Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 20, 2017 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Entity Registrant Name | Employers Holdings, Inc. | |
Entity Central Index Key | 1,379,041 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well Know Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock Shares Outstanding | 32,278,012 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Available for sale: | ||
Fixed maturity securities at fair value (amortized cost $2,273,100 at September 30, 2016 and $2,221,100 at December 31, 2015) | $ 2,395,300 | $ 2,344,400 |
Equity securities at fair value (cost $114,400 at September 30, 2016 and $137,500 at December 31, 2015) | 199,800 | 192,200 |
Short-term investments at fair value (amortized cost $14,000 at September 30, 2016) | 15,400 | 16,000 |
Total investments | 2,610,500 | 2,552,600 |
Cash and cash equivalents | 58,600 | 67,200 |
Restricted cash and cash equivalents | 4,100 | 3,600 |
Accrued investment income | 20,100 | 20,600 |
Premiums receivable (less bad debt allowance of $10,700 at September 30, 2016 and $12,200 at December 31, 2015) | 323,800 | 304,700 |
Reinsurance recoverable for: | ||
Paid losses | 8,100 | 8,700 |
Unpaid losses | 572,900 | 580,000 |
Deferred policy acquisition costs | 48,100 | 44,300 |
Deferred income taxes, net | 52,100 | 59,400 |
Property and equipment, net | 23,900 | 22,200 |
Intangible assets, net | 8,100 | 8,200 |
Goodwill | 36,200 | 36,200 |
Contingent commission receivable—LPT Agreement | 31,100 | 31,100 |
Other assets | 36,000 | 34,600 |
Total assets | 3,833,600 | 3,773,400 |
Claims and policy liabilities: | ||
Unpaid losses and loss adjustment expenses | 2,298,200 | 2,301,000 |
Unearned premiums | 330,800 | 310,300 |
Total claims and policy liabilities | 2,629,000 | 2,611,300 |
Commissions and premium taxes payable | 49,300 | 48,800 |
Accounts payable and accrued expenses | 21,000 | 24,200 |
Unsettled purchases of investments | 18,000 | 0 |
Deferred reinsurance gain—LPT Agreement | 171,900 | 174,900 |
Notes payable | 32,000 | 32,000 |
Other liabilities | 44,900 | 41,600 |
Total liabilities | 2,966,100 | 2,932,800 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock, $0.01 par value; 150,000,000 shares authorized; 56,124,974 and 55,589,454 shares issued and 32,109,976 and 32,216,480 shares outstanding at September 30, 2016 and December 31, 2015, respectively | 600 | 600 |
Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued | 0 | 0 |
Additional paid-in capital | 372,700 | 372,000 |
Retained earnings | 795,400 | 777,200 |
Accumulated other comprehensive income, net | 82,500 | 74,500 |
Treasury stock, at cost (24,014,998 shares at September 30, 2016 and 23,372,974 shares at December 31, 2015) | (383,700) | (383,700) |
Total stockholders’ equity | 867,500 | 840,600 |
Total liabilities and stockholders’ equity | $ 3,833,600 | $ 3,773,400 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Available for sale: | ||
Fixed maturity securities, amortized cost | $ 2,483,600 | $ 2,438,000 |
Available for sale, short-term investments, at amortized cost | 15,400 | 16,000 |
Premiums receivable, bad debt allowance | 9,400 | 9,800 |
Reinsurance Recoverables on Unpaid Losses, Allowance | $ 0 | $ 0 |
Stockholders' equity | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 56,373,568 | 56,226,277 |
Common stock, shares outstanding (in shares) | 32,276,213 | 32,128,922 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Treasury stock, at cost (in shares) | 24,097,355 | 24,097,355 |
Debt Securities [Member] | ||
Available for sale: | ||
Fixed maturity securities, amortized cost | $ 2,350,600 | $ 2,305,900 |
Equity Securities [Member] | ||
Available for sale: | ||
Fixed maturity securities, amortized cost | 117,600 | 116,100 |
Short-term Investments [Member] | ||
Available for sale: | ||
Fixed maturity securities, amortized cost | $ 15,400 | $ 16,000 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenues | ||
Net premiums earned | $ 175,300 | $ 172,600 |
Net investment income | 18,800 | 17,800 |
Net realized gains on investments | 2,200 | 1,500 |
Other income | 0 | 100 |
Total revenues | 196,300 | 192,000 |
Expenses | ||
Losses and loss adjustment expenses | 109,000 | 107,300 |
Commission expense | 21,500 | 20,300 |
Underwriting and other operating expenses | 35,900 | 36,300 |
Interest expense | 400 | 400 |
Total expenses | 166,800 | 164,300 |
Net income before income taxes | 29,500 | 27,700 |
Income tax expense | 6,300 | 5,900 |
Net income | 23,200 | 21,800 |
Comprehensive income | ||
Unrealized (losses) gains during the period (net of tax (benefit) expense of $(2,300) and $(5,900) for the three months ended September 30, 2016 and 2015, respectively, and $21,500 and $(14,200) for the nine months ended September 30, 2016 and 2015, respectively) | 9,400 | 20,800 |
Reclassification adjustment for realized gains in net income (net of taxes of $600 and $700 for the three months ended September 30, 2016 and 2015, respectively, and $3,200 and $1,800 for the nine months ended September 30, 2016 and 2015, respectively) | (1,400) | (1,000) |
Other comprehensive (loss) income, net of tax | 8,000 | 19,800 |
Total comprehensive income | 31,200 | 41,600 |
Net realized gains on investments | ||
Net realized gains on investments before credit related impairments | 2,400 | 6,800 |
Other than temporary impairment recognized in earnings | (200) | (5,300) |
Net realized gains on investments | $ 2,200 | $ 1,500 |
Earnings per common share (Note 11): | ||
Basic | $ 0.72 | $ 0.67 |
Diluted | 0.70 | 0.66 |
Cash dividends declared per common share | $ 0.15 | $ 0.09 |
Conolidated Statements of Compr
Conolidated Statements of Comprehensive Income (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement Parenthetical [Abstract] | ||
Other comprehensive income (loss), unrealized holding gain (loss) on securities arising during period, tax | $ 5,100 | $ 11,200 |
Other comprehensive income (loss), reclassification adjustment for sale of securities included in net income, tax | $ 800 | $ 500 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders Equity Statement - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income, Net | Treasury Stock [Member] |
Stockholders' equity, shares at Dec. 31, 2015 | 55,589,454 | |||||
Stockholders' equity, value at Dec. 31, 2015 | $ 760,800 | $ 600 | $ 357,200 | $ 682,000 | $ 83,600 | $ (362,600) |
Stock-based compensation, shares | 0 | |||||
Stock-based compensation, value | $ 1,800 | $ 0 | 1,800 | 0 | 0 | 0 |
Stock-options exercised, shares | 262,239 | 262,239 | ||||
Stock-options exercised, value | $ 4,000 | $ 0 | 4,000 | 0 | 0 | 0 |
Vesting of restricted stock units, net of shares withheld to satisfy minimum tax withholding, shares | 42,595 | |||||
Vesting of restricted stock units, net of shares withheld to satisfy minimum tax withholding, value | (600) | $ 0 | (600) | 0 | 0 | 0 |
Acquisition of treasury stock, shares | 0 | |||||
Acquisition of treasury stock, value | (1,000) | $ 0 | 0 | 0 | 0 | (1,000) |
Dividends declared, shares | 0 | |||||
Dividends declared, value | (2,900) | $ 0 | 0 | (2,900) | 0 | 0 |
Net income | 21,800 | 0 | 0 | 21,800 | 0 | 0 |
Change in net unrealized gains in investments, net of tax | 19,800 | $ 0 | 0 | 0 | 19,800 | 0 |
Stockholders' equity, shares at Mar. 31, 2016 | 55,894,288 | |||||
Stockholders' equity, value at Mar. 31, 2016 | 803,700 | $ 600 | 362,400 | 700,900 | 103,400 | (363,600) |
Stockholders' equity, shares at Dec. 31, 2015 | 55,589,454 | |||||
Stockholders' equity, value at Dec. 31, 2015 | $ 760,800 | $ 600 | 357,200 | 682,000 | 83,600 | (362,600) |
Stock-options exercised, shares | 586,132 | |||||
Stockholders' equity, shares at Dec. 31, 2016 | 56,226,277 | 56,226,277 | ||||
Stockholders' equity, value at Dec. 31, 2016 | $ 840,600 | $ 600 | 372,000 | 777,200 | 74,500 | (383,700) |
Stock-based compensation, shares | 0 | |||||
Stock-based compensation, value | $ 2,000 | $ 0 | 2,000 | 0 | 0 | 0 |
Stock-options exercised, shares | 37,005 | 37,005 | ||||
Stock-options exercised, value | $ 600 | $ 0 | 600 | 0 | 0 | 0 |
Vesting of restricted stock units, net of shares withheld to satisfy minimum tax withholding, shares | 110,286 | |||||
Vesting of restricted stock units, net of shares withheld to satisfy minimum tax withholding, value | (1,900) | $ 0 | (1,900) | 0 | 0 | 0 |
Dividends declared, shares | 0 | |||||
Dividends declared, value | (5,000) | $ 0 | 0 | (5,000) | 0 | 0 |
Net income | 23,200 | 0 | 0 | 23,200 | 0 | 0 |
Change in net unrealized gains in investments, net of tax | $ 8,000 | $ 0 | 0 | 0 | 8,000 | 0 |
Stockholders' equity, shares at Mar. 31, 2017 | 56,373,568 | 56,373,568 | ||||
Stockholders' equity, value at Mar. 31, 2017 | $ 867,500 | $ 600 | $ 372,700 | $ 795,400 | $ 82,500 | $ (383,700) |
Conslidated Stockholders Equity
Conslidated Stockholders Equity (Parentheticals) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Stockholders' Equity Parenthetical [Abstract] | ||
Change in net unrealized gains on investments, net of tax | $ (4.3) | $ (10.7) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Operating activities | ||
Net income | $ 23,200 | $ 21,800 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 2,100 | 2,200 |
Stock-based compensation | 1,900 | 1,800 |
Amortization of premium on investments, net | 3,600 | 3,700 |
Allowance for doubtful accounts | (400) | (2,600) |
Deferred income tax expense | 3,000 | 1,700 |
Realized gains on investments, net | (2,200) | (1,500) |
Other | (300) | 100 |
Change in operating assets and liabilities: | ||
Premiums receivable | (18,700) | (11,400) |
Reinsurance recoverable for paid and unpaid losses | 7,700 | 6,600 |
Federal income taxes | 3,200 | 4,100 |
Unpaid losses and loss adjustment expenses | 2,800 | 5,600 |
Unearned premiums | 20,500 | 14,800 |
Accounts payable, accrued expenses and other liabilities | (3,100) | (4,000) |
Deferred reinsurance gain—LPT Agreement | (3,000) | (3,100) |
Other | (4,000) | (7,000) |
Net cash provided by operating activities | 30,700 | 21,600 |
Investing activities | ||
Purchase of fixed maturity securities | (138,300) | (102,500) |
Purchase of equity securities | (5,600) | (32,600) |
Purchase of short-term investments | (7,900) | 0 |
Proceeds from sale of fixed maturity securities | 27,300 | 42,400 |
Proceeds from sale of equity securities | 5,800 | 26,300 |
Proceeds from maturities and redemptions of investments | 63,300 | 61,500 |
Proceeds from maturities of short-term investments | 8,500 | 0 |
Net change in unsettled investment purchases and sales | 18,000 | 0 |
Capital expenditures | (3,500) | (200) |
Change in restricted cash and cash equivalents | (500) | (1,700) |
Net cash used in investing activities | (32,900) | (6,800) |
Financing activities | ||
Acquisition of treasury stock | 0 | (1,000) |
Cash transactions related to stock-based compensation | (1,300) | 3,400 |
Dividends paid to stockholders | (5,000) | (2,900) |
Payments on notes payable and capital leases | (100) | (100) |
Net cash used in financing activities | (6,400) | (600) |
Net increase (decrease) in cash and cash equivalents | (8,600) | 14,200 |
Cash and cash equivalents at the beginning of the period | 67,200 | 56,600 |
Cash and cash equivalents at the end of the period | $ 58,600 | $ 70,800 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Basis of Presentation and Summary of Operations Employers Holdings, Inc. (EHI) is a Nevada holding company. Through its wholly owned insurance subsidiaries, Employers Insurance Company of Nevada (EICN), Employers Compensation Insurance Company (ECIC), Employers Preferred Insurance Company (EPIC), and Employers Assurance Company (EAC), EHI is engaged in the commercial property and casualty insurance industry, specializing in workers' compensation products and services. Unless otherwise indicated, all references to the “Company” refer to EHI, together with its subsidiaries. In 1999, the Nevada State Industrial Insurance System (the Fund) entered into a retroactive 100% quota share reinsurance agreement (the LPT Agreement) through a loss portfolio transfer transaction with third party reinsurers. The LPT Agreement commenced on June 30, 1999 and will remain in effect until all claims under the covered policies have closed, the LPT Agreement is commuted or terminated, upon the mutual agreement of the parties, or the reinsurers' aggregate maximum limit of liability is exhausted, whichever occurs first. The LPT Agreement does not provide for any additional termination terms. On January 1, 2000, EICN assumed all of the assets, liabilities and operations of the Fund, including the Fund's rights and obligations associated with the LPT Agreement. See Note 7 . The Company accounts for the LPT Agreement as retroactive reinsurance. Upon entry into the LPT Agreement, an initial deferred reinsurance gain (the Deferred Gain) was recorded as a liability on the Company’s Consolidated Balance Sheets. The Company is entitled to receive a contingent profit commission under the LPT Agreement. The contingent profit commission is estimated based on both actual paid results to date and projections of expected paid losses under the LPT Agreement and is recorded as an asset in the accompanying Consolidated Balance Sheets. The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) necessary for a fair presentation of the Company’s consolidated financial position and results of operations for the periods presented have been included. The results of operations for an interim period are not necessarily indicative of the results for an entire year. These financial statements have been prepared consistent with the accounting policies described in the Company’s Form 10-K for the year ended December 31, 2016 (Annual Report). The Company considers an operating segment to be any component of its business whose operating results are regularly reviewed by the Company’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance based on discrete financial information. Currently, the Company has one operating segment, workers’ compensation insurance and related services. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. As a result, actual results could differ from these estimates. The most significant areas that require management judgment are the estimate of unpaid losses and loss adjustment expenses (LAE), evaluation of reinsurance recoverables, recognition of premium revenue, recoverability of deferred income taxes, and valuation of investments. Reclassifications Certain prior period information has been reclassified to conform to the current period presentation. See Note 2. |
New Accounting Standards Level
New Accounting Standards Level 1 (Notes) | 3 Months Ended |
Mar. 31, 2017 | |
New Accounting Standards [Abstract] | |
New Accounting Standards | New Accounting Standards Recently Adopted Accounting Standards In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) Number 2016-09, Compensation - Stock Compensation (Topic 718) that impacted the net tax benefits on the Company's stock-based compensation. The Company elected to early adopt this standard in the third quarter of 2016 with an effective date of January 1, 2016. Adoption of this standard resulted in a $0.8 million reduction to Income tax expense and a corresponding increase to Net income for the three months ended March 31, 2016 and increased basic and diluted earnings per share by $0.02 for the same period. This standard also requires that assumed proceeds under the treasury stock method be modified to exclude the excess tax benefits that would have been recognized in Additional paid-in capital. Additionally, this standard requires that excess tax benefits from stock-based compensation be reported as cash flows from operating activities, as opposed to financing activities. This update resulted in a change in presentation in the Consolidated Statements of Cash Flows. Recently Issued Accounting Standards In January 2017, the FASB issued ASU Number 2017-04, Intangibles-Goodwill and Other (Topic 350) . This update simplifies the measurement of goodwill by eliminating the performance of Step 2 in the goodwill impairment testing. This update allows the testing to be performed by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge when the carrying amount exceeds fair value. Additionally, this update eliminated the requirements of any reporting unit with a zero or negative carrying value to perform Step 2, but requires disclosure of the amount of goodwill allocated to a reporting unit with zero or negative carrying amount of net assets. This update becomes effective for fiscal years beginning after December 15, 2019. The Company does not expect this update to have a material impact to its consolidated financial condition and results of operations. In March 2017, the FASB issued ASU Number 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20) . This update shortens the amortization period on callable debt securities held at a premium to the earliest call date, which now closely aligns the amortization period of premiums and discounts to expectations incorporated in the market pricing on callable debt securities. This update becomes effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, and early adoption is permitted. The Company has not yet estimated the full impact that the adoption will have on its consolidated financial condition and results of operations. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying value and the estimated fair value of the Company’s financial instruments were as follows: March 31, 2017 December 31, 2016 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value (in millions) Financial assets Investments $ 2,610.5 $ 2,610.5 $ 2,552.6 $ 2,552.6 Cash and cash equivalents 58.6 58.6 67.2 67.2 Restricted cash and cash equivalents 4.1 4.1 3.6 3.6 Financial liabilities Notes payable $ 32.0 $ 34.5 $ 32.0 $ 33.0 Assets and liabilities recorded at fair value on the Company's Consolidated Balance Sheets are categorized based upon the levels of judgment associated with the inputs used to measure their fair value. Level inputs are defined as follows: • Level 1 - Inputs are unadjusted quoted market prices for identical assets or liabilities in active markets at the measurement date. • Level 2 - Inputs other than Level 1 prices that are observable for similar assets or liabilities through corroboration with market data at the measurement date. • Level 3 - Inputs that are unobservable that reflect management's best estimate of what willing market participants would use in pricing the assets or liabilities at the measurement date. The Company uses third party pricing services to assist with its investment accounting function. The ultimate pricing source varies depending on the investment security and pricing service used, but investment securities valued on the basis of observable inputs (Levels 1 and 2) are generally assigned values on the basis of actual transactions. Securities valued on the basis of pricing models with significant unobservable inputs or nonbinding broker quotes are classified as Level 3. The Company performs quarterly analyses on the prices it receives from third parties to determine whether the prices are reasonable estimates of fair value, including confirming the fair values of these securities through observable market prices using an alternative pricing source, as it is ultimately management’s responsibility to ensure that the fair values reflected in the Company’s consolidated financial statements are appropriate. If differences are noted in these analyses, the Company may obtain additional information from other pricing services to validate the quoted price. The Company bases all of its estimates of fair value for assets on the bid prices, when available, as they represent what a third-party market participant would be willing to pay in an arm's length transaction. For securities not actively traded, third party pricing services may use quoted market prices of similar instruments or discounted cash flow analyses, incorporating inputs that are currently observable in the markets for similar securities. Inputs that are often used in the valuation methodologies include, but are not limited to, broker quotes, benchmark yields, credit spreads, default rates, and prepayment speed assumptions. There were no adjustments to prices obtained from third party pricing services as of March 31, 2017 and December 31, 2016 that were material to the consolidated financial statements. These methods of valuation will only produce an estimate of fair value if there is objectively verifiable information to produce a valuation. If objectively verifiable information is not available, the Company would be required to produce an estimate of fair value using some of the same methodologies, making assumptions for market-based inputs that are unavailable. The Company's estimates of fair value for its financial liabilities are based on a combination of the variable interest rates for notes with similar durations to discount the projection of future payments on notes payable. The fair value measurements for notes payable have been determined to be Level 2 at each of the periods presented. Each of the Company's insurance operating subsidiaries is a member of the Federal Home Loan Bank (FHLB) of San Francisco. Members are required to purchase stock in the FHLB in addition to maintaining collateral deposits that back any funds advanced. Investment in FHLB stock is recorded at cost, as purchases and sales of these securities are at par value with the issuer. The FHLB stock is considered a restricted security and is periodically evaluated for impairment based on the ultimate recovery of par value. Due to the nature of FHLB stock, its carrying value approximates fair value and was determined by the Company to be Level 3 at each of the periods presented. Certain of the Company's privately placed asset-backed securities are designated as Level 3 primarily due to restrictions on resale. Third party pricing based on actual transactions are typically not available for these securities due to the limited nature of observable pricing inputs. The following table presents the items in the Company's Consolidated Balance Sheets that are stated at fair value and the corresponding fair value measurements. March 31, 2017 December 31, 2016 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in millions) Fixed maturity securities U.S. Treasuries $ — $ 133.7 $ — $ — $ 127.4 $ — U.S. Agencies — 15.0 — — 12.8 — States and municipalities — 817.5 — — 851.6 — Corporate securities — 985.7 — — 956.7 — Residential mortgage-backed securities — 302.9 — — 258.0 — Commercial mortgage-backed securities — 94.9 — — 95.5 — Asset-backed securities — 40.2 5.4 — 35.4 7.0 Total fixed maturity securities $ — $ 2,389.9 $ 5.4 $ — $ 2,337.4 $ 7.0 Equity securities Industrial and miscellaneous $ 174.2 $ — $ — $ 167.2 $ — $ — Non-redeemable preferred (FHLB stock) — — 4.9 — — 4.9 Other 20.7 — — 20.1 — — Total equity securities $ 194.9 $ — $ 4.9 $ 187.3 $ — $ 4.9 Short-term investments $ — $ 15.4 $ — $ — $ 16.0 $ — Certain cash equivalents, principally money market securities, are measured at fair value using the net asset value (NAV) per share. The following table presents cash equivalents at NAV and total cash and cash equivalents carried at fair value on the Company's Consolidated Balance Sheets. March 31, 2017 December 31, 2016 (in millions) Cash and cash equivalents at fair value $ 23.6 $ 9.7 Cash equivalents measured at NAV, which approximates fair value 35.0 57.5 Total cash and cash equivalents $ 58.6 $ 67.2 The following table provides a reconciliation of the beginning and ending balances that are measured using Level 3 inputs for the three months ended March 31, 2017 and 2016 . Level 3 Securities 2017 2016 (in millions) Beginning balance, January 1 $ 11.9 $ — Transfers in (out) of Level 3 (1) (1.4 ) — Purchases and sales, net (0.2 ) 5.3 Ending balance, March 31 $ 10.3 $ 5.3 (1) Transferred from Level 3 to Level 2 because observable market data became available for the securities. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2017 | |
Investments [Abstract] | |
Investments | Investments The cost or amortized cost, gross unrealized gains, gross unrealized losses, and estimated fair value of the Company’s investments were as follows: Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in millions) At March 31, 2017 Fixed maturity securities U.S. Treasuries $ 130.5 $ 3.4 $ (0.2 ) $ 133.7 U.S. Agencies 14.2 0.8 — 15.0 States and municipalities 794.2 28.3 (5.0 ) 817.5 Corporate securities 969.1 19.8 (3.2 ) 985.7 Residential mortgage-backed securities 301.5 4.2 (2.8 ) 302.9 Commercial mortgage-backed securities 95.4 0.4 (0.9 ) 94.9 Asset-backed securities 45.7 0.1 (0.2 ) 45.6 Total fixed maturity securities 2,350.6 57.0 (12.3 ) 2,395.3 Equity securities Industrial and miscellaneous 102.0 73.0 (0.8 ) 174.2 Non-redeemable preferred (FHLB stock) 4.9 — — 4.9 Other 10.7 10.0 — 20.7 Total equity securities 117.6 83.0 (0.8 ) 199.8 Short-term investments 15.4 — — 15.4 Total investments $ 2,483.6 $ 140.0 $ (13.1 ) $ 2,610.5 At December 31, 2016 Fixed maturity securities U.S. Treasuries $ 124.1 $ 3.5 $ (0.2 ) $ 127.4 U.S. Agencies 11.9 0.9 — 12.8 States and municipalities 833.0 24.7 (6.1 ) 851.6 Corporate securities 942.3 18.9 (4.5 ) 956.7 Residential mortgage-backed securities 255.9 4.7 (2.6 ) 258.0 Commercial mortgage-backed securities 96.1 0.4 (1.0 ) 95.5 Asset-backed securities 42.6 — (0.2 ) 42.4 Total fixed maturity securities 2,305.9 53.1 (14.6 ) 2,344.4 Equity securities Industrial and miscellaneous 100.5 67.4 (0.7 ) 167.2 Non-redeemable preferred (FHLB stock) 4.9 — — 4.9 Other 10.7 9.4 — 20.1 Total equity securities 116.1 76.8 (0.7 ) 192.2 Short-term investments 16.0 — — 16.0 Total investments $ 2,438.0 $ 129.9 $ (15.3 ) $ 2,552.6 The amortized cost and estimated fair value of the Company's fixed maturity securities at March 31, 2017 , by contractual maturity, are shown below. Expected maturities differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Amortized Cost Estimated Fair Value (in millions) Due in one year or less $ 180.5 $ 181.8 Due after one year through five years 874.7 899.4 Due after five years through ten years 600.4 615.5 Due after ten years 252.4 255.2 Mortgage and asset-backed securities 442.6 443.4 Total $ 2,350.6 $ 2,395.3 The following is a summary of investments that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 months or greater as of March 31, 2017 and December 31, 2016 . March 31, 2017 December 31, 2016 Estimated Fair Value Gross Unrealized Losses Number of Issues Estimated Fair Value Gross Unrealized Losses Number of Issues (in millions, except number of issues data) Less than 12 months: Fixed maturity securities U.S. Treasuries $ 32.8 $ (0.2 ) 16 $ 33.3 $ (0.2 ) 14 States and municipalities 120.7 (5.0 ) 32 200.9 (6.1 ) 50 Corporate securities 228.9 (2.8 ) 215 289.5 (4.1 ) 101 Residential mortgage-backed securities 165.2 (2.8 ) 59 137.5 (2.6 ) 51 Commercial mortgage-backed securities 50.5 (0.9 ) 21 48.0 (1.0 ) 21 Asset-backed securities 23.8 (0.2 ) 22 30.1 (0.2 ) 20 Total fixed maturity securities 621.9 (11.9 ) 365 739.3 (14.2 ) 257 Equity securities 13.1 (0.7 ) 29 13.6 (0.6 ) 28 Total less than 12 months $ 635.0 $ (12.6 ) 394 $ 752.9 $ (14.8 ) 285 12 months or greater: Fixed maturity securities Corporate securities $ 16.4 $ (0.4 ) 6 $ 15.2 $ (0.4 ) 5 Total fixed maturity securities 16.4 (0.4 ) 6 15.2 (0.4 ) 5 Equity securities 1.5 (0.1 ) 3 1.7 (0.1 ) 5 Total 12 months or greater $ 17.9 $ (0.5 ) 9 $ 16.9 $ (0.5 ) 10 Total available-for-sale: Fixed maturity securities U.S. Treasuries $ 32.8 $ (0.2 ) 16 $ 33.3 $ (0.2 ) 14 States and municipalities 120.7 (5.0 ) 32 200.9 (6.1 ) 50 Corporate securities 245.3 (3.2 ) 221 304.7 (4.5 ) 106 Residential mortgage-backed securities 165.2 (2.8 ) 59 137.5 (2.6 ) 51 Commercial mortgage-backed securities 50.5 (0.9 ) 21 48.0 (1.0 ) 21 Asset-backed securities 23.8 (0.2 ) 22 30.1 (0.2 ) 20 Total fixed maturity securities 638.3 (12.3 ) 371 754.5 (14.6 ) 262 Equity securities 14.6 (0.8 ) 32 15.3 (0.7 ) 33 Total available-for-sale $ 652.9 $ (13.1 ) 403 $ 769.8 $ (15.3 ) 295 The Company determined that unrealized losses on fixed maturities for the three months ended March 31, 2017 were primarily the result of changes in prevailing interest rates and not the credit quality of the issuers. The fixed maturity securities whose total fair value was less than amortized cost were not determined to be other-than-temporarily impaired given the lack of severity and duration of the impairment, the credit quality of the issuers, the Company’s intent to not sell the securities, and a determination that it is not more likely than not that the Company will be required to sell the securities until fair value recovers to above amortized cost, or principal value upon maturity. The Company recognized impairments of $0.2 million (consisting of one security) during the three months ended March 31, 2017 . The other-than-temporary impairment recognized during this period related to an equity security and was the result of the severity and duration of the change in fair value of this security. Certain unrealized losses on equity securities were not considered to be other-than-temporary due to the financial condition and near-term prospects of the issuers, and the Company's intent to hold the securities until fair value recovers to above cost. Net realized gains on investments and the change in unrealized gains (losses) on fixed maturity and equity securities are determined on a specific-identification basis and were as follows: Three Months Ended March 31, 2017 2016 (in millions) Net realized gains on investments Fixed maturity securities Gross gains $ 0.5 $ 0.2 Gross losses — (0.1 ) Net realized gains on fixed maturity securities $ 0.5 $ 0.1 Equity securities Gross gains $ 1.9 $ 7.2 Gross losses (0.2 ) (5.8 ) Net realized gains on equity securities $ 1.7 $ 1.4 Total $ 2.2 $ 1.5 Change in unrealized gains Fixed maturity securities $ 6.2 $ 29.3 Equity securities 6.1 1.2 Total $ 12.3 $ 30.5 Net investment income was as follows: Three Months Ended March 31, 2017 2016 (in millions) Fixed maturity securities $ 17.8 $ 16.7 Equity securities 1.8 1.9 Cash equivalents and restricted cash 0.1 — Gross investment income 19.7 18.6 Investment expenses (0.9 ) (0.8 ) Net investment income $ 18.8 $ 17.8 The Company is required by various state laws and regulations to hold securities or letters of credit in depository accounts with certain states in which it does business. These laws and regulations govern not only the amount but also the types of securities that are eligible for deposit. As of March 31, 2017 and December 31, 2016 , securities having a fair value of $1,175.7 million and $1,009.7 million , respectively, were on deposit. Certain reinsurance contracts require the Company's funds to be held in trust for the benefit of the ceding reinsurer to secure the outstanding liabilities assumed by the Company. The fair value of fixed maturity securities and restricted cash and cash equivalents held in trust for the benefit of ceding reinsurers at March 31, 2017 and December 31, 2016 was $27.6 million and $27.2 million , respectively. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Taxes [Abstract] | |
Income Taxes | Income Taxes Income tax expense for interim periods is measured using an estimated effective tax rate for the annual period. The Company's effective tax rate was 21.4% and 21.3% for the three months ended March 31, 2017 and 2016 , respectively. For each of these periods, tax-advantaged investment income, LPT Reserve Adjustments, Deferred Gain amortization, and certain other adjustments served to reduce our effective income tax rate below the U.S. statutory rate of 35% . |
Liability for Unpaid Losses and
Liability for Unpaid Losses and Loss Adjustment Expenses | 3 Months Ended |
Mar. 31, 2017 | |
Liability for Unpaid Losses and Loss Adjustment Expenses [Abstract] | |
Liability for Unpaid Losses and Loss Adjustment Expenses | Liability for Unpaid Losses and Loss Adjustment Expenses The following table represents a reconciliation of changes in the liability for unpaid losses and LAE. Three Months Ended March 31, 2017 2016 (in millions) Unpaid losses and LAE, gross of reinsurance, at beginning of period $ 2,301.0 $ 2,347.5 Less reinsurance recoverable, excluding bad debt allowance, on unpaid losses and LAE 580.0 628.2 Net unpaid losses and LAE at beginning of period 1,721.0 1,719.3 Losses and LAE, net of reinsurance, incurred during the period related to: Current period 111.9 110.7 Prior periods — (0.3 ) Total net losses and LAE incurred during the period 111.9 110.4 Paid losses and LAE, net of reinsurance, related to: Current period 4.7 4.7 Prior periods 102.9 104.5 Total net paid losses and LAE during the period 107.6 109.2 Ending unpaid losses and LAE, net of reinsurance 1,725.3 1,720.5 Reinsurance recoverable, excluding bad debt allowance, on unpaid losses and LAE 572.9 621.4 Unpaid losses and LAE, gross of reinsurance, at end of period $ 2,298.2 $ 2,341.9 Total net losses and LAE included in the above table excludes the impact of the aggregate of amortization of the deferred reinsurance gain—LPT Agreement, LPT Reserve Adjustments, and LPT Contingent Commission Adjustments, which totaled $2.9 million and $3.1 million for the three months ended March 31, 2017 and 2016 , respectively (Note 7 ). The change in incurred losses and LAE attributable to prior periods was related to the Company's assigned risk business for the three months ended March 31, 2016 . |
LPT Agreement
LPT Agreement | 3 Months Ended |
Mar. 31, 2017 | |
LPT Agreement [Abstract] | |
LPT Agreement | LPT Agreement The Company is party to the LPT Agreement under which $1,525.0 million in liabilities for losses and LAE related to claims incurred by the Fund prior to July 1, 1995 were reinsured for consideration of $775.0 million . The LPT Agreement provides coverage up to $2,000.0 million . The Company records its estimate of contingent profit commission in the accompanying Consolidated Balance Sheets as Contingent commission receivable–LPT Agreement and a corresponding liability is recorded in the accompanying Consolidated Balance Sheets in Deferred reinsurance gain–LPT Agreement. The Deferred Gain is being amortized using the recovery method. Amortization is determined by the proportion of actual reinsurance recoveries to total estimated recoveries over the life of the LPT Agreement, except for the contingent profit commission, which is amortized through June 30, 2024, the date through which the Company is entitled to receive a contingent profit commission under the LPT Agreement. The amortization is recorded in losses and LAE incurred in the accompanying consolidated statements of comprehensive income. Any adjustments to the Deferred Gain are recorded in losses and LAE incurred in the accompanying consolidated statements of comprehensive income. The Company amortized $2.9 million and $3.1 million of the Deferred Gain for the three months ended March 31, 2017 and 2016 , respectively. The remaining Deferred Gain was $171.9 million and $174.9 million as of March 31, 2017 and December 31, 2016 , respectively. The estimated remaining liabilities subject to the LPT Agreement were $458.6 million and $465.5 million as of March 31, 2017 and December 31, 2016 , respectively. Losses and LAE paid with respect to the LPT Agreement totaled $729.6 million and $722.7 million from inception through March 31, 2017 and December 31, 2016 , respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2017 | |
Accumulated Other Comprehensive Income [Abstract] | |
Accumulated Other Comprehensive Income, Net | Accumulated Other Comprehensive Income Accumulated other comprehensive income is comprised of unrealized gains on investments classified as available-for-sale, net of deferred tax expense. The following table summarizes the components of accumulated other comprehensive income: March 31, 2017 December 31, 2016 (in millions) Net unrealized gain on investments, before taxes $ 126.9 $ 114.6 Deferred tax expense on net unrealized gains (44.4 ) (40.1 ) Total accumulated other comprehensive income $ 82.5 $ 74.5 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Stock-Based Compensation [Abstract] | |
Stock-Based compensation | Stock-Based Compensation The Company awarded restricted stock units (RSUs) and performance share units (PSUs) to certain employees of the Company as follows: Number Awarded Weighted Average Fair Value on Date of Grant Weighted Average Exercise Price Aggregate Fair Value on Date of Grant (in millions) March 2017 RSUs (1) 72,020 37.60 — 2.7 PSUs (2) 97,440 37.60 — 3.7 (1) The RSUs awarded in March 2017 were awarded to certain employees of the Company and vest 25% on March 15, 2018, and each of the subsequent three anniversaries of that date . The RSUs are subject to accelerated vesting in certain circumstances, including but not limited to: death, disability, retirement, or in connection with change of control of the Company. (2) The PSUs awarded in March 2017 were awarded to certain employees of the Company and have a performance period of two years followed by an additional one year vesting period. The PSU awards are subject to certain performance goals with payouts that range from 0% to 200% of the target awards. The value shown in the table represents the aggregate number of PSUs awarded at the target level. Commencing in 2017, employees who were awarded RSUs and PSUs are entitled to receive dividend equivalents for eligible awards, payable in cash, when the underlying award vests and becomes payable. If the underlying award does not vest or is forfeited, any dividend equivalents with respect to the underlying award will also fail to become payable and will be forfeited. A total of 37,005 , 262,239 , and 586,132 stock options were exercised during the three months ended March 31, 2017 and 2016, and the year ended December 31, 2016 , respectively. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share excludes dilution and is computed by dividing income applicable to stockholders by the weighted average number of shares outstanding for the period. Diluted earnings per share reflects the potential dilutive impact of all convertible securities on earnings per share. Diluted earnings per share includes shares that are assumed to be issued under the “treasury stock method,” which reflects the potential dilution that would occur if outstanding RSUs and PSUs had vested and options were to be exercised. Commencing in 2017, certain stock-based compensation awards are eligible to receive dividend equivalents on awards that fully vest or become payable. These awards are not considered participating securities for the purposes of determining earnings per share. The following table presents the net income and the weighted average number of shares outstanding used in the earnings per common share calculations. Three Months Ended March 31, 2017 2016 (in millions, except share data) Net income available to stockholders—basic and diluted $ 23.2 $ 21.8 Weighted average number of shares outstanding—basic 32,327,784 32,413,818 Effect of dilutive securities: PSUs 309,891 151,031 Stock options 225,664 304,073 RSUs 102,028 86,310 Dilutive potential shares 637,583 541,414 Weighted average number of shares outstanding—diluted 32,965,367 32,955,232 Diluted earnings per share excludes outstanding options and other common stock equivalents in periods where the inclusion of such options and common stock equivalents would be anti-dilutive. The following table presents options, PSUs, and RSUs that were excluded from diluted earnings per share. Three Months Ended March 31, 2017 2016 Options excluded as the exercise price was greater than the average market price — — Options, PSUs and RSUs excluded under the treasury method as the potential proceeds on settlement or exercise price were greater than the value of shares acquired — 80,800 |
Fair Value of Financial Instr19
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value of Financial Instruments [Abstract] | |
Estimated fair value of financial instruments table | The carrying value and the estimated fair value of the Company’s financial instruments were as follows: March 31, 2017 December 31, 2016 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value (in millions) Financial assets Investments $ 2,610.5 $ 2,610.5 $ 2,552.6 $ 2,552.6 Cash and cash equivalents 58.6 58.6 67.2 67.2 Restricted cash and cash equivalents 4.1 4.1 3.6 3.6 Financial liabilities Notes payable $ 32.0 $ 34.5 $ 32.0 $ 33.0 |
Fair value, assets and liabilities measured on recurring basis table | The following table presents the items in the Company's Consolidated Balance Sheets that are stated at fair value and the corresponding fair value measurements. March 31, 2017 December 31, 2016 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in millions) Fixed maturity securities U.S. Treasuries $ — $ 133.7 $ — $ — $ 127.4 $ — U.S. Agencies — 15.0 — — 12.8 — States and municipalities — 817.5 — — 851.6 — Corporate securities — 985.7 — — 956.7 — Residential mortgage-backed securities — 302.9 — — 258.0 — Commercial mortgage-backed securities — 94.9 — — 95.5 — Asset-backed securities — 40.2 5.4 — 35.4 7.0 Total fixed maturity securities $ — $ 2,389.9 $ 5.4 $ — $ 2,337.4 $ 7.0 Equity securities Industrial and miscellaneous $ 174.2 $ — $ — $ 167.2 $ — $ — Non-redeemable preferred (FHLB stock) — — 4.9 — — 4.9 Other 20.7 — — 20.1 — — Total equity securities $ 194.9 $ — $ 4.9 $ 187.3 $ — $ 4.9 Short-term investments $ — $ 15.4 $ — $ — $ 16.0 $ — |
Schedule of Cash and Cash Equivalents [Table Text Block] | The following table presents cash equivalents at NAV and total cash and cash equivalents carried at fair value on the Company's Consolidated Balance Sheets. March 31, 2017 December 31, 2016 (in millions) Cash and cash equivalents at fair value $ 23.6 $ 9.7 Cash equivalents measured at NAV, which approximates fair value 35.0 57.5 Total cash and cash equivalents $ 58.6 $ 67.2 |
Fair value, assets measured on recurring basis, unobservable input reconciliation table | The following table provides a reconciliation of the beginning and ending balances that are measured using Level 3 inputs for the three months ended March 31, 2017 and 2016 . Level 3 Securities 2017 2016 (in millions) Beginning balance, January 1 $ 11.9 $ — Transfers in (out) of Level 3 (1) (1.4 ) — Purchases and sales, net (0.2 ) 5.3 Ending balance, March 31 $ 10.3 $ 5.3 (1) Transferred from Level 3 to Level 2 because observable market data became available for the securities. |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Investments [Abstract] | |
Available-for-sale securities table | The cost or amortized cost, gross unrealized gains, gross unrealized losses, and estimated fair value of the Company’s investments were as follows: Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in millions) At March 31, 2017 Fixed maturity securities U.S. Treasuries $ 130.5 $ 3.4 $ (0.2 ) $ 133.7 U.S. Agencies 14.2 0.8 — 15.0 States and municipalities 794.2 28.3 (5.0 ) 817.5 Corporate securities 969.1 19.8 (3.2 ) 985.7 Residential mortgage-backed securities 301.5 4.2 (2.8 ) 302.9 Commercial mortgage-backed securities 95.4 0.4 (0.9 ) 94.9 Asset-backed securities 45.7 0.1 (0.2 ) 45.6 Total fixed maturity securities 2,350.6 57.0 (12.3 ) 2,395.3 Equity securities Industrial and miscellaneous 102.0 73.0 (0.8 ) 174.2 Non-redeemable preferred (FHLB stock) 4.9 — — 4.9 Other 10.7 10.0 — 20.7 Total equity securities 117.6 83.0 (0.8 ) 199.8 Short-term investments 15.4 — — 15.4 Total investments $ 2,483.6 $ 140.0 $ (13.1 ) $ 2,610.5 At December 31, 2016 Fixed maturity securities U.S. Treasuries $ 124.1 $ 3.5 $ (0.2 ) $ 127.4 U.S. Agencies 11.9 0.9 — 12.8 States and municipalities 833.0 24.7 (6.1 ) 851.6 Corporate securities 942.3 18.9 (4.5 ) 956.7 Residential mortgage-backed securities 255.9 4.7 (2.6 ) 258.0 Commercial mortgage-backed securities 96.1 0.4 (1.0 ) 95.5 Asset-backed securities 42.6 — (0.2 ) 42.4 Total fixed maturity securities 2,305.9 53.1 (14.6 ) 2,344.4 Equity securities Industrial and miscellaneous 100.5 67.4 (0.7 ) 167.2 Non-redeemable preferred (FHLB stock) 4.9 — — 4.9 Other 10.7 9.4 — 20.1 Total equity securities 116.1 76.8 (0.7 ) 192.2 Short-term investments 16.0 — — 16.0 Total investments $ 2,438.0 $ 129.9 $ (15.3 ) $ 2,552.6 |
Investments classified by contractual maturity date table | The amortized cost and estimated fair value of the Company's fixed maturity securities at March 31, 2017 , by contractual maturity, are shown below. Expected maturities differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Amortized Cost Estimated Fair Value (in millions) Due in one year or less $ 180.5 $ 181.8 Due after one year through five years 874.7 899.4 Due after five years through ten years 600.4 615.5 Due after ten years 252.4 255.2 Mortgage and asset-backed securities 442.6 443.4 Total $ 2,350.6 $ 2,395.3 |
Unrealized loss on investments table | The following is a summary of investments that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 months or greater as of March 31, 2017 and December 31, 2016 . March 31, 2017 December 31, 2016 Estimated Fair Value Gross Unrealized Losses Number of Issues Estimated Fair Value Gross Unrealized Losses Number of Issues (in millions, except number of issues data) Less than 12 months: Fixed maturity securities U.S. Treasuries $ 32.8 $ (0.2 ) 16 $ 33.3 $ (0.2 ) 14 States and municipalities 120.7 (5.0 ) 32 200.9 (6.1 ) 50 Corporate securities 228.9 (2.8 ) 215 289.5 (4.1 ) 101 Residential mortgage-backed securities 165.2 (2.8 ) 59 137.5 (2.6 ) 51 Commercial mortgage-backed securities 50.5 (0.9 ) 21 48.0 (1.0 ) 21 Asset-backed securities 23.8 (0.2 ) 22 30.1 (0.2 ) 20 Total fixed maturity securities 621.9 (11.9 ) 365 739.3 (14.2 ) 257 Equity securities 13.1 (0.7 ) 29 13.6 (0.6 ) 28 Total less than 12 months $ 635.0 $ (12.6 ) 394 $ 752.9 $ (14.8 ) 285 12 months or greater: Fixed maturity securities Corporate securities $ 16.4 $ (0.4 ) 6 $ 15.2 $ (0.4 ) 5 Total fixed maturity securities 16.4 (0.4 ) 6 15.2 (0.4 ) 5 Equity securities 1.5 (0.1 ) 3 1.7 (0.1 ) 5 Total 12 months or greater $ 17.9 $ (0.5 ) 9 $ 16.9 $ (0.5 ) 10 Total available-for-sale: Fixed maturity securities U.S. Treasuries $ 32.8 $ (0.2 ) 16 $ 33.3 $ (0.2 ) 14 States and municipalities 120.7 (5.0 ) 32 200.9 (6.1 ) 50 Corporate securities 245.3 (3.2 ) 221 304.7 (4.5 ) 106 Residential mortgage-backed securities 165.2 (2.8 ) 59 137.5 (2.6 ) 51 Commercial mortgage-backed securities 50.5 (0.9 ) 21 48.0 (1.0 ) 21 Asset-backed securities 23.8 (0.2 ) 22 30.1 (0.2 ) 20 Total fixed maturity securities 638.3 (12.3 ) 371 754.5 (14.6 ) 262 Equity securities 14.6 (0.8 ) 32 15.3 (0.7 ) 33 Total available-for-sale $ 652.9 $ (13.1 ) 403 $ 769.8 $ (15.3 ) 295 |
Net realized gains and change in unrealized gains (losses), available for sale securities table | ealized gains on investments and the change in unrealized gains (losses) on fixed maturity and equity securities are determined on a specific-identification basis and were as follows: Three Months Ended March 31, 2017 2016 (in millions) Net realized gains on investments Fixed maturity securities Gross gains $ 0.5 $ 0.2 Gross losses — (0.1 ) Net realized gains on fixed maturity securities $ 0.5 $ 0.1 Equity securities Gross gains $ 1.9 $ 7.2 Gross losses (0.2 ) (5.8 ) Net realized gains on equity securities $ 1.7 $ 1.4 Total $ 2.2 $ 1.5 Change in unrealized gains Fixed maturity securities $ 6.2 $ 29.3 Equity securities 6.1 1.2 Total $ 12.3 $ 30.5 |
Investment income table | Net investment income was as follows: Three Months Ended March 31, 2017 2016 (in millions) Fixed maturity securities $ 17.8 $ 16.7 Equity securities 1.8 1.9 Cash equivalents and restricted cash 0.1 — Gross investment income 19.7 18.6 Investment expenses (0.9 ) (0.8 ) Net investment income $ 18.8 $ 17.8 |
Liability for Unpaid Losses a21
Liability for Unpaid Losses and Loss Adjustment Expenses (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Liability for Unpaid Losses and Loss Adjustment Expenses [Abstract] | |
Changes in the liability for unpaid losses and LAE table | The following table represents a reconciliation of changes in the liability for unpaid losses and LAE. Three Months Ended March 31, 2017 2016 (in millions) Unpaid losses and LAE, gross of reinsurance, at beginning of period $ 2,301.0 $ 2,347.5 Less reinsurance recoverable, excluding bad debt allowance, on unpaid losses and LAE 580.0 628.2 Net unpaid losses and LAE at beginning of period 1,721.0 1,719.3 Losses and LAE, net of reinsurance, incurred during the period related to: Current period 111.9 110.7 Prior periods — (0.3 ) Total net losses and LAE incurred during the period 111.9 110.4 Paid losses and LAE, net of reinsurance, related to: Current period 4.7 4.7 Prior periods 102.9 104.5 Total net paid losses and LAE during the period 107.6 109.2 Ending unpaid losses and LAE, net of reinsurance 1,725.3 1,720.5 Reinsurance recoverable, excluding bad debt allowance, on unpaid losses and LAE 572.9 621.4 Unpaid losses and LAE, gross of reinsurance, at end of period $ 2,298.2 $ 2,341.9 |
Accumulated Other Comprehensi22
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Accumulated Other Comprehensive Income [Abstract] | |
Schedule of accumulated other comprehensive income (loss) table | The following table summarizes the components of accumulated other comprehensive income: March 31, 2017 December 31, 2016 (in millions) Net unrealized gain on investments, before taxes $ 126.9 $ 114.6 Deferred tax expense on net unrealized gains (44.4 ) (40.1 ) Total accumulated other comprehensive income $ 82.5 $ 74.5 |
Stock-Based Compensation Stock-
Stock-Based Compensation Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Stock-Based Compensation [Abstract] | |
Share-based compensation arrangements by share-based payment award table | The Company awarded restricted stock units (RSUs) and performance share units (PSUs) to certain employees of the Company as follows: Number Awarded Weighted Average Fair Value on Date of Grant Weighted Average Exercise Price Aggregate Fair Value on Date of Grant (in millions) March 2017 RSUs (1) 72,020 37.60 — 2.7 PSUs (2) 97,440 37.60 — 3.7 (1) The RSUs awarded in March 2017 were awarded to certain employees of the Company and vest 25% on March 15, 2018, and each of the subsequent three anniversaries of that date . The RSUs are subject to accelerated vesting in certain circumstances, including but not limited to: death, disability, retirement, or in connection with change of control of the Company. (2) The PSUs awarded in March 2017 were awarded to certain employees of the Company and have a performance period of two years followed by an additional one year vesting period. The PSU awards are subject to certain performance goals with payouts that range from 0% to 200% of the target awards. The value shown in the table represents the aggregate number of PSUs awarded at the target level. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net income and weighted average common shares outstanding used in earnings per share calculations table | The following table presents the net income and the weighted average number of shares outstanding used in the earnings per common share calculations. Three Months Ended March 31, 2017 2016 (in millions, except share data) Net income available to stockholders—basic and diluted $ 23.2 $ 21.8 Weighted average number of shares outstanding—basic 32,327,784 32,413,818 Effect of dilutive securities: PSUs 309,891 151,031 Stock options 225,664 304,073 RSUs 102,028 86,310 Dilutive potential shares 637,583 541,414 Weighted average number of shares outstanding—diluted 32,965,367 32,955,232 |
Antidilutive securities excluded from computation of earnings per share table | The following table presents options, PSUs, and RSUs that were excluded from diluted earnings per share. Three Months Ended March 31, 2017 2016 Options excluded as the exercise price was greater than the average market price — — Options, PSUs and RSUs excluded under the treasury method as the potential proceeds on settlement or exercise price were greater than the value of shares acquired — 80,800 |
Basis of Presentation (Details)
Basis of Presentation (Details) | 9 Months Ended |
Sep. 30, 2016 | |
Basis of Presentation [Abstract] | |
Number of Operating Segments | 1 |
New Accounting Standards Adopte
New Accounting Standards Adopted ASU (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Tax Expense (Benefit) | $ 6,300 | $ 5,900 |
Net income | $ 23,200 | $ 21,800 |
Accounting Standards Update No 2016-09 [Member] | ||
Basic and Diluted | $ 0.02 | |
Income Tax Expense (Benefit) | $ (800) | |
Net income | $ 800 |
Fair Value of Financial Instr27
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Investments | $ 2,610,500 | $ 2,552,600 | ||
Investments, fair value | 2,610,500 | 2,552,600 | ||
Cash and cash equivalents | 58,600 | 67,200 | $ 70,800 | $ 56,600 |
Cash and cash equivalents, estimated fair value | 58,600 | 67,200 | ||
Restricted cash and cash equivalents | 4,100 | 3,600 | ||
Notes payable | 32,000 | 32,000 | ||
Notes Payable, fair value | 34,500 | 33,000 | ||
Estimate of Fair Value, Fair Value Disclosure [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Restricted cash and cash equivalents | $ 4,100 | $ 3,600 |
Fair Value of Financial Instr28
Fair Value of Financial Instruments, Fair Value Inputs (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 2,610.5 | $ 2,552.6 |
Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 2,395.3 | 2,344.4 |
Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 2,389.9 | 2,337.4 |
Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 5.4 | 7 |
US Treasury Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 133.7 | 127.4 |
US Treasury Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
US Treasury Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 133.7 | 127.4 |
US Treasury Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
US Government Agencies Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 15 | 12.8 |
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 15 | 12.8 |
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
US States and Political Subdivisions Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 817.5 | 851.6 |
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 817.5 | 851.6 |
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Corporate Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 985.7 | 956.7 |
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 985.7 | 956.7 |
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Residential Mortgage Backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 302.9 | 258 |
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 302.9 | 258 |
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Commercial Mortgage Backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 94.9 | 95.5 |
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 94.9 | 95.5 |
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Asset-backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 45.6 | 42.4 |
Asset-backed Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Asset-backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 40.2 | 35.4 |
Asset-backed Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 5.4 | 7 |
Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 199.8 | 192.2 |
Equity Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 194.9 | 187.3 |
Equity Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Equity Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 4.9 | 4.9 |
Industrial and Miscellaneous [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 174.2 | 167.2 |
Industrial and Miscellaneous [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 174.2 | 167.2 |
Industrial and Miscellaneous [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Industrial and Miscellaneous [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Non-redeemable preferred (FHLB stock) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 4.9 | 4.9 |
Non-redeemable preferred (FHLB stock) [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Non-redeemable preferred (FHLB stock) [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Non-redeemable preferred (FHLB stock) [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 4.9 | 4.9 |
Other [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 20.7 | 20.1 |
Other [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 20.7 | 20.1 |
Other [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Other [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Short-term Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 15.4 | 16 |
Short-term Investments [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Short-term Investments [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 16 | |
Short-term Investments [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 0 | $ 0 |
Fair Value of Financial Instr29
Fair Value of Financial Instruments Cash Equivalents at NAV and Total Cash and Cash Equivalents Carried at Fair Value (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents at fair value | $ 23.6 | $ 9.7 |
Cash equivalents measured at NAV, which approximates fair value | 35 | 57.5 |
Total cash and cash equivalents | $ 58.6 | $ 67.2 |
Fair Value of Financial Instr30
Fair Value of Financial Instruments Fair Value of Financial Instruments, Reconciliation of Level 3 Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Beginning balance, January 1, 2017 | $ 2,552,600 | ||
Transfers in (out) of Level 3 (1) | (1,400) | [1] | $ 0 |
Purchases and sales, net | (200) | 5,300 | |
Ending balance, March 31, 2017 | 2,610,500 | ||
Fair Value, Inputs, Level 3 [Member] | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Beginning balance, January 1, 2017 | 11,900 | 0 | |
Ending balance, March 31, 2017 | $ 10,300 | $ 5,300 | |
[1] | (1)Transferred from Level 3 to Level 2 because observable market data became available for the securities. |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | $ 2,483,600 | $ 2,438,000 |
Gross unrealized gain | 140,000 | 129,900 |
Gross unrealized loss | (13,100) | (15,300) |
Investments | 2,610,500 | 2,552,600 |
Deposit Assets | ||
Investments | 2,610,500 | 2,552,600 |
Assets Held-in-trust | ||
Investments | 2,610,500 | 2,552,600 |
Funds Held under Reinsurance Agreements, Asset | 27,600 | 27,200 |
Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 2,350,600 | 2,305,900 |
Gross unrealized gain | 57,000 | 53,100 |
Gross unrealized loss | (12,300) | (14,600) |
Investments | 2,395,300 | 2,344,400 |
Deposit Assets | ||
Investments | 2,395,300 | 2,344,400 |
Assets Held-in-trust | ||
Investments | 2,395,300 | 2,344,400 |
US Treasury Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 130,500 | 124,100 |
Gross unrealized gain | 3,400 | 3,500 |
Gross unrealized loss | (200) | (200) |
Investments | 133,700 | 127,400 |
Deposit Assets | ||
Investments | 133,700 | 127,400 |
Assets Held-in-trust | ||
Investments | 133,700 | 127,400 |
US Government Agencies Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 14,200 | 11,900 |
Gross unrealized gain | 800 | 900 |
Gross unrealized loss | 0 | 0 |
Investments | 15,000 | 12,800 |
Deposit Assets | ||
Investments | 15,000 | 12,800 |
Assets Held-in-trust | ||
Investments | 15,000 | 12,800 |
US States and Political Subdivisions Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 794,200 | 833,000 |
Gross unrealized gain | 28,300 | 24,700 |
Gross unrealized loss | (5,000) | (6,100) |
Investments | 817,500 | 851,600 |
Deposit Assets | ||
Investments | 817,500 | 851,600 |
Assets Held-in-trust | ||
Investments | 817,500 | 851,600 |
Corporate Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 969,100 | 942,300 |
Gross unrealized gain | 19,800 | 18,900 |
Gross unrealized loss | (3,200) | (4,500) |
Investments | 985,700 | 956,700 |
Deposit Assets | ||
Investments | 985,700 | 956,700 |
Assets Held-in-trust | ||
Investments | 985,700 | 956,700 |
Residential Mortgage Backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 301,500 | 255,900 |
Gross unrealized gain | 4,200 | 4,700 |
Gross unrealized loss | (2,800) | (2,600) |
Investments | 302,900 | 258,000 |
Deposit Assets | ||
Investments | 302,900 | 258,000 |
Assets Held-in-trust | ||
Investments | 302,900 | 258,000 |
Commercial Mortgage Backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 95,400 | 96,100 |
Gross unrealized gain | 400 | 400 |
Gross unrealized loss | (900) | (1,000) |
Investments | 94,900 | 95,500 |
Deposit Assets | ||
Investments | 94,900 | 95,500 |
Assets Held-in-trust | ||
Investments | 94,900 | 95,500 |
Asset-backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 45,700 | 42,600 |
Gross unrealized gain | 100 | 0 |
Gross unrealized loss | (200) | (200) |
Investments | 45,600 | 42,400 |
Deposit Assets | ||
Investments | 45,600 | 42,400 |
Assets Held-in-trust | ||
Investments | 45,600 | 42,400 |
Equity Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 117,600 | 116,100 |
Gross unrealized gain | 83,000 | 76,800 |
Gross unrealized loss | (800) | (700) |
Investments | 199,800 | 192,200 |
Deposit Assets | ||
Investments | 199,800 | 192,200 |
Assets Held-in-trust | ||
Investments | 199,800 | 192,200 |
Industrial and Miscellaneous [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 102,000 | 100,500 |
Gross unrealized gain | 73,000 | 67,400 |
Gross unrealized loss | (800) | (700) |
Investments | 174,200 | 167,200 |
Deposit Assets | ||
Investments | 174,200 | 167,200 |
Assets Held-in-trust | ||
Investments | 174,200 | 167,200 |
Non-redeemable preferred (FHLB stock) [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 4,900 | 4,900 |
Gross unrealized gain | 0 | 0 |
Gross unrealized loss | 0 | 0 |
Investments | 4,900 | 4,900 |
Deposit Assets | ||
Investments | 4,900 | 4,900 |
Assets Held-in-trust | ||
Investments | 4,900 | 4,900 |
Other [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 10,700 | 10,700 |
Gross unrealized gain | 10,000 | 9,400 |
Gross unrealized loss | 0 | 0 |
Investments | 20,700 | 20,100 |
Deposit Assets | ||
Investments | 20,700 | 20,100 |
Assets Held-in-trust | ||
Investments | 20,700 | 20,100 |
Short-term Investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 15,400 | 16,000 |
Gross unrealized gain | 0 | 0 |
Gross unrealized loss | 0 | 0 |
Investments | 15,400 | 16,000 |
Deposit Assets | ||
Investments | 15,400 | 16,000 |
Assets Held-in-trust | ||
Investments | 15,400 | 16,000 |
Required by various state laws and regulations to hold securities or letters of credit in depository account [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investments | 1,175,700 | 1,009,700 |
Deposit Assets | ||
Investments | 1,175,700 | 1,009,700 |
Assets Held-in-trust | ||
Investments | $ 1,175,700 | $ 1,009,700 |
Investments, Amortized Cost and
Investments, Amortized Cost and Estimated Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Amortized Cost | ||
Due in one year or less, amortized cost | $ 180,500 | |
Due after one year through five years, amortized cost | 874,700 | |
Due after five years through ten years, amortized cost | 600,400 | |
Due after ten years, amortized cost | 252,400 | |
Mortgage and asset-backed securities, amortized cost | 442,600 | |
Total, amortized cost | 2,350,600 | |
Estimated Fair Value | ||
Due in one year or less, fair value | 181,800 | |
Due after one year through five years, fair value | 899,400 | |
Due after five years through ten years, fair value | 615,500 | |
Due after ten years, fair value | 255,200 | |
Mortgage and asset-backed securities, fair value | 443,400 | |
Total, fair value | $ 2,395,300 | $ 2,344,400 |
Investments, Continuous Loss Po
Investments, Continuous Loss Position (Details) | 3 Months Ended | ||
Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 635,000,000 | $ 752,900,000 | |
Estimated fair value, 12 months or greater | 17,900,000 | 16,900,000 | |
Estimated fair value, total | 652,900,000 | 769,800,000 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 months | (12,600,000) | (14,800,000) | |
Gross unrealized losses, 12 months or greater | 500,000 | 500,000 | |
Estimated unrealized losses, total | $ (13,100,000) | $ (15,300,000) | |
Number of issues in loss position, less than 12 months | 394 | 285 | |
Number of Issues in loss position, 12 months or greater | 9 | 10 | |
Number of issues loss position, aggregate | 403 | 295 | |
Other than temporary impairment, credit losses recognized in earnings | $ 200,000 | $ 5,300,000 | |
Total impairments, number of securities | 1 | ||
Debt Securities [Member] | |||
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 621,900,000 | $ 739,300,000 | |
Estimated fair value, 12 months or greater | 16,400,000 | 15,200,000 | |
Estimated fair value, total | 638,300,000 | 754,500,000 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 months | (11,900,000) | (14,200,000) | |
Gross unrealized losses, 12 months or greater | 400,000 | 400,000 | |
Estimated unrealized losses, total | $ (12,300,000) | $ (14,600,000) | |
Number of issues in loss position, less than 12 months | 365 | 257 | |
Number of Issues in loss position, 12 months or greater | 6 | 5 | |
Number of issues loss position, aggregate | 371 | 262 | |
US Treasury Securities [Member] | |||
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 32,800,000 | $ 33,300,000 | |
Estimated fair value, total | 32,800,000 | 33,300,000 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 months | (200,000) | (200,000) | |
Estimated unrealized losses, total | $ (200,000) | $ (200,000) | |
Number of issues in loss position, less than 12 months | 16 | 14 | |
Number of issues loss position, aggregate | 16 | 14 | |
US States and Political Subdivisions Debt Securities [Member] | |||
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 120,700,000 | $ 200,900,000 | |
Estimated fair value, total | 120,700,000 | 200,900,000 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 months | (5,000,000) | (6,100,000) | |
Estimated unrealized losses, total | $ (5,000,000) | $ (6,100,000) | |
Number of issues in loss position, less than 12 months | 32 | 50 | |
Number of issues loss position, aggregate | 32 | 50 | |
Corporate Debt Securities [Member] | |||
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 228,900,000 | $ 289,500,000 | |
Estimated fair value, 12 months or greater | 16,400,000 | 15,200,000 | |
Estimated fair value, total | 245,300,000 | 304,700,000 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 months | (2,800,000) | (4,100,000) | |
Gross unrealized losses, 12 months or greater | 400,000 | 400,000 | |
Estimated unrealized losses, total | $ (3,200,000) | $ (4,500,000) | |
Number of issues in loss position, less than 12 months | 215 | 101 | |
Number of Issues in loss position, 12 months or greater | 6 | 5 | |
Number of issues loss position, aggregate | 221 | 106 | |
Residential Mortgage Backed Securities [Member] | |||
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 165,200,000 | $ 137,500,000 | |
Estimated fair value, total | 165,200,000 | 137,500,000 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 months | (2,800,000) | (2,600,000) | |
Estimated unrealized losses, total | $ (2,800,000) | $ (2,600,000) | |
Number of issues in loss position, less than 12 months | 59 | 51 | |
Number of issues loss position, aggregate | 59 | 51 | |
Commercial Mortgage Backed Securities [Member] | |||
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 50,500,000 | $ 48,000,000 | |
Estimated fair value, total | 50,500,000 | 48,000,000 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 months | (900,000) | (1,000,000) | |
Estimated unrealized losses, total | $ (900,000) | $ (1,000,000) | |
Number of issues in loss position, less than 12 months | 21 | 21 | |
Number of issues loss position, aggregate | 21 | 21 | |
Asset-backed Securities [Member] | |||
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 23,800,000 | $ 30,100,000 | |
Estimated fair value, total | 23,800,000 | 30,100,000 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 months | (200,000) | (200,000) | |
Estimated unrealized losses, total | $ (200,000) | $ (200,000) | |
Number of issues in loss position, less than 12 months | 0 | 0 | |
Number of issues loss position, aggregate | 0 | 0 | |
Equity Securities [Member] | |||
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 13,100,000 | $ 13,600,000 | |
Estimated fair value, 12 months or greater | 1,500,000 | 1,700,000 | |
Estimated fair value, total | 14,600,000 | 15,300,000 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 months | (700,000) | (600,000) | |
Gross unrealized losses, 12 months or greater | 100,000 | 100,000 | |
Estimated unrealized losses, total | $ (800,000) | $ (700,000) | |
Number of issues in loss position, less than 12 months | 29 | 28 | |
Number of Issues in loss position, 12 months or greater | 3 | 5 | |
Number of issues loss position, aggregate | 32 | 33 |
Investments, Net Realized Gains
Investments, Net Realized Gains (Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Net realized gains (losses) | ||
Net realized gains (losses) on fixed maturity and equity securities | $ 2.2 | $ 1.5 |
Change in unrealized gains (losses) | ||
Change in unrealized gains (losses) on fixed maturity and equity securities | 12.3 | 30.5 |
Debt Securities [Member] | ||
Net realized gains (losses) | ||
Gross gains from sales | 0.5 | 0.2 |
Gross losses from sales | 0 | 0.1 |
Net realized gains (losses) on fixed maturity and equity securities | 0.5 | 0.1 |
Change in unrealized gains (losses) | ||
Change in unrealized gains (losses) on fixed maturity and equity securities | 6.2 | 29.3 |
Equity Securities [Member] | ||
Net realized gains (losses) | ||
Gross gains from sales | 1.9 | 7.2 |
Gross losses from sales | 0.2 | 5.8 |
Net realized gains (losses) on fixed maturity and equity securities | 1.7 | 1.4 |
Change in unrealized gains (losses) | ||
Change in unrealized gains (losses) on fixed maturity and equity securities | $ 6.1 | $ 1.2 |
Net Investment Income (Details)
Net Investment Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||
Investment income | $ 19.7 | $ 18.6 |
Investment expenses | 0.9 | 0.8 |
Net investment income | 18.8 | 17.8 |
Debt Securities [Member] | ||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||
Investment income related to fixed maturity securities and short-term investments and cash equivalents | 17.8 | 16.7 |
Equity Securities [Member] | ||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||
Investment income related to equity securities | 1.8 | 1.9 |
Short-term Investments [Member] | ||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||
Investment income related to fixed maturity securities and short-term investments and cash equivalents | $ 0.1 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract] | ||
Statutory tax rate | 35.00% | |
Effective tax rate | 21.40% | 21.30% |
Liability for Unpaid Losses a37
Liability for Unpaid Losses and Loss Adjustment Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Unpaid losses and LAE, gross of reinsurance, at beginning of period | $ 2,301,000 | $ 2,347,500 |
Less reinsurance recoverable, excluding bad debt allowance, on unpaid losses and LAE | 580,000 | 628,200 |
Net unpaid losses and LAE at beginning of period | 1,721,000 | 1,719,300 |
Losses and LAE, net of reinsurance, incurred during the period related to: | ||
Current period | 111,900 | 110,700 |
Prior periods | 0 | (300) |
Total net losses and LAE incurred during the period | 111,900 | 110,400 |
Deduct payments for losses and LAE, net of reinsurance, related to: | ||
Current period | 4,700 | 4,700 |
Prior periods | 102,900 | 104,500 |
Total net paid losses and LAE during the period | 107,600 | 109,200 |
Ending unpaid losses and LAE, net of reinsurance | 1,725,300 | 1,720,500 |
Reinsurance recoverable, excluding bad debt allowance, on unpaid losses and LAE | 572,900 | 621,400 |
Unpaid losses and LAE, gross of reinsurance, at end of period | 2,298,200 | 2,341,900 |
LPT Agreement [Abstract] | ||
Impact of the LPT Agreement | $ 2,900 | $ 3,100 |
LPT Agreement LPT Agreement (De
LPT Agreement LPT Agreement (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Reinsurance Agreement [Line Items] | |||
Liabilities for the incurred but unpaid losses and LAE related to claims prior to July 1, 1995 | $ 1,500,000 | ||
Ceded premiums written | 775,000 | ||
Amortization of deferred gain | 2,900 | $ 3,100 | |
Deferred reinsurance gain—LPT Agreement | 171,900 | $ 174,900 | |
Estimated remaining liabilities - LPT Agreement | 458,600 | 465,500 | |
Paid losses and LAE claims related to LPT | 729,600 | $ 722,700 | |
Indemnification Agreement [Member] | |||
Reinsurance Agreement [Line Items] | |||
Coverage provided under LPT Agreement | $ 2,000,000 |
Accumulated Other Comprehensi39
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Net unrealized gain on investments, before taxes | $ 126,900 | $ 114,600 |
Deferred tax expense on net unrealized gains | (44,400) | (40,100) |
Accumulated other comprehensive income, net | $ 82,500 | $ 74,500 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-options exercised | 37,005 | 262,239 | 586,132 | |
Officer [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting rights for options awarded | vest 25% on March 15, 2018, and each of the subsequent three anniversaries of that date | |||
Performance share awards performance period | two years | |||
Performance share awards, minimum payout | 0.00% | |||
Performance share awards, maximum payout | 200.00% | |||
Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation award, shares issued | [1] | 72,020 | ||
Share-based compensation options, exercise price on grant date | [2] | $ 37.60 | ||
Share-based compensation award, fair value assumptions, exercise price | $ 0 | |||
Fair value of awards awarded on grant date | [1] | $ 2.7 | ||
Performance Shares [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation award, shares issued | [2] | 97,440 | ||
Share-based compensation options, exercise price on grant date | [2] | $ 37.60 | ||
Share-based compensation award, fair value assumptions, exercise price | $ 0 | |||
Fair value of awards awarded on grant date | [2] | $ 3.7 | ||
Performance Shares [Member] | Officer [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation arrangement by share-based payment award, award vesting period | 1 year | |||
[1] | The RSUs awarded in March 2017 were awarded to certain employees of the Company and vest 25% on March 15, 2018, and each of the subsequent three anniversaries of that date. The RSUs are subject to accelerated vesting in certain circumstances, including but not limited to: death, disability, retirement, or in connection with change of control of the Company. | |||
[2] | The PSUs awarded in March 2017 were awarded to certain employees of the Company and have a performance period of two years followed by an additional one year vesting period. The PSU awards are subject to certain performance goals with payouts that range from 0% to 200% of the target awards. The value shown in the table represents the aggregate number of PSUs awarded at the target level. |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Earnings Per Share, Basic and Diluted, by Common Class [Line Items] | ||
Net income available to stockholders - basic and diluted | $ 23,200 | $ 21,800 |
Weighted average number of shares outstanding - basic | 32,327,784 | 32,413,818 |
Effect of dilutive securities: | ||
Dilutive securities | 637,583 | 541,414 |
Weighted average number of shares outstanding - diluted | 32,965,367 | 32,955,232 |
Antidilutive securities excluded from computation of earnings per share | 0 | 0 |
Antidilutive securites excluded under the treasury method from computation of earnings per share | 0 | 80,800 |
Employee Stock Option [Member] | ||
Effect of dilutive securities: | ||
Dilutive securities | 225,664 | 304,073 |
Restricted Stock Units (RSUs) [Member] | ||
Effect of dilutive securities: | ||
Dilutive securities | 102,028 | 86,310 |
Performance Shares [Member] | ||
Effect of dilutive securities: | ||
Dilutive securities | 309,891 | 151,031 |