 0 | – | 0 | 0 | 0 | 7,347 | 7,347 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment, net of tax | – | 0 | – | 0 | 0 | 645 | 0 | 645 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in unrealized gain (loss) on investments, net of tax | – | 0 | – | 0 | 0 | 16,071 | 0 | 16,071 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock dividends | – | 0 | – | 0 | 0 | 0 | (5,857 | ) | (5,857 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (12 | ) | (1 | ) | (665 | ) | (27 | ) | (2,896 | ) | 0 | (8,577 | ) | (11,501 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock grants | 0 | 0 | 87 | 4 | 1,525 | 0 | 0 | 1,529 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | 2,603 | $ | 111 | 11,676 | $ | 499 | $ | 53,349 | $ | 9,369 | $ | 300,988 | $ | 364,316 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative effect of adoption of ASU 2016-13, net of tax | 0 | 0 | 0 | 0 | 0 | 0 | (12,281 | ) | (12,281 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | – | 0 | – | 0 | 0 | 0 | 4,463 | 4,463 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment, net of tax | – | 0 | – | 0 | 0 | 249 | 0 | 249 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in unrealized gain (loss) on investments, net of tax | – | 0 | – | 0 | 0 | 12,141 | 0 | 12,141 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock dividends | – | 0 | – | 0 | 0 | 0 | (5,813 | ) | (5,813 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | 0 | 0 | (127 | ) | (5 | ) | (563 | ) | 0 | (1,214 | ) | (1,782 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock grants | 0 | 0 | 126 | 4 | 1,785 | 0 | 0 | 1,789 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | 2,603 | $ | 111 | 11,675 | $ | 498 | $ | 54,571 | $ | 21,759 | $ | 286,143 | $ | 363,082 |
Year Ended December 31 | Year Ended December 31 | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2020 | 2019 | 2018 | |||||||||||||||||||
Operating activities | ||||||||||||||||||||||||
Net income (loss) | $ | (34,075 | ) | $ | 18,323 | $ | 28,945 | $ | 4,463 | $ | 7,347 | $ | (34,075 | ) | ||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||||||||||
Change in accounts receivable and unearned premium | (3,904 | ) | 2,678 | (2,721 | ) | (9,024 | ) | (3,835 | ) | (3,904 | ) | |||||||||||||
Change in accrued investment income | (199 | ) | (278 | ) | 108 | 65 | (524 | ) | (199 | ) | ||||||||||||||
Change in reinsurance recoverable on paid losses | 956 | (446 | ) | 692 | (3,799 | ) | (19,083 | ) | 956 | |||||||||||||||
Change in losses and loss expenses reserves, net of reinsurance | 117,027 | 47,229 | 23,568 | 75,103 | 100,648 | 117,027 | ||||||||||||||||||
Change in other assets, other liabilities and current income taxes | 8,204 | 49,221 | (8,063 | ) | (2,322 | ) | 10,140 | 8,204 | ||||||||||||||||
Amortization of net policy acquisition costs | 54,981 | 47,387 | 18,085 | 55,183 | 55,802 | 54,981 | ||||||||||||||||||
Net policy acquisition costs deferred | (55,940 | ) | (51,824 | ) | (17,813 | ) | (56,431 | ) | (57,731 | ) | (55,940 | ) | ||||||||||||
Provision for deferred income tax expense (benefit) | (18,794 | ) | (3,866 | ) | 2,838 | (5,244 | ) | (51 | ) | (18,794 | ) | |||||||||||||
Bond amortization | 184 | 1,865 | 3,030 | (26 | ) | (725 | ) | 184 | ||||||||||||||||
Loss on sale of property and equipment | – | 235 | 63 | |||||||||||||||||||||
Depreciation | 6,102 | 5,752 | 5,521 | 5,869 | 6,052 | 6,102 | ||||||||||||||||||
Net realized (gains) losses on investments | 25,691 | (19,686 | ) | (23,228 | ) | |||||||||||||||||||
Net realized and unrealized (gains) losses on investments | 9,236 | (12,889 | ) | 25,691 | ||||||||||||||||||||
Compensation expense related to restricted stock | 475 | 1,154 | 1,343 | 1,789 | 1,529 | 475 | ||||||||||||||||||
Net cash provided by operating activities | 100,708 | 97,744 | 32,368 | 74,862 | 86,680 | 100,708 | ||||||||||||||||||
Investing activities | ||||||||||||||||||||||||
Purchases of fixed maturities and equity securities | (415,326 | ) | (436,932 | ) | (400,670 | ) | ||||||||||||||||||
Purchases of fixed income securities and equity securities | (392,223 | ) | (423,544 | ) | (415,326 | ) | ||||||||||||||||||
Purchases of limited partnership interests | (450 | ) | (1,097 | ) | – | 0 | 0 | (450 | ) | |||||||||||||||
Distributions from limited partnerships | 6,869 | 19,230 | 1,462 | 14,636 | 33,396 | 6,869 | ||||||||||||||||||
Proceeds from maturities | 64,035 | 131,623 | 78,691 | 136,390 | 84,387 | 64,035 | ||||||||||||||||||
Proceeds from sales of fixed maturities | 241,429 | 148,652 | 199,790 | |||||||||||||||||||||
Proceeds from sales of fixed income securities | 103,938 | 139,310 | 241,429 | |||||||||||||||||||||
Proceeds from sales of equity securities | 149,195 | 69,756 | 88,773 | 51,713 | 21,621 | 149,195 | ||||||||||||||||||
Net sales of short-term investments | – | 500 | 11,258 | |||||||||||||||||||||
Purchase of insurance company-owned life insurance | (10,000 | ) | – | – | 0 | 0 | (10,000 | ) | ||||||||||||||||
Purchase of commercial mortgage loans | (6,672 | ) | – | – | (555 | ) | (7,082 | ) | (6,672 | ) | ||||||||||||||
Proceeds from commercial mortgage loans | 1,539 | 1,972 | 0 | |||||||||||||||||||||
Purchases of property and equipment | (5,439 | ) | (6,661 | ) | (7,725 | ) | (1,470 | ) | (1,953 | ) | (5,439 | ) | ||||||||||||
Proceeds from disposals of property and equipment | 10 | 582 | 1,059 | 0 | 3 | 10 | ||||||||||||||||||
Net cash provided by (used in) investing activities | 23,651 | (74,347 | ) | (27,362 | ) | (86,032 | ) | (151,890 | ) | 23,651 | ||||||||||||||
Financing activities | ||||||||||||||||||||||||
Dividends paid to shareholders | (16,835 | ) | (16,302 | ) | (15,803 | ) | (5,692 | ) | (5,857 | ) | (16,835 | ) | ||||||||||||
Repurchase of common shares | (4,596 | ) | (1,880 | ) | – | (1,782 | ) | (11,501 | ) | (4,596 | ) | |||||||||||||
Net cash used in financing activities | (21,431 | ) | (18,182 | ) | (15,803 | ) | (7,474 | ) | (17,358 | ) | (21,431 | ) | ||||||||||||
Effect of foreign exchange rates on cash and cash equivalents | (830 | ) | 522 | 235 | 185 | 645 | (830 | ) | ||||||||||||||||
Increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents | 102,098 | 5,737 | (10,562 | ) | (18,459 | ) | (81,923 | ) | 102,098 | |||||||||||||||
Cash, cash equivalents and restricted cash and cash equivalents at beginning of year | 68,713 | 62,976 | 73,538 | 88,888 | 170,811 | 68,713 | ||||||||||||||||||
Cash, cash equivalents and restricted cash and cash equivalents at end of year | $ | 170,811 | $ | 68,713 | $ | 62,976 | $ | 70,429 | $ | 88,888 | $ | 170,811 | ||||||||||||
Supplemental Disclosures of Cash Flow Information | ||||||||||||||||||||||||
Cash paid for income taxes, net of refunds | $ | 9,500 | $ | – | $ | 10,173 | ||||||||||||||||||
Cash paid (refunds received) for income taxes | $ | 1,500 | $ | (1,186 | ) | $ | 9,500 | |||||||||||||||||
Cash paid for interest | $ | 504 | $ | 456 | $ | 309 | $ | 433 | $ | 723 | $ | 504 |
Fair Value | Cost or Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Net Unrealized Gains (Losses) | Fair Value | Cost or Amortized Cost | Allowance for Credit Losses | Gross Unrealized Gains | Gross Unrealized Losses | Net Unrealized Gains (Losses) | ||||||||||||||||||||||||||||||||||
December 31, 2018 (1) | ||||||||||||||||||||||||||||||||||||||||||||
December 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||
Fixed income securities | ||||||||||||||||||||||||||||||||||||||||||||
Agency collateralized mortgage obligations | $ | 10,687 | $ | 10,636 | $ | 145 | $ | (94 | ) | $ | 51 | $ | 11,931 | $ | 11,448 | $ | 0 | $ | 483 | $ | 0 | $ | 483 | |||||||||||||||||||||
Agency mortgage-backed securities | 37,385 | 37,168 | 371 | (154 | ) | 217 | 102,107 | 99,060 | 0 | 3,062 | (15 | ) | 3,047 | |||||||||||||||||||||||||||||||
Asset-backed securities | 64,422 | 66,241 | 14 | (1,833 | ) | (1,819 | ) | 107,696 | 108,686 | 0 | 596 | (1,586 | ) | (990 | ) | |||||||||||||||||||||||||||||
Bank loans | 9,750 | 10,208 | 27 | (485 | ) | (458 | ) | 11,361 | 11,590 | 0 | 128 | (357 | ) | (229 | ) | |||||||||||||||||||||||||||||
Certificates of deposit | 2,835 | 2,835 | – | – | – | |||||||||||||||||||||||||||||||||||||||
Collateralized mortgage obligations | 5,423 | 5,095 | 376 | (48 | ) | 328 | 5,118 | 5,061 | 0 | 151 | (94 | ) | 57 | |||||||||||||||||||||||||||||||
Corporate securities | 190,450 | 196,925 | 127 | (6,602 | ) | (6,475 | ) | 360,241 | 344,059 | 0 | 16,380 | (198 | ) | 16,182 | ||||||||||||||||||||||||||||||
Mortgage-backed securities | 38,540 | 38,586 | 377 | (423 | ) | (46 | ) | 38,056 | 40,675 | (1,035 | ) | 659 | (2,243 | ) | (1,584 | ) | ||||||||||||||||||||||||||||
Municipal obligations | 29,155 | 29,102 | 239 | (186 | ) | 53 | 45,143 | 43,353 | 0 | 1,820 | (30 | ) | 1,790 | |||||||||||||||||||||||||||||||
Non-U.S. government obligations | 25,180 | 25,339 | 6 | (165 | ) | (159 | ) | 30,600 | 29,882 | 0 | 718 | 0 | 718 | |||||||||||||||||||||||||||||||
U.S. government obligations | 178,818 | 178,369 | 1,252 | (803 | ) | 449 | 207,439 | 200,654 | 0 | 7,000 | (215 | ) | 6,785 | |||||||||||||||||||||||||||||||
Total fixed income securities | $ | 592,645 | $ | 600,504 | $ | 2,934 | $ | (10,793 | ) | $ | (7,859 | ) | $ | 919,692 | $ | 894,468 | $ | (1,035 | ) | $ | 30,997 | $ | (4,738 | ) | $ | 26,259 |
Fair Value | Cost or Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Net Unrealized Gains (Losses) | Fair Value | Cost or Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Net Unrealized Gains (Losses) | |||||||||||||||||||||||||||||||
December 31, 2017 | ||||||||||||||||||||||||||||||||||||||||
December 31, 2019 | ||||||||||||||||||||||||||||||||||||||||
Fixed income securities | ||||||||||||||||||||||||||||||||||||||||
Agency collateralized mortgage obligations | $ | 16,586 | $ | 15,839 | $ | 818 | $ | (71 | ) | $ | 747 | $ | 12,093 | $ | 11,557 | $ | 536 | $ | 0 | $ | 536 | |||||||||||||||||||
Agency mortgage-backed securities | 27,075 | 27,180 | 47 | (152 | ) | (105 | ) | 56,280 | 54,286 | 2,005 | (11 | ) | 1,994 | |||||||||||||||||||||||||||
Asset-backed securities | 43,469 | 42,861 | 749 | (141 | ) | 608 | 106,397 | 107,028 | 499 | (1,130 | ) | (631 | ) | |||||||||||||||||||||||||||
Bank loans | 19,488 | 19,271 | 266 | (49 | ) | 217 | 14,568 | 14,932 | 106 | (470 | ) | (364 | ) | |||||||||||||||||||||||||||
Certificates of deposit | 3,135 | 3,124 | 11 | – | 11 | 2,835 | 2,835 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Collateralized mortgage obligations | 6,492 | 6,079 | 451 | (38 | ) | 413 | 5,616 | 5,123 | 493 | 0 | 493 | |||||||||||||||||||||||||||||
Corporate securities | 198,349 | 198,419 | 1,602 | (1,672 | ) | (70 | ) | 281,381 | 274,340 | 7,492 | (451 | ) | 7,041 | |||||||||||||||||||||||||||
Mortgage-backed securities | 24,204 | 23,656 | 933 | (385 | ) | 548 | 47,463 | 46,685 | 1,047 | (269 | ) | 778 | ||||||||||||||||||||||||||||
Municipal obligations | 96,650 | 97,059 | 322 | (731 | ) | (409 | ) | 36,286 | 35,749 | 684 | (147 | ) | 537 | |||||||||||||||||||||||||||
Non-U.S. government obligations | 37,394 | 37,971 | 475 | (1,052 | ) | (577 | ) | 24,179 | 23,889 | 290 | 0 | 290 | ||||||||||||||||||||||||||||
U.S. government obligations | 49,011 | 49,558 | – | (547 | ) | (547 | ) | 208,440 | 206,623 | 2,891 | (1,074 | ) | 1,817 | |||||||||||||||||||||||||||
Total fixed income securities | 521,853 | 521,017 | 5,674 | (4,838 | ) | 836 | $ | 795,538 | $ | 783,047 | $ | 16,043 | $ | (3,552 | ) | $ | 12,491 | |||||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||||||||||||||||||
Consumer | 46,578 | 23,565 | 24,031 | (1,018 | ) | 23,013 | ||||||||||||||||||||||||||||||||||
Energy | 10,278 | 6,763 | 3,602 | (87 | ) | 3,515 | ||||||||||||||||||||||||||||||||||
Financial | 45,470 | 31,859 | 13,937 | (326 | ) | 13,611 | ||||||||||||||||||||||||||||||||||
Industrial | 25,402 | 8,949 | 16,793 | (340 | ) | 16,453 | ||||||||||||||||||||||||||||||||||
Technology | 13,061 | 5,768 | 7,401 | (108 | ) | 7,293 | ||||||||||||||||||||||||||||||||||
Funds (e.g. mutual funds, closed end funds, ETFs) | 50,291 | 46,177 | 4,153 | (39 | ) | 4,114 | ||||||||||||||||||||||||||||||||||
Other | 10,683 | 7,670 | 3,313 | (300 | ) | 3,013 | ||||||||||||||||||||||||||||||||||
Total equity securities | 201,763 | 130,751 | 73,230 | (2,218 | ) | 71,012 | ||||||||||||||||||||||||||||||||||
Total | $ | 723,616 | $ | 651,768 | $ | 78,904 | $ | (7,056 | ) | $ | 71,848 |
2018 | 2017 | 2020 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||
Number of Securities | Fair Value | Gross Unrealized Loss | Number of Securities | Fair Value | Gross Unrealized Loss | Number of Securities | Fair Value | Gross Unrealized Loss | Number of Securities | Fair Value | Gross Unrealized Loss | |||||||||||||||||||||||||||||||||||||
Fixed income securities: | ||||||||||||||||||||||||||||||||||||||||||||||||
12 months or less | 275 | $ | 282,646 | $ | (7,296 | ) | 459 | $ | 313,421 | $ | (2,683 | ) | 100 | $ | 120,630 | $ | (3,405 | ) | 88 | $ | 108,387 | $ | (2,452 | ) | ||||||||||||||||||||||||
Greater than 12 months | 217 | 131,001 | (3,497 | ) | 112 | 75,638 | (2,155 | ) | 24 | 33,065 | (1,333 | ) | 69 | 66,860 | (1,100 | ) | ||||||||||||||||||||||||||||||||
Total fixed income securities | 492 | 413,647 | (10,793 | ) | 571 | 389,059 | (4,838 | ) | 124 | $ | 153,695 | $ | (4,738 | ) | 157 | $ | 175,247 | $ | (3,552 | ) | ||||||||||||||||||||||||||||
Equity securities (1): | ||||||||||||||||||||||||||||||||||||||||||||||||
12 months or less | – | – | – | 65 | 46,654 | (2,218 | ) | |||||||||||||||||||||||||||||||||||||||||
Greater than 12 months | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||
Total equity securities | – | – | – | 65 | 46,654 | (2,218 | ) | |||||||||||||||||||||||||||||||||||||||||
Total | 492 | $ | 413,647 | $ | (10,793 | ) | 636 | $ | 435,713 | $ | (7,056 | ) |
Fair Value | Cost or Amortized Cost | Fair Value | Cost or Amortized Cost | |||||||||||||||||||||||||||||
One year or less | $ | 45,858 | 7.7 | % | $ | 46,150 | 7.7 | % | $ | 117,017 | 12.7 | % | $ | 115,774 | 12.9 | % | ||||||||||||||||
Excess of one year to five years | 287,506 | 48.5 | 290,743 | 48.4 | 359,314 | 39.1 | 346,150 | 38.7 | ||||||||||||||||||||||||
Excess of five years to ten years | 101,605 | 17.1 | 104,571 | 17.4 | 161,700 | 17.6 | 151,446 | 16.9 | ||||||||||||||||||||||||
Excess of ten years | 6,641 | 1.2 | 6,410 | 1.1 | 21,871 | 2.4 | 22,264 | 2.6 | ||||||||||||||||||||||||
Total contractual maturities | 441,610 | 74.5 | 447,874 | 74.6 | 659,902 | 71.8 | 635,634 | 71.1 | ||||||||||||||||||||||||
Asset-backed securities | 151,035 | 25.5 | 152,630 | 25.4 | 259,790 | 28.2 | 258,834 | 28.9 | ||||||||||||||||||||||||
Total | $ | 592,645 | 100.0 | % | $ | 600,504 | 100.0 | $ | 919,692 | 100.0 | % | $ | 894,468 | 100.0 | % |
2018 | 2017 | 2016 | 2020 | 2019 | 2018 | |||||||||||||||||||
Interest on fixed income securities | $ | 19,092 | $ | 15,340 | $ | 13,254 | $ | 24,874 | $ | 24,620 | $ | 19,092 | ||||||||||||
Dividends on equity securities | 4,380 | 4,611 | 3,598 | 1,868 | 2,320 | 4,380 | ||||||||||||||||||
Money market funds, Short-term and other | 1,529 | 471 | 128 | 1,070 | 1,976 | 1,529 | ||||||||||||||||||
25,001 | 20,422 | 16,980 | 27,812 | 28,916 | 25,001 | |||||||||||||||||||
Investment expenses | (2,953 | ) | (2,327 | ) | (2,497 | ) | (2,390 | ) | (2,667 | ) | (2,953 | ) | ||||||||||||
Net investment income | $ | 22,048 | $ | 18,095 | $ | 14,483 | $ | 25,422 | $ | 26,249 | $ | 22,048 |
2018 | 2017 | 2016 | ||||||||||
Gross gains on available-for-sale investments sold during the period: | ||||||||||||
Fixed income securities | $ | 10,807 | $ | 9,135 | $ | 11,628 | ||||||
Equity securities (1) | – | 10,481 | 28,742 | |||||||||
Total gains | 10,807 | 19,616 | 40,370 | |||||||||
Gross losses on available-for-sale investments sold during the period: | ||||||||||||
Fixed income securities | (14,367 | ) | (9,882 | ) | (10,940 | ) | ||||||
Equity securities (1) | – | (2,368 | ) | (2,932 | ) | |||||||
Total losses | (14,367 | ) | (12,250 | ) | (13,872 | ) | ||||||
Other-than-temporary impairments | (19 | ) | (149 | ) | (5,743 | ) | ||||||
Change in value of limited partnership investments | (9,343 | ) | 12,469 | 2,473 | ||||||||
Losses on equity securities: | ||||||||||||
Realized losses on equity securities sold during the period (2) | (3,072 | ) | – | – | ||||||||
Unrealized losses on equity securities held at the end of the period | (9,697 | ) | – | – | ||||||||
Realized and unrealized losses on equity securities held at the end of the period | (12,769 | ) | – | – | ||||||||
Net realized and unrealized gains (losses) on investments | $ | (25,691 | ) | $ | 19,686 | $ | 23,228 |
2020 | 2019 | 2018 | ||||||||||
Gross gains on available-for-sale fixed income securities during the period: | $ | 11,125 | $ | 11,009 | $ | 10,807 | ||||||
Gross losses on available-for-sale fixed income securities during the period: | (9,943 | ) | (10,492 | ) | (14,367 | ) | ||||||
Impairment losses on investments | (2,861 | ) | (497 | ) | (19 | ) | ||||||
Change in value of limited partnership investments | (1,442 | ) | 1,644 | (9,343 | ) | |||||||
Gains (losses) on equity securities: | ||||||||||||
Realized gains (losses) on equity securities sold during the period(1) | (8,058 | ) | 1,938 | (3,072 | ) | |||||||
Unrealized gains (losses) on equity securities held at the end of the period | 1,943 | 9,287 | (9,697 | ) | ||||||||
Total realized and unrealized gains (losses) on equity securities | (6,115 | ) | 11,225 | (12,769 | ) | |||||||
Net realized and unrealized gains (losses) on investments | $ | (9,236 | ) | $ | 12,889 | $ | (25,691 | ) |
(1) |
During 2018, the Company sold $149,195 in equity securities, resulting in a gain on sale of $51,900. The majority of these gains were included in unrealized gains within other comprehensive income (loss) at December 31, 2017 and, as a result of the adoption of ASU 2016-01, were reclassified to retained earnings as of January 1, 2018 and were therefore not recognized in the consolidated statements of operations for the year ended December 31, 2018. |
2018 | 2017 | 2016 | ||||||||||
Cumulative charges to income at beginning of year | $ | 4,209 | $ | 5,650 | $ | 10,513 | ||||||
Writedowns based on objective and subjective criteria | 19 | 149 | 5,743 | |||||||||
Recovery of prior writedowns upon sale or disposal | (3,298 | ) | (1,590 | ) | (10,606 | ) | ||||||
Net pre-tax realized gain | 3,279 | 1,441 | 4,863 | |||||||||
Cumulative charges to income at end of year | $ | 930 | $ | 4,209 | $ | 5,650 |
2020 | 2019 | 2018 | ||||||||||
Cumulative charges to income at beginning of year | $ | 889 | $ | 930 | $ | 4,209 | ||||||
Write-downs based on objective and subjective criteria | 1,826 | 497 | 19 | |||||||||
Recovery of prior write-downs upon sale or disposal | (909 | ) | (538 | ) | (3,298 | ) | ||||||
Net pre-tax realized gain (loss) | (917 | ) | 41 | 3,279 | ||||||||
Cumulative charges to income at end of year | $ | 1,806 | $ | 889 | $ | 930 |
2018 | 2017 | 2016 | ||||||||||
Investment income (loss) | $ | 4,298 | $ | 623 | $ | (5 | ) | |||||
Partnership expenses | 6,874 | 2,206 | 2,426 | |||||||||
Net investment loss | (2,576 | ) | (1,583 | ) | (2,431 | ) | ||||||
Realized gain on investments | 12,314 | 8,723 | 7,754 | |||||||||
Unrealized appreciation (depreciation) on investments | (65,250 | ) | 133,807 | (21,002 | ) | |||||||
Net increase (decrease) in partners' capital resulting from operations | $ | (55,512 | ) | $ | 140,947 | $ | (15,679 | ) | ||||
Total assets | $ | 462,058 | $ | 566,629 | $ | 448,263 | ||||||
Total liabilities | 45,483 | 30,976 | 39,988 | |||||||||
Total partners' capital | 416,575 | 535,653 | 408,275 |
2018 | 2017 | 2016 | ||||||||||
Investment income | $ | 19,507 | $ | 14,524 | $ | 13,534 | ||||||
Partnership expenses | 9,132 | 12,861 | 10,628 | |||||||||
Net investment income | 10,375 | 1,663 | 2,906 | |||||||||
Realized gain (loss) on investments | (37,143 | ) | (15,073 | ) | 830 | |||||||
Unrealized appreciation (depreciation) on investments | (48,132 | ) | 49,847 | 46,685 | ||||||||
Net increase (decrease) in partners' capital resulting from operations | $ | (74,900 | ) | $ | 36,437 | $ | 50,421 | |||||
Total assets | $ | 241,174 | $ | 354,709 | $ | 464,184 | ||||||
Total liabilities | 20,020 | 2,000 | 14,555 | |||||||||
Total partners' capital | 221,154 | 352,709 | 449,629 |
2018 | 2017 | 2016 | ||||||||||||||||||||||
2020 | 2019 | 2018 | ||||||||||||||||||||||
Reserves, gross of reinsurance recoverable, at the beginning of the year | $ | 680,274 | $ | 576,330 | $ | 513,596 | $ | 988,305 | $ | 865,339 | $ | 680,274 | ||||||||||||
Reinsurance recoverable on unpaid losses at the beginning of the year | 308,143 | 251,563 | 211,843 | 398,305 | 375,935 | 308,143 | ||||||||||||||||||
Reserves at the beginning of the year | 372,131 | 324,767 | 301,753 | 590,000 | 489,404 | 372,131 | ||||||||||||||||||
Provision for losses and loss expenses: | ||||||||||||||||||||||||
Claims occurring during the current year | 329,078 | 228,303 | 172,645 | 319,269 | 349,018 | 329,078 | ||||||||||||||||||
Claims occurring during prior years | 16,786 | 19,215 | 13,836 | (311 | ) | (550 | ) | 16,786 | ||||||||||||||||
Total incurred losses and loss expenses | 345,864 | 247,518 | 186,481 | 318,958 | 348,468 | 345,864 | ||||||||||||||||||
Loss and loss expense payments: | ||||||||||||||||||||||||
Claims occurring during the current year | 84,738 | 67,234 | 54,239 | 77,880 | 90,364 | 84,738 | ||||||||||||||||||
Claims occurring during prior years | 143,853 | 132,920 | 109,228 | 165,777 | 157,508 | 143,853 | ||||||||||||||||||
Total paid | 228,591 | 200,154 | 163,467 | 243,657 | 247,872 | 228,591 | ||||||||||||||||||
Reserves at the end of the year | 489,404 | 372,131 | 324,767 | 665,301 | 590,000 | 489,404 | ||||||||||||||||||
Reinsurance recoverable on unpaid losses at the end of the year | 375,935 | 308,143 | 251,563 | 424,368 | 398,305 | 375,935 | ||||||||||||||||||
Reserves, gross of reinsurance recoverable, at the end of the year | $ | 865,339 | $ | 680,274 | $ | 576,330 | $ | 1,089,669 | $ | 988,305 | $ | 865,339 |
Prior Year (Savings) / Deficiency | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Workers' Compensation | $ | 1,431 | $ | (2,733 | ) | $ | (9,601 | ) | ||||
Commercial Auto Liability | 10,717 | 8,893 | 32,342 | |||||||||
Occupational Accident | (7,467 | ) | 688 | (4,178 | ) | |||||||
Physical Damage | (1,684 | ) | (4,561 | ) | (1,066 | ) | ||||||
Professional Liability Assumed | 189 | 259 | 2,343 | |||||||||
Other short-duration contracts | (3,497 | ) | (3,096 | ) | (3,054 | ) | ||||||
Total | $ | (311 | ) | $ | (550 | ) | $ | 16,786 |
As of December 31, 2018 | As of December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | Total of Incurred-but-Not- Reported Liabilities Plus Expected Development on Reported Claims | Number of Reported Claims Per Year | Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | Total of Incurred-but-Not-Reported Liabilities Plus Expected Development | Number of Reported | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | For the Years Ended December 31 (2009-2017 is Supplementary Information and Unaudited) | For the Years Ended December 31 (2011-2019 is Supplementary Information and Unaudited) | on Reported | Claims | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | Claims | Per Year | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 17,270 | $ | 20,931 | $ | 21,447 | $ | 21,261 | $ | 21,268 | $ | 20,767 | $ | 20,641 | $ | 20,817 | $ | 20,946 | $ | 21,153 | $ | 985 | 3,784 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2010 | 20,644 | 20,111 | 19,400 | 19,300 | 18,849 | 18,344 | 19,195 | 19,541 | 19,819 | 1,098 | 4,223 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 26,057 | 26,628 | 26,958 | 26,767 | 25,515 | 27,293 | 26,617 | 26,631 | 2,179 | 4,546 | $ | 26,057 | $ | 26,628 | $ | 26,958 | $ | 26,767 | $ | 25,515 | $ | 27,293 | $ | 26,617 | $ | 26,631 | $ | 26,452 | $ | 26,356 | $ | 1,989 | 4,547 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 23,965 | 25,544 | 24,887 | 24,485 | 25,616 | 27,020 | 26,775 | 2,824 | 4,481 | 23,965 | 25,544 | 24,887 | 24,485 | 25,616 | 27,020 | 26,775 | 25,508 | 26,397 | 2,327 | 4,484 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 27,619 | 30,638 | 29,913 | 32,121 | 32,553 | 31,131 | 3,780 | 5,275 | 27,619 | 30,638 | 29,913 | 32,121 | 32,553 | 31,131 | 31,066 | 31,360 | 3,137 | 5,282 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 36,768 | 36,968 | 34,009 | 33,427 | 31,031 | 4,482 | 5,406 | 36,768 | 36,968 | 34,009 | 33,427 | 31,031 | 31,579 | 31,551 | 3,772 | 5,413 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 26,277 | 23,115 | 25,889 | 24,948 | 5,328 | 6,308 | 26,277 | 23,115 | 25,889 | 24,948 | 25,436 | 25,167 | 3,367 | 6,340 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 35,240 | 29,757 | 29,317 | 6,740 | 6,059 | 35,240 | 29,757 | 29,317 | 30,060 | 29,785 | 3,693 | 6,087 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | 42,387 | 37,731 | 13,918 | 16,106 | 42,387 | 37,731 | 36,211 | 34,930 | 5,921 | 16,469 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 62,973 | 36,250 | 12,893 | 62,973 | 61,530 | 62,451 | 13,632 | 14,295 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 65,837 | 67,113 | 19,079 | 9,480 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 60,204 | 34,084 | 7,550 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | Total | $ | 311,509 | $ | 77,584 | Total | $ | 395,314 | $ | 91,001 |
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31 (2009-2017 is Supplementary Information and Unaudited) | For the Years Ended December 31 (2011-2019 is Supplementary Information and Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 4,186 | $ | 10,073 | $ | 13,343 | $ | 15,576 | $ | 16,592 | $ | 17,448 | $ | 18,028 | $ | 18,514 | $ | 18,982 | $ | 19,261 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2010 | 3,974 | 9,134 | 11,963 | 13,845 | 14,966 | 15,835 | 16,590 | 16,789 | 17,062 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 4,916 | 11,912 | 15,973 | 18,884 | 20,617 | 21,622 | 22,569 | 22,991 | $ | 4,916 | $ | 11,912 | $ | 15,973 | $ | 18,884 | $ | 20,617 | $ | 21,622 | $ | 22,569 | $ | 22,991 | $ | 23,366 | $ | 23,516 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 4,597 | 11,004 | 14,834 | 17,415 | 18,946 | 20,276 | 21,157 | 4,597 | 11,004 | 14,834 | 17,415 | 18,946 | 20,276 | 21,157 | 21,636 | 21,850 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 4,880 | 12,792 | 18,065 | 21,655 | 23,643 | 24,968 | 4,880 | 12,792 | 18,065 | 21,655 | 23,643 | 24,968 | 25,847 | 26,702 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 5,328 | 13,665 | 19,075 | 22,387 | 23,968 | 5,328 | 13,665 | 19,075 | 22,387 | 23,968 | 24,714 | 25,507 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 2,918 | 10,128 | 15,020 | 17,487 | 2,918 | 10,128 | 15,020 | 17,487 | 19,385 | 20,251 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 5,784 | 13,377 | 18,461 | 5,784 | 13,377 | 18,461 | 21,304 | 23,113 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | 6,150 | 15,811 | 6,150 | 15,811 | 20,863 | 23,910 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 10,987 | 10,987 | 27,862 | 36,794 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 13,171 | 31,140 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 10,508 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | Total | $ | 192,153 | Total | $ | 243,291 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding liabilities prior to 2009 net of reinsurance | 12,640 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding liabilities prior to 2011, net of reinsurance | Outstanding liabilities prior to 2011, net of reinsurance | 16,836 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities for claims and claims adjustment expenses, net of reinsurance | Liabilities for claims and claims adjustment expenses, net of reinsurance | $ | 131,996 | Liabilities for claims and claims adjustment expenses, net of reinsurance | $ | 168,859 |
As of December 31, 2018 | As of December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | Total of Incurred-but-Not- Reported Liabilities Plus Expected Development on Reported Claims | Number of Reported Claims Per Year | Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | Total of Incurred-but-Not-Reported Liabilities Plus Expected Development | Number of Reported | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31 (2009-2017 is Supplementary Information and Unaudited) | For the Years Ended December 31 (2011-2019 is Supplementary Information and Unaudited) | on Reported | Claims | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | Claims | Per Year | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 29,707 | $ | 30,406 | $ | 30,203 | $ | 26,280 | $ | 27,259 | $ | 25,872 | $ | 25,373 | $ | 25,320 | $ | 25,485 | $ | 25,761 | $ | 190 | 899 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2010 | 31,124 | 22,161 | 21,899 | 19,139 | 20,300 | 19,764 | 19,377 | 19,081 | 19,985 | 112 | 2,403 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 46,829 | 43,832 | 31,633 | 36,894 | 35,805 | 37,122 | 36,076 | 37,852 | 131 | 2,901 | $ | 46,829 | $ | 43,832 | $ | 31,633 | $ | 36,894 | $ | 35,805 | $ | 37,122 | $ | 36,076 | $ | 37,852 | $ | 37,795 | $ | 38,773 | $ | 21 | 2,902 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 49,743 | 54,269 | 49,743 | 51,367 | 48,708 | 51,475 | 51,648 | 135 | 3,130 | 49,743 | 54,269 | 49,743 | 51,367 | 48,708 | 51,475 | 51,648 | 51,962 | 51,830 | 443 | 3,131 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 53,817 | 39,143 | 37,701 | 36,371 | 46,690 | 48,857 | 663 | 3,749 | 53,817 | 39,143 | 37,701 | 36,371 | 46,690 | 48,857 | 51,598 | 51,293 | 270 | 3,753 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 49,971 | 52,254 | 52,483 | 52,964 | 64,372 | 307 | 3,320 | 49,971 | 52,254 | 52,483 | 52,964 | 64,372 | 70,841 | 72,636 | 1,051 | 3,325 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 61,420 | 70,174 | 64,323 | 71,088 | 2,785 | 3,185 | 61,420 | 70,174 | 64,323 | 71,088 | 75,503 | 77,225 | 1,736 | 3,198 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 61,638 | 68,974 | 77,362 | 7,048 | 3,707 | 61,638 | 68,974 | 77,362 | 79,015 | 80,788 | 2,420 | 3,751 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | 103,126 | 103,611 | 25,527 | 5,261 | 103,126 | 103,611 | 99,287 | 97,663 | 12,197 | 5,403 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 179,589 | 70,070 | 6,870 | 179,589 | 177,262 | 186,521 | 29,518 | 8,197 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 198,022 | 195,273 | 53,842 | 8,313 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 173,878 | 109,654 | 4,410 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | Total | $ | 680,125 | $ | 106,968 | Total | $ | 1,025,880 | $ | 211,152 |
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31 (2009-2017 is Supplementary Information and Unaudited) | For the Years Ended December 31 (2011-2019 is Supplementary Information and Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | 928 | $ | 17,880 | $ | 19,718 | $ | 23,521 | $ | 24,866 | $ | 25,066 | $ | 25,114 | $ | 25,125 | $ | 25,199 | $ | 25,391 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2010 | 1,649 | 7,166 | 11,635 | 16,052 | 18,627 | 18,517 | 18,866 | 18,662 | 18,791 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 1,809 | 11,350 | 23,615 | 30,795 | 33,255 | 34,009 | 35,561 | 36,400 | $ | 1,809 | $ | 11,350 | $ | 23,615 | $ | 30,795 | $ | 33,255 | $ | 34,009 | $ | 35,561 | $ | 36,400 | $ | 37,263 | $ | 37,267 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 3,086 | 23,252 | 32,942 | 45,303 | 47,601 | 50,036 | 50,750 | 3,086 | 23,252 | 32,942 | 45,303 | 47,601 | 50,036 | 50,750 | 50,882 | 50,908 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 5,167 | 15,772 | 25,270 | 34,481 | 44,865 | 46,084 | 5,167 | 15,772 | 25,270 | 34,481 | 44,865 | 46,084 | 49,522 | 49,879 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 4,023 | 9,046 | 28,393 | 45,075 | 57,692 | 4,023 | 9,046 | 28,393 | 45,075 | 57,692 | 68,392 | 69,183 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 10,923 | 27,582 | 49,267 | 63,133 | 10,923 | 27,582 | 49,267 | 63,133 | 71,697 | 74,276 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 6,843 | 30,377 | 52,764 | 6,843 | 30,377 | 52,764 | 70,324 | 74,324 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | 11,415 | 46,529 | 11,415 | 46,529 | 58,173 | 73,496 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 18,689 | 18,689 | 66,575 | 101,803 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 19,311 | 64,294 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 13,185 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | Total | $ | 416,223 | Total | $ | 608,615 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding liabilities prior to 2009 net of reinsurance | 4,621 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding liabilities prior to 2011, net of reinsurance | Outstanding liabilities prior to 2011, net of reinsurance | 3,433 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities for claims and claims adjustment expenses, net of reinsurance | Liabilities for claims and claims adjustment expenses, net of reinsurance | $ | 268,523 | Liabilities for claims and claims adjustment expenses, net of reinsurance | $ | 420,698 |
As of December 31, 2018 | As of December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | Total of Incurred-but-Not- Reported Liabilities Plus Expected Development on Reported Claims | Number of Reported Claims Per Year | Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | Total of Incurred-but-Not-Reported Liabilities Plus Expected Development | Number of Reported | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | For the Years Ended December 31 (2009-2017 is Supplementary Information and Unaudited) | For the Years Ended December 31 (2011-2019 is Supplementary Information and Unaudited) | on Reported | Claims | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | Claims | Per Year | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2010 | 2,196 | 4,277 | 7,827 | 7,946 | 9,733 | 10,740 | 11,689 | 11,893 | 11,677 | 24 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 10,492 | 8,314 | 9,017 | 9,859 | 10,779 | 12,735 | 12,744 | 12,725 | 116 | N/A | $ | 10,492 | $ | 8,314 | $ | 9,017 | $ | 9,859 | $ | 10,779 | $ | 12,735 | $ | 12,744 | $ | 12,725 | $ | 13,018 | $ | 13,228 | $ | 219 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 10,041 | 9,276 | 5,569 | 10,157 | 14,605 | 16,555 | 14,949 | 706 | N/A | 10,041 | 9,276 | 5,569 | 10,157 | 14,605 | 16,555 | 14,949 | 16,013 | 16,439 | 489 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 14,370 | 13,034 | 11,618 | 17,694 | 23,256 | 22,213 | 1,847 | N/A | 14,370 | 13,034 | 11,618 | 17,694 | 23,256 | 22,213 | 23,474 | 23,381 | 1,764 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 12,675 | 8,825 | 7,259 | 9,837 | 12,749 | 2,297 | N/A | 12,675 | 8,825 | 7,259 | 9,837 | 12,749 | 10,721 | 10,619 | 1,256 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 11,638 | 7,859 | 7,147 | 10,422 | 5,422 | N/A | 11,638 | 7,859 | 7,147 | 10,422 | 8,753 | 8,404 | 1,959 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 6,368 | 2,482 | 1,522 | 1,035 | N/A | 6,368 | 2,482 | 1,522 | 2,993 | 3,090 | 435 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | – | – | – | N/A | 0 | 0 | 0 | 0 | 0 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | – | – | N/A | 0 | 0 | 0 | 0 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | �� | 0 | 0 | 0 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 0 | 0 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | Total | $ | 86,257 | $ | 11,447 | Total | $ | 75,161 | $ | 6,122 |
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31 (2009-2017 is Supplementary Information and Unaudited) | For the Years Ended December 31 (2011-2019 is Supplementary Information and Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009 | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2010 | 41 | 729 | 3,505 | 5,844 | 7,758 | 9,904 | 11,132 | 11,334 | 11,334 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 50 | 637 | 2,061 | 4,983 | 8,104 | 10,404 | 11,679 | 12,280 | $ | 50 | $ | 637 | $ | 2,061 | $ | 4,983 | $ | 8,104 | $ | 10,404 | $ | 11,679 | $ | 12,280 | $ | 12,404 | $ | 12,629 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 103 | 992 | 2,388 | 5,077 | 8,355 | 11,239 | 13,091 | 103 | 992 | 2,388 | 5,077 | 8,355 | 11,239 | 13,091 | 13,706 | 14,403 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 123 | 1,135 | 5,088 | 10,988 | 14,779 | 18,229 | 123 | 1,135 | 5,088 | 10,988 | 14,779 | 18,229 | 19,201 | 20,157 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 723 | 761 | 2,241 | 3,999 | 6,627 | 723 | 761 | 2,241 | 3,999 | 6,627 | 7,732 | 8,890 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 10 | 390 | 1,899 | 3,207 | 10 | 390 | 1,899 | 3,207 | 3,964 | 5,162 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | – | 5 | 99 | 0 | 5 | 99 | 2,254 | 2,496 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | – | – | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | – | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | Total | $ | 64,867 | Total | $ | 63,737 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding liabilities prior to 2009 net of reinsurance | – | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding liabilities prior to 2011, net of reinsurance | Outstanding liabilities prior to 2011, net of reinsurance | 534 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities for claims and claims adjustment expenses, net of reinsurance | Liabilities for claims and claims adjustment expenses, net of reinsurance | $ | 21,390 | Liabilities for claims and claims adjustment expenses, net of reinsurance | $ | 11,958 |
As of December 31, 2020 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | Total of Incurred-but-Not-Reported Liabilities Plus Expected Development | Number of Reported | ||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | For the Years Ended December 31 (2011-2019 is Supplementary Information and Unaudited) | on Reported | Claims | |||||||||||||||||||||||||||||||||||||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2018 | 2020 | Claims | Per Year | |||||||||||||||||||||||||||||||||||||
2011 | $ | 6,249 | $ | 6,937 | $ | 6,485 | $ | 6,283 | $ | 6,151 | $ | 6,297 | $ | 6,264 | $ | 6,263 | $ | 6,287 | $ | 6,275 | $ | 2 | 472 | |||||||||||||||||||||||||
2012 | 5,272 | 4,168 | 3,908 | 3,758 | 3,585 | 3,566 | 3,551 | 3,773 | 3,758 | 8 | 380 | |||||||||||||||||||||||||||||||||||||
2013 | 6,410 | 5,044 | 4,403 | 4,390 | 4,166 | 4,107 | 4,082 | 4,082 | 0 | 337 | ||||||||||||||||||||||||||||||||||||||
2014 | 5,283 | 4,865 | 4,147 | 4,093 | 4,031 | 4,061 | 4,041 | 38 | 325 | |||||||||||||||||||||||||||||||||||||||
2015 | 3,897 | 3,539 | 3,715 | 3,846 | 3,832 | 3,698 | 111 | 275 | ||||||||||||||||||||||||||||||||||||||||
2016 | 6,729 | 6,312 | 5,847 | 5,965 | 4,894 | 112 | 704 | |||||||||||||||||||||||||||||||||||||||||
2017 | 17,041 | 13,334 | 12,976 | 11,031 | 111 | 1,040 | ||||||||||||||||||||||||||||||||||||||||||
2018 | 16,365 | 17,053 | 12,147 | 412 | 892 | |||||||||||||||||||||||||||||||||||||||||||
2018 | 10,498 | 11,134 | 1,469 | 882 | ||||||||||||||||||||||||||||||||||||||||||||
2020 | 12,869 | 2,508 | 772 | |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 73,929 | $ | 4,771 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31 (2011-2019 is Supplementary Information and Unaudited) | ||||||||||||||||||||||||||||||||||||||||
Accident Year | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||||||||||||||||||||||
2011 | $ | 2,159 | $ | 4,861 | $ | 6,003 | $ | 6,050 | $ | 6,020 | $ | 6,278 | $ | 6,219 | $ | 6,232 | $ | 6,246 | $ | 6,267 | ||||||||||||||||||||
2012 | 1,082 | 2,648 | 3,190 | 3,390 | 3,377 | 3,442 | 3,482 | 3,521 | 3,555 | |||||||||||||||||||||||||||||||
2013 | 1,989 | 3,565 | 3,768 | 4,108 | 4,110 | 4,107 | 4,082 | 4,082 | ||||||||||||||||||||||||||||||||
2014 | 2,000 | 3,685 | 3,861 | 3,909 | 3,948 | 3,968 | 3,968 | |||||||||||||||||||||||||||||||||
2015 | 739 | 1,934 | 2,670 | 2,988 | 3,224 | 3,285 | ||||||||||||||||||||||||||||||||||
2016 | 1,596 | 4,388 | 4,818 | 4,807 | 4,785 | |||||||||||||||||||||||||||||||||||
2017 | 3,229 | 7,756 | 9,126 | 9,645 | ||||||||||||||||||||||||||||||||||||
2018 | 5,324 | 9,807 | 10,642 | |||||||||||||||||||||||||||||||||||||
2019 | 4,007 | 7,782 | ||||||||||||||||||||||||||||||||||||||
2020 | 4,978 | |||||||||||||||||||||||||||||||||||||||
Total | $ | 58,989 | ||||||||||||||||||||||||||||||||||||||
Outstanding liabilities prior to 2011, net of reinsurance | 99 | |||||||||||||||||||||||||||||||||||||||
Liabilities for claims and claims adjustment expenses, net of reinsurance | $ | 15,039 |
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | As of December 31, 2018 | |||||||||||||||||||
For the Years Ended December 31 (2016-2017 is Supplementary Information and Unaudited) | Total of Incurred-but-Not-Reported Liabilities Plus Expected Development on Reported Claims | Number of Reported Claims Per Year | ||||||||||||||||||
Accident Year | 2016 | 2017 | 2018 | |||||||||||||||||
2016 and prior | $ | 40,651 | $ | 39,477 | $ | 39,658 | $ | 5 | 9,619 | |||||||||||
2017 | 48,440 | 47,193 | 512 | 10,517 | ||||||||||||||||
2018 | 53,726 | 4,221 | 10,186 | |||||||||||||||||
Total | $ | 140,577 | $ | 4,738 |
As of December 31, 2020 | ||||||||||||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | Total of Incurred-but-Not- Reported Liabilities Plus | Number of | ||||||||||||||||||
For the Years Ended December 31 (2018-2019 is Supplementary Information and Unaudited) | Expected Development | Reported Claims | ||||||||||||||||||
Accident Year | 2018 | 2019 | 2020 | on Reported Claims | Per Year | |||||||||||||||
2018 | $ | 53,726 | $ | 50,122 | $ | 49,767 | $ | 22 | 11,151 | |||||||||||
2019 | 0 | 55,354 | 54,126 | 141 | 10,472 | |||||||||||||||
2020 | 0 | 56,602 | 3,233 | 9,130 | ||||||||||||||||
Total | $ | 160,495 | $ | 3,396 |
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | ||||||||||||
For the Years Ended December 31 (2018-2019 is Supplementary Information and Unaudited) | ||||||||||||
Accident Year | 2018 | 2019 | 2020 | |||||||||
2018 | $ | 41,631 | $ | 49,685 | $ | 49,638 | ||||||
2019 | 0 | 44,197 | 53,647 | |||||||||
2020 | 0 | 42,726 | ||||||||||
Total | $ | 146,011 | ||||||||||
Outstanding liabilities prior to 2018, net of reinsurance | 77 | |||||||||||
Liabilities for claims and claims adjustment expenses, net of reinsurance | $ | 14,561 |
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance | ||||||||||||
For the Years Ended December 31 (2016-2017 is Supplementary Information and Unaudited) | ||||||||||||
Accident Year | 2016 | 2017 | 2018 | |||||||||
2016 and prior | $ | 34,114 | $ | 39,354 | $ | 39,073 | ||||||
2017 | 39,517 | 46,554 | ||||||||||
2018 | 41,631 | |||||||||||
Total | $ | 127,258 | ||||||||||
Outstanding liabilities prior to 2016 net of reinsurance | 10 | |||||||||||
Liabilities for claims and claims adjustment expenses, net of reinsurance | $ | 13,329 |
(1) | The majority of physical damage claims settle within a two-year period. The triangles above have been abbreviated to reflect the short-tail nature of this business. |
2018 | 2017 | 2020 | 2019 | |||||||||||||
Net outstanding liabilities | ||||||||||||||||
Commercial Liability | $ | 268,523 | $ | 162,581 | $ | 420,698 | $ | 355,148 | ||||||||
Workers' Compensation | 131,996 | 113,751 | 168,859 | 154,409 | ||||||||||||
Occupational Accident | 15,039 | 19,840 | ||||||||||||||
Physical Damage | 13,329 | 9,087 | 14,561 | 11,676 | ||||||||||||
Professional Liability Assumed | 21,390 | 28,980 | 11,958 | 16,079 | ||||||||||||
Other short-duration insurance lines | 33,716 | 39,883 | 10,016 | 10,478 | ||||||||||||
Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance | 468,954 | 354,282 | 641,131 | 567,630 | ||||||||||||
Reinsurance recoverable on unpaid claims | ||||||||||||||||
Commercial Liability | 194,483 | 124,695 | 209,126 | 209,152 | ||||||||||||
Workers' Compensation | 172,869 | 170,394 | 211,421 | 182,908 | ||||||||||||
Occupational Accident | 500 | 1,979 | ||||||||||||||
Physical Damage | 1,851 | 51 | 1,054 | 655 | ||||||||||||
Other short-duration insurance lines | 6,732 | 13,002 | 2,267 | 3,611 | ||||||||||||
Reinsurance recoverable on unpaid losses at the end of the year | 375,935 | 308,142 | 424,368 | 398,305 | ||||||||||||
Unallocated claims adjustment expenses | 20,450 | 17,850 | 24,170 | 22,370 | ||||||||||||
Total gross liability for unpaid claims and claims adjustment expense | $ | 865,339 | $ | 680,274 | $ | 1,089,669 | $ | 988,305 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Supplementary Information and Unaudited) | Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Supplementary Information and Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||||||||||||||||||||||||||||||||||||||||
Commercial Liability | 8.5 | % | 30.5 | % | 23.7 | % | 20.6 | % | 9.9 | % | 1.9 | % | 1.9 | % | 0.5 | % | 0.5 | % | 0.7 | % | 8.8% | 25.2% | 22.8% | 19.8% | 8.9% | 5.4% | 3.3% | 0.8% | 1.1% | 0 | ||||||||||||||||||||||||||||||
Workers' Compensation | 17.3 | % | 26.3 | % | 16.3 | % | 10.4 | % | 5.7 | % | 4.3 | % | 3.3 | % | 1.6 | % | 1.8 | % | 1.3 | % | 16.9% | 26.5% | 16.1% | 10.1% | 6.2% | 3.8% | 3.1% | 2.0% | 1.1% | 0.6% | ||||||||||||||||||||||||||||||
Occupational Accident | 36.2% | 40.7% | 11.2% | 4.1% | 1.0% | 1.6% | (0.1)% | 0.4% | 0.6% | 0.3% | ||||||||||||||||||||||||||||||||||||||||||||||||||
Physical Damage | 80.6 | % | 14.1 | % | 2.0 | % | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 81.6% | 16.3% | (0.4)% | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||
Professional Liability Assumed | 1.1 | % | 3.6 | % | 13.5 | % | 19.0 | % | 18.3 | % | 17.8 | % | 11.0 | % | 1.7 | % | – | N/A | 1.4% | 3.2% | 11.8% | 27.6% | 16.9% | 14.9% | 9.0% | 4.1% | 2.6% | 1.7% |
Premiums Written | Premiums Earned | Premiums Written | Premiums Earned | |||||||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2020 | 2019 | 2018 | 2020 | 2019 | 2018 | |||||||||||||||||||||||||||||||||||||
Direct | $ | 581,070 | $ | 504,033 | $ | 395,625 | $ | 562,364 | $ | 470,158 | $ | 394,679 | $ | 546,708 | $ | 574,181 | $ | 581,070 | $ | 557,795 | $ | 570,959 | $ | 562,364 | ||||||||||||||||||||||||
Ceded on direct | (138,102 | ) | (151,348 | ) | (131,166 | ) | (131,080 | ) | (145,201 | ) | (129,926 | ) | (106,561 | ) | (122,676 | ) | (138,102 | ) | (113,125 | ) | (124,446 | ) | (131,080 | ) | ||||||||||||||||||||||||
Net direct | 442,968 | 352,685 | 264,459 | 431,284 | 324,957 | 264,753 | 440,147 | 451,505 | 442,968 | 444,670 | 446,513 | 431,284 | ||||||||||||||||||||||||||||||||||||
Assumed | 1,430 | 704 | 7,379 | 1,596 | 3,188 | 11,344 | 853 | 737 | 1,430 | 845 | 775 | 1,596 | ||||||||||||||||||||||||||||||||||||
Ceded on assumed | – | – | (86 | ) | – | – | (86 | ) | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||
Net assumed | 1,430 | 704 | 7,293 | 1,596 | 3,188 | 11,258 | 853 | 737 | 1,430 | 845 | 775 | 1,596 | ||||||||||||||||||||||||||||||||||||
Net | $ | 444,398 | $ | 353,389 | $ | 271,752 | $ | 432,880 | $ | 328,145 | $ | 276,011 | $ | 441,000 | $ | 452,242 | $ | 444,398 | $ | 445,515 | $ | 447,288 | $ | 432,880 |
2018 | 2017 | 2020 | 2019 | |||||||||||||
Case unpaid losses, net of valuation allowance | $ | 163,011 | $ | 119,615 | ||||||||||||
Case unpaid losses, net of allowance for reinsurance | $ | 166,171 | $ | 166,675 | ||||||||||||
Incurred but not reported unpaid losses and loss expenses | 211,805 | 187,163 | 257,225 | 230,459 | ||||||||||||
Paid losses and loss expenses | 1,250 | 2,206 | 24,133 | 20,334 | ||||||||||||
Unearned premiums | 16,370 | 9,347 | 8,035 | 14,599 | ||||||||||||
$ | 392,436 | $ | 318,331 | $ | 455,564 | $ | 432,067 |
2018 | 2017 | 2020 | 2019 | |||||||||||||
Deferred tax liabilities: | ||||||||||||||||
Unrealized gain on fixed income and equity security investments | $ | 4,572 | $ | 15,086 | $ | 8,159 | $ | 5,327 | ||||||||
Deferred acquisition costs | 2,552 | 1,804 | 2,538 | 2,821 | ||||||||||||
Loss and loss expense reserves | 3,583 | 2,623 | 2,222 | 2,701 | ||||||||||||
Limited partnership investments | – | 3,826 | 0 | 2,587 | ||||||||||||
Accelerated depreciation | 690 | 492 | 669 | 687 | ||||||||||||
Other | 1,509 | 1,791 | 1,495 | 1,361 | ||||||||||||
Total deferred tax liabilities | 12,906 | 25,622 | 15,083 | 15,484 | ||||||||||||
Deferred tax assets: | ||||||||||||||||
Loss and loss expense reserves | 9,999 | 6,761 | 12,923 | 11,460 | ||||||||||||
Limited partnership investments | 3,498 | – | 822 | 0 | ||||||||||||
Unearned premiums discount | 2,321 | 1,837 | 2,339 | 2,529 | ||||||||||||
Other-than-temporary investment declines | 625 | 815 | ||||||||||||||
Impairment related investment declines | 435 | 39 | ||||||||||||||
Deferred compensation | 580 | 885 | 1,999 | 1,181 | ||||||||||||
Deferred ceding commission | 1,173 | 627 | 492 | 1,037 | ||||||||||||
Allowance for credit losses | 3,580 | 0 | ||||||||||||||
Other | 972 | 339 | 1,473 | 1,273 | ||||||||||||
Total deferred tax assets | 19,168 | 11,264 | 24,063 | 17,519 | ||||||||||||
Net deferred tax (assets) liabilities | $ | (6,262 | ) | $ | 14,358 | |||||||||||
Net deferred tax assets | $ | 8,980 | $ | 2,035 |
2018 | 2017 | 2016 | 2020 | 2019 | 2018 | |||||||||||||||||||
Statutory federal income rate applied to pre-tax income (loss) | $ | (9,213 | ) | $ | 3,543 | $ | 15,069 | $ | 1,336 | $ | 1,821 | $ | (9,213 | ) | ||||||||||
Tax effect of (deduction): | ||||||||||||||||||||||||
Tax-exempt investment income | (253 | ) | (968 | ) | (938 | ) | (239 | ) | (402 | ) | (253 | ) | ||||||||||||
Change in enacted tax rates | – | (9,572 | ) | – | ||||||||||||||||||||
Valuation allowance | 1,264 | 0 | 0 | |||||||||||||||||||||
Other | (331 | ) | (1,204 | ) | (22 | ) | (461 | ) | (93 | ) | (331 | ) | ||||||||||||
Federal income tax expense (benefit) | $ | (9,797 | ) | $ | (8,201 | ) | $ | 14,109 | $ | 1,900 | $ | 1,326 | $ | (9,797 | ) |
2018 | 2017 | 2016 | 2020 | 2019 | 2018 | |||||||||||||||||||
Tax expense (benefit) on pre-tax income (loss): | ||||||||||||||||||||||||
Current | $ | 8,997 | $ | (4,335 | ) | $ | 11,271 | $ | 7,144 | $ | 1,377 | $ | 8,997 | |||||||||||
Deferred | (18,794 | ) | (3,866 | ) | 2,838 | (5,244 | ) | (51 | ) | (18,794 | ) | |||||||||||||
$ | (9,797 | ) | $ | (8,201 | ) | $ | 14,109 | $ | 1,900 | $ | 1,326 | $ | (9,797 | ) |
2018 | 2017 | 2016 | 2020 | 2019 | 2018 | |||||||||||||||||||
Limited partnerships | $ | (2,383 | ) | $ | 4,099 | $ | 503 | $ | (3,409 | ) | $ | 1,143 | $ | (2,383 | ) | |||||||||
Discounts of loss and loss expense reserves | (2,704 | ) | 1,315 | (114 | ) | (1,944 | ) | (2,269 | ) | (2,704 | ) | |||||||||||||
Reserves - salvage and subrogation and other | 427 | 56 | (1,110 | ) | 1 | (74 | ) | 427 | ||||||||||||||||
Unearned premium discount | (484 | ) | (1,767 | ) | 298 | 190 | (208 | ) | (484 | ) | ||||||||||||||
Deferred compensation | 305 | (168 | ) | 595 | (818 | ) | (600 | ) | 305 | |||||||||||||||
Other-than-temporary investment declines | 695 | (127 | ) | 2,320 | ||||||||||||||||||||
Impairment related investment declines | (1,400 | ) | (411 | ) | 695 | |||||||||||||||||||
Deferred acquisitions costs and ceding commission | 201 | 1,553 | (95 | ) | 262 | 405 | 201 | |||||||||||||||||
Change in enacted tax rates | – | (9,572 | ) | – | ||||||||||||||||||||
Unrealized gains / losses | (13,876 | ) | – | – | (59 | ) | 1,837 | (13,876 | ) | |||||||||||||||
Valuation allowance | 1,264 | 0 | 0 | |||||||||||||||||||||
Other | (975 | ) | 745 | 441 | 669 | 126 | (975 | ) | ||||||||||||||||
Provision for deferred federal income taxes | $ | (18,794 | ) | $ | (3,866 | ) | $ | 2,838 | $ | (5,244 | ) | $ | (51 | ) | $ | (18,794 | ) |
2018 | 2017 | 2020 | 2019 | |||||||||||||
Investments: | ||||||||||||||||
Total unrealized gain (loss) before federal income tax expense (benefit) | $ | (7,859 | ) | $ | 71,848 | |||||||||||
Total unrealized gain before federal income tax expense (benefit) | $ | 26,259 | $ | 12,491 | ||||||||||||
Deferred tax benefit (liability) | 1,651 | (25,148 | ) | (4,255 | ) | (2,628 | ) | |||||||||
Net unrealized gains (losses) on investments | (6,208 | ) | 46,700 | |||||||||||||
Net unrealized gains on investments | 22,004 | 9,863 | ||||||||||||||
Foreign exchange adjustment: | ||||||||||||||||
Total unrealized losses | (1,442 | ) | (475 | ) | (310 | ) | (625 | ) | ||||||||
Deferred tax benefit | 303 | 166 | 65 | 131 | ||||||||||||
Net unrealized losses on foreign exchange adjustment | (1,139 | ) | (309 | ) | (245 | ) | (494 | ) | ||||||||
Accumulated other comprehensive income (loss) | $ | (7,347 | ) | $ | 46,391 | |||||||||||
Accumulated other comprehensive income | $ | 21,759 | $ | 9,369 |
(1) | Includes the $1,264 valuation allowance benefit recorded in other comprehensive income. See Note E - Income Taxes for additional information. |
2018 | 2017 | 2016 | 2020 | 2019 | 2018 | |||||||||||||||||||
Investments: | ||||||||||||||||||||||||
Pre-tax holding gains (losses) on debt and equity securities arising during period (1) | $ | (12,253 | ) | $ | 26,677 | $ | 13,259 | |||||||||||||||||
Less: applicable federal income tax expense (benefit) | (2,573 | ) | 9,337 | 4,641 | ||||||||||||||||||||
Pre-tax holding gains (losses) on fixed income securities arising during period | $ | 10,501 | $ | 19,182 | $ | (12,253 | ) | |||||||||||||||||
Less: applicable federal income tax expense (benefit) (1) | 941 | 4,028 | (2,573 | ) | ||||||||||||||||||||
(9,680 | ) | 17,340 | 8,618 | 9,560 | 15,154 | (9,680 | ) | |||||||||||||||||
Pre-tax gains (losses) on debt and equity securities included in net income (loss) during period (1) | (3,560 | ) | 7,217 | 20,755 | ||||||||||||||||||||
Pre-tax gains (losses) on fixed income securities included in net income (loss) during period (1) | (3,267 | ) | (1,161 | ) | (3,560 | ) | ||||||||||||||||||
Less: applicable federal income tax expense (benefit) | (748 | ) | 2,526 | 7,264 | (686 | ) | (244 | ) | (748 | ) | ||||||||||||||
(2,812 | ) | 4,691 | 13,491 | (2,581 | ) | (917 | ) | (2,812 | ) | |||||||||||||||
Change in unrealized gains (losses) on investments | $ | (6,868 | ) | $ | 12,649 | $ | (4,873 | ) | $ | 12,141 | $ | 16,071 | $ | (6,868 | ) |
(1) | Includes the $1,264 valuation allowance benefit recorded in other comprehensive income. See Note E - Income Taxes for additional information. |
2018 | 2017 | 2016 | 2020 | 2019 | 2018 | |||||||||||||||||||
Amortization of gross deferred policy acquisition costs | $ | 78,105 | $ | 70,574 | $ | 51,597 | $ | 79,947 | $ | 81,734 | $ | 78,105 | ||||||||||||
Other underwriting expenses | 46,638 | 37,230 | 41,692 | 66,005 | 59,975 | 46,638 | ||||||||||||||||||
Reinsurance ceded credits | (23,124 | ) | (23,187 | ) | (33,512 | ) | (24,764 | ) | (25,932 | ) | (23,124 | ) | ||||||||||||
Total underwriting expenses | 101,619 | 84,617 | 59,777 | 121,188 | 115,777 | 101,619 | ||||||||||||||||||
Operating expenses of non-insurance companies | 32,406 | 28,977 | 29,685 | 22,240 | 22,679 | 32,406 | ||||||||||||||||||
Goodwill impairment charge | 3,152 | – | – | 0 | 0 | 3,152 | ||||||||||||||||||
Total other operating expenses | $ | 137,177 | $ | 113,594 | $ | 89,462 | $ | 143,428 | $ | 138,456 | $ | 137,177 |
Grant Date | Number of Shares Issued | Vesting Date | Service Period | Grant Date Fair Value Per Share | Number of Shares Issued | Vesting Date | Service Period | Grant Date Fair Value Per Share | ||||||||||||
5/10/2016 | 17,677 | 5/10/2017 | 7/1/2016 - 6/30/2017 | $ | 24.89 | |||||||||||||||
5/9/2017 | 18,183 | 5/9/2018 | 7/1/2017 - 6/30/2018 | $ | 24.20 | |||||||||||||||
8/31/2017 | 1,257 | 5/9/2018 | 8/31/2017 - 6/30/2018 | $ | 21.90 | |||||||||||||||
2/9/2018 | 408 | 5/9/2018 | 2/9/2018 - 6/30/2018 | $ | 24.20 | 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 | 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 | |||||||||||||||
5/17/2019 | 3,591 | 5/7/2020 | 5/17/2019 - 6/30/2020 | $ | 16.25 | |||||||||||||||
5/22/2019 | 3,541 | 5/7/2020 | 5/22/2019 - 6/30/2020 | $ | 16.25 | |||||||||||||||
5/5/2020 | 42,220 | 5/5/2021 | 7/1/2020 - 6/30/2021 | $ | 14.21 |
2018 | 2017 | 2016 | 2020 | 2019 | 2018 | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums earned | $ | 432,880 | $ | 328,145 | $ | 276,011 | $ | 445,515 | $ | 447,288 | $ | 432,880 | ||||||||||||
Net investment income | 22,048 | 18,095 | 14,483 | 25,422 | 26,249 | 22,048 | ||||||||||||||||||
Net realized and unrealized gains (losses) on investments | (25,691 | ) | 19,686 | 23,228 | (9,236 | ) | 12,889 | (25,691 | ) | |||||||||||||||
Commissions and other income | 9,932 | 5,308 | 5,275 | 7,048 | 9,171 | 9,932 | ||||||||||||||||||
Total revenues | $ | 439,169 | $ | 371,234 | $ | 318,997 | $ | 468,749 | $ | 495,597 | $ | 439,169 |
2018 | 2017 | 2016 | 2020 | 2019 | 2018 | |||||||||||||||||||
Average shares outstanding for basic earnings (loss) per share | 14,964,812 | 15,065,216 | 15,071,900 | 14,140,178 | 14,520,815 | 14,964,812 | ||||||||||||||||||
Dilutive effect of share equivalents | – | 42,220 | 12,108 | 129,806 | 99,118 | 0 | ||||||||||||||||||
Average shares outstanding for diluted earnings (loss) per share | 14,964,812 | 15,107,436 | 15,084,008 | 14,269,984 | 14,619,933 | 14,964,812 |
Description | Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
Fixed income securities: | ||||||||||||||||||||||||||||||||
Agency collateralized mortgage obligations | $ | 10,687 | $ | – | $ | 10,687 | $ | – | $ | 11,931 | $ | 0 | $ | 11,931 | $ | 0 | ||||||||||||||||
Agency mortgage-backed securities | 37,385 | – | 37,385 | – | 102,107 | 0 | 102,107 | 0 | ||||||||||||||||||||||||
Asset-backed securities | 64,422 | – | 64,422 | – | 107,696 | 0 | 107,696 | 0 | ||||||||||||||||||||||||
Bank loans | 9,750 | – | 9,750 | – | 11,361 | 0 | 11,361 | 0 | ||||||||||||||||||||||||
Certificates of deposit | 2,835 | 2,835 | – | – | ||||||||||||||||||||||||||||
Collateralized mortgage obligations | 5,423 | – | 5,423 | – | 5,118 | 0 | 5,118 | 0 | ||||||||||||||||||||||||
Corporate securities | 186,651 | – | 186,651 | – | 352,837 | 0 | 352,837 | 0 | ||||||||||||||||||||||||
Options embedded in convertible securities | 3,799 | – | 3,799 | – | 7,404 | 0 | 7,404 | 0 | ||||||||||||||||||||||||
Mortgage-backed securities | 38,540 | – | 38,540 | – | 38,056 | 0 | 38,056 | 0 | ||||||||||||||||||||||||
Municipal obligations | 29,155 | – | 29,155 | – | 45,143 | 0 | 45,143 | 0 | ||||||||||||||||||||||||
Non-U.S. government obligations | 25,180 | – | 25,180 | – | 30,600 | 0 | 30,600 | 0 | ||||||||||||||||||||||||
U.S. government obligations | 178,818 | – | 178,818 | – | 207,439 | 0 | 207,439 | 0 | ||||||||||||||||||||||||
Total fixed income securities | 592,645 | 2,835 | 589,810 | – | 919,692 | 0 | 919,692 | 0 | ||||||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||||||||||
Consumer | 17,945 | 17,945 | – | – | 11,598 | 11,598 | 0 | 0 | ||||||||||||||||||||||||
Energy | 3,179 | 3,179 | – | – | 1,227 | 1,227 | 0 | 0 | ||||||||||||||||||||||||
Financial | 25,253 | 25,253 | – | – | 29,064 | 29,064 | 0 | 0 | ||||||||||||||||||||||||
Industrial | 6,920 | 6,920 | – | – | 5,180 | 5,180 | 0 | 0 | ||||||||||||||||||||||||
Technology | 2,303 | 2,303 | – | – | 2,851 | 2,851 | 0 | 0 | ||||||||||||||||||||||||
Funds (e.g. mutual funds, closed end funds, ETFs) | 5,489 | 5,489 | – | – | ||||||||||||||||||||||||||||
Other | 5,333 | 5,333 | – | – | 8,249 | 8,249 | 0 | 0 | ||||||||||||||||||||||||
Total equity securities | 66,422 | 66,422 | – | – | 58,169 | 58,169 | 0 | 0 | ||||||||||||||||||||||||
Short-term | 1,000 | 1,000 | – | – | ||||||||||||||||||||||||||||
Short-term investments | 1,000 | 1,000 | 0 | 0 | ||||||||||||||||||||||||||||
Cash equivalents | 156,855 | – | 156,855 | – | 47,026 | 0 | 47,026 | 0 | ||||||||||||||||||||||||
Total | $ | 816,922 | $ | 70,257 | $ | 746,665 | $ | – | $ | 1,025,887 | $ | 59,169 | $ | 966,718 | $ | 0 |
Description | Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
Fixed income securities: | ||||||||||||||||||||||||||||||||
Agency collateralized mortgage obligations | $ | 16,586 | $ | – | $ | 16,586 | $ | – | $ | 12,093 | $ | 0 | $ | 12,093 | $ | 0 | ||||||||||||||||
Agency mortgage-backed securities | 27,075 | – | 27,075 | – | 56,280 | 0 | 56,280 | 0 | ||||||||||||||||||||||||
Asset-backed securities | 43,469 | – | 43,469 | – | 106,397 | 0 | 106,397 | 0 | ||||||||||||||||||||||||
Bank loans | 19,488 | – | 19,488 | – | 14,568 | 0 | 14,568 | 0 | ||||||||||||||||||||||||
Certificates of deposit | 3,135 | 3,135 | – | – | 2,835 | 2,835 | 0 | 0 | ||||||||||||||||||||||||
Collateralized mortgage obligations | 6,492 | – | 6,492 | – | 5,616 | 0 | 5,616 | 0 | ||||||||||||||||||||||||
Corporate securities | 193,058 | – | 193,058 | – | 276,087 | 0 | 276,087 | 0 | ||||||||||||||||||||||||
Options embedded in convertible securities | 5,291 | – | 5,291 | – | 5,294 | 0 | 5,294 | 0 | ||||||||||||||||||||||||
Mortgage-backed securities | 24,204 | – | 24,204 | – | 47,463 | 0 | 47,463 | 0 | ||||||||||||||||||||||||
Municipal obligations | 96,650 | – | 96,650 | – | 36,286 | 0 | 36,286 | 0 | ||||||||||||||||||||||||
Non-U.S. government obligations | 37,394 | – | 37,394 | – | 24,179 | 0 | 24,179 | 0 | ||||||||||||||||||||||||
U.S. government obligations | 49,011 | – | 49,011 | – | 208,440 | 0 | 208,440 | 0 | ||||||||||||||||||||||||
Total fixed income securities | 521,853 | 3,135 | 518,718 | – | 795,538 | 2,835 | 792,703 | 0 | ||||||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||||||||||
Consumer | 46,578 | 46,578 | – | – | 16,707 | 16,707 | 0 | 0 | ||||||||||||||||||||||||
Energy | 10,278 | 10,278 | – | – | 3,074 | 3,074 | 0 | 0 | ||||||||||||||||||||||||
Financial | 45,470 | 45,470 | – | – | 31,577 | 31,577 | 0 | 0 | ||||||||||||||||||||||||
Industrial | 25,402 | 25,402 | – | – | 4,927 | 4,927 | 0 | 0 | ||||||||||||||||||||||||
Technology | 13,061 | 13,061 | – | – | 2,817 | 2,817 | 0 | 0 | ||||||||||||||||||||||||
Funds (e.g. mutual funds, closed end funds, ETFs) | 50,291 | 45,276 | 5,015 | – | ||||||||||||||||||||||||||||
Funds (e.g., mutual funds, closed end funds, ETFs) | 9,460 | 9,460 | 0 | 0 | ||||||||||||||||||||||||||||
Other | 10,683 | 10,683 | – | – | 8,250 | 8,250 | 0 | 0 | ||||||||||||||||||||||||
Total equity securities | 201,763 | 196,748 | 5,015 | – | 76,812 | 76,812 | 0 | 0 | ||||||||||||||||||||||||
Short-term | 1,000 | 1,000 | – | – | ||||||||||||||||||||||||||||
Short-term investments | 1,000 | 1,000 | 0 | 0 | ||||||||||||||||||||||||||||
Cash equivalents | 59,173 | – | 59,173 | – | 59,780 | 0 | 59,780 | 0 | ||||||||||||||||||||||||
Total | $ | 783,789 | $ | 200,883 | $ | 582,906 | $ | – | $ | 933,130 | $ | 80,647 | $ | 852,483 | $ | 0 |
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. |
2018 | 2017 | |||||||
Beginning of period balance | $ | – | $ | 25,218 | ||||
Total gains or losses (realized) included in income | – | 406 | ||||||
Purchases | – | 81 | ||||||
Settlements | – | (9,123 | ) | |||||
Transfers into Level 3 | – | 144 | ||||||
Transfers out of Level 3 | – | (16,726 | ) | |||||
End of period balance | $ | – | $ | – |
2018: | Carrying | Fair Value | ||||||||||||||||||||||||||||||||||||||
Value | Level 1 | Level 2 | Level 3 | Total | Carrying | Fair Value | ||||||||||||||||||||||||||||||||||
2020: | Value | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||
Limited partnerships | $ | 55,044 | $ | – | $ | – | $ | 55,044 | $ | 55,044 | $ | 7,214 | $ | 0 | $ | 0 | $ | 7,214 | $ | 7,214 | ||||||||||||||||||||
Commercial mortgage loans | 6,672 | – | – | 6,672 | 6,672 | 10,602 | 0 | 0 | 11,425 | 11,425 | ||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||
Short-term borrowings | 20,000 | – | 20,000 | – | 20,000 | 20,000 | 0 | 20,000 | 0 | 20,000 | ||||||||||||||||||||||||||||||
2017: | ||||||||||||||||||||||||||||||||||||||||
2019: | ||||||||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||
Limited partnerships | $ | 70,806 | $ | – | $ | – | $ | 70,806 | $ | 70,806 | $ | 23,292 | $ | 0 | $ | 0 | $ | 23,292 | $ | 23,292 | ||||||||||||||||||||
Commercial mortgage loans | – | – | – | – | – | 11,782 | 0 | 0 | 12,068 | 12,068 | ||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||
Short-term borrowings | 20,000 | – | 20,000 | – | 20,000 | 20,000 | 0 | 20,000 | 0 | 20,000 |
2018 | 2017 | 2020 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1st | 2nd | 3rd | 4th | 1st | 2nd | 3rd | 4th | 1st | 2nd | 3rd | 4th | 1st | 2nd | 3rd | 4th | |||||||||||||||||||||||||||||||||||||||||||||||||
Net premiums earned | $ | 105,462 | $ | 111,940 | $ | 96,807 | $ | 118,671 | $ | 73,974 | $ | 67,996 | $ | 89,100 | $ | 97,075 | $ | 109,659 | $ | 97,730 | $ | 117,853 | $ | 120,273 | $ | 110,012 | $ | 115,631 | $ | 110,288 | $ | 111,357 | ||||||||||||||||||||||||||||||||
Net investment income | 4,636 | 5,796 | 5,578 | 6,038 | 3,692 | 4,716 | 4,027 | 5,661 | 7,236 | 6,379 | 5,486 | 6,321 | 6,231 | 6,500 | 6,703 | 6,815 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gains (losses) on investments | (4,533 | ) | (3,435 | ) | 2,373 | (20,096 | ) | 6,294 | 3,296 | 5,944 | 4,152 | (27,756 | ) | 10,615 | 144 | 7,761 | 6,027 | 2,889 | 125 | 3,848 | ||||||||||||||||||||||||||||||||||||||||||||
Losses and loss expenses incurred | 72,298 | 77,488 | 94,540 | 101,537 | 48,599 | 71,754 | 60,673 | 66,492 | 81,831 | 68,208 | 84,673 | 84,246 | 87,122 | 90,433 | 84,781 | 86,132 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | 330 | 2,487 | (12,325 | ) | (24,567 | ) | 6,756 | (12,343 | ) | 7,434 | 16,476 | (22,156 | ) | 11,367 | 3,281 | 11,971 | 2,748 | 1,535 | (707 | ) | 3,771 | |||||||||||||||||||||||||||||||||||||||||||
Net income (loss) per share | $ | 0.02 | $ | 0.17 | $ | (0.82 | ) | $ | (1.65 | ) | $ | 0.45 | $ | (0.82 | ) | $ | 0.49 | $ | 1.10 | |||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) per diluted share | $ | (1.56 | ) | $ | 0.80 | $ | 0.23 | $ | 0.84 | $ | 0.18 | $ | 0.11 | $ | (0.05 | ) | $ | 0.26 |
2019 | $ | 342 | ||
2020 | 114 | |||
2021 | 15 | |||
2022 and thereafter | 1 | |||
Total minimum payments required | $ | 472 |
2021 | $ | 103 | ||
2022 | 18 | |||
2023 | 0 | |||
2024 and thereafter | 0 | |||
Total minimum payments required | $ | 121 |
Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Protective Insurance Corporation Opinion on Internal Control over Financial Reporting We have audited Protective Insurance Corporation and subsidiaries’ internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Protective Insurance Corporation and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Protective Insurance Corporation and subsidiaries as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”) and our report dated March 11, 2021 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ ERNST & YOUNG LLP Indianapolis, Indiana March 11, 2021 |
(a) 1. | List of Financial Statements--The following consolidated financial statements of the registrant and its subsidiaries (including the Report of Independent Registered Public Accounting Firm) are submitted in Item 8 of this Annual Report on Form 10-K. |
2. | List of Financial Statement Schedules--The following consolidated financial statement schedules of Protective Insurance Corporation and subsidiaries are included in this Annual Report on Form 10-K: |
Schedule I | Summary of Investments--Other than Investments in Related Parties |
Schedule II | Condensed Financial Information of Registrant |
Schedule III | Supplementary Insurance Information |
Schedule IV | Reinsurance |
Schedule VI | Supplemental Information Concerning Property/Casualty Insurance Operations |
Exhibit No. | Description | |
Agreement and Plan of Merger, dated as of February 14, 2021, by and among the Company, The Progressive Corporation and Carnation Merger Sub Inc. (Incorporated as an exhibit by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed on February 16, 2021) | ||
Amended and Restated Articles of Incorporation of Protective Insurance Corporation (Incorporated as an exhibit by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed on August 8, 2018) | ||
Description of the Company’s Securities Registered Under Section 12 of the Exchange Act (Incorporated as an exhibit by reference to Exhibit 4.1 to the Company's Annual Report on Form 10-K for the year ended December 31, 2019) | ||
Protective Insurance Corporation Restricted Stock Compensation Plan (Incorporated as an exhibit by reference to Exhibit A to the Company's definitive Proxy Statement filed on April 1, 2010 for its Annual Meeting held May 4, 2010) | ||
Amendment 1 to the Employment Agreement, effective as of May 22, 2019, by and between the Company and Jeremy D. Edgecliffe-Johnson, dated as of March 31, 2020 (Incorporated as an exhibit by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed on May 6, 2020)* | ||
Amendment 2 to the Employment Agreement, effective as of May 22, 2019, by and between the Company and Jeremy D. Edgecliffe-Johnson, dated as of August 3, 2020 (Incorporated as an exhibit by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed on August 5, 2020)* | ||
Offer Letter, dated September 6, 2019, between the Company and John R. Barnett (Incorporated as an exhibit by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on | ||
Non-Compete, Severance and Confidentiality Agreement, dated effective as of October 1, 2019, between the Company and John R. Barnett (Incorporated as an exhibit by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on November 6, 2019)* | ||
Confidentiality, Non-Competition, and Non-Solicitation Agreement, dated May 25, 2018, by and between the Company and Jeremy F. Goldstein (Incorporated as an exhibit by reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018)* | ||
Confidentiality, Non-Competition, and Non-Solicitation Agreement, dated July 26, 2018, by and between the Company and Patrick S. Schmiedt (Incorporated as an exhibit by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018)* | ||
Offer Letter, dated August 23, 2019, between the Company and Bahr D. Omidfar (Incorporated as an exhibit by reference to Exhibit 10.9 to the Company's Annual Report on Form 10-K for the year ended December 31, 2019)* |
Non-Compete, Severance and Confidentiality Agreement, dated effective as of September 16, 2019, between the Company and Bahr D. Omidfar (Incorporated as an exhibit by reference to Exhibit 10.10 to the Company's Annual Report on Form 10-K for the year ended December 31, 2019)* | ||
Severance, Confidentiality, Non-Competition and Non-Solicitation Agreement, dated June 22, 2018, by and between the Company and Matthew A. Thompson (Incorporated as an exhibit by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on August 8, 2018)* | ||
Employment Agreement, dated as of November 13, 2018, by and between the Company and John D. Nichols, Jr. (Incorporated as an exhibit by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K/A filed on November 16, 2018)* | ||
Company's Annual Report on Form 10-K for the year ended December 31, 2019)* | ||
certain Executives, dated as of July 6, 2020 (Incorporated as an exhibit by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q filed on August 5, 2020)* | ||
Indemnification Agreement, by and between the Company and members of the Company's Board of Directors, dated as of May 5, 2020 (Incorporated as an exhibit be reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed on May 6, 2020)* | ||
February 14, 2021, by and among the Company, The Progressive Corporation and the Company's shareholders listed therein (Incorporated as an exhibit by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on February 16, 2021) | ||
21 | ||
23 | Consent of Ernst & Young LLP | |
24 | Powers of Attorney for certain Officers and Directors | |
101 | The following materials from Protective Insurance Corporation's Annual Report on Form 10-K for the year ended December 31, | |
104 | Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101) |
Type of Investment | Cost | Fair Value | Amount at Which Shown in the Consolidated Balance Sheet (1) | Cost | Fair Value | Amount at Which Shown in the Consolidated Balance Sheet (1) | ||||||||||||||||||
Fixed Income Securities: | ||||||||||||||||||||||||
Bonds: | ||||||||||||||||||||||||
Agency collateralized mortgage obligations | $ | 10,636 | $ | 10,687 | $ | 10,687 | $ | 11,448 | $ | 11,931 | $ | 11,931 | ||||||||||||
Agency mortgage-backed securities | 37,168 | 37,385 | 37,385 | 99,060 | 102,107 | 102,107 | ||||||||||||||||||
Asset-backed securities | 66,241 | 64,422 | 64,422 | 108,686 | 107,696 | 107,696 | ||||||||||||||||||
Bank loans | 10,208 | 9,750 | 9,750 | 11,590 | 11,361 | 11,361 | ||||||||||||||||||
Certificates of deposit | 2,835 | 2,835 | 2,835 | |||||||||||||||||||||
Collateralized mortgage obligations | 5,095 | 5,423 | 5,423 | 5,061 | 5,118 | 5,118 | ||||||||||||||||||
Corporate securities | 196,925 | 190,450 | 190,450 | 344,059 | 360,241 | 360,241 | ||||||||||||||||||
Mortgage-backed securities | 38,586 | 38,540 | 38,540 | 40,675 | 38,056 | 38,056 | ||||||||||||||||||
Municipal obligations | 29,102 | 29,155 | 29,155 | 43,353 | 45,143 | 45,143 | ||||||||||||||||||
Non-U.S. government obligations | 25,339 | 25,180 | 25,180 | 29,882 | 30,600 | 30,600 | ||||||||||||||||||
U.S. government obligations | 178,369 | 178,818 | 178,818 | 200,654 | 207,439 | 207,439 | ||||||||||||||||||
Total fixed income securities | 600,504 | 592,645 | 592,645 | 894,468 | 919,692 | 919,692 | ||||||||||||||||||
Equity Securities: | ||||||||||||||||||||||||
Common Stocks: | ||||||||||||||||||||||||
Consumer | 15,963 | 17,945 | 17,945 | 9,619 | 11,598 | 11,598 | ||||||||||||||||||
Energy | 3,981 | 3,179 | 3,179 | 2,046 | 1,227 | 1,227 | ||||||||||||||||||
Financial | 23,111 | 25,253 | 25,253 | 24,007 | 29,064 | 29,064 | ||||||||||||||||||
Industrial | 3,287 | 6,920 | 6,920 | 4,066 | 5,180 | 5,180 | ||||||||||||||||||
Technology | 1,259 | 2,303 | 2,303 | 1,749 | 2,851 | 2,851 | ||||||||||||||||||
Funds (e.g. mutual funds, closed end funds, ETFs) | 6,797 | 5,489 | 5,489 | |||||||||||||||||||||
Other | 5,032 | 5,333 | 5,333 | 6,950 | 8,249 | 8,249 | ||||||||||||||||||
Total equity securities | 59,430 | 66,422 | 66,422 | 48,437 | 58,169 | 58,169 | ||||||||||||||||||
Commercial mortgage loans | 6,672 | 6,672 | 6,672 | 10,602 | 11,425 | 10,602 | ||||||||||||||||||
Short-term: | ||||||||||||||||||||||||
Certificates of deposit | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | ||||||||||||||||||
Total short-term and other | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | ||||||||||||||||||
Total investments | $ | 667,606 | $ | 666,739 | $ | 666,739 | $ | 954,507 | $ | 990,286 | $ | 989,463 |
(1) | Amounts presented above do not include investments of |
December 31 | December 31 | |||||||||||||||
2018 | 2017 | 2020 | 2019 | |||||||||||||
Assets | ||||||||||||||||
Investment in subsidiaries | $ | 401,260 | $ | 436,879 | $ | 389,757 | $ | 398,725 | ||||||||
Due from affiliates | 1,152 | 1,191 | 7,877 | 1,579 | ||||||||||||
Investments other than subsidiaries: | ||||||||||||||||
Fixed income securities | 22,302 | 22,306 | 23,379 | 23,979 | ||||||||||||
Limited partnerships | 215 | 222 | 206 | 206 | ||||||||||||
22,517 | 22,528 | 23,585 | 24,185 | |||||||||||||
Cash and cash equivalents | 15,185 | 26,496 | 12,917 | 7,059 | ||||||||||||
Accounts receivable | 2,276 | 6,833 | 7,059 | 5,606 | ||||||||||||
Other assets | 28,794 | 24,772 | 14,316 | 22,153 | ||||||||||||
Total assets | $ | 471,184 | $ | 518,699 | $ | 455,511 | $ | 459,307 | ||||||||
Liabilities and shareholders' equity | ||||||||||||||||
Liabilities: | ||||||||||||||||
Premiums payable | $ | 22,964 | $ | 14,046 | $ | 16,866 | $ | 20,238 | ||||||||
Deposits from insureds | 58,748 | 60,893 | 44,268 | 42,067 | ||||||||||||
Short-term borrowings | 20,000 | 20,000 | 20,000 | 20,000 | ||||||||||||
Other liabilities | 13,390 | 4,949 | 11,295 | 12,686 | ||||||||||||
115,102 | 99,888 | 92,429 | 94,991 | |||||||||||||
Shareholders' equity: | ||||||||||||||||
Common stock: | ||||||||||||||||
Class A | 112 | 112 | 111 | 111 | ||||||||||||
Class B | 522 | 530 | 498 | 499 | ||||||||||||
Additional paid-in capital | 54,720 | 55,078 | 54,571 | 53,349 | ||||||||||||
Accumulated other comprehensive income (loss) | (7,347 | ) | 46,391 | |||||||||||||
Accumulated other comprehensive income | 21,759 | 9,369 | ||||||||||||||
Retained earnings | 308,075 | 316,700 | 286,143 | 300,988 | ||||||||||||
356,082 | 418,811 | 363,082 | 364,316 | |||||||||||||
Total liabilities and shareholders' equity | $ | 471,184 | $ | 518,699 | $ | 455,511 | $ | 459,307 |
Year Ended December 31 | Year Ended December 31 | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2020 | 2019 | 2018 | |||||||||||||||||||
Revenue: | ||||||||||||||||||||||||
Commissions and service fees | $ | 17,456 | $ | 18,863 | $ | 27,736 | $ | 15,011 | $ | 14,149 | $ | 17,456 | ||||||||||||
Cash dividends from subsidiaries | 5,000 | 10,000 | 20,000 | 0 | 0 | 5,000 | ||||||||||||||||||
Net investment income | 569 | 348 | 134 | 453 | 692 | 569 | ||||||||||||||||||
Net realized gains (losses) on investments | (192 | ) | 308 | (3 | ) | |||||||||||||||||||
Net realized losses on investments | (10 | ) | (46 | ) | (192 | ) | ||||||||||||||||||
Other | 51 | (106 | ) | (24 | ) | 138 | 17 | 51 | ||||||||||||||||
22,884 | 29,413 | 47,843 | 15,592 | 14,812 | 22,884 | |||||||||||||||||||
Expenses: | ||||||||||||||||||||||||
Salary and related items | 20,158 | 18,140 | 17,462 | 10,663 | 11,804 | 20,158 | ||||||||||||||||||
Other | 11,724 | 9,686 | 10,808 | 11,048 | 10,386 | 11,724 | ||||||||||||||||||
31,882 | 27,826 | 28,270 | 21,711 | 22,190 | 31,882 | |||||||||||||||||||
Income (loss) before federal income tax benefit and equity in undistributed income of subsidiaries | (8,998 | ) | 1,587 | 19,573 | ||||||||||||||||||||
Loss before federal income tax benefit and equity in undistributed income of subsidiaries | (6,119 | ) | (7,378 | ) | (8,998 | ) | ||||||||||||||||||
Federal income tax benefit | (2,862 | ) | (2,971 | ) | (69 | ) | (1,333 | ) | (1,452 | ) | (2,862 | ) | ||||||||||||
(6,136 | ) | 4,558 | 19,642 | (4,786 | ) | (5,926 | ) | (6,136 | ) | |||||||||||||||
Equity in undistributed income of subsidiaries | (27,939 | ) | 13,765 | 9,303 | 9,249 | 13,273 | (27,939 | ) | ||||||||||||||||
Net income (loss) | $ | (34,075 | ) | $ | 18,323 | $ | 28,945 | $ | 4,463 | $ | 7,347 | $ | (34,075 | ) |
Year Ended December 31 | Year Ended December 31 | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2020 | 2019 | 2018 | |||||||||||||||||||
Net income (loss) | $ | (34,075 | ) | $ | 18,323 | $ | 28,945 | $ | 4,463 | $ | 7,347 | $ | (34,075 | ) | ||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||
Unrealized net gains (losses) on fixed income securities: | ||||||||||||||||||||||||
Unrealized net gains (losses) arising during the period | (9,680 | ) | 17,340 | 8,618 | ||||||||||||||||||||
Less: reclassification adjustment for net gains (losses) included in net income (loss) | (2,812 | ) | 4,691 | 13,491 | ||||||||||||||||||||
(6,868 | ) | 12,649 | (4,873 | ) | ||||||||||||||||||||
Unrealized net gains (losses) on fixed income securities | 12,141 | 16,071 | (6,868 | ) | ||||||||||||||||||||
Foreign currency translation adjustments | (830 | ) | 522 | 235 | 249 | 645 | (830 | ) | ||||||||||||||||
Other comprehensive income (loss) | (7,698 | ) | 13,171 | (4,638 | ) | 12,390 | 16,716 | (7,698 | ) | |||||||||||||||
Comprehensive income (loss) | $ | (41,773 | ) | $ | 31,494 | $ | 24,307 | $ | 16,853 | $ | 24,063 | $ | (41,773 | ) |
Year Ended December 31 | Year Ended December 31 | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2020 | 2019 | 2018 | |||||||||||||||||||
Net cash provided by operating activities | $ | 14,019 | $ | 44,998 | $ | 15,484 | $ | 12,350 | $ | 10,643 | $ | 14,019 | ||||||||||||
Investing activities: | ||||||||||||||||||||||||
Purchases of investments | (11,435 | ) | (21,365 | ) | (4,000 | ) | (7,795 | ) | (4,967 | ) | (11,435 | ) | ||||||||||||
Sales or maturities of investments | 11,213 | 9,146 | 3,493 | 8,777 | 3,935 | 11,213 | ||||||||||||||||||
Net sales of short-term investments | – | – | 2,165 | |||||||||||||||||||||
Distributions from limited partnerships | – | 298 | – | 0 | 1 | 0 | ||||||||||||||||||
Net purchases of property and equipment | (3,677 | ) | (3,394 | ) | (4,278 | ) | 0 | (380 | ) | (3,677 | ) | |||||||||||||
Net cash used in investing activities | (3,899 | ) | (15,315 | ) | (2,620 | ) | ||||||||||||||||||
Net cash provided by (used in) investing activities | 982 | (1,411 | ) | (3,899 | ) | |||||||||||||||||||
Financing activities: | ||||||||||||||||||||||||
Dividends paid to shareholders | (16,835 | ) | (16,302 | ) | (15,803 | ) | (5,692 | ) | (5,857 | ) | (16,835 | ) | ||||||||||||
Repurchase of common shares | (4,596 | ) | (1,880 | ) | – | (1,782 | ) | (11,501 | ) | (4,596 | ) | |||||||||||||
Net cash used in financing activities | (21,431 | ) | (18,182 | ) | (15,803 | ) | (7,474 | ) | (17,358 | ) | (21,431 | ) | ||||||||||||
Increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents | (11,311 | ) | 11,501 | (2,939 | ) | 5,858 | (8,126 | ) | (11,311 | ) | ||||||||||||||
Cash, cash equivalents and restricted cash and cash equivalents at beginning of year | 26,496 | 14,995 | 17,934 | 7,059 | 15,185 | 26,496 | ||||||||||||||||||
Cash, cash equivalents and restricted cash and cash equivalents at end of year | $ | 15,185 | $ | 26,496 | $ | 14,995 | $ | 12,917 | $ | 7,059 | $ | 15,185 |
As of December 31 | Year Ended December 31 | As of December 31 | Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment | Deferred Policy Acquisition Costs | Reserves for Unpaid Claims and Claim Adjustment Expenses | Unearned Premiums | Other Policy Claims and Benefits Payable | Net Premium Earned | Net Investment Income | Benefits, Claims, Losses and Settlement Expenses | Amortization of Deferred Policy Acquisition Costs | Other Operating Expenses | Net Premiums Written | Deferred Policy Acquisition Costs | Reserves for Unpaid Claims and Claim Adjustment Expenses | Unearned Premiums | Other Policy Claims and Benefits Payable | Net Premium Earned | Net Investment Income | Benefits, Claims, Losses and Settlement Expenses | Amortization of Deferred Policy Acquisition Costs | Other Operating Expenses | Net Premiums Written | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(A) | (A) | (A) (B) | (A) | (A) | (A) (B) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property/Casualty Insurance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 9,744 | $ | 1,089,669 | $ | 63,731 | 0 | $ | 445,515 | $ | 25,422 | $ | 318,958 | $ | 79,947 | $ | 41,241 | $ | 441,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 8,496 | 988,305 | 74,810 | 0 | 447,288 | 26,249 | 348,468 | 81,734 | 34,043 | 452,242 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | $ | 6,568 | $ | 865,339 | $ | 71,625 | – | $ | 432,880 | $ | 22,048 | $ | 345,864 | $ | 78,105 | $ | 23,514 | $ | 444,398 | 6,568 | 865,339 | 71,625 | 0 | 432,880 | 22,048 | 345,864 | 78,105 | 23,514 | 444,398 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | 5,608 | 680,274 | 53,085 | – | 328,145 | 18,095 | 247,518 | 70,574 | 14,043 | 353,389 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 1,172 | 576,330 | 21,694 | – | 276,011 | 14,483 | 186,481 | 51,597 | 8,180 | 271,752 |
(A) | Allocations of certain expenses have been made to investment income, settlement expenses and other operating expenses and are based on a number of assumptions and estimates. Results among these categories would change if different methods were applied. |
(B) | Commission allowances relating to reinsurance ceded are offset against other operating expenses. |
Direct Premiums | Ceded to Other Companies | Assumed from Other Companies | Net Amount | % of Amount Assumed to Net | Direct Premiums | Ceded to Other Companies | Assumed from Other Companies | Net Amount | % of Amount Assumed to Net | |||||||||||||||||||||||||||||||
Premiums Earned - | ||||||||||||||||||||||||||||||||||||||||
Years Ended December 31: | ||||||||||||||||||||||||||||||||||||||||
2020 | $ | 557,795 | $ | 113,125 | $ | 845 | $ | 445,515 | 0.2 | % | ||||||||||||||||||||||||||||||
2019 | 570,959 | 124,446 | 775 | 447,288 | 0.2 | % | ||||||||||||||||||||||||||||||||||
2018 | $ | 562,364 | $ | 131,080 | $ | 1,596 | $ | 432,880 | 0.4 | % | 562,364 | 131,080 | 1,596 | 432,880 | 0.4 | % | ||||||||||||||||||||||||
2017 | 470,158 | 145,201 | 3,188 | 328,145 | 1.0 | % | ||||||||||||||||||||||||||||||||||
2016 | 394,679 | 130,012 | 11,344 | 276,011 | 4.1 | % |
Note: | Included in Ceded to Other Companies is $0 |
Additions | ||||||||||||||||||||
Description | Balance as of Beginning of Period | Charged to Costs and Expenses | Other Additions | Deductions | Balance as of End of Period | |||||||||||||||
January 1, 2018 | ||||||||||||||||||||
Accounts receivable | $ | 484 | $ | 29 | 0 | $ | 110 | $ | 403 | |||||||||||
Reinsurance recoverable | 1,365 | 32 | 0 | 278 | 1,119 | |||||||||||||||
December 31, 2018 | 1,849 | 61 | 0 | 388 | 1,522 | |||||||||||||||
Accounts receivable | 403 | 1,908 | 0 | 78 | 2,233 | |||||||||||||||
Reinsurance recoverable | 1,119 | 52 | 0 | 0 | 1,171 | |||||||||||||||
December 31, 2019 | 1,522 | 1,960 | 0 | 78 | 3,404 | |||||||||||||||
Fixed income securities | 0 | 1,035 | 0 | 0 | 1,035 | |||||||||||||||
Accounts receivable | 2,233 | 1,250 | 0 | 23 | 3,460 | |||||||||||||||
Reinsurance recoverable | 1,171 | 0 | 0 | 199 | 972 | |||||||||||||||
Deductible receivable allowance (2) | 0 | 16,500 | 0 | 0 | 16,500 | |||||||||||||||
Mortgage loans | 0 | 195 | 0 | 0 | 195 | |||||||||||||||
December 31, 2020 | $ | 3,404 | $ | 18,980 | 0 | $ | 222 | $ | 22,162 |
(1) | Effective January 1, 2020 the Company adopted the measurement of credit losses on financial instruments accounting standard that primarily affected its accounts receivable, reinsurance recoverable and commercial mortgage loans balances. After consideration of existing valuation allowances maintained prior to adopting the new guidance, the Company increased its valuation allowance for credit losses at January 1, 2020 to conform to the new requirements. |
(2) | In conjunction with the adoption of the credit losses accounting standard, the Company recorded an allowance for expected credit losses of $16,500 related to the PSG litigation matter. See Note T – Litigation, Commitments and Contingencies for further discussion. |
As of December 31 | Year Ended December 31 | As of December 31 | Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Policy | Reserves for Unpaid Claims | Discount, if any Deducted | Net | Claims and Claim Adjustment Expenses Incurred Related to | Amortization of Deferred Policy | Paid Claims and Claims | Net | Deferred Policy | Reserves for Unpaid Claims | Discount, if any Deducted | Net | Claims and Claim Adjustment Expenses Incurred Related to | Amortization of Deferred Policy | Paid Claims and Claims | Net | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Affiliation with Registrant | Acquisition Costs | Adjustment Expenses | from Reserves | Unearned Premiums | Earned Premiums | Investment Income | Current Year | Prior Years | Acquisition Costs | Adjustment Expenses | Premiums Written | Acquisition Costs | Adjustment Expenses | from Reserves | Unearned Premiums | Earned Premiums | Investment Income | Current Year | Prior Years | Acquisition Costs | Adjustment Expenses | Premiums Written | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated Property/Casualty Subsidiaries: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 9,744 | $ | 1,089,669 | $ | 0 | $ | 63,731 | $ | 445,515 | $ | 25,422 | $ | 319,269 | $ | (311 | ) | $ | 79,947 | $ | 243,657 | $ | 441,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 8,496 | 988,305 | 0 | 74,810 | 447,288 | 26,249 | 349,018 | (550 | ) | 81,734 | 247,872 | 452,242 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | $ | 6,568 | $ | 865,339 | $ | – | $ | 71,625 | $ | 432,880 | $ | 22,048 | $ | 329,078 | $ | 16,786 | $ | 78,105 | $ | 228,591 | $ | 444,398 | 6,568 | 865,339 | 0 | 71,625 | 432,880 | 22,048 | 329,078 | 16,786 | 78,105 | 228,591 | 444,398 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | 5,608 | 680,274 | – | 53,085 | 328,145 | 18,095 | 228,303 | 19,215 | 70,574 | 200,154 | 353,389 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 1,172 | 576,330 | – | 21,694 | 276,011 | 14,483 | 172,645 | 13,836 | 51,597 | 163,467 | 271,752 |
PROTECTIVE INSURANCE CORPORATION | ||
March | By: | /s/ |
Signatures | Title | Date | ||
/s/ | March | |||
(Principal Executive Officer) | ||||
/s/ | Chief Financial Officer | March | ||
(Principal Financial Officer and Principal Accounting Officer) | ||||
/s/ Steven J. Bensinger | Director | March | ||
Steven J. Bensinger | ||||
/s/ Stuart D. Bilton | Director | March | ||
Stuart D. Bilton | ||||
/s/ Otto N. Frenzel IV | Director | March | ||
Otto N. Frenzel IV | ||||
/s/ Stephen J. Gray | Director | March 11, 2021 | ||
Stephen J. Gray | ||||
/s/ LoriAnn Lowery-Biggers | Director | March | ||
LoriAnn Lowery-Biggers | ||||
/s/ David W. Michelson | Director | March | ||
David W. Michelson | ||||
/s/ John D. Nichols, Jr. | Director, Chairman of the Board of Directors | March 11, 2021 | ||
John D. Nichols, Jr. | ||||
/s/ James A. Porcari III | Director | March | ||
James A. Porcari III | ||||
/s/ Nathan Shapiro | Director | March | ||
Nathan Shapiro | ||||
/s/ Robert Shapiro | Director | March | ||
Robert Shapiro |