Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 15, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 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 | 32,705,816 | ||
Entity Public Float | $ 1,180,291,866 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Investments: | ||
Fixed maturity securities at fair value (amortized cost $2,421.0 at December 31, 2017 and $2,305.9 at December 31, 2016) | $ 2,463,400 | $ 2,344,400 |
Equity securities at fair value (cost $116.7 at December 31, 2017 and $116.1 at December 31, 2016) | 210,300 | 192,200 |
Short-term investments at fair value (amortized cost $4.0 at December 31, 2017 and $16.0 at December 31, 2016) | 4,000 | 16,000 |
Total investments | 2,677,700 | 2,552,600 |
Cash and cash equivalents | 73,300 | 67,200 |
Restricted cash and cash equivalents | 1,000 | 3,600 |
Accrued investment income | 19,600 | 20,600 |
Premiums receivable (less bad debt allowance of $10.0 at December 31, 2017 and $9.8 at December 31, 2016) | 326,700 | 304,700 |
Reinsurance recoverable for: | ||
Paid losses | 7,200 | 8,700 |
Unpaid losses | 537,000 | 580,000 |
Deferred policy acquisition costs | 45,800 | 44,300 |
Deferred income taxes, net | 28,700 | 59,400 |
Property and equipment, net | 13,900 | 22,200 |
Intangible assets, net | 7,900 | 8,200 |
Goodwill | 36,200 | 36,200 |
Contingent commission receivable–LPT Agreement | 31,400 | 31,100 |
Other assets | 33,700 | 34,600 |
Total assets | 3,840,100 | 3,773,400 |
Claims and policy liabilities: | ||
Unpaid losses and loss adjustment expenses | 2,266,100 | 2,301,000 |
Unearned premiums | 318,300 | 310,300 |
Total claims and policy liabilities | 2,584,400 | 2,611,300 |
Commissions and premium taxes payable | 55,300 | 48,800 |
Accounts payable and accrued expenses | 23,700 | 24,200 |
Deferred reinsurance gain—LPT Agreement | 163,600 | 174,900 |
Notes payable | 20,000 | 32,000 |
Other liabilities | 45,400 | 41,600 |
Total liabilities | 2,892,400 | 2,932,800 |
Commitments and contingencies (Note 12) | ||
Stockholders’ equity: | ||
Common stock, $0.01 par value; 150,000,000 shares authorized; 56,695,174 and 56,226,277 shares issued and 32,597,819 and 32,128,922 shares outstanding at December 31, 2017 and 2016, respectively | 600 | 600 |
Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued | 0 | 0 |
Additional paid-in capital | 381,200 | 372,000 |
Retained earnings | 842,200 | 777,200 |
Accumulated other comprehensive income, net of tax | 107,400 | 74,500 |
Treasury stock, at cost (24,097,355 shares at December 31, 2017 and December 31, 2016) | (383,700) | (383,700) |
Total stockholders’ equity | 947,700 | 840,600 |
Total liabilities and stockholders’ equity | $ 3,840,100 | $ 3,773,400 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Investments: | ||
Amortized cost | $ 2,541.7 | $ 2,438 |
Premiums receivable, bad debt allowance | $ 10 | $ 9.8 |
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) | 56,695,174 | 56,226,277 |
Common stock, shares outstanding (in shares) | 32,597,819 | 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] | ||
Investments: | ||
Amortized cost | $ 2,421 | $ 2,305.9 |
Equity Securities [Member] | ||
Investments: | ||
Amortized cost | 116.7 | 116.1 |
Short-term Investments [Member] | ||
Investments: | ||
Amortized cost | $ 4 | $ 16 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues | |||
Net premiums earned | $ 716.5 | $ 694.8 | $ 690.4 |
Net investment income | 74.6 | 73.2 | 72.2 |
Net realized gains (losses) on investments | 7.4 | 11.2 | (10.7) |
Gain on redemption of notes payable | 2.1 | 0 | 0 |
Other income | 0.8 | 0.6 | 0.2 |
Total revenues | 801.4 | 779.8 | 752.1 |
Expenses | |||
Losses and loss adjustment expenses | 417.2 | 417.9 | 429.4 |
Commission expense | 91.4 | 83.5 | 85.4 |
Underwriting and other operating expenses | 139.9 | 136.1 | 135.2 |
Interest expense | 1.4 | 1.6 | 2.7 |
Other expenses | 7.5 | 0 | 0 |
Total expenses | 657.4 | 639.1 | 652.7 |
Net income before income taxes | 144 | 140.7 | 99.4 |
Income tax expense | 42.8 | 34 | 5 |
Net income | 101.2 | 106.7 | 94.4 |
Comprehensive income | |||
Unrealized gains (losses) during the period (net of taxes of $8.9, $(1.0), and $(16.3) for the years ended December 31, 2017, 2016, and 2015, respectively) | 19.9 | (1.8) | (30.3) |
Reclassification adjustment for net realized (gains) losses in net income (net of taxes of $2.6, $3.9, and $(3.7) for the years ended December 31, 2017, 2016, and 2015, respectively) | (4.8) | (7.3) | 7 |
Other comprehensive income (loss), net of tax | 15.1 | (9.1) | (23.3) |
Total comprehensive income | $ 116.3 | $ 97.6 | $ 71.1 |
Earnings per common share (Note 18): | |||
Basic | $ 3.11 | $ 3.29 | $ 2.94 |
Diluted | 3.06 | 3.24 | 2.90 |
Cash dividends declared per common share | $ 0.60 | $ 0.36 | $ 0.24 |
Net realized gains (losses) on investments | |||
Net realized gains on investments before impairments on fixed maturity and equity securities | $ 8.8 | $ 17 | $ 6.5 |
Other than temporary impairments recognized in earnings | (1.4) | (5.8) | (17.2) |
Net realized gains (losses) on investments | $ 7.4 | $ 11.2 | $ (10.7) |
Consolidated Statements of Com5
Consolidated Statements of Comprehensive Income (Parentheticals) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other Comprehensive Income Parenthetical [Abstract] | |||
Other comprehensive income (loss), unrealized holding gain (loss) on securities arising during period, tax | $ 8.9 | $ (1) | $ (16.3) |
Other comprehensive income (loss), reclassification adjustment for sale of securities included in net income, tax | $ 2.6 | $ 3.9 | $ (3.7) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income, Net | Treasury Stock at Cost |
Stockholders' equity, shares at Dec. 31, 2014 | 54,866,802 | |||||
Stockholders' equity, value at Dec. 31, 2014 | $ 686,800 | $ 600 | $ 346,600 | $ 595,300 | $ 106,900 | $ (362,600) |
Stock-based compensation (Note 14), shares | 0 | |||||
Stock-based compensation (Note 14), value | 4,600 | $ 0 | 4,600 | 0 | 0 | 0 |
Stock-options exercised, shares | 463,466 | |||||
Stock options exercised, value | 7,600 | $ 0 | 7,600 | 0 | 0 | 0 |
Vesting of restricted stock units, net of shares withheld to satisfy minimum tax withholding (Note 14), shares | 259,186 | |||||
Vesting of restricted stock units, net of shares withheld to satisfy minimum tax withholding (Note 14), value | (2,700) | $ 0 | (2,700) | 0 | 0 | 0 |
Dividend to common stockholders, shares | 0 | |||||
Dividend to common stockholders, value | 7,700 | $ 0 | 0 | 7,700 | 0 | 0 |
Stockholders' equity, shares at Dec. 31, 2015 | 55,589,454 | |||||
Excess tax benefit from stock-based compensation | 1,100 | $ 0 | 1,100 | 0 | 0 | 0 |
Net income for the period | 94,400 | 0 | 0 | 94,400 | 0 | 0 |
Change in net unrealized gains on investments, net of taxes | (23,300) | 0 | 0 | 0 | (23,300) | 0 |
Stockholders' equity, value at Dec. 31, 2015 | 760,800 | $ 600 | 357,200 | 682,000 | 83,600 | (362,600) |
Stock-based compensation (Note 14), shares | 0 | |||||
Stock-based compensation (Note 14), value | 5,800 | $ 0 | 5,800 | 0 | 0 | 0 |
Stock-options exercised, shares | 586,132 | |||||
Stock options exercised, value | 9,600 | $ 0 | 9,600 | 0 | 0 | 0 |
Vesting of restricted stock units, net of shares withheld to satisfy minimum tax withholding (Note 14), shares | 50,691 | |||||
Vesting of restricted stock units, net of shares withheld to satisfy minimum tax withholding (Note 14), value | (600) | $ 0 | (600) | 0 | 0 | 0 |
Acquisition of treasury stock (Note 13), shares | 0 | |||||
Acquisition of treasury stock (Note 13), value | (21,100) | $ 0 | 0 | 0 | 0 | (21,100) |
Dividend to common stockholders, shares | 0 | |||||
Dividend to common stockholders, value | $ 11,500 | $ 0 | 0 | 11,500 | 0 | 0 |
Stockholders' equity, shares at Dec. 31, 2016 | 56,226,277 | 56,226,277 | ||||
Net income for the period | $ 106,700 | $ 0 | 0 | 106,700 | 0 | 0 |
Change in net unrealized gains on investments, net of taxes | (9,100) | 0 | 0 | 0 | (9,100) | 0 |
Stockholders' equity, value at Dec. 31, 2016 | 840,600 | $ 600 | 372,000 | 777,200 | 74,500 | (383,700) |
Stock-based compensation (Note 14), shares | 0 | |||||
Stock-based compensation (Note 14), value | 6,900 | $ 0 | 6,900 | 0 | 0 | 0 |
Stock-options exercised, shares | 307,076 | |||||
Stock options exercised, value | 6,000 | $ 0 | 6,000 | 0 | 0 | 0 |
Vesting of restricted stock units, net of shares withheld to satisfy minimum tax withholding (Note 14), shares | 161,821 | |||||
Vesting of restricted stock units, net of shares withheld to satisfy minimum tax withholding (Note 14), value | (2,200) | $ 0 | (2,200) | 0 | 0 | 0 |
Grant date fair value adjustment | (200) | $ 0 | (1,500) | 1,300 | 0 | 0 |
Dividend to common stockholders, shares | 0 | |||||
Dividend to common stockholders, value | $ 19,700 | $ 0 | 0 | 19,700 | 0 | 0 |
Stockholders' equity, shares at Dec. 31, 2017 | 56,695,174 | 56,695,174 | ||||
Net income for the period | $ 101,200 | $ 0 | 0 | 101,200 | 0 | 0 |
Net impact of tax enactment on net unrealized gains on investments | 0 | 0 | 0 | (17,800) | 17,800 | 0 |
Change in net unrealized gains on investments, net of taxes | 15,100 | 0 | 0 | 0 | 15,100 | 0 |
Stockholders' equity, value at Dec. 31, 2017 | $ 947,700 | $ 600 | $ 381,200 | $ 842,200 | $ 107,400 | $ (383,700) |
Consolidated Stockholders Equit
Consolidated Stockholders Equity (Parentheticals) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stockholders Equity Parenthetical [Abstract] | |||
Change in net unrealized gains on investments, net of tax of | $ 6.3 | $ (4.9) | $ (12.6) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating activities | |||
Net income | $ 101,200 | $ 106,700 | $ 94,400 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 8,200 | 8,500 | 8,300 |
Stock-based compensation | 6,800 | 5,800 | 4,600 |
Amortization of premium on investments, net | 14,300 | 14,600 | 12,800 |
Allowance for doubtful accounts | 200 | (2,400) | 4,300 |
Deferred income tax expense (benefit) | 24,200 | 13,400 | (5,600) |
Net realized (gains) losses on investments | (7,400) | (11,200) | 10,700 |
Gain on redemption of notes payable | (2,100) | 0 | 0 |
Write-off of previously capitalized costs | 7,500 | 0 | 0 |
Excess tax benefits from stock-based compensation | 0 | 0 | (1,200) |
Change in operating assets and liabilities: | |||
Premiums receivable | (22,200) | (1,200) | (9,600) |
Reinsurance recoverable on paid and unpaid losses | 44,500 | 47,200 | 44,300 |
Current federal income taxes | (2,700) | 7,700 | (3,900) |
Unpaid losses and loss adjustment expenses | (34,900) | (46,500) | (22,200) |
Unearned premiums | 8,000 | 1,400 | (1,900) |
Accounts payable, accrued expenses and other liabilities | (7,000) | (4,200) | 8,600 |
Deferred reinsurance gain–LPT Agreement | (11,300) | (14,600) | (17,500) |
Contingent commission receivable–LPT Agreement | (300) | (1,900) | (2,800) |
Other | 15,300 | (500) | (6,900) |
Net cash provided by operating activities | 142,300 | 122,800 | 116,400 |
Investing activities | |||
Purchases of fixed maturity securities | (592,300) | (466,800) | (476,900) |
Purchases of equity securities | (36,800) | (49,100) | (85,100) |
Purchases of short-term investments | (8,200) | (10,000) | 0 |
Proceeds from sale of fixed maturity securities | 249,800 | 132,400 | 105,400 |
Proceeds from sale of equity securities | 41,200 | 80,400 | 34,700 |
Proceeds from maturities and redemptions of fixed maturity securities | 215,700 | 230,600 | 323,900 |
Proceeds from maturities of short-term investments | 20,200 | 0 | 0 |
Net change in unsettled investment purchases and sales | 5,800 | 0 | 0 |
Capital expenditures and other | (8,200) | (5,000) | (11,500) |
Change in restricted cash and cash equivalents | 2,600 | (1,100) | 8,300 |
Net cash used in investing activities | (110,200) | (88,600) | (101,200) |
Financing activities | |||
Acquisition of common stock | 0 | (21,100) | 0 |
Cash transactions related to stock-based compensation | 3,800 | 9,000 | 4,800 |
Dividends paid to stockholders | (19,700) | (11,500) | (7,700) |
Redemption of notes payable | (9,900) | 0 | (60,000) |
Payments on capital leases | (200) | 0 | (500) |
Excess tax benefits from stock-based compensation | 0 | 0 | 1,200 |
Net cash used in financing activities | (26,000) | (23,600) | (62,200) |
Net increase (decrease) in cash and cash equivalents | 6,100 | 10,600 | (47,000) |
Cash and cash equivalents at the beginning of the period | 67,200 | 56,600 | 103,600 |
Cash and cash equivalents at the end of the period | 73,300 | 67,200 | 56,600 |
Non-cash transactions | |||
Financed property and equipment purchases | 400 | 700 | 300 |
Non-cash exchange of fixed maturity investments for short-term investments | $ 0 | $ 6,000 | $ 0 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2017 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Basis of Presentation and Summary of Operations Nature of Operations and Organization 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 Notes 3 and 10 . 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 on the Company's Consolidated Balance Sheets. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). All intercompany transactions and balances have been eliminated in consolidation. The Company operates as a single operating segment, workers’ compensation insurance, through its wholly owned subsidiaries. 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. 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. Pending Acquisition On August 11, 2017, the Company entered into a stock purchase agreement (Purchase Agreement) with Partner Reinsurance Company of the U.S. (PRUS) with respect to the acquisition (Acquisition) of all of the outstanding shares of capital stock of PartnerRe Insurance Company of New York (PRNY). The purchase price is equal to the sum of: (i) the amount of statutory capital and surplus of PRNY at closing (which is currently estimated to be approximately $40.0 million ); and (ii) $5.8 million . The Company expects to fund the Acquisition with cash on hand. Pursuant to the Purchase Agreement, all liabilities and obligations of PRNY existing as of the closing date, whether known or unknown, will be assumed by PRUS. In addition, PartnerRe Ltd., the parent company of PRUS, has provided the Company with a Guaranty that unconditionally, absolutely and irrevocably guarantees the full and prompt payment and performance by PRUS of all of its obligations, liabilities and indemnities under the Purchase Agreement and the transactions contemplated thereby. The Company will not be acquiring any employees or ongoing business operations pursuant to the Acquisition. The Acquisition is subject to certain closing conditions, including, among other things, approval from the Department of Financial Services of the State of New York. |
Changes in Estimates Level 1 (N
Changes in Estimates Level 1 (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Changes in Estimates [Abstract] | |
Accounting Changes and Error Corrections | Changes in Estimates The Company reduced its estimated loss and LAE reserves ceded under the LPT Agreement (LPT Reserve Adjustments) in each of the years 2016 and 2015 as a result of the determination that adjustments were necessary to reflect observed favorable paid loss trends in each of these years. There were no LPT Reserve Adjustments in 2017. The following table shows the financial statement impact related to the LPT Reserve Adjustments. 2016 2015 (in millions, except per share data) LPT Reserve Adjustments $ (5.0 ) $ (10.0 ) Cumulative adjustment to the Deferred Gain (1) (3.1 ) (6.4 ) Net income impact from this change in estimate 3.1 6.4 Earnings per common share impact from this change in estimate Basic 0.10 0.20 Diluted 0.09 0.20 (1) The cumulative adjustments to the Deferred Gain were also recognized in losses and LAE incurred in the Company's Consolidated Statements of Comprehensive Income, so that the Deferred Gain reflects the balance that would have existed had the revised loss and LAE reserves been recognized at the inception of the LPT Agreement. The Company increased its estimate of Contingent commission receivable – LPT Agreement (LPT Contingent Commission Adjustments) in each of 2017 , 2016 , and 2015 as a result of the determination that adjustments were necessary to reflect observed favorable paid loss trends in each of those years. The following table shows the impact to the Consolidated Statements of Comprehensive Income related to these changes in estimates. 2017 2016 2015 (in millions, except per share data) Change in estimate of Contingent commission receivable - LPT Agreement $ 0.3 $ 1.9 $ 2.8 Cumulative adjustment to the Deferred Gain (1) (0.3 ) (1.8 ) (2.6 ) Net income impact from this change in estimate 0.3 1.8 2.6 Earnings per common share impact from this change in estimate Basic 0.01 0.06 0.08 Diluted 0.01 0.05 0.08 (1) The cumulative adjustments to the Deferred Gain were also recognized in losses and LAE incurred in the Company's Consolidated Statements of Comprehensive Income, so that the Deferred Gain reflects the balance that would have existed had the revised loss and LAE reserves been recognized at the inception of the LPT Agreement. The Company reallocated loss and LAE reserves from non-taxable periods prior to January 1, 2000 to taxable years, which reduced its effective tax rate in 2015 . These changes in estimates were the result of the determination that a reallocation of reserves among accident years was appropriate to address a continuation of observed loss trends in 2015. The following table shows the financial statement impact of these changes in estimates. 2015 (in millions, except per share data) Loss and LAE reserves reallocated to taxable years $ 56.3 Impact to effective tax rate (15.4 )% Net income impact from this change in estimate $ 15.3 Earnings per common share impact from this change in estimate Basic 0.48 Diluted 0.47 No reallocations of losses and LAE reserves from non-taxable periods were made in 2017 or 2016 . |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | Summary of Significant Accounting Policies Cash and Cash Equivalents The Company considers all liquid investments with maturities of less than three months, as measured from the date of purchase, to be cash equivalents. Restricted Cash and Cash Equivalents Restricted cash and cash equivalents represent cash and cash equivalents held in trust in order to secure certain of the Company's obligations and, accordingly, are restricted as to withdrawal or usage. As of December 31, 2017 and 2016 the Company held $24.5 million and $27.2 million , respectively, in trust for reinsurance obligations, of which $1.0 million and $3.6 million , respectively, represented restricted cash and cash equivalents. Short-Term Investments The Company considers all liquid investments with maturities of between three and twelve months, as measured from the date of purchase, to be short-term investments. Investment Securities The Company's investments in fixed maturity securities and equity securities are classified as available-for-sale and are reported at fair value with unrealized gains and losses excluded from earnings and reported as a separate component of stockholders' equity, net of deferred taxes, in accumulated other comprehensive income on the Company’s Consolidated Balance Sheets. Investment income consists primarily of interest and dividends generated by investment securities. Interest is recorded as earned on an accrual basis and dividends are recorded as earned at the ex-dividend date. Interest income on mortgage-backed and asset-backed securities is determined using the effective-yield method based on estimated principal repayments. Mortgage-backed securities are adjusted for the effects of changes in prepayment assumptions on the related accretion of discount or amortization of premium of such securities using the retrospective method. Realized gains and losses on investments are determined on a specific-identification basis. When, in the opinion of management, a decline in the fair value of an equity security below its cost is considered to be “other-than-temporary,” the equity security's cost is written down to its fair value at the time the other-than-temporary decline is identified. The determination of an other-than-temporary decline for fixed maturity securities includes, in addition to other relevant factors, a presumption that if the market value is below cost by a significant amount for a period of time, a bifurcation of the write-down may be necessary based on the portion of the loss that is deemed to be a “credit loss”, which is considered a realized loss, and the portion that is deemed to be an “other than credit loss”, which is considered to be an unrealized loss. If management has the intent to sell the fixed maturity security or more likely than not will be required to sell the fixed maturity security before its anticipated recovery, the investment is written down to its fair value and the entire impairment is recorded as a realized loss in the Company's Consolidated Statements of Comprehensive Income. If management does not have the intent to sell or will not be required to sell the fixed maturity security but does not expect to recover the amortized cost basis of the fixed maturity security, the amount of the other-than-temporary impairment is bifurcated (see Note 6 ). Recognition of Revenue and Expense Revenue Recognition Premiums written are recognized as revenues, net of any applicable underlying reinsurance coverage, and are earned over the term of the related policy. At the end of the policy term, payroll-based premium audits are performed on substantially all policyholder accounts to determine the actual amount of net premiums earned for that policy year. Earned but unbilled premiums include estimated future audit premiums based on the Company's historical experience. These estimates are subject to changes in policyholders' payrolls, economic conditions, and seasonality, and are continually reviewed and adjusted as experience develops or new information becomes known. Any such adjustments are included in current operations; however, they are partially offset by the resulting changes in losses and LAE, commission expenses, and premium taxes. The Company's premiums receivable on its Consolidated Balance Sheets included $64.2 million and $58.4 million of additional premiums expected to be received from policyholders for final audits at December 31, 2017 and 2016 , respectively. The Company establishes a bad debt allowance on its premiums receivable through a charge included in underwriting and other operating expenses in its Consolidated Statements of Comprehensive Income. This bad debt allowance is determined based on estimates and assumptions to project future experience. After all collection efforts have been exhausted, the Company reduces the bad debt allowance for write-offs of premiums receivable that have been deemed uncollectible. The Company's bad debt allowance was $10.0 million and $9.8 million at December 31, 2017 and 2016 , respectively. The Company had write offs, net of recoveries of amounts previously written off, of $3.2 million , $6.0 million , and $2.4 million for the years ended December 31, 2017 , 2016 , and 2015 , respectively. Deferred Policy Acquisition Costs Policy acquisition costs, those costs that relate directly to the successful acquisition of new or renewal insurance contracts, including underwriting, policy issuance and processing, medical and inspection, and sales force contract selling are deferred and amortized as the related premiums are earned. Amortization of deferred policy acquisition costs for the years ended December 31, 2017 , 2016 , and 2015 , was $108.2 million , $104.5 million , and $103.9 million , respectively. If the sum of a policy’s expected losses and LAE and deferred policy acquisition costs exceeds the related unearned premiums and projected investment income, a premium deficiency is determined to exist. In this event, deferred policy acquisition costs are immediately expensed to the extent necessary to eliminate the premium deficiency. If the premium deficiency exceeds deferred acquisition costs then a liability is accrued for the excess deficiency. There were no premium deficiency adjustments recognized during the years ended December 31, 2017 , 2016 , and 2015 . Unpaid Loss and LAE Reserves Unpaid loss and LAE reserves represent management's best estimate of the ultimate net cost of all reported and unreported losses incurred for the applicable periods, less payments made. The estimated reserves for losses and LAE include the accumulation of estimates for all claims reported prior to the balance sheet date, estimates of claims incurred but not reported, and estimates of expenses for investigating and adjusting all incurred and unadjusted claims (based on projections of relevant historical data). Amounts reported are subject to the impact of future changes in economic, regulatory and social conditions. Management believes that, subject to the inherent variability in any such estimate, the reserves are within a reasonable and acceptable range of adequacy. Estimates for claims prior to the balance sheet date are continually monitored and reviewed, and as settlements are made or reserves adjusted, the differences are reported in current operations. Salvage and subrogation recoveries are estimated based on a review of the level of historical salvage and subrogation recoveries. Reinsurance In the ordinary course of business, the Company may purchase excess of loss reinsurance in order to protect it against the impact of large and/or catastrophic losses. Additionally, the Company is a party to the LPT Agreement (see Note 10 ). These reinsurance arrangements reduce the Company's exposure to such losses since its reinsurers are liable to the Company to the extent of the reinsurance protection provided. However, the Company remains liable for all losses it incurs to the extent that any reinsurer is unable or unwilling to make timely payments under its reinsurance agreements. Balances due from reinsurers on unpaid losses, including an estimate of such recoverables related to reserves for incurred but not reported losses, are reported as reinsurance recoverables on the Company’s Consolidated Balance Sheets. Reinsurance recoverables on paid losses represents amounts currently due from reinsurers. Reinsurance recoverables on unpaid losses represents amounts that will be collectible from reinsurers once the losses are paid. Reinsurance recoverables on unpaid losses and LAE amounted to $537.0 million and $580.0 million at December 31, 2017 and 2016 , respectively. Ceded reinsurance premiums are accounted for on a basis consistent with those used in accounting for the underlying premiums, and are reported as reductions to arrive at net premiums written and earned. Ceded losses and LAE are also accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the relevant reinsurance agreement, and are recorded as reductions to losses and LAE incurred. Pursuant to the LPT Agreement, LAE is deemed to be 7% of total losses paid and are payable to the Company as compensation for management of the claims under the LPT Agreement. The Deferred Gain is amortized using the recovery method, whereby the amortization is determined by the proportion of actual reinsurance recoveries to total estimated recoveries through the life of the LPT Agreement, and is recorded in losses and LAE incurred in the Company's Consolidated Statements of Comprehensive Income. Any adjustment to the estimated loss and LAE reserves ceded under the LPT Agreement results in a cumulative adjustment to the Deferred Gain, which is also recognized in losses and LAE incurred in the Company's Consolidated Statements of Comprehensive Income, such that the Deferred Gain reflects the balance that would have existed had the revised reserves been recognized at the inception of the LPT Agreement. Additionally, the Company is entitled to receive a contingent profit commission under the LPT Agreement. The contingent profit commission is equal to 30% of the favorable difference between actual paid losses and LAE and expected paid losses and LAE as established in the LPT Agreement based on losses paid through June 30, 2024. The contingent profit commission is paid every five years beginning June 30, 2004 for the first 25 years of the agreement. The Company could be required to return any previously received contingent profit commission, plus interest, in the event of unfavorable differences through June 30, 2024. The Company records an estimate of contingent profit commission in its Consolidated Balance Sheets as Contingent commission receivable–LPT Agreement and a corresponding liability is recorded as Deferred reinsurance gain–LPT Agreement. The Contingent commission receivable–LPT Agreement is reduced as amounts are received from participating reinsurers. The Deferred reinsurance gain–LPT Agreement is amortized using the recovery method. The amortization of the contingent profit commission is determined by the proportion of actual reinsurance recoveries to total estimated recoveries over the life of the contingent profit commission (through June 30, 2024), and is recorded in losses and LAE incurred in the Company's Consolidated Statements of Comprehensive Income. Any adjustment to the contingent profit commission under the LPT Agreement results in a cumulative adjustment to the Deferred Gain, which is also recognized in losses and LAE incurred in the Company's Consolidated Statements of Comprehensive Income, such that the Deferred Gain reflects the balance that would have existed had the revised contingent profit commission been recognized at the inception of the LPT Agreement. Property and Equipment Property and equipment are stated at cost less accumulated depreciation (see Note 7 ). Expenditures for maintenance and repairs are charged against operations as incurred. Electronic data processing equipment, software, furniture and equipment, and automobiles are depreciated using the straight-line method over three to seven years . Leasehold improvements are carried at cost less accumulated amortization. The Company amortizes leasehold improvements using the straight-line method over the lesser of the useful life of the asset or the remaining original lease term, excluding options or renewal periods. Leasehold improvements are generally amortized over three to five years . Obligations Held Under Capital Leases Leased property and equipment meeting capital lease criteria are capitalized at the lower of the present value of the related lease payments or the fair value of the leased asset at the inception of the lease. Amortization is calculated using the straight-line method based on the term of the lease and is included in the depreciation expense of property and equipment. See Note 12 for additional disclosures related to capital leases. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the Company's financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of the recent change in tax rates on the Company's deferred tax assets and liabilities was recognized within continuing operations in income as of December 22, 2017, the date that the Tax Cuts and Jobs Act was enacted (Enactment) and created stranded tax effects within accumulated other comprehensive income that did not reflect the newly enacted tax rate. The Company reclassified the net tax effects from Accumulated other comprehensive income, net of tax, to Retained earnings as of the date of Enactment. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process. Recognition (Step 1) occurs when the Company concludes that a tax position, based solely on its technical merits, is more likely than not to be sustained upon examination. Measurement (Step 2) is addressed only if Step 1 has been satisfied. Under Step 2, the tax benefit is measured as the largest amount of benefit, determined on a cumulative probability basis, that is more likely than not to be realized upon ultimate settlement. The Company recognizes deferred tax assets when it determines that such assets are more likely than not to be realized in future periods. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, tax-planning strategies, projected future taxable income, projected future tax rates, and results of recent operations. If the Company determines that it is not more likely than not that it could realize its deferred tax assets in future periods it would establish a deferred tax asset valuation allowance that would increase the Company's provision for income taxes. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of its net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents (including restricted cash equivalents), short-term investments, investment securities, premiums receivable, and reinsurance recoverable balances. The Company’s cash equivalents and short-term investments include investments in money market securities and securities backed by the U.S. government. The Company's investment securities are diversified throughout many industries and geographic regions and include investments in U.S. government and U.S. government-sponsored enterprises. The Company believes that it has no significant concentrations of credit risk from a single issue or issuer within its cash equivalents, short-term investments and investment securities other than concentrations in U.S. government and U.S. government-sponsored enterprises. The Company's premiums receivable are generally diversified due to the large number of entities composing the Company's policyholder base and their dispersion across many different industries. The Company monitors the financial condition of its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. The Company also obtains collateral from its reinsurers in order to mitigate the risks related to insolvencies. At December 31, 2017 , $3.5 million of the Company's reinsurance recoverables were collateralized by cash or letters of credit and an additional $380.8 million was in trust accounts for reinsurance recoverables specifically related to the LPT Agreement. Fair Value of Financial Instruments The fair values of the Company's financial instruments have been determined using available market information and other appropriate valuation methodologies. Judgment is required in developing fair value estimates where quoted market prices are not available. Accordingly, these estimates are not necessarily indicative of the amounts that could be realized in a current market exchange. The use of different market assumptions or estimating methodologies may have an effect on the estimated fair value amounts. The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments: Cash and cash equivalents, short-term investments, premiums receivable, accounts payable and accrued expenses, and other liabilities. The carrying amounts for each of these financial instruments as reported in the Company's Consolidated Balance Sheets approximate their fair values. Investment securities. The Company’s investment securities are predominantly valued on the basis of actual market transactions or observable inputs. A small portion of the Company’s investment securities are valued on the basis of pricing models with significant unobservable inputs or nonbinding broker quotes. See Note 5 . Goodwill and Other Intangible Assets The Company tests for impairment of goodwill and non-amortizable intangible assets in the fourth quarter of each year. At the end of each quarter, management considers the results of the previous analysis as well as any recent developments that may constitute triggering events requiring the impairment analysis of goodwill and other intangible assets to be updated. The Company has assessed the effects of current economic conditions on the Company's financial condition and results of operations and changes in the Company's stock price and determined that there were no impairments of these assets as of December 31, 2017 and 2016 . Intangible assets related to state licenses are not subject to amortization. Intangibles related to insurance relationships are amortized in proportion to the expected period of benefit over the next year. The gross carrying value, accumulated amortization, and net carrying value for the Company's intangible assets, by major class, as of December 31, were as follows: 2017 2016 Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value (in millions) State licenses $ 7.7 $ — $ 7.7 $ 7.7 $ — $ 7.7 Insurance relationships 9.4 $ (9.2 ) 0.2 9.4 $ (8.9 ) 0.5 Total $ 17.1 $ (9.2 ) $ 7.9 $ 17.1 $ (8.9 ) $ 8.2 During the years ended December 31, 2017 , 2016 , and 2015 , the Company recognized $0.3 million , $0.3 million , and $0.5 million in amortization expenses associated with its intangible assets, respectively. These amortization expenses are included in the Company's Consolidated Statements of Comprehensive Income in underwriting and other operating expenses. Future amortization expenses associated with the Company's intangible assets are expected to be as follows: Year Amount (in millions) 2018 0.2 Total $ 0.2 Stock-Based Compensation The Company provides stock-based compensation to its directors and certain of its employees, which is recognized in its Consolidated Statements of Comprehensive Income based on estimated fair values over the relevant service period (see Note 14 ). |
New Accounting Standards
New Accounting Standards | 12 Months Ended |
Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
New Accounting Standards | New Accounting Standards Recently Issued Accounting Standards In February 2018, the Financial Accounting Standards Board (FASB) issued ASU Number 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) . The amendments in this update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from Enactment. This update becomes effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted for reporting periods for which financial statements have not yet been issued and should be applied in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company elected to early adopt this update and, accordingly, reclassified $17.8 million of net tax effects resulting from Enactment from Accumulated other comprehensive income, net of tax, to Retained earnings at December 31, 2017 . 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 recognizing an impairment charge when the carrying amount exceeds fair value. Additionally, this update eliminates 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 that this update will 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 does not expect that adoption of this update will have a material impact on its consolidated financial condition and results of operations. In January 2016, the FASB issued ASU Number 2016-01, Financial Instruments - Overall (Subtopic 825-10). This update replaces the guidance to classify equity securities with readily determinable fair values into different categories (trading or available-for-sale) and requires equity securities to be measured at fair value with changes in fair value recognized through net income. Additionally, this update eliminates the disclosure of the method and significant assumptions used to estimate the fair value of financial instruments measured at amortized cost. It requires financial instruments to be measured at fair value using the exit price notion. Furthermore, this update clarifies that an evaluation of deferred tax assets related to available-for-sale securities is needed, in combination with an evaluation of other deferred tax assets, to determine if a valuation allowance is required. This update became effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company has determined this update will result in a reclassification adjustment, net of tax, to retained earnings from accumulated other comprehensive income, which will be determined based on the fair value of securities at the effective date of adoption. In February 2016, the FASB issued ASU Number 2016-02, Leases (Topic 842). This update provides guidance on a new lessee model that includes the recognition of assets and liabilities arising from lease transactions on the balance sheet. Additionally, the update provides clarity on the definition of a lease and the distinction between finance and operating leases. Furthermore, the update requires certain qualitative and quantitative disclosures pertaining to the amounts recorded in the financial statements. This update becomes effective for annual reporting periods, including interim periods within those annual periods, beginning after December 15, 2018 and early adoption is permitted. Currently, the Company is analyzing the impact of the new standard on its current accounting policies, internal controls, and lease contracts. Upon completion of these and other assessments, the Company will evaluate the impact of adopting the new standard on its consolidated financial condition and results of operations. In May 2014, the FASB issued ASU Number 2014-09, Revenue from Contracts with Customers (Topic 606). This update clarifies the principles for recognizing revenue and develops revenue standards to improve revenue recognition guidance. This update requires an entity to recognize revenue as performance obligations are met in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services. In applying this guidance companies are required to: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract(s); (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract(s); and (5) recognize revenue when, or as, the entity satisfies a performance obligation. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which deferred the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, and interim reporting periods within that annual reporting period. Insurance contracts are not within the scope of this updated guidance. The Company has analyzed revenue streams within the current business operation and determined the adoption of this standard will not have an impact on its consolidated financial condition and results of operations. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 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 as of December 31, were as follows: 2017 2016 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Financial assets (in millions) Investments (Note 6) $ 2,677.7 $ 2,677.7 $ 2,552.6 $ 2,552.6 Cash and cash equivalents 73.3 73.3 67.2 67.2 Restricted cash and cash equivalents 1.0 1.0 3.6 3.6 Financial liabilities Notes payable (Note 11) $ 20.0 $ 23.6 $ 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 price, when available, as it represents 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 speeds. There were no adjustments to prices obtained from third party pricing services as of December 31, 2017 and 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 of San Francisco (FHLB). 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. FHLB stock is considered a restricted security and is periodically evaluated by the Company 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 (ABS) 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. December 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 $ — $ 137.0 $ — $ — $ 127.4 $ — U.S. Agencies — 11.8 — — 12.8 — States and municipalities — 642.5 — — 851.6 — Corporate securities — 1,118.0 — — 956.7 — Residential mortgage-backed securities — 389.3 — — 258.0 — Commercial mortgage-backed securities — 106.0 — — 95.5 — Asset-backed securities — 58.8 — — 35.4 7.0 Total fixed maturity securities $ — $ 2,463.4 $ — $ — $ 2,337.4 $ 7.0 Equity securities Industrial and miscellaneous $ 181.7 $ — $ — $ 167.2 $ — $ — Non-redeemable preferred (FHLB stock) — — 4.7 — — 4.9 Other 23.9 — — 20.1 — — Total equity securities $ 205.6 $ — $ 4.7 $ 187.3 $ — $ 4.9 Short-term investments $ — $ 4.0 $ — $ — $ 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. December 31, 2017 December 31, 2016 Cash and cash equivalents at fair value $ 34.3 $ 9.7 Cash equivalents measured at NAV, which approximates fair value 39.0 57.5 Total cash and cash equivalents $ 73.3 $ 67.2 The following table provides a reconciliation of the beginning and ending balances that are measured using Level 3 inputs for the year ended December 31, 2017 . Level 3 Securities 2017 2016 (in millions) Beginning balance, January 1 $ 11.9 $ — Transfers out of Level 3 (1) (7.0 ) — Purchases and sales, net (0.2 ) 11.9 Ending balance, December 31 $ 4.7 $ 11.9 (1) Transferred from Level 3 to Level 2 because observable market data became available for the securities. |
Investments
Investments | 12 Months Ended |
Dec. 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 At December 31, 2017 (in millions) Fixed maturity securities U.S. Treasuries $ 135.8 $ 2.0 $ (0.8 ) $ 137.0 U.S. Agencies 11.3 0.5 — 11.8 States and municipalities 617.0 25.5 — 642.5 Corporate securities 1,103.4 18.0 (3.4 ) 1,118.0 Residential mortgage-backed securities 388.3 3.6 (2.6 ) 389.3 Commercial mortgage-backed securities 106.5 0.4 (0.9 ) 106.0 Asset-backed securities 58.7 0.3 (0.2 ) 58.8 Total fixed maturity securities 2,421.0 50.3 (7.9 ) 2,463.4 Equity securities Industrial and miscellaneous 100.8 81.5 (0.6 ) 181.7 Non-redeemable preferred (FHLB stock) 4.7 — — 4.7 Other 11.2 12.7 — 23.9 Total equity securities 116.7 94.2 (0.6 ) 210.3 Short-term investments 4.0 — — 4.0 Total investments $ 2,541.7 $ 144.5 $ (8.5 ) $ 2,677.7 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 December 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 $ 220.5 $ 221.3 Due after one year through five years 766.6 782.1 Due after five years through ten years 754.7 772.1 Due after ten years 125.7 133.8 Mortgage and asset-backed securities 553.5 554.1 Total $ 2,421.0 $ 2,463.4 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 December 31, 2017 and 2016 . December 31, 2017 December 31, 2016 Estimated Fair Value Gross Unrealized Losses Number of Issues Estimated Fair Value Gross Unrealized Losses Number of Issues Less than 12 months: (dollars in millions) Fixed maturity securities U.S. Treasuries $ 86.0 $ (0.5 ) 28 $ 33.3 $ (0.2 ) 14 States and municipalities — — — 200.9 (6.1 ) 50 Corporate securities 307.6 (2.3 ) 113 289.5 (4.1 ) 101 Residential mortgage-backed securities 165.0 (0.8 ) 45 137.5 (2.6 ) 51 Commercial mortgage-backed securities 41.8 (0.2 ) 19 48.0 (1.0 ) 21 Asset-backed securities 29.3 (0.2 ) 25 30.1 (0.2 ) 20 Total fixed maturity securities 629.7 (4.0 ) 230 739.3 (14.2 ) 257 Equity securities 13.9 (0.6 ) 24 13.6 (0.6 ) 28 Total less than 12 months $ 643.6 $ (4.6 ) 254 $ 752.9 $ (14.8 ) 285 12 months or greater: Fixed maturity securities U.S. Treasuries $ 23.4 $ (0.3 ) 10 $ — $ — — Corporate securities 53.2 (1.1 ) 17 15.2 (0.4 ) 5 Residential mortgage-backed securities 77.1 (1.8 ) 32 — — — Commercial mortgage-backed securities 25.1 (0.7 ) 8 — — — Total fixed maturity securities 178.8 (3.9 ) 67 15.2 (0.4 ) 5 12 months or greater $ 178.8 $ (3.9 ) 67 $ 16.9 $ (0.5 ) 10 Total available-for-sale: Fixed maturity securities U.S. Treasuries $ 109.4 $ (0.8 ) 38 $ 33.3 $ (0.2 ) 14 States and municipalities — — — 200.9 (6.1 ) 50 Corporate securities 360.8 (3.4 ) 130 304.7 (4.5 ) 106 Residential mortgage-backed securities 242.1 (2.6 ) 77 137.5 (2.6 ) 51 Commercial mortgage-backed securities 66.9 (0.9 ) 27 48.0 (1.0 ) 21 Asset-backed securities 29.3 (0.2 ) 25 30.1 (0.2 ) 20 Total fixed maturity securities 808.5 (7.9 ) 297 754.5 (14.6 ) 262 Equity securities 13.9 (0.6 ) 24 15.3 (0.7 ) 33 Total available-for-sale $ 822.4 $ (8.5 ) 321 $ 769.8 $ (15.3 ) 295 The Company recognized impairments on fixed maturity securities of $0.5 million (consisting of nine securities) during the year ended December 31, 2017 . The other-than-temporary impairments recognized during this year were the result of the Company's intent to sell these securities. There were no other-than-temporary impairments recognized on fixed maturity securities during the years ended December 31, 2016 and 2015 . The Company determined that the remaining unrealized losses on fixed maturity securities at December 31, 2017 , 2016 , and 2015 were primarily the result of changes in prevailing interest rates and not the credit quality of the issuers. The fixed maturity securities whose 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 at an amount less than its amortized cost. The Company recognized impairments on equity securities of $0.9 million (consisting of seven securities), $5.8 million (consisting of thirty-seven securities) and $17.2 million (consisting of twenty-seven securities) during the years ended December 31, 2017 , 2016 , and 2015 , respectively. The other-than-temporary impairments recognized during these years were the result of the Company's intent to sell the securities and/or the severity and duration of the change in fair values of these securities. The impairments on equity securities in 2016 and 2015 were primarily due to the downturn in the energy sector that occurred during the fourth quarter of 2015 and the first quarter of 2016. 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: Years Ended December 31, 2017 2016 2015 Net realized gains (losses) on investments (in millions) Fixed maturity securities Gross gains $ 4.7 $ 1.9 $ 0.5 Gross losses (2.2 ) (0.7 ) (0.4 ) Net realized gains on fixed maturity securities $ 2.5 $ 1.2 $ 0.1 Equity securities Gross gains $ 9.3 $ 16.6 $ 8.1 Gross losses (4.4 ) (6.6 ) (18.9 ) Net realized gains (losses) on equity securities $ 4.9 $ 10.0 $ (10.8 ) Total $ 7.4 $ 11.2 $ (10.7 ) Change in unrealized gains (losses) Fixed maturity securities $ 3.9 $ (28.9 ) $ (22.2 ) Equity securities 17.5 14.9 (13.7 ) Total $ 21.4 $ (14.0 ) $ (35.9 ) Net investment income was as follows: Years Ended December 31, 2017 2016 2015 (in millions) Fixed maturity securities $ 70.4 $ 68.5 $ 68.8 Equity securities 6.9 7.4 5.9 Short-term investments 0.1 — — Cash equivalents and restricted cash 0.6 0.4 0.1 Gross investment income 78.0 76.3 74.8 Investment expenses (3.4 ) (3.1 ) (2.6 ) Net investment income $ 74.6 $ 73.2 $ 72.2 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 both December 31, 2017 and 2016 , securities having a fair value of $1,009.7 million 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 December 31, 2017 and 2016 was $24.5 million and $27.2 million , respectively. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure | Property and Equipment Property and equipment consists of the following: As of December 31, 2017 2016 (in millions) Furniture and equipment $ 1.7 $ 2.3 Leasehold improvements 2.9 4.3 Computers and software 54.2 59.0 Automobiles 1.1 1.2 Property and equipment, gross 59.9 66.8 Accumulated depreciation (46.0 ) (44.6 ) Property and equipment, net $ 13.9 $ 22.2 Depreciation expenses related to property and equipment for the years ended December 31, 2017 , 2016 , and 2015 were $7.9 million , $8.2 million , and $7.8 million , respectively. Internally developed software costs of $2.1 million and $1.3 million were capitalized during each of the years ended December 31, 2017 and 2016 , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
Income Taxes | Income Taxes The Company files a consolidated federal income tax return. The insurance subsidiaries pay premium taxes on gross premiums written in lieu of some states' income or franchise taxes. The Tax Cuts and Jobs Act significantly revised U.S. corporate income tax law by, among other things, reducing the corporate statutory income tax rate from 35% to 21% , beginning January 1, 2018 . This reduction in the corporate statutory income tax rate required the Company to re-evaluate certain of its deferred tax assets and liabilities, as of the date of Enactment, to reflect the revised income tax rates applicable to future periods. The Company believes that it has made a reasonable estimate of the income tax effects of the Tax Cuts and Jobs Act as of and for the year ended December 31, 2017. However, the Company was required to base certain of its estimates and assumptions on incomplete information and/or preliminary interpretations of the effects of Enactment. As a result, the Company may need to reflect further adjustments to its deferred tax assets and liabilities recorded as of December 31, 2017 in future periods upon obtaining, preparing, or analyzing additional information about facts and circumstances that existed as of that date that, if known at that time, would have affected the income tax effects initially reported. The Company does not expect the amounts of any future income tax adjustments that may be required to be made to the Company’s deferred tax assets and liabilities as of December 31, 2017 to be material. The Company's provision for income taxes consisted of the following: Years Ended December 31, 2017 2016 2015 Current tax expense: (in millions) Federal $ 17.9 $ 20.3 $ 9.5 State 0.7 0.3 1.1 Total current tax expense 18.6 20.6 10.6 Deferred federal tax expense (benefit): Impact of tax Enactment 7.0 — — Other 17.2 13.4 (5.6 ) Total deferred federal tax expense (benefit) 24.2 13.4 (5.6 ) Income tax expense $ 42.8 $ 34.0 $ 5.0 The difference between the statutory federal tax rate of 35% and the Company's effective tax rate on net income before income taxes as reflected in the Consolidated Statements of Comprehensive Income was as follows: Years Ended December 31, 2017 2016 2015 (in millions) Expense computed at statutory rate $ 50.4 $ 49.3 $ 34.8 Tax-advantaged investment income (7.6 ) (8.5 ) (8.6 ) Pre-Privatization reserve adjustments, excluding LPT — — (15.3 ) LPT deferred gain amortization (4.0 ) (4.7 ) (4.9 ) LPT Reserve Adjustment — (1.1 ) (2.2 ) Stock based compensation (3.4 ) (1.6 ) — Impact of tax Enactment 7.0 — — Other 0.4 0.6 1.2 Income tax expense $ 42.8 $ 34.0 $ 5.0 On January 1, 2000, EICN assumed the assets, liabilities, and operations of the Fund pursuant to legislation passed in the 1999 Nevada Legislature (the Privatization). Prior to the Privatization, the Fund was a part of the State of Nevada and therefore was not subject to federal income tax; accordingly, it did not take an income tax deduction with respect to the establishment of its unpaid loss and LAE reserves. Due to favorable loss experience after the Privatization, it was determined that certain of the pre-Privatization unpaid loss and LAE reserves assumed by EICN as part of the Privatization were no longer necessary and the unpaid loss and LAE reserves were reduced accordingly. Such a downward adjustment of pre-Privatization unpaid loss reserves increased GAAP net income by $15.3 million for the year ended December 31, 2015 , but did not increase taxable income. There were no downward adjustments of pre-Privatization unpaid loss reserves for the years ended December 31, 2017 and 2016 . A downward adjustment of pre-Privatization unpaid loss reserves, excluding the LPT, was $56.3 million for the year ended December 31, 2015 . The LPT Reserve Adjustments for the years ended December 31, 2016 and 2015 increased GAAP net income by $3.1 million and $6.4 million , respectively, but did not increase taxable income. There were no LPT Reserve Adjustments in 2017. The LPT Contingent Commission Adjustments increased net income by $0.3 million , $1.8 million , and $2.6 million during 2017 , 2016 , and 2015 , respectively, but did not increase taxable income. As of December 31, 2017 and 2016 , the Company had no unrecognized tax benefits. The Company paid $21.3 million , $13.7 million and $12.7 million in income taxes during the years ended December 31, 2017 , 2016 , and 2015 , respectively. Tax years 2014 through 2017 remained open and are subject to full examination by the federal taxing authority. The significant components of deferred income taxes, net, were as follows as of December 31: 2017 2016 Deferred Tax Deferred Tax Assets Liabilities Assets Liabilities (in millions) Unrealized capital gains, net $ — $ 28.5 $ — $ 40.1 Deferred policy acquisition costs — 9.7 — 15.7 Intangible assets — 1.7 — 2.9 Loss reserve discounting for tax reporting 29.0 — 51.7 — Unearned premiums 12.8 — 20.9 — Allowance for bad debt 2.1 — 3.4 — Stock-based compensation 2.5 — 4.4 — Accrued liabilities 4.2 — 8.1 — Minimum tax credit 20.0 — 27.8 — Other 2.8 4.8 9.7 7.9 Total $ 73.4 $ 44.7 $ 126.0 $ 66.6 Deferred income taxes, net $ 28.7 $ 59.4 Enactment had no impact on the amount of the Company's minimum tax credit as of December 31, 2017 . Despite a repeal of the corporate alternative minimum tax, the Company's minimum tax credit will be recognized (subject to annual limits) over the period from January 1, 2018 through December 31, 2021. Deferred tax assets are required to be reduced by a valuation allowance if it is more likely than not that all or some portion of the deferred tax asset will not be realized. Realization of the deferred income tax asset is dependent on the Company generating sufficient taxable income in future years as the deferred income tax charges become deductible for tax reporting purposes. Although realization is not assured, management believes that it is more likely than not that the net deferred income tax asset will be realized. |
Liability for Unpaid Losses and
Liability for Unpaid Losses and Loss Adjustment Expenses | 12 Months Ended |
Dec. 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 Accounting for workers' compensation insurance requires the Company to estimate the liability for the expected ultimate cost of unpaid losses and LAE (loss reserves) as of a balance sheet date. Loss reserve estimates are inherently uncertain because the ultimate amount the Company will pay for many of the claims it has incurred as of the balance sheet date will not be known for many years. The estimate of loss reserves is intended to equal the difference between the expected ultimate losses and LAE of all claims that have occurred as of a balance sheet date and amounts already paid. The Company establishes loss reserves based on its own analysis of emerging claims experience and environmental conditions in its markets and review of the results of various actuarial projections. The Company's aggregate carried reserve for unpaid losses and LAE is the sum of its reserves for each accident year and represents its best estimate of outstanding loss reserves. The amount by which estimated losses in the aggregate differ from those previously estimated for a specific time period is known as reserve “development.” Reserve development is unfavorable when losses ultimately settle for more than the amount reserved or subsequent estimates indicate a basis for reserve increases on open claims, causing the previously estimated loss reserves to be ''deficient.'' Reserve development is favorable when estimates of ultimate losses indicate a decrease in established reserves, causing the previously estimated loss reserves to be ''redundant.'' Development is reflected in the Company's operating results through an adjustment to incurred losses and LAE during the period in which it is recognized. Although claims for which reserves are established may not be paid for several years or more, the Company does not discount loss reserves in its financial statements for the time value of money, in accordance with GAAP. The three main components of reserves for unpaid losses and LAE are case reserves, incurred but not reported (IBNR) loss reserves, and LAE reserves. When claims are reported, the Company establishes individual estimates of the ultimate cost of each claim (case reserves). These case reserves are continually monitored and revised in response to new information and for amounts paid. IBNR is an actuarial estimate of future payments on claims that have occurred but have not yet been reported. In addition to this provision for late reported claims, the Company also estimates and makes a provision for the extent to which the case reserves on known claims may develop and for additional payments on closed claims, known as “reopening.” IBNR reserves apply to the entire body of claims arising from a specific time period, rather than a specific claim. Most of the Company's IBNR reserves relate to estimated future claim payments on recorded open claims. LAE reserves are the Company's estimate of the future expenses of investigating, administering, and settling claims that will be paid to manage claims that have occurred, including legal expenses. LAE reserves are established in the aggregate, rather than on a claim-by-claim basis. LAE reserves are categorized between defense and cost containment, and adjusting and other. A portion of the Company's obligations for losses and LAE are ceded to unaffiliated reinsurers. The amount of reinsurance that will be recoverable on its losses and LAE reserves includes both the reinsurance recoverable from excess of loss reinsurance contracts, as well as reinsurance recoverable under the terms of the LPT Agreement. The Company uses actuarial methods to analyze and estimate the aggregate amount of unpaid losses and LAE. Management considers the results of various actuarial projection methods and their underlying assumptions, among other factors, in establishing reserves for unpaid losses and LAE. Judgment is required in the actuarial estimation of loss reserves, including the selection of various actuarial methodologies to project the ultimate cost of claims. Specifically, judgment is required in the following areas: the selection of projection parameters based on historical company data; the use of industry data and other benchmarks; the identification and quantification of potential changes in parameters from historical levels to current and future levels due to changes in future claims development expectations; and the weighting of differing reserve indications resulting from alternative methods and assumptions. The following table represents a reconciliation of changes in the liability for unpaid losses and LAE. Years Ended December 31, 2017 2016 2015 (in millions) Unpaid losses and LAE at beginning of period $ 2,301.0 $ 2,347.5 $ 2,369.7 Less reinsurance recoverable, excluding bad debt allowance, on unpaid losses and LAE 580.0 628.2 669.5 Net unpaid losses and LAE at beginning of period 1,721.0 1,719.3 1,700.2 Losses and LAE, net of reinsurance, incurred during the period related to: Current year 447.3 452.9 456.9 Prior years (1) (18.5 ) (18.4 ) (7.2 ) Total net losses and LAE incurred during the period (1) 428.8 434.5 449.7 Paid losses and LAE, net of reinsurance, related to: Current year 76.9 78.7 75.4 Prior years (2) 343.8 354.1 355.2 Total net paid losses and LAE during the period (2) 420.7 432.8 430.6 Ending unpaid losses and LAE, net of reinsurance 1,729.1 1,721.0 1,719.3 Reinsurance recoverable, excluding bad debt allowance, on unpaid losses and LAE 537.0 580.0 628.2 Unpaid losses and LAE at end of period $ 2,266.1 $ 2,301.0 $ 2,347.5 (1) Losses and LAE, net of reinsurance, incurred during the period related to prior years and Total net losses and LAE incurred during the period included in the above table excludes the impact of the amortization of the Deferred Gain and LPT Reserve Adjustments (Note 10 ). Including these amounts, Losses and LAE, net of reinsurance, incurred during the period related to prior years was $(30.1) million , $(35.0) million , and $(27.6) million and Total net losses and LAE incurred during the period was $417.2 million , $417.9 million , and $429.4 million for the years ended December 31, 2017 , 2016 , and 2015 , respectively. (2) Paid losses and LAE, net of reinsurance, related to prior years and Total net paid losses and LAE during the period included in the above table excludes the impact of the amortization of the Deferred Gain and LPT Reserve Adjustments (Note 10 ). Including these amounts, Paid losses and LAE, net of reinsurance, related to prior years was $332.2 million , $337.5 million , and $334.8 million and Total net paid losses and LAE during the period was $409.1 million , $416.2 million , and $410.2 million for the years ended December 31, 2017 , 2016 , and 2015 , respectively. In 2017, the Company had $18.5 million of favorable prior accident year loss development, which included $17.4 million of favorable development on its voluntary risk business and $1.1 million of favorable development related to its assigned risk business. In 2016, the Company had $18.4 million of favorable prior accident year loss development, which included $17.0 million of favorable development on its voluntary risk business and $1.4 million of favorable development related to its assigned risk business. In 2015, the Company had $7.2 million of favorable prior accident year loss development, which included $9.0 million of favorable prior accident year loss development on its voluntary risk business, which was partially offset by $1.8 million of unfavorable loss development related to its assigned risk business. The favorable prior accident year loss development on voluntary business in 2017 and 2016 was the result of the Company's determination that adjustments were necessary to reflect observed favorable paid loss trends. Paid loss trends have been impacted by cost savings associated with accelerated claims settlement activity that began in 2014 and continued through 2017. In California, where the Company's operations began in 2002, the actuaries' and management's initial expectations of ultimate losses and patterns of loss emergence and payment were based on benchmarks derived from analyses of historical insurance industry data in California. No historical data from the Company's California insurance subsidiary existed prior to July 1, 2002; however, some historical data was available for the prior years for some of the market segments the Company entered in California, but was limited as to the number of loss reserve evaluation points available. The industry-based benchmarks were judgmentally adjusted for the anticipated impact of significant environmental changes, specifically the enactment of major changes to the statutory workers' compensation benefit structure and the manner in which claims are administered and adjudicated in California. The actual emergence and payment of claims by the Company's California insurance subsidiary have been more favorable than those initial expectations through 2008, due in part to the enactment of the major changes in the California workers' compensation environment. The Company's recent loss experience, from 2010 through 2016, indicates an upward trend in medical and indemnity costs that are reflected in its loss reserves. Loss experience in 2017 indicated a slight downward movement in medical and indemnity costs per claim. The Company's indemnity claims frequency (the number of claims expressed as a percentage of payroll) decreased year-over-year for the past three years. The Company's reserve estimates assume that increasing medical cost trends will continue and will impact the Company's long-term claims costs and loss reserves. The Company continues to develop its own loss experience in California and will rely more on its experience and less on historical industry data in projecting its reserve requirements as such data becomes available. As the actual experience of the Company emerges, it will continue to evaluate prior estimates, which may result in additional adjustments in reserves. In Nevada, the Company has compiled a lengthy history of workers' compensation claims payment patterns based on the business of the Fund and EICN, but the emergence and payment of claims in recent years has been more favorable than in the long-term history in Nevada with the Fund. The expected patterns of claim payments and emergence used in the projection of the Company's ultimate claim payments are based on both the long and short-term historical paid data. In recent evaluations, claim patterns have continued to emerge in a manner consistent with short-term historical data. Consequently, the Company has relied more heavily on claim projection patterns observed in recent years in Nevada. Loss reserves shown in the Company's Consolidated Balance Sheets are net of $35.0 million and $28.1 million for anticipated subrogation recoveries as of December 31, 2017 and 2016 , respectively. The Company compiles and aggregates its claims data by grouping the claims according to the year in which the claim occurred (“accident year”) when analyzing claim payment and emergence patterns and trends over time. For the purposes of defining claims frequency, the number of reported claims includes any claim that has case reserves and/or loss and LAE payments associated with them. The Company analyzed the usefulness of disaggregation of its results and determined the characteristics associated with the policies and the related unpaid loss reserves, incurred losses, and payment patterns are similar in nature. As such, the following tables show the Company's historical incurred and cumulative paid losses and LAE development, net of reinsurance, as well as IBNR loss reserves and the number of reported claims on an aggregated basis as of December 31, 2017 for each of the previous 10 accident years. Incurred Losses and LAE, Net of Reinsurance Years Ended December 31, As of December 31, 2017 Accident Year 2008 (1) 2009 (1) 2010 (1) 2011 (1) 2012 (1) 2013 (1) 2014 (1) 2015 (1) 2016 (1) 2017 IBNR Cumulative number of reported claims (in millions, except claims counts) 2008 $ 315.9 $ 315.3 $ 317.8 $ 329.2 $ 329.5 $ 335.1 $ 336.9 $ 343.8 $ 341.4 $ 342.1 $ 15.4 28,088 2009 255.4 266.9 279.0 280.1 283.6 283.7 291.2 290.5 290.5 13.5 22,673 2010 204.9 224.4 228.1 246.1 250.2 262.0 259.9 258.8 19.8 18,543 2011 253.7 267.3 272.0 277.4 296.3 292.6 288.8 27.5 19,571 2012 348.8 359.9 360.9 386.4 388.2 382.8 50.7 25,972 2013 452.6 460.6 478.6 472.6 468.9 73.6 28,816 2014 463.4 445.8 432.9 434.6 86.1 28,449 2015 422.2 425.8 423.9 98.7 26,993 2016 419.0 414.6 140.8 25,305 2017 412.4 244.6 21,214 Total $ 3,717.4 Cumulative Paid Losses and LAE, Net of Reinsurance Years Ended December 31, Accident Year 2008 (1) 2009 (1) 2010 (1) 2011 (1) 2012 (1) 2013 (1) 2014 (1) 2015 (1) 2016 (1) 2017 (in millions) 2008 $ 71.1 $ 155.4 $ 201.8 $ 234.7 $ 255.3 $ 271.1 $ 284.2 $ 293.6 $ 300.7 $ 307.1 2009 59.0 130.6 174.1 202.0 219.3 232.1 242.3 249.5 255.1 2010 47.1 105.6 143.8 171.7 190.7 206.2 215.4 221.3 2011 47.4 115.1 162.6 193.8 217.5 230.1 238.2 2012 58.6 148.3 214.2 261.4 289.9 305.0 2013 68.5 184.4 263.8 317.4 346.1 2014 65.3 172.7 248.9 297.2 2015 65.5 174.5 246.9 2016 65.6 166.8 2017 63.5 Total $ 2,447.3 All outstanding liabilities for unpaid losses and LAE prior to 2007, net of reinsurance 364.2 Total outstanding liabilities for unpaid losses and LAE, net of reinsurance $ 1,634.3 (1) Data presented for these calendar years is required supplementary information, which is unaudited. The following table represents a reconciliation of claims development to the aggregate carrying amount of the liability for unpaid losses and LAE: December 31, 2017 (in millions) Liabilities for unpaid losses and LAE, net of reinsurance $ 1,634.3 Reinsurance recoverable on unpaid losses 537.0 Unallocated LAE (adjusting and other) 94.8 Total liability for unpaid losses and LAE $ 2,266.1 The following table presents the average annual percentage payout of incurred claims by age, net of reinsurance, as of December 31, 2017 and is presented as required supplementary information, which is unaudited: Average Annual Percentage Payout of Claims by Age, Net of Reinsurance Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 16.7 % 24.3 % 16.1 % 10.8 % 6.9 % 4.7 % 3.4 % 2.5 % 2.0 % 1.9 % |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2017 | |
Reinsurance [Abstract] | |
Reinsurance | Reinsurance The Company purchases reinsurance from third parties in the normal course of its business in order to manage its exposures. The Company's reinsurance coverage is provided on both a quota share and excess of loss basis. The effects of reinsurance on the Company's written and earned premiums and on its losses and LAE incurred were as follows: Years Ended December 31, 2017 2016 2015 Written Earned Written Earned Written Earned (in millions) Direct premiums $ 719.5 $ 712.5 $ 691.0 $ 691.0 $ 684.9 $ 686.0 Assumed premiums 10.2 10.0 10.4 10.6 12.8 12.8 Gross premiums 729.7 722.5 701.4 701.6 697.7 698.8 Ceded premiums (6.0 ) (6.0 ) (6.8 ) (6.8 ) (8.4 ) (8.4 ) Net premiums $ 723.7 $ 716.5 $ 694.6 $ 694.8 $ 689.3 $ 690.4 Ceded losses and LAE incurred $ (0.5 ) $ 0.1 $ 10.1 Ceded losses and LAE incurred includes the amortization of the Deferred Gain, LPT Reserve Adjustments, and LPT Contingent Commission Adjustments. Excess of Loss Reinsurance The Company has consistently maintained excess of loss reinsurance coverage to protect it against the impact of large and/or catastrophic losses in its workers' compensation business. The Company currently maintains reinsurance for losses from a single occurrence or catastrophic event in excess of $10.0 million and up to $200.0 million , subject to certain exclusions. This current reinsurance program is effective July 1, 2017 through June 30, 2018 . The coverage under the Company's annual reinsurance programs that ended July 1, 2017 and 2016 was $190.0 million and $193.0 million , in excess of its $10.0 million and $7.0 million retention on a per occurrence basis, respectively. The reinsurance coverage includes coverage for acts of terrorism, excluding nuclear, biological, chemical, and radiological events. Any liability outside the coverage limits of the reinsurance program is retained by the Company. LPT Agreement Recoverables from reinsurers on unpaid losses and LAE amounted to $537.0 million and $580.0 million at December 31, 2017 and 2016 , respectively. At each of December 31, 2017 and 2016 , $438.9 million and $465.5 million , respectively, of those recoverables was related to the LPT Agreement that was entered into in 1999 by the Fund and assumed by EICN. Under the LPT Agreement, substantially all of the Fund's losses and LAE on claims incurred prior to July 1, 1995, have been ceded to three unaffiliated reinsurers on a 100% quota share basis. Investments totaling $380.8 million and $355.7 million at December 31, 2017 and 2016 , respectively, have been placed in trust by the three reinsurers as security for payment of the reinsured claims. Under the LPT Agreement, initially $1.5 billion in liabilities for the incurred but unpaid losses and LAE related to claims incurred prior to July 1, 1995, were reinsured for consideration of $775.0 million . The LPT Agreement provides coverage up to $2.0 billion . Through December 31, 2017 , the Company has paid losses and LAE claims totaling $749.3 million related to the LPT Agreement. The Company amortized $11.3 million , $11.7 million , and $11.4 million of the Deferred Gain for the years ended December 31, 2017 , 2016 , and 2015 , respectively. Additionally, the Deferred Gain was reduced by $3.1 million and $6.4 million for the years ended December 31, 2016 and 2015 , respectively, due to favorable LPT Reserve Adjustments and by $0.3 million , $1.8 million , and $2.6 million for the years ended December 31, 2017 , 2016 , and 2015 , respectively, due to favorable LPT Contingent Commission Adjustments (Note 2 ). |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2017 | |
Notes Payable [Abstract] | |
Notes Payable | Notes Payable Notes payable is comprised of the following: December 31, 2017 2016 (in millions) Dekania Surplus Note, due April 29, 2034 $ 10.0 $ 10.0 Alesco Surplus Note, due December 15, 2034 10.0 10.0 ICONS Surplus Note, due May 24, 2034 — 12.0 Total $ 20.0 $ 32.0 EPIC has a $10.0 million surplus note to Dekania CDO II, Ltd. issued as part of a pooled transaction. The note matures in 2034 and became callable by the Company in 2009 . The terms of the note provide for quarterly interest payments at a rate 425 basis points in excess of the 90-day LIBOR. Both the payment of interest and repayment of the principal under this note and the surplus notes described in the succeeding two paragraphs are subject to the prior approval of the Florida Department of Financial Services. Interest paid during each of the years ended December 31, 2017 , 2016 , and 2015 was $0.6 million , $0.5 million , and $0.5 million . Interest accrued as of December 31, 2017 and 2016 was $0.1 million . EPIC has a $10.0 million surplus note to Alesco Preferred Funding V, LTD issued as part of a pooled transaction. The note matures in 2034 and became callable by the Company in 2009 . The terms of the note provide for quarterly interest payments at a rate 405 basis points in excess of the 90-day LIBOR. Interest paid during each of the years ended December 31, 2017 , 2016 , and 2015 was $0.5 million , $0.5 million , and $0.4 million , respectively. Interest accrued as of December 31, 2017 and 2016 was less than $0.1 million . EPIC had a $12.0 million surplus note to ICONS, Inc. issued as part of a pooled transaction. This note was purchased by EHI in May 2017 for $9.9 million , resulting in a $2.1 million gain, and is no longer deemed to be outstanding on a consolidated basis. Interest paid to third parties during each of the years ended December 31, 2017 , 2016 , and 2015 was $0.3 million , $0.6 million and $0.6 million , respectively. Interest accrued as of December 31, 2016 was $0.1 million . In 2010, the Company entered into a credit facility, under which the Company was provided with: (a) $100.0 million line of credit through December 31, 2011; (b) $90.0 million line of credit from January 1, 2012 through December 31, 2012; (c) $80.0 million line of credit from January 1, 2013 through December 31, 2013; (d) $70.0 million line of credit from January 1, 2014 through December 31, 2014; and (e) $60.0 million line of credit from January 1, 2015 through December 31, 2015. Amounts outstanding bore interest at a rate equal to, at our option: (a) a fluctuating rate of 1.75% above prime rate or (b) a fixed rate that is 1.75% above the LIBOR rate then in effect. Interest paid during the year ended December 31, 2015 totaled $1.3 million . In accordance with the terms of the contract, the remaining principal balance of $60.0 million was repaid on the credit facility in 2015. Principal payment obligations on notes payable outstanding at December 31, 2017 , were as follows: Year Principal Due (in millions) 2018 - 2022 $ — Thereafter 20.0 Total $ 20.0 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies Disclosure | Commitments and Contingencies Leases The Company leases office facilities and certain equipment under operating and capital leases. Most leases have renewal options, typically with increased rental rates during the option period. Certain of these leases contain options to purchase the property at amounts that approximate fair market value; other leases contain options to purchase at a bargain purchase price. At December 31, 2017 , the remaining lease terms expire over the next ten years . The future lease payments for the next five years on these non-cancelable operating and capital leases at December 31, 2017 , were as follows: Year Operating Leases Capital Leases (in millions) 2018 $ 4.8 $ 0.3 2019 4.8 0.3 2020 4.2 0.2 2021 2.8 0.2 2022 1.8 0.1 Thereafter 7.9 — Total $ 26.3 $ 1.1 Included in the future minimum capital lease payments are future interest charges of $0.1 million . Facilities rent expense was $4.8 million , $4.9 million , and $4.9 million for the years ended December 31, 2017 , 2016 , and 2015 , respectively. Property held under capital leases is included in property and equipment as follows: Asset Class 2017 2016 (in millions) Automobiles 1.1 1.2 1.1 1.2 Accumulated amortization (0.3 ) (0.6 ) Total $ 0.8 $ 0.6 Contingencies Surrounding Insurance Assessments All of the states where the Company's insurance subsidiaries are licensed to transact business require property and casualty insurers doing business within the respective state to pay various insurance assessments. The Company accrues a liability for estimated insurance assessments as direct premiums are written, losses are recorded, or as other events occur in accordance with various states' laws and regulations, and defers these costs and recognizes them as an expense as the related premiums are earned. The Company had an accrued liability for guaranty fund assessments, second injury funds assessments, and other insurance assessments totaling $12.4 million and $18.6 million as of December 31, 2017 and 2016 , respectively. These liabilities are generally expected to be paid over one to eighty year periods based on individual state's regulations. The Company also recorded an asset of $14.1 million and $21.6 million , as of December 31, 2017 and 2016 , respectively, for prepaid policy charges still to be collected in the future from policyholders, or assessments that may be recovered through a reduction in future premium taxes in certain states. These assets are expected to be realized over one to ten year periods in accordance with their type and each individual state's regulations. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Treasury Stock | Stockholders' Equity Stock Repurchase Programs On February 16, 2016, the Board of Directors authorized a share repurchase program for up to $50.0 million of the Company's common stock from February 22, 2016 through February 22, 2018 (the 2016 Program). The Company expects that its common stock may be purchased at prevailing market prices through a variety of methods, including open market or private transactions, in accordance with applicable laws and regulations and as determined by management. The timing and actual number of shares repurchased will depend on a variety of factors, including the share price, corporate and regulatory requirements, and other market and economic conditions. Repurchases under the 2016 Program may be commenced, modified, or suspended from time-to-time without prior notice, and the 2016 Program may be suspended or discontinued at any time. Through December 31, 2017 , the Company has repurchased a total of 724,381 shares of common stock at an average price of $29.08 per share, including commissions, for a total of $21.1 million under the 2016 Program. The Company made no repurchases of common stock during the year ended December 31, 2017. Since the Company's initial public offering in January 2007 through December 31, 2017 , the Company has repurchased a total of 24,097,355 shares of common stock at an average cost per share of $15.92 , which is reported as treasury stock, at cost, on its Consolidated Balance Sheets. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Employers Holdings, Inc. Amended and Restated Equity and Incentive Plan (the Plan) is administered by the Compensation Committee of the Board of Directors, which is authorized to grant, at its discretion, awards to officers, employees, non-employee directors, consultants, and independent contractors. The maximum number of common shares reserved for grants of awards under the Plan was 5,500,000 shares, prior to reductions for grants made. The Plan provides for the grant of stock options (both incentive stock options and nonqualified stock options), stock appreciation rights, shares of restricted stock, restricted stock units (RSUs), performance stock units (PSUs), and other stock-based awards. 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, dividend equivalents with respect to the underlying award will also fail to become payable and will be forfeited. These awards are not considered participating securities for the purposes of determining earnings per share. As of December 31, 2017 , the only incentive awards outstanding under the Plan were nonqualified stock options, RSUs, and PSUs. Compensation costs are recognized based on expected performance, if applicable, net of any estimated forfeitures on a straight-line basis over the requisite employee service periods. Forfeiture rates are based on historical experience and are adjusted in subsequent periods for differences in actual forfeitures from those estimated. Net stock-based compensation expense recognized in the Company's Consolidated Statements of Comprehensive Income was as follows: Years Ended December 31, 2017 2016 2015 Stock-based compensation expense related to: (in millions) Stock options $ 0.5 $ 0.7 $ 1.0 RSUs 2.0 1.9 2.0 PSUs 4.3 3.2 1.6 Total 6.8 5.8 4.6 Less: related tax benefit 2.4 2.0 1.6 Net stock-based compensation expense $ 4.4 $ 3.8 $ 3.0 Stock Options The fair value of the stock options granted is estimated using a Black-Scholes option pricing model that uses the assumptions noted in the following table. During the years ended December 31, 2016 and 2015 , the expected stock price volatility used to value the stock options granted in 2016 and 2015 was based on the volatility of the Company's historical stock price since February 2007. No stock options were granted in 2017 . The expected term of the stock options granted in 2016 and 2015 was calculated using the 'plain-vanilla' calculation provided in the guidance of the SEC's SAB No. 107. The dividend yield was calculated using amounts authorized by the Board of Directors. The risk-free interest rate is the yield on the grant date of the stock options of U.S. Treasury zero coupon securities with a maturity comparable to the expected term of the stock options. The Company anticipates issuing new shares of common stock upon the exercise of its outstanding stock options. The fair value of the stock options granted during the years ended December 31, 2016 and 2015 was calculated using the following weighted average assumptions: 2016 2015 Expected volatility 38.0 % 38.0 % Expected life (in years) 4.8 4.8 Dividend yield 1.3 % 1.0 % Risk-free interest rate 1.4 % 1.6 % Weighted average grant date fair values of stock options granted $8.46 $7.63 Changes in outstanding stock options for the year ended December 31, 2017 were as follows: Number of Stock Options Weighted-Average Price Weighted Average Remaining Contractual Life Stock options outstanding at December 31, 2014 1,521,290 $ 17.45 2.9 years Granted 80,800 24.20 6.2 years Exercised (463,466 ) 16.43 Forfeited (17,079 ) 20.21 Stock options outstanding at December 31, 2015 1,121,545 18.31 2.8 years Granted 67,431 27.72 6.2 years Exercised (586,132 ) 16.39 Expired (6,075 ) 22.48 Forfeited (32,673 ) 24.35 Stock options outstanding at December 31, 2016 564,096 21.04 3.3 years Exercised (307,076 ) 19.44 Forfeited (9,673 ) 24.45 Stock options outstanding at December 31, 2017 247,347 22.90 3.4 years Exercisable at December 31, 2017 156,517 21.71 2.8 years At December 31, 2017 , the Company had yet to recognize $0.5 million of unamortized expense related to stock option grants and expects to recognize these costs on a straight-line basis over the next 27 months . The fair value of stock options vested and the intrinsic value of outstanding and exercisable stock options as of December 31, were as follows: 2017 2016 2015 (in millions) Fair value of stock options vested $ 0.6 $ 0.8 $ 1.3 Intrinsic value of outstanding stock options 5.3 10.6 10.1 Intrinsic value of exercisable stock options 3.6 7.6 8.5 The intrinsic value of stock options exercised was $7.6 million , $7.6 million , and $4.0 million for the years ended December 31, 2017 , 2016 , and 2015 . RSUs The Company has awarded RSUs to non-employee members of the Board of Directors and certain employees of the Company. The RSUs awarded to non-employee members of the Board of Directors generally vest on the first anniversary of the award date. RSU grants allow each non-employee Director to decide whether to defer settlement of the RSUs until six months after termination of Board service or settle the RSUs at vesting. Dividend equivalents are granted to Directors who elected to defer settlement of the RSUs after the grants vested. RSUs awarded to employees of the Company have a service vesting period of approximately four years from the date awarded and vest 25% on or after each of the subsequent four anniversaries of such date . These RSUs are subject to accelerated vesting in certain limited circumstances, such as: retirement, death or disability of the holder, or in connection with a change of control of the Company. Changes in outstanding RSUs for the year ended December 31, 2017 were as follows: Number of RSUs Weighted Average Grant Date Fair Value RSUs outstanding at December 31, 2014 306,867 $ 19.15 Granted 112,048 24.19 Forfeited (7,749 ) 20.99 Vested (92,133 ) 19.74 RSUs outstanding at December 31, 2015 319,033 20.71 Granted 100,218 28.20 Forfeited (21,872 ) 24.87 Vested (72,995 ) 21.56 RSUs outstanding at December 31, 2016 324,384 22.55 Granted 87,276 37.94 Forfeited (13,711 ) 29.28 Vested (70,877 ) 24.97 RSUs outstanding at December 31, 2017 327,072 25.85 Vested but unsettled RSUs at December 31, 2017 152,644 19.54 At December 31, 2017 , the Company had yet to recognize $4.2 million of unamortized expense related to outstanding RSUs and expects to recognize these costs on a straight-line basis over the next 39 months . The grant date fair value of RSUs vested and the intrinsic value of vested RSUs for the years ended December 31, were as follows: 2017 2016 2015 (in millions) Grant date fair value of RSUs vested $ 1.8 $ 1.6 $ 1.7 Intrinsic value of RSUs vested 2.8 2.1 2.2 The intrinsic value of outstanding RSUs was $14.5 million , $12.8 million , and $8.7 million at December 31, 2017 , 2016 , and 2015 . PSUs The Company has awarded PSUs to certain employees of the Company as follows: Date of Grant Target Number Awarded Fair Value on Date of Grant Aggregate Fair Value on Date of Grant (in millions) March 2015 (1) 110,000 $ 24.20 $ 2.7 March 2016 (1) 97,236 27.72 2.7 March 2017 (1) 97,440 37.60 3.7 (1) The PSUs awarded in March 2015, 2016 and 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 values shown in the table represent the aggregate number of PSUs awarded at the target level. At December 31, 2017 , the Company had yet to recognize $4.7 million of unamortized expense related to PSU grants and expects to recognize these costs on a straight-line basis over the next 24 months . This is based on the expectation of the Company achieving a 200% of target rate for the 2015 PSUs, a 200% of target rate for the 2016 PSUs, and a 127% of target rate for the 2017 PSUs. |
Statutory Matters
Statutory Matters | 12 Months Ended |
Dec. 31, 2017 | |
Stautory Matters [Abstract] | |
Statutory Financial Data Disclosure | Statutory Matters Statutory Financial Data The combined capital stock, surplus, and net income of the Company's insurance subsidiaries (EICN, ECIC, EPIC, and EAC), prepared in accordance with the statutory accounting practices (SAP) of the National Association of Insurance Commissioners (NAIC) as well as SAP permitted by the states of California, Florida, and Nevada, were as follows: December 31, 2017 2016 (in millions) Capital stock and unassigned surplus $ 510.6 $ 447.1 Paid in capital 349.8 349.8 Surplus notes 32.0 32.0 Total statutory surplus $ 892.4 $ 828.9 Net income for the Company's insurance subsidiaries prepared in accordance with SAP for the years ended December 31, 2017 , 2016 and 2015 was $116.8 million , $101.4 million , and $87.8 million , respectively. Treatment of the LPT Agreement, deferred policy acquisition costs, fair value of financial instruments, and the surplus notes (see Notes 5 , 10 , and 11 ) are the primary differences in the SAP-basis capital stock and total surplus of the insurance subsidiaries of $892.4 million and $828.9 million , and the GAAP-basis equity of the Company of $947.7 million and $840.6 million as of December 31, 2017 and 2016 , respectively. Under SAP accounting, the retroactive reinsurance gain resulting from the LPT Agreement is recorded as a special component of surplus (special surplus funds) in the initial year of the contract, and not reported as unassigned surplus until the Company has recovered amounts in excess of the original consideration paid. The special surplus funds are also reduced by the amount of extraordinary dividends as approved by the Nevada Division of Insurance. Under SAP, the surplus notes are recorded as a separate component of surplus. Under SAP, changes to the estimated contingent profit commission under the LPT Agreement are reflected in commission expense in the period that the estimate is revised. Insurance Company Dividends and Regulatory Requirements and Restrictions The ability of EHI to pay dividends on the Company's common stock and to pay other expenses will be dependent to a significant extent upon the ability of the Nevada domiciled insurance company, EICN, the California domiciled insurance company, ECIC, and the Florida domiciled insurance companies, EPIC and EAC, to pay dividends to their immediate holding company, Employers Group, Inc. (EGI) and, in turn, the ability of EGI to pay dividends to EHI. The amount of dividends each of the Company's subsidiaries may pay to their immediate parent is limited by the laws of its respective state of domicile. On December 31, 2016, the legal structure of the Company's insurance subsidiaries changed such that all four of its insurance subsidiaries are now wholly owned by EGI (ECIC is no longer a wholly owned subsidiary of EICN and EAC is no longer a wholly owned subsidiary of EPIC). This change in legal structure allows each of the Company's insurance subsidiaries to pay dividends directly to EGI. Nevada law limits the payment of cash dividends by EICN to its parent by providing that payments cannot be made except from available and accumulated surplus, otherwise unrestricted (unassigned), and derived from realized net operating profits and realized and unrealized capital gains. A stock dividend may be paid out of any available surplus. A cash or stock dividend prohibited by these restrictions may only be declared and distributed as an extraordinary dividend upon the prior approval of the Nevada Commissioner of Insurance (Nevada Commissioner). EICN may not pay such an extraordinary dividend or make an extraordinary distribution until the Nevada Commissioner either approves or does not disapprove the payment within 30 days after receiving notice of its declaration. An extraordinary dividend or distribution is defined by statute to include any dividend or distribution of cash or property whose fair market value, together with that of other dividends or distributions made within the preceding 12 months, exceeds the lesser of: (a) 10% of EICN's statutory surplus as regards to policyholders at the next preceding December 31; or (b) EICN's statutory net income, not including realized capital gains, for the 12-month period ending at the next preceding December 31. As of December 31, 2017 , EICN had positive unassigned surplus of $196.7 million . During 2017 , EICN did not pay any dividends. The maximum dividends that may be paid in 2018 by EICN without prior regulatory approval from the Nevada Department of Insurance is $19.9 million . Under Florida law, without regulatory approval, EPIC and EAC may pay dividends if they do not exceed the greater of: the lesser of 10% of surplus or net income, not including realized capital gains, plus a 2-year carry forward; 10% of surplus, with dividends payable limited to unassigned funds minus 25% of unrealized capital gains; or, the lesser of 10% of surplus or net investment income plus a 3-year carry forward with dividends payable limited to unassigned funds minus 25% of unrealized capital gains. During 2017 , EPIC and EAC did not pay any dividends. The maximum dividends that may be paid in 2018 by EPIC and EAC without prior regulatory approval from the Florida Office of Insurance Regulation (FOIR) is $15.9 million and $19.0 million , respectively. ECIC is subject to regulation by the California Department of Insurance (California DOI). The ability of ECIC to pay dividends was further limited by restrictions imposed by the California DOI in its approval of the Company's October 1, 2008 reinsurance pooling agreement. Under that approval: (a) ECIC must initiate discussions of its business plan with the California DOI if its net written premium to policyholder surplus ratio exceeds 1.5 to 1 ; (b) ECIC will not exceed a ratio of net written premium to policyholder surplus of 2 to 1 without approval of the California DOI; (c) if at any time ECIC's policyholder surplus decreases to 80% or less than the September 30, 2008 balance, ECIC shall cease issuing new policies in California, but may continue to renew existing policies until it has (i) received a capital infusion to bring its surplus position to the same level as that as of September 30, 2008 and (ii) submitted a new business plan to the California DOI; (d) ECIC will maintain a risk based capital (RBC) level of at least 350% of the authorized control level; (e) should ECIC fail to comply with any commitments listed herein, ECIC will consent to any request by the California DOI to cease issuing new policies in California, but may continue to renew existing policies until such time that as ECIC is able to achieve full compliance with each commitment; and (f) the obligations listed shall only terminate with the written consent of the California DOI. During the years ended December 31, 2017 , 2016 , and 2015 , ECIC was in compliance with these requirements. Additionally, the California Insurance Holding Company System Regulatory Act limits the ability of ECIC to pay dividends to its parent. California law provides that, absent prior approval of the California Insurance Commissioner, dividends may only be declared from earned surplus. For purpose of this statute, earned surplus excludes amounts (1) derived from net appreciation in the value of assets not yet realized, or (2) derived from an exchange of assets, unless the assets received are currently realizable in cash. In addition, California law provides that the appropriate insurance regulatory authorities in the state of California must approve (or, within a 30 day notice period, not disapprove) any dividend that, together with all other such dividends paid during the preceding 12 months, exceeds the greater of: (a) 10% of the paying company's statutory surplus as regards to policyholders at the preceding December 31; or (b) 100% of net income for the preceding year. During 2017 , ECIC paid an ordinary dividend in the amount of $38.0 million to its parent company, EGI. ECIC can pay $10.4 million of dividends through August 8, 2018 and $48.4 million thereafter without prior regulatory approval, provided that no dividends are paid prior to August 8, 2018. EPIC and EAC are subject to regulation by the Florida Department of Financial Services (FDFS). Florida statute Section 624.408 requires EPIC and EAC to maintain minimum capital and surplus of the greater of $4.0 million or 10% of total liabilities. Florida statute Section 624.4095 requires EPIC and EAC to maintain a ratio of written premiums, defined as 1.25 times written premiums, to surplus of no greater than 10-to-1 for gross written premiums and 4-to-1 for net written premiums. During the years ended December 31, 2017 , 2016 , and 2015 , EPIC and EAC were in compliance with these statutes. Additionally, EICN, ECIC, EPIC, and EAC are required to comply with RBC requirements. RBC is a method of measuring the amount of capital appropriate for an insurance company to support its overall business operations in light of its size and risk profile. NAIC RBC standards are used by regulators to determine appropriate regulatory actions relating to insurers that show signs of weak or deteriorating conditions. As of December 31, 2017 , 2016 , and 2015 , EICN, ECIC, EPIC, and EAC each had total adjusted capital above all regulatory action levels. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income, Net | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [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: Years Ended December 31, 2017 2016 (in millions) Net unrealized gain on investments, before taxes $ 136.0 $ 114.6 Deferred tax expense on net unrealized gains (28.6 ) (40.1 ) Total accumulated other comprehensive income $ 107.4 $ 74.5 |
Employee Benefit and Retirement
Employee Benefit and Retirement Plans | 12 Months Ended |
Dec. 31, 2017 | |
Employee Benefit and Retirement Plans [Abstract] | |
Compensation and Employee Benefit Plans | Employee Benefit and Retirement Plans The Company maintains a 401(k) defined contribution plan covering all eligible Company employees (the Employers 401(k) Plan). Under the Employers 401(k) Plan, the Company's safe harbor matching consists of 100% matching contribution on salary deferrals up to 3% of compensation and then 50% matching contribution on salary deferrals from 3% to 5% of compensation. The Company's matching contribution to the Employers 401(k) Plan was $1.9 million , $1.9 million , and $1.8 million for the years ended December 31, 2017 , 2016 , and 2015 , respectively. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Common Share Basic earnings per share, which includes no dilution from outstanding stock-based awards, is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilutive impact of all outstanding stock-based awards on earnings per share. Diluted earnings per share includes common shares assumed issued under the “treasury stock method,” which reflects the potential dilution that would occur if outstanding RSUs and PSUs vested, and stock 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 shares outstanding used in the earnings per share common share calculations. Years Ended December 31, 2017 2016 2015 (in millions, except share data) Net income $ 101.2 $ 106.7 $ 94.4 Weighted average number of shares outstanding–basic 32,501,576 32,434,580 32,070,911 Effect of dilutive securities: Stock options 208,602 246,562 286,764 PSUs 271,738 222,594 155,768 RSUs 78,844 73,099 48,010 Dilutive potential shares 559,184 542,255 490,542 Weighted average number of shares outstanding–diluted 33,060,760 32,976,835 32,561,453 Diluted earnings per share excludes those outstanding stock options and any other common stock equivalents in periods where the inclusion of such stock options and common stock equivalents would be anti-dilutive. The following table presents the number of stock options, PSUs and RSUs that were excluded from the Company's calculation of diluted earnings per share. Years Ended December 31, 2017 2016 2015 Stock options excluded as the exercise price was greater than the average market price — — 20,200 Stock options excluded under the treasury method, as the potential proceeds on settlement or exercise was greater than the value of shares acquired — 89,221 257,405 |
Selected Quarterly Financial Da
Selected Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2017 | |
Selecled Quarterly Financial Data (Unaudited) [Abstract] | |
Quarterly Financial Information | Selected Quarterly Financial Data (Unaudited) Quarterly results for the years ended December 31, 2017 and 2016 were as follows: 2017 Quarters Ended March 31 June 30 September 30 December 31 (in millions, except per share data) Net premiums earned $ 175.3 $ 171.7 $ 187.9 $ 181.6 Net realized gains on investments 2.2 1.1 4.1 — Losses and loss adjustment expenses 109.0 106.1 116.9 85.2 Commission expense 21.5 21.5 23.7 24.7 Underwriting and other operating expenses 35.9 32.6 33.6 37.8 Other expenses — — 7.5 — Income tax expense 6.3 7.8 7.0 21.7 Net income 23.2 24.8 21.9 31.3 Earnings per common share: Basic 0.72 0.76 0.67 0.96 Diluted 0.70 0.75 0.66 0.94 2016 Quarters Ended March 31 June 30 September 30 December 31 (in millions, except per share data) Net premiums earned $ 172.6 $ 176.9 $ 173.3 $ 172.0 Net realized gains on investments 1.5 6.0 1.6 2.1 Losses and loss adjustment expenses 107.3 111.7 109.0 89.9 Commission expense 20.3 21.9 21.3 20.0 Underwriting and other operating expenses 36.3 33.6 31.7 34.5 Income tax expense 5.9 7.4 7.8 12.9 Net income 21.8 26.8 22.6 35.5 Earnings per common share: Basic 0.67 0.82 0.70 1.10 Diluted 0.66 0.81 0.69 1.08 Significant Quarterly Adjustments The second quarter of 2017 was favorably impacted by a $2.1 million gain from EHI's purchase of a $12.0 million notes payable. The third quarter of 2017 was negatively impacted by a write-off of $7.5 million of previously capitalized costs relating to the development of information technology capabilities that had not yet been placed in service. The fourth quarter of 2017 was impacted by: (1) favorable prior accident year loss development of $18.0 million ; (2) a reduction in our current accident year loss provision rate for that reduced Losses and LAE by $10.6 million ; and (3) $7.0 million in additional income tax expense from a revaluation of the Company's net deferred tax asset resulting from Enactment. The second quarter of 2016 was impacted by: (1) an increase in net realized gains on investments, which resulted from sales of equity securities, which were undertaken in order to meet certain cash needs at the holding company; and (2) an increase in losses and loss adjustment expenses primarily due to four large losses totaling $6.5 million recognized during the quarter. The fourth quarter of 2016 was impacted by favorable prior accident year loss development of $16.9 million . |
Schedule II. Condensed Financia
Schedule II. Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Condensed Financial Statments [Abstract] | |
Schedule II. Condensed Financial Information of Registrant | Employers Holdings, Inc. Condensed Balance Sheets December 31, 2017 2016 Assets (in millions, except share data) Investments: Investment in subsidiary $ 849.6 $ 757.5 Fixed maturity securities at fair value (amortized cost $40.2 in 2017 and $14.7 in 2016) 41.4 16.0 Short-term investments at fair value (amortized cost $3.7 at December 31, 2017) 3.7 — Total investments 894.7 773.5 Cash and cash equivalents 39.6 41.4 Accrued investment income 0.3 0.3 Federal income taxes receivable 4.2 9.6 Deferred income taxes, net 14.5 20.0 Other assets 0.8 0.7 Total assets $ 954.1 $ 845.5 Liabilities and stockholders' equity Accounts payable and accrued expenses $ 4.5 $ 4.8 Intercompany payable 1.9 0.1 Total liabilities 6.4 4.9 Stockholders' equity : Common stock, $0.01 par value; 150,000,000 shares authorized; 56,695,174 and 56,226,277 shares issued and 32,597,819 and 32,128,922 shares outstanding at December 31, 2017 and 2016, respectively 0.6 0.6 Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued — — Additional paid-in capital 381.2 372.0 Retained earnings 842.2 777.2 Accumulated other comprehensive income, net of tax 107.4 74.5 Treasury stock, at cost (24,097,355 shares at December 31, 2017 and December 31, 2016) (383.7 ) (383.7 ) Total stockholders' equity 947.7 840.6 Total liabilities and stockholders' equity $ 954.1 $ 845.5 Employers Holdings, Inc. Condensed Statements of Income Years Ended December 31, 2017 2016 2015 (in millions, except per share data) Revenues Net investment income $ 1.3 $ 1.9 $ 4.0 Net realized gains on investments — 8.0 2.4 Total revenues 1.3 9.9 6.4 Expenses Other operating expenses 15.2 13.8 13.8 Interest expense — — 1.1 Total expenses 15.2 13.8 14.9 Loss before income taxes and equity in earnings of subsidiary (13.9 ) (3.9 ) (8.5 ) Income tax benefit (5.8 ) (3.5 ) (3.3 ) Net loss before equity in earnings of subsidiary (8.1 ) (0.4 ) (5.2 ) Equity in earnings of subsidiary 109.3 107.1 99.6 Net income $ 101.2 $ 106.7 $ 94.4 Earnings per common share: Basic $ 3.11 $ 3.29 $ 2.94 Diluted $ 3.06 $ 3.24 $ 2.90 Cash dividends declared per common share $ 0.60 $ 0.36 $ 0.24 Employers Holdings, Inc. Condensed Statement of Cash Flows Years Ended December 31, 2017 2016 2015 (in millions) Operating activities Net income $ 101.2 $ 106.7 $ 94.4 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Equity in undistributed earnings of subsidiary (71.5 ) (107.1 ) (99.6 ) Realized gains on investments — (8.0 ) (2.4 ) Stock-based compensation 6.8 5.8 4.6 Excess tax benefits from stock-based compensation — — (1.2 ) Amortization of premium on investments, net 0.1 0.4 0.9 Deferred income tax expense (benefit) 5.3 2.9 (4.6 ) Change in operating assets and liabilities: Accounts payable and accrued expenses (0.3 ) (0.7 ) 1.7 Federal income taxes 5.4 (7.9 ) 4.9 Other assets (0.1 ) 0.8 0.4 Intercompany payable 1.8 0.3 0.1 Other — (0.4 ) 1.2 Net cash provided by (used in) operating activities 48.7 (7.2 ) 0.4 Investing activities Purchases of fixed maturity securities (30.6 ) (31.0 ) (21.6 ) Purchases of equity securities — (3.6 ) (19.0 ) Purchases of short-term securities (7.9 ) — — Proceeds from sale of fixed maturity securities 5.0 — 18.3 Proceeds from maturities and redemptions of investments 4.5 24.9 45.5 Proceeds from sale of equity securities — 88.5 24.0 Capital contributions to subsidiary (5.6 ) (8.0 ) — Change in restricted cash equivalents — — 4.6 Net cash (used in) provided by investing activities (34.6 ) 70.8 51.8 Financing activities Acquisition of common stock — (21.1 ) — Cash transactions related to stock-based compensation 3.8 9.0 4.8 Dividends paid to stockholders (19.7 ) (11.5 ) (7.7 ) Payments on notes payable — — (60.0 ) Excess tax benefits from stock-based compensation — — 1.2 Net cash used in financing activities (15.9 ) (23.6 ) (61.7 ) Net (decrease) increase in cash and cash equivalents (1.8 ) 40.0 (9.5 ) Cash and cash equivalents at the beginning of the period 41.4 1.4 10.9 Cash and cash equivalents at the end of the period $ 39.6 $ 41.4 $ 1.4 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Cash and Cash Equivalents, Policy | Cash and Cash Equivalents The Company considers all liquid investments with maturities of less than three months, as measured from the date of purchase, to be cash equivalents. |
Restricted Cash and Cash Equivalents, Policy | Restricted Cash and Cash Equivalents Restricted cash and cash equivalents represent cash and cash equivalents held in trust in order to secure certain of the Company's obligations and, accordingly, are restricted as to withdrawal or usage. As of December 31, 2017 and 2016 the Company held $24.5 million and $27.2 million , respectively, in trust for reinsurance obligations, of which $1.0 million and $3.6 million , respectively, represented restricted cash and cash equivalents. |
Investments, Policy | Short-Term Investments The Company considers all liquid investments with maturities of between three and twelve months, as measured from the date of purchase, to be short-term investments. Investment Securities The Company's investments in fixed maturity securities and equity securities are classified as available-for-sale and are reported at fair value with unrealized gains and losses excluded from earnings and reported as a separate component of stockholders' equity, net of deferred taxes, in accumulated other comprehensive income on the Company’s Consolidated Balance Sheets. Investment income consists primarily of interest and dividends generated by investment securities. Interest is recorded as earned on an accrual basis and dividends are recorded as earned at the ex-dividend date. Interest income on mortgage-backed and asset-backed securities is determined using the effective-yield method based on estimated principal repayments. Mortgage-backed securities are adjusted for the effects of changes in prepayment assumptions on the related accretion of discount or amortization of premium of such securities using the retrospective method. Realized gains and losses on investments are determined on a specific-identification basis. When, in the opinion of management, a decline in the fair value of an equity security below its cost is considered to be “other-than-temporary,” the equity security's cost is written down to its fair value at the time the other-than-temporary decline is identified. The determination of an other-than-temporary decline for fixed maturity securities includes, in addition to other relevant factors, a presumption that if the market value is below cost by a significant amount for a period of time, a bifurcation of the write-down may be necessary based on the portion of the loss that is deemed to be a “credit loss”, which is considered a realized loss, and the portion that is deemed to be an “other than credit loss”, which is considered to be an unrealized loss. If management has the intent to sell the fixed maturity security or more likely than not will be required to sell the fixed maturity security before its anticipated recovery, the investment is written down to its fair value and the entire impairment is recorded as a realized loss in the Company's Consolidated Statements of Comprehensive Income. If management does not have the intent to sell or will not be required to sell the fixed maturity security but does not expect to recover the amortized cost basis of the fixed maturity security, the amount of the other-than-temporary impairment is bifurcated (see Note 6 ). |
Revenue Recognition, Policy | Revenue Recognition Premiums written are recognized as revenues, net of any applicable underlying reinsurance coverage, and are earned over the term of the related policy. At the end of the policy term, payroll-based premium audits are performed on substantially all policyholder accounts to determine the actual amount of net premiums earned for that policy year. Earned but unbilled premiums include estimated future audit premiums based on the Company's historical experience. These estimates are subject to changes in policyholders' payrolls, economic conditions, and seasonality, and are continually reviewed and adjusted as experience develops or new information becomes known. Any such adjustments are included in current operations; however, they are partially offset by the resulting changes in losses and LAE, commission expenses, and premium taxes. The Company's premiums receivable on its Consolidated Balance Sheets included $64.2 million and $58.4 million of additional premiums expected to be received from policyholders for final audits at December 31, 2017 and 2016 , respectively. The Company establishes a bad debt allowance on its premiums receivable through a charge included in underwriting and other operating expenses in its Consolidated Statements of Comprehensive Income. This bad debt allowance is determined based on estimates and assumptions to project future experience. After all collection efforts have been exhausted, the Company reduces the bad debt allowance for write-offs of premiums receivable that have been deemed uncollectible. The Company's bad debt allowance was $10.0 million and $9.8 million at December 31, 2017 and 2016 , respectively. |
Deferred Policy Acquisition Costs, Policy | Deferred Policy Acquisition Costs Policy acquisition costs, those costs that relate directly to the successful acquisition of new or renewal insurance contracts, including underwriting, policy issuance and processing, medical and inspection, and sales force contract selling are deferred and amortized as the related premiums are earned. Amortization of deferred policy acquisition costs for the years ended December 31, 2017 , 2016 , and 2015 , was $108.2 million , $104.5 million , and $103.9 million , respectively. If the sum of a policy’s expected losses and LAE and deferred policy acquisition costs exceeds the related unearned premiums and projected investment income, a premium deficiency is determined to exist. In this event, deferred policy acquisition costs are immediately expensed to the extent necessary to eliminate the premium deficiency. If the premium deficiency exceeds deferred acquisition costs then a liability is accrued for the excess deficiency. There were no premium deficiency adjustments recognized during the years ended December 31, 2017 , 2016 , and 2015 . |
Unpaid Loss and LAE Reserves, Policy | Unpaid Loss and LAE Reserves Unpaid loss and LAE reserves represent management's best estimate of the ultimate net cost of all reported and unreported losses incurred for the applicable periods, less payments made. The estimated reserves for losses and LAE include the accumulation of estimates for all claims reported prior to the balance sheet date, estimates of claims incurred but not reported, and estimates of expenses for investigating and adjusting all incurred and unadjusted claims (based on projections of relevant historical data). Amounts reported are subject to the impact of future changes in economic, regulatory and social conditions. Management believes that, subject to the inherent variability in any such estimate, the reserves are within a reasonable and acceptable range of adequacy. Estimates for claims prior to the balance sheet date are continually monitored and reviewed, and as settlements are made or reserves adjusted, the differences are reported in current operations. Salvage and subrogation recoveries are estimated based on a review of the level of historical salvage and subrogation recoveries. |
Reinsurance, Policy | Reinsurance In the ordinary course of business, the Company may purchase excess of loss reinsurance in order to protect it against the impact of large and/or catastrophic losses. Additionally, the Company is a party to the LPT Agreement (see Note 10 ). These reinsurance arrangements reduce the Company's exposure to such losses since its reinsurers are liable to the Company to the extent of the reinsurance protection provided. However, the Company remains liable for all losses it incurs to the extent that any reinsurer is unable or unwilling to make timely payments under its reinsurance agreements. Balances due from reinsurers on unpaid losses, including an estimate of such recoverables related to reserves for incurred but not reported losses, are reported as reinsurance recoverables on the Company’s Consolidated Balance Sheets. Reinsurance recoverables on paid losses represents amounts currently due from reinsurers. Reinsurance recoverables on unpaid losses represents amounts that will be collectible from reinsurers once the losses are paid. Reinsurance recoverables on unpaid losses and LAE amounted to $537.0 million and $580.0 million at December 31, 2017 and 2016 , respectively. Ceded reinsurance premiums are accounted for on a basis consistent with those used in accounting for the underlying premiums, and are reported as reductions to arrive at net premiums written and earned. Ceded losses and LAE are also accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the relevant reinsurance agreement, and are recorded as reductions to losses and LAE incurred. Pursuant to the LPT Agreement, LAE is deemed to be 7% of total losses paid and are payable to the Company as compensation for management of the claims under the LPT Agreement. The Deferred Gain is amortized using the recovery method, whereby the amortization is determined by the proportion of actual reinsurance recoveries to total estimated recoveries through the life of the LPT Agreement, and is recorded in losses and LAE incurred in the Company's Consolidated Statements of Comprehensive Income. Any adjustment to the estimated loss and LAE reserves ceded under the LPT Agreement results in a cumulative adjustment to the Deferred Gain, which is also recognized in losses and LAE incurred in the Company's Consolidated Statements of Comprehensive Income, such that the Deferred Gain reflects the balance that would have existed had the revised reserves been recognized at the inception of the LPT Agreement. Additionally, the Company is entitled to receive a contingent profit commission under the LPT Agreement. The contingent profit commission is equal to 30% of the favorable difference between actual paid losses and LAE and expected paid losses and LAE as established in the LPT Agreement based on losses paid through June 30, 2024. The contingent profit commission is paid every five years beginning June 30, 2004 for the first 25 years of the agreement. The Company could be required to return any previously received contingent profit commission, plus interest, in the event of unfavorable differences through June 30, 2024. The Company records an estimate of contingent profit commission in its Consolidated Balance Sheets as Contingent commission receivable–LPT Agreement and a corresponding liability is recorded as Deferred reinsurance gain–LPT Agreement. The Contingent commission receivable–LPT Agreement is reduced as amounts are received from participating reinsurers. The Deferred reinsurance gain–LPT Agreement is amortized using the recovery method. The amortization of the contingent profit commission is determined by the proportion of actual reinsurance recoveries to total estimated recoveries over the life of the contingent profit commission (through June 30, 2024), and is recorded in losses and LAE incurred in the Company's Consolidated Statements of Comprehensive Income. Any adjustment to the contingent profit commission under the LPT Agreement results in a cumulative adjustment to the Deferred Gain, which is also recognized in losses and LAE incurred in the Company's Consolidated Statements of Comprehensive Income, such that the Deferred Gain reflects the balance that would have existed had the revised contingent profit commission been recognized at the inception of the LPT Agreement. |
Property, and Equipment, Policy | Property and Equipment Property and equipment are stated at cost less accumulated depreciation (see Note 7 ). Expenditures for maintenance and repairs are charged against operations as incurred. Electronic data processing equipment, software, furniture and equipment, and automobiles are depreciated using the straight-line method over three to seven years . Leasehold improvements are carried at cost less accumulated amortization. The Company amortizes leasehold improvements using the straight-line method over the lesser of the useful life of the asset or the remaining original lease term, excluding options or renewal periods. Leasehold improvements are generally amortized over three to five years . |
Lessee, Leases [Policy Text Block] | Obligations Held Under Capital Leases Leased property and equipment meeting capital lease criteria are capitalized at the lower of the present value of the related lease payments or the fair value of the leased asset at the inception of the lease. Amortization is calculated using the straight-line method based on the term of the lease and is included in the depreciation expense of property and equipment. See Note 12 for additional disclosures related to capital leases. |
Income Taxes, Policy | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the Company's financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of the recent change in tax rates on the Company's deferred tax assets and liabilities was recognized within continuing operations in income as of December 22, 2017, the date that the Tax Cuts and Jobs Act was enacted (Enactment) and created stranded tax effects within accumulated other comprehensive income that did not reflect the newly enacted tax rate. The Company reclassified the net tax effects from Accumulated other comprehensive income, net of tax, to Retained earnings as of the date of Enactment. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process. Recognition (Step 1) occurs when the Company concludes that a tax position, based solely on its technical merits, is more likely than not to be sustained upon examination. Measurement (Step 2) is addressed only if Step 1 has been satisfied. Under Step 2, the tax benefit is measured as the largest amount of benefit, determined on a cumulative probability basis, that is more likely than not to be realized upon ultimate settlement. The Company recognizes deferred tax assets when it determines that such assets are more likely than not to be realized in future periods. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, tax-planning strategies, projected future taxable income, projected future tax rates, and results of recent operations. If the Company determines that it is not more likely than not that it could realize its deferred tax assets in future periods it would establish a deferred tax asset valuation allowance that would increase the Company's provision for income taxes. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of its net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. |
Credit Risk, Policy | Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents (including restricted cash equivalents), short-term investments, investment securities, premiums receivable, and reinsurance recoverable balances. The Company’s cash equivalents and short-term investments include investments in money market securities and securities backed by the U.S. government. The Company's investment securities are diversified throughout many industries and geographic regions and include investments in U.S. government and U.S. government-sponsored enterprises. The Company believes that it has no significant concentrations of credit risk from a single issue or issuer within its cash equivalents, short-term investments and investment securities other than concentrations in U.S. government and U.S. government-sponsored enterprises. The Company's premiums receivable are generally diversified due to the large number of entities composing the Company's policyholder base and their dispersion across many different industries. The Company monitors the financial condition of its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. The Company also obtains collateral from its reinsurers in order to mitigate the risks related to insolvencies. At December 31, 2017 , $3.5 million of the Company's reinsurance recoverables were collateralized by cash or letters of credit and an additional $380.8 million was in trust accounts for reinsurance recoverables specifically related to the LPT Agreement. |
Fair Value of Financial Instruments, Policy | Fair Value of Financial Instruments The fair values of the Company's financial instruments have been determined using available market information and other appropriate valuation methodologies. Judgment is required in developing fair value estimates where quoted market prices are not available. Accordingly, these estimates are not necessarily indicative of the amounts that could be realized in a current market exchange. The use of different market assumptions or estimating methodologies may have an effect on the estimated fair value amounts. The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments: Cash and cash equivalents, short-term investments, premiums receivable, accounts payable and accrued expenses, and other liabilities. The carrying amounts for each of these financial instruments as reported in the Company's Consolidated Balance Sheets approximate their fair values. Investment securities. The Company’s investment securities are predominantly valued on the basis of actual market transactions or observable inputs. A small portion of the Company’s investment securities are valued on the basis of pricing models with significant unobservable inputs or nonbinding broker quotes. See Note 5 . |
Goodwill and Other Intangible Assets, Policy | Goodwill and Other Intangible Assets The Company tests for impairment of goodwill and non-amortizable intangible assets in the fourth quarter of each year. At the end of each quarter, management considers the results of the previous analysis as well as any recent developments that may constitute triggering events requiring the impairment analysis of goodwill and other intangible assets to be updated. The Company has assessed the effects of current economic conditions on the Company's financial condition and results of operations and changes in the Company's stock price and determined that there were no impairments of these assets as of December 31, 2017 and 2016 . Intangible assets related to state licenses are not subject to amortization. Intangibles related to insurance relationships are amortized in proportion to the expected period of benefit over the next year. The gross carrying value, accumulated amortization, and net carrying value for the Company's intangible assets, by major class, as of December 31, were as follows: 2017 2016 Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value (in millions) State licenses $ 7.7 $ — $ 7.7 $ 7.7 $ — $ 7.7 Insurance relationships 9.4 $ (9.2 ) 0.2 9.4 $ (8.9 ) 0.5 Total $ 17.1 $ (9.2 ) $ 7.9 $ 17.1 $ (8.9 ) $ 8.2 During the years ended December 31, 2017 , 2016 , and 2015 , the Company recognized $0.3 million , $0.3 million , and $0.5 million in amortization expenses associated with its intangible assets, respectively. These amortization expenses are included in the Company's Consolidated Statements of Comprehensive Income in underwriting and other operating expenses. Future amortization expenses associated with the Company's intangible assets are expected to be as follows: Year Amount (in millions) 2018 0.2 Total $ 0.2 |
Stock-based Compensation, Policy | Stock-Based Compensation The Company provides stock-based compensation to its directors and certain of its employees, which is recognized in its Consolidated Statements of Comprehensive Income based on estimated fair values over the relevant service period (see Note 14 ). |
Changes in Estimates (Tables)
Changes in Estimates (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Changes in Estimates [Abstract] | |
Change to Contingent Profit Commission [Table Text Block] | The Company increased its estimate of Contingent commission receivable – LPT Agreement (LPT Contingent Commission Adjustments) in each of 2017 , 2016 , and 2015 as a result of the determination that adjustments were necessary to reflect observed favorable paid loss trends in each of those years. The following table shows the impact to the Consolidated Statements of Comprehensive Income related to these changes in estimates. 2017 2016 2015 (in millions, except per share data) Change in estimate of Contingent commission receivable - LPT Agreement $ 0.3 $ 1.9 $ 2.8 Cumulative adjustment to the Deferred Gain (1) (0.3 ) (1.8 ) (2.6 ) Net income impact from this change in estimate 0.3 1.8 2.6 Earnings per common share impact from this change in estimate Basic 0.01 0.06 0.08 Diluted 0.01 0.05 0.08 (1) The cumulative adjustments to the Deferred Gain were also recognized in losses and LAE incurred in the Company's Consolidated Statements of Comprehensive Income, so that the Deferred Gain reflects the balance that would have existed had the revised loss and LAE reserves been recognized at the inception of the LPT Agreement. |
Change Due to Estimated Reserves Ceded Under the LPT Agreement [Table Text Block] | The Company reduced its estimated loss and LAE reserves ceded under the LPT Agreement (LPT Reserve Adjustments) in each of the years 2016 and 2015 as a result of the determination that adjustments were necessary to reflect observed favorable paid loss trends in each of these years. There were no LPT Reserve Adjustments in 2017. The following table shows the financial statement impact related to the LPT Reserve Adjustments. 2016 2015 (in millions, except per share data) LPT Reserve Adjustments $ (5.0 ) $ (10.0 ) Cumulative adjustment to the Deferred Gain (1) (3.1 ) (6.4 ) Net income impact from this change in estimate 3.1 6.4 Earnings per common share impact from this change in estimate Basic 0.10 0.20 Diluted 0.09 0.20 (1) The cumulative adjustments to the Deferred Gain were also recognized in losses and LAE incurred in the Company's Consolidated Statements of Comprehensive Income, so that the Deferred Gain reflects the balance that would have existed had the revised loss and LAE reserves been recognized at the inception of the LPT Agreement. |
Change in Reserves for Non-taxable Periods [Table Text Block] | The Company reallocated loss and LAE reserves from non-taxable periods prior to January 1, 2000 to taxable years, which reduced its effective tax rate in 2015 . These changes in estimates were the result of the determination that a reallocation of reserves among accident years was appropriate to address a continuation of observed loss trends in 2015. The following table shows the financial statement impact of these changes in estimates. 2015 (in millions, except per share data) Loss and LAE reserves reallocated to taxable years $ 56.3 Impact to effective tax rate (15.4 )% Net income impact from this change in estimate $ 15.3 Earnings per common share impact from this change in estimate Basic 0.48 Diluted 0.47 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of intangible assets table | The gross carrying value, accumulated amortization, and net carrying value for the Company's intangible assets, by major class, as of December 31, were as follows: 2017 2016 Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value (in millions) State licenses $ 7.7 $ — $ 7.7 $ 7.7 $ — $ 7.7 Insurance relationships 9.4 $ (9.2 ) 0.2 9.4 $ (8.9 ) 0.5 Total $ 17.1 $ (9.2 ) $ 7.9 $ 17.1 $ (8.9 ) $ 8.2 |
Expected amortization expense table | Future amortization expenses associated with the Company's intangible assets are expected to be as follows: Year Amount (in millions) 2018 0.2 Total $ 0.2 |
Fair Value of Financial Instr32
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 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 as of December 31, were as follows: 2017 2016 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Financial assets (in millions) Investments (Note 6) $ 2,677.7 $ 2,677.7 $ 2,552.6 $ 2,552.6 Cash and cash equivalents 73.3 73.3 67.2 67.2 Restricted cash and cash equivalents 1.0 1.0 3.6 3.6 Financial liabilities Notes payable (Note 11) $ 20.0 $ 23.6 $ 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. December 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 $ — $ 137.0 $ — $ — $ 127.4 $ — U.S. Agencies — 11.8 — — 12.8 — States and municipalities — 642.5 — — 851.6 — Corporate securities — 1,118.0 — — 956.7 — Residential mortgage-backed securities — 389.3 — — 258.0 — Commercial mortgage-backed securities — 106.0 — — 95.5 — Asset-backed securities — 58.8 — — 35.4 7.0 Total fixed maturity securities $ — $ 2,463.4 $ — $ — $ 2,337.4 $ 7.0 Equity securities Industrial and miscellaneous $ 181.7 $ — $ — $ 167.2 $ — $ — Non-redeemable preferred (FHLB stock) — — 4.7 — — 4.9 Other 23.9 — — 20.1 — — Total equity securities $ 205.6 $ — $ 4.7 $ 187.3 $ — $ 4.9 Short-term investments $ — $ 4.0 $ — $ — $ 16.0 $ — |
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 year ended December 31, 2017 . Level 3 Securities 2017 2016 (in millions) Beginning balance, January 1 $ 11.9 $ — Transfers out of Level 3 (1) (7.0 ) — Purchases and sales, net (0.2 ) 11.9 Ending balance, December 31 $ 4.7 $ 11.9 |
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. December 31, 2017 December 31, 2016 Cash and cash equivalents at fair value $ 34.3 $ 9.7 Cash equivalents measured at NAV, which approximates fair value 39.0 57.5 Total cash and cash equivalents $ 73.3 $ 67.2 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 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 At December 31, 2017 (in millions) Fixed maturity securities U.S. Treasuries $ 135.8 $ 2.0 $ (0.8 ) $ 137.0 U.S. Agencies 11.3 0.5 — 11.8 States and municipalities 617.0 25.5 — 642.5 Corporate securities 1,103.4 18.0 (3.4 ) 1,118.0 Residential mortgage-backed securities 388.3 3.6 (2.6 ) 389.3 Commercial mortgage-backed securities 106.5 0.4 (0.9 ) 106.0 Asset-backed securities 58.7 0.3 (0.2 ) 58.8 Total fixed maturity securities 2,421.0 50.3 (7.9 ) 2,463.4 Equity securities Industrial and miscellaneous 100.8 81.5 (0.6 ) 181.7 Non-redeemable preferred (FHLB stock) 4.7 — — 4.7 Other 11.2 12.7 — 23.9 Total equity securities 116.7 94.2 (0.6 ) 210.3 Short-term investments 4.0 — — 4.0 Total investments $ 2,541.7 $ 144.5 $ (8.5 ) $ 2,677.7 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 December 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 $ 220.5 $ 221.3 Due after one year through five years 766.6 782.1 Due after five years through ten years 754.7 772.1 Due after ten years 125.7 133.8 Mortgage and asset-backed securities 553.5 554.1 Total $ 2,421.0 $ 2,463.4 |
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 December 31, 2017 and 2016 . December 31, 2017 December 31, 2016 Estimated Fair Value Gross Unrealized Losses Number of Issues Estimated Fair Value Gross Unrealized Losses Number of Issues Less than 12 months: (dollars in millions) Fixed maturity securities U.S. Treasuries $ 86.0 $ (0.5 ) 28 $ 33.3 $ (0.2 ) 14 States and municipalities — — — 200.9 (6.1 ) 50 Corporate securities 307.6 (2.3 ) 113 289.5 (4.1 ) 101 Residential mortgage-backed securities 165.0 (0.8 ) 45 137.5 (2.6 ) 51 Commercial mortgage-backed securities 41.8 (0.2 ) 19 48.0 (1.0 ) 21 Asset-backed securities 29.3 (0.2 ) 25 30.1 (0.2 ) 20 Total fixed maturity securities 629.7 (4.0 ) 230 739.3 (14.2 ) 257 Equity securities 13.9 (0.6 ) 24 13.6 (0.6 ) 28 Total less than 12 months $ 643.6 $ (4.6 ) 254 $ 752.9 $ (14.8 ) 285 12 months or greater: Fixed maturity securities U.S. Treasuries $ 23.4 $ (0.3 ) 10 $ — $ — — Corporate securities 53.2 (1.1 ) 17 15.2 (0.4 ) 5 Residential mortgage-backed securities 77.1 (1.8 ) 32 — — — Commercial mortgage-backed securities 25.1 (0.7 ) 8 — — — Total fixed maturity securities 178.8 (3.9 ) 67 15.2 (0.4 ) 5 12 months or greater $ 178.8 $ (3.9 ) 67 $ 16.9 $ (0.5 ) 10 Total available-for-sale: Fixed maturity securities U.S. Treasuries $ 109.4 $ (0.8 ) 38 $ 33.3 $ (0.2 ) 14 States and municipalities — — — 200.9 (6.1 ) 50 Corporate securities 360.8 (3.4 ) 130 304.7 (4.5 ) 106 Residential mortgage-backed securities 242.1 (2.6 ) 77 137.5 (2.6 ) 51 Commercial mortgage-backed securities 66.9 (0.9 ) 27 48.0 (1.0 ) 21 Asset-backed securities 29.3 (0.2 ) 25 30.1 (0.2 ) 20 Total fixed maturity securities 808.5 (7.9 ) 297 754.5 (14.6 ) 262 Equity securities 13.9 (0.6 ) 24 15.3 (0.7 ) 33 Total available-for-sale $ 822.4 $ (8.5 ) 321 $ 769.8 $ (15.3 ) 295 |
Net realized gains and change in unrealized gains (losses), available for sale securities table | 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: Years Ended December 31, 2017 2016 2015 Net realized gains (losses) on investments (in millions) Fixed maturity securities Gross gains $ 4.7 $ 1.9 $ 0.5 Gross losses (2.2 ) (0.7 ) (0.4 ) Net realized gains on fixed maturity securities $ 2.5 $ 1.2 $ 0.1 Equity securities Gross gains $ 9.3 $ 16.6 $ 8.1 Gross losses (4.4 ) (6.6 ) (18.9 ) Net realized gains (losses) on equity securities $ 4.9 $ 10.0 $ (10.8 ) Total $ 7.4 $ 11.2 $ (10.7 ) Change in unrealized gains (losses) Fixed maturity securities $ 3.9 $ (28.9 ) $ (22.2 ) Equity securities 17.5 14.9 (13.7 ) Total $ 21.4 $ (14.0 ) $ (35.9 ) |
Investment income table | Net investment income was as follows: Years Ended December 31, 2017 2016 2015 (in millions) Fixed maturity securities $ 70.4 $ 68.5 $ 68.8 Equity securities 6.9 7.4 5.9 Short-term investments 0.1 — — Cash equivalents and restricted cash 0.6 0.4 0.1 Gross investment income 78.0 76.3 74.8 Investment expenses (3.4 ) (3.1 ) (2.6 ) Net investment income $ 74.6 $ 73.2 $ 72.2 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment [Abstract] | |
Property, plant and equipment table | Property and equipment consists of the following: As of December 31, 2017 2016 (in millions) Furniture and equipment $ 1.7 $ 2.3 Leasehold improvements 2.9 4.3 Computers and software 54.2 59.0 Automobiles 1.1 1.2 Property and equipment, gross 59.9 66.8 Accumulated depreciation (46.0 ) (44.6 ) Property and equipment, net $ 13.9 $ 22.2 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
Summary of income tax contingencies table | The Company's provision for income taxes consisted of the following: Years Ended December 31, 2017 2016 2015 Current tax expense: (in millions) Federal $ 17.9 $ 20.3 $ 9.5 State 0.7 0.3 1.1 Total current tax expense 18.6 20.6 10.6 Deferred federal tax expense (benefit): Impact of tax Enactment 7.0 — — Other 17.2 13.4 (5.6 ) Total deferred federal tax expense (benefit) 24.2 13.4 (5.6 ) Income tax expense $ 42.8 $ 34.0 $ 5.0 |
Reconciliation of federal staturoty income tax rates to the effective tax rates table | The difference between the statutory federal tax rate of 35% and the Company's effective tax rate on net income before income taxes as reflected in the Consolidated Statements of Comprehensive Income was as follows: Years Ended December 31, 2017 2016 2015 (in millions) Expense computed at statutory rate $ 50.4 $ 49.3 $ 34.8 Tax-advantaged investment income (7.6 ) (8.5 ) (8.6 ) Pre-Privatization reserve adjustments, excluding LPT — — (15.3 ) LPT deferred gain amortization (4.0 ) (4.7 ) (4.9 ) LPT Reserve Adjustment — (1.1 ) (2.2 ) Stock based compensation (3.4 ) (1.6 ) — Impact of tax Enactment 7.0 — — Other 0.4 0.6 1.2 Income tax expense $ 42.8 $ 34.0 $ 5.0 |
Deferred tax assets and liabilities | The significant components of deferred income taxes, net, were as follows as of December 31: 2017 2016 Deferred Tax Deferred Tax Assets Liabilities Assets Liabilities (in millions) Unrealized capital gains, net $ — $ 28.5 $ — $ 40.1 Deferred policy acquisition costs — 9.7 — 15.7 Intangible assets — 1.7 — 2.9 Loss reserve discounting for tax reporting 29.0 — 51.7 — Unearned premiums 12.8 — 20.9 — Allowance for bad debt 2.1 — 3.4 — Stock-based compensation 2.5 — 4.4 — Accrued liabilities 4.2 — 8.1 — Minimum tax credit 20.0 — 27.8 — Other 2.8 4.8 9.7 7.9 Total $ 73.4 $ 44.7 $ 126.0 $ 66.6 Deferred income taxes, net $ 28.7 $ 59.4 |
Liability for Unpaid Losses a36
Liability for Unpaid Losses and Loss Adjustment Expenses (Tables) | 12 Months Ended |
Dec. 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. Years Ended December 31, 2017 2016 2015 (in millions) Unpaid losses and LAE at beginning of period $ 2,301.0 $ 2,347.5 $ 2,369.7 Less reinsurance recoverable, excluding bad debt allowance, on unpaid losses and LAE 580.0 628.2 669.5 Net unpaid losses and LAE at beginning of period 1,721.0 1,719.3 1,700.2 Losses and LAE, net of reinsurance, incurred during the period related to: Current year 447.3 452.9 456.9 Prior years (1) (18.5 ) (18.4 ) (7.2 ) Total net losses and LAE incurred during the period (1) 428.8 434.5 449.7 Paid losses and LAE, net of reinsurance, related to: Current year 76.9 78.7 75.4 Prior years (2) 343.8 354.1 355.2 Total net paid losses and LAE during the period (2) 420.7 432.8 430.6 Ending unpaid losses and LAE, net of reinsurance 1,729.1 1,721.0 1,719.3 Reinsurance recoverable, excluding bad debt allowance, on unpaid losses and LAE 537.0 580.0 628.2 Unpaid losses and LAE at end of period $ 2,266.1 $ 2,301.0 $ 2,347.5 (1) Losses and LAE, net of reinsurance, incurred during the period related to prior years and Total net losses and LAE incurred during the period included in the above table excludes the impact of the amortization of the Deferred Gain and LPT Reserve Adjustments (Note 10 ). Including these amounts, Losses and LAE, net of reinsurance, incurred during the period related to prior years was $(30.1) million , $(35.0) million , and $(27.6) million and Total net losses and LAE incurred during the period was $417.2 million , $417.9 million , and $429.4 million for the years ended December 31, 2017 , 2016 , and 2015 , respectively. (2) Paid losses and LAE, net of reinsurance, related to prior years and Total net paid losses and LAE during the period included in the above table excludes the impact of the amortization of the Deferred Gain and LPT Reserve Adjustments (Note 10 ). Including these amounts, Paid losses and LAE, net of reinsurance, related to prior years was $332.2 million , $337.5 million , and $334.8 million and Total net paid losses and LAE during the period was $409.1 million , $416.2 million , and $410.2 million for the years ended December 31, 2017 , 2016 , and 2015 , respectively. |
Short-duration Insurance Contracts, Claims Development [Table Text Block] | The Company analyzed the usefulness of disaggregation of its results and determined the characteristics associated with the policies and the related unpaid loss reserves, incurred losses, and payment patterns are similar in nature. As such, the following tables show the Company's historical incurred and cumulative paid losses and LAE development, net of reinsurance, as well as IBNR loss reserves and the number of reported claims on an aggregated basis as of December 31, 2017 for each of the previous 10 accident years. Incurred Losses and LAE, Net of Reinsurance Years Ended December 31, As of December 31, 2017 Accident Year 2008 (1) 2009 (1) 2010 (1) 2011 (1) 2012 (1) 2013 (1) 2014 (1) 2015 (1) 2016 (1) 2017 IBNR Cumulative number of reported claims (in millions, except claims counts) 2008 $ 315.9 $ 315.3 $ 317.8 $ 329.2 $ 329.5 $ 335.1 $ 336.9 $ 343.8 $ 341.4 $ 342.1 $ 15.4 28,088 2009 255.4 266.9 279.0 280.1 283.6 283.7 291.2 290.5 290.5 13.5 22,673 2010 204.9 224.4 228.1 246.1 250.2 262.0 259.9 258.8 19.8 18,543 2011 253.7 267.3 272.0 277.4 296.3 292.6 288.8 27.5 19,571 2012 348.8 359.9 360.9 386.4 388.2 382.8 50.7 25,972 2013 452.6 460.6 478.6 472.6 468.9 73.6 28,816 2014 463.4 445.8 432.9 434.6 86.1 28,449 2015 422.2 425.8 423.9 98.7 26,993 2016 419.0 414.6 140.8 25,305 2017 412.4 244.6 21,214 Total $ 3,717.4 Cumulative Paid Losses and LAE, Net of Reinsurance Years Ended December 31, Accident Year 2008 (1) 2009 (1) 2010 (1) 2011 (1) 2012 (1) 2013 (1) 2014 (1) 2015 (1) 2016 (1) 2017 (in millions) 2008 $ 71.1 $ 155.4 $ 201.8 $ 234.7 $ 255.3 $ 271.1 $ 284.2 $ 293.6 $ 300.7 $ 307.1 2009 59.0 130.6 174.1 202.0 219.3 232.1 242.3 249.5 255.1 2010 47.1 105.6 143.8 171.7 190.7 206.2 215.4 221.3 2011 47.4 115.1 162.6 193.8 217.5 230.1 238.2 2012 58.6 148.3 214.2 261.4 289.9 305.0 2013 68.5 184.4 263.8 317.4 346.1 2014 65.3 172.7 248.9 297.2 2015 65.5 174.5 246.9 2016 65.6 166.8 2017 63.5 Total $ 2,447.3 All outstanding liabilities for unpaid losses and LAE prior to 2007, net of reinsurance 364.2 Total outstanding liabilities for unpaid losses and LAE, net of reinsurance $ 1,634.3 (1) Data presented for these calendar years is required supplementary information, which is unaudited |
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Table Text Block] | The following table represents a reconciliation of claims development to the aggregate carrying amount of the liability for unpaid losses and LAE: December 31, 2017 (in millions) Liabilities for unpaid losses and LAE, net of reinsurance $ 1,634.3 Reinsurance recoverable on unpaid losses 537.0 Unallocated LAE (adjusting and other) 94.8 Total liability for unpaid losses and LAE $ 2,266.1 |
Short-duration Insurance Contracts, Schedule of Historical Claims Duration [Table Text Block] | The following table presents the average annual percentage payout of incurred claims by age, net of reinsurance, as of December 31, 2017 and is presented as required supplementary information, which is unaudited: Average Annual Percentage Payout of Claims by Age, Net of Reinsurance Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 16.7 % 24.3 % 16.1 % 10.8 % 6.9 % 4.7 % 3.4 % 2.5 % 2.0 % 1.9 % |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Reinsurance [Abstract] | |
Supplemental schedule of reinsurance premiums for insurance companies table | The effects of reinsurance on the Company's written and earned premiums and on its losses and LAE incurred were as follows: Years Ended December 31, 2017 2016 2015 Written Earned Written Earned Written Earned (in millions) Direct premiums $ 719.5 $ 712.5 $ 691.0 $ 691.0 $ 684.9 $ 686.0 Assumed premiums 10.2 10.0 10.4 10.6 12.8 12.8 Gross premiums 729.7 722.5 701.4 701.6 697.7 698.8 Ceded premiums (6.0 ) (6.0 ) (6.8 ) (6.8 ) (8.4 ) (8.4 ) Net premiums $ 723.7 $ 716.5 $ 694.6 $ 694.8 $ 689.3 $ 690.4 Ceded losses and LAE incurred $ (0.5 ) $ 0.1 $ 10.1 Ceded losses and LAE incurred includes the amortization of the Deferred Gain, LPT Reserve Adjustments, and LPT Contingent Commission Adjustments. |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Notes Payable [Abstract] | |
Schedule of long-term debt instruments table | Notes payable is comprised of the following: December 31, 2017 2016 (in millions) Dekania Surplus Note, due April 29, 2034 $ 10.0 $ 10.0 Alesco Surplus Note, due December 15, 2034 10.0 10.0 ICONS Surplus Note, due May 24, 2034 — 12.0 Total $ 20.0 $ 32.0 |
Schedule of maturities of long-term debt table | Principal payment obligations on notes payable outstanding at December 31, 2017 , were as follows: Year Principal Due (in millions) 2018 - 2022 $ — Thereafter 20.0 Total $ 20.0 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies [Abstract] | |
Operating and capital leases schedule of future minimum lease payments table | The future lease payments for the next five years on these non-cancelable operating and capital leases at December 31, 2017 , were as follows: Year Operating Leases Capital Leases (in millions) 2018 $ 4.8 $ 0.3 2019 4.8 0.3 2020 4.2 0.2 2021 2.8 0.2 2022 1.8 0.1 Thereafter 7.9 — Total $ 26.3 $ 1.1 |
Schedule of capital leased asssets table | Property held under capital leases is included in property and equipment as follows: Asset Class 2017 2016 (in millions) Automobiles 1.1 1.2 1.1 1.2 Accumulated amortization (0.3 ) (0.6 ) Total $ 0.8 $ 0.6 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stock-Based Compensation [Abstract] | |
Schedule of compensation cost for share-based payment arrangements, allocation of share-based compensation costs by plan table | Net stock-based compensation expense recognized in the Company's Consolidated Statements of Comprehensive Income was as follows: Years Ended December 31, 2017 2016 2015 Stock-based compensation expense related to: (in millions) Stock options $ 0.5 $ 0.7 $ 1.0 RSUs 2.0 1.9 2.0 PSUs 4.3 3.2 1.6 Total 6.8 5.8 4.6 Less: related tax benefit 2.4 2.0 1.6 Net stock-based compensation expense $ 4.4 $ 3.8 $ 3.0 |
Schedule of share-based payment award, stock options, valuation assumptions table | The fair value of the stock options granted during the years ended December 31, 2016 and 2015 was calculated using the following weighted average assumptions: 2016 2015 Expected volatility 38.0 % 38.0 % Expected life (in years) 4.8 4.8 Dividend yield 1.3 % 1.0 % Risk-free interest rate 1.4 % 1.6 % Weighted average grant date fair values of stock options granted $8.46 $7.63 |
Schedule of share-based compensation arrangement by share-based payment award, options, vested and expected to vest, outstanding table | Changes in outstanding stock options for the year ended December 31, 2017 were as follows: Number of Stock Options Weighted-Average Price Weighted Average Remaining Contractual Life Stock options outstanding at December 31, 2014 1,521,290 $ 17.45 2.9 years Granted 80,800 24.20 6.2 years Exercised (463,466 ) 16.43 Forfeited (17,079 ) 20.21 Stock options outstanding at December 31, 2015 1,121,545 18.31 2.8 years Granted 67,431 27.72 6.2 years Exercised (586,132 ) 16.39 Expired (6,075 ) 22.48 Forfeited (32,673 ) 24.35 Stock options outstanding at December 31, 2016 564,096 21.04 3.3 years Exercised (307,076 ) 19.44 Forfeited (9,673 ) 24.45 Stock options outstanding at December 31, 2017 247,347 22.90 3.4 years Exercisable at December 31, 2017 156,517 21.71 2.8 years |
Schedule of fair value of options vested and instrinsic value of outstanding and exercisable options table | The fair value of stock options vested and the intrinsic value of outstanding and exercisable stock options as of December 31, were as follows: 2017 2016 2015 (in millions) Fair value of stock options vested $ 0.6 $ 0.8 $ 1.3 Intrinsic value of outstanding stock options 5.3 10.6 10.1 Intrinsic value of exercisable stock options 3.6 7.6 8.5 |
Schedule of share-based compensation, restricted stock and restricted stock units activity | Changes in outstanding RSUs for the year ended December 31, 2017 were as follows: Number of RSUs Weighted Average Grant Date Fair Value RSUs outstanding at December 31, 2014 306,867 $ 19.15 Granted 112,048 24.19 Forfeited (7,749 ) 20.99 Vested (92,133 ) 19.74 RSUs outstanding at December 31, 2015 319,033 20.71 Granted 100,218 28.20 Forfeited (21,872 ) 24.87 Vested (72,995 ) 21.56 RSUs outstanding at December 31, 2016 324,384 22.55 Granted 87,276 37.94 Forfeited (13,711 ) 29.28 Vested (70,877 ) 24.97 RSUs outstanding at December 31, 2017 327,072 25.85 Vested but unsettled RSUs at December 31, 2017 152,644 19.54 |
Schedule of fair value of RSUs vested and instrinsic value of outstanding and vested RSUs table | The grant date fair value of RSUs vested and the intrinsic value of vested RSUs for the years ended December 31, were as follows: 2017 2016 2015 (in millions) Grant date fair value of RSUs vested $ 1.8 $ 1.6 $ 1.7 Intrinsic value of RSUs vested 2.8 2.1 2.2 |
PSUs awarded to certain officers table | The Company has awarded PSUs to certain employees of the Company as follows: Date of Grant Target Number Awarded Fair Value on Date of Grant Aggregate Fair Value on Date of Grant (in millions) March 2015 (1) 110,000 $ 24.20 $ 2.7 March 2016 (1) 97,236 27.72 2.7 March 2017 (1) 97,440 37.60 3.7 (1) The PSUs awarded in March 2015, 2016 and 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 values shown in the table represent the aggregate number of PSUs awarded at the target level. |
Statutory Matters (Tables)
Statutory Matters (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stautory Matters [Abstract] | |
Statutory accounting practices disclosure table | The combined capital stock, surplus, and net income of the Company's insurance subsidiaries (EICN, ECIC, EPIC, and EAC), prepared in accordance with the statutory accounting practices (SAP) of the National Association of Insurance Commissioners (NAIC) as well as SAP permitted by the states of California, Florida, and Nevada, were as follows: December 31, 2017 2016 (in millions) Capital stock and unassigned surplus $ 510.6 $ 447.1 Paid in capital 349.8 349.8 Surplus notes 32.0 32.0 Total statutory surplus $ 892.4 $ 828.9 |
Accumulated Other Comprehensi42
Accumulated Other Comprehensive Income, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of accumulated other comprehensive income (loss) table | The following table summarizes the components of accumulated other comprehensive income: Years Ended December 31, 2017 2016 (in millions) Net unrealized gain on investments, before taxes $ 136.0 $ 114.6 Deferred tax expense on net unrealized gains (28.6 ) (40.1 ) Total accumulated other comprehensive income $ 107.4 $ 74.5 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 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 shares outstanding used in the earnings per share common share calculations. Years Ended December 31, 2017 2016 2015 (in millions, except share data) Net income $ 101.2 $ 106.7 $ 94.4 Weighted average number of shares outstanding–basic 32,501,576 32,434,580 32,070,911 Effect of dilutive securities: Stock options 208,602 246,562 286,764 PSUs 271,738 222,594 155,768 RSUs 78,844 73,099 48,010 Dilutive potential shares 559,184 542,255 490,542 Weighted average number of shares outstanding–diluted 33,060,760 32,976,835 32,561,453 |
Antidilutive securities excluded from computation of earnings per share table | The following table presents the number of stock options, PSUs and RSUs that were excluded from the Company's calculation of diluted earnings per share. Years Ended December 31, 2017 2016 2015 Stock options excluded as the exercise price was greater than the average market price — — 20,200 Stock options excluded under the treasury method, as the potential proceeds on settlement or exercise was greater than the value of shares acquired — 89,221 257,405 |
Selected Quarterly Financial 44
Selected Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Selecled Quarterly Financial Data (Unaudited) [Abstract] | |
Schedule of Quarterly Financial Information [Table Text Block] | Quarterly results for the years ended December 31, 2017 and 2016 were as follows: 2017 Quarters Ended March 31 June 30 September 30 December 31 (in millions, except per share data) Net premiums earned $ 175.3 $ 171.7 $ 187.9 $ 181.6 Net realized gains on investments 2.2 1.1 4.1 — Losses and loss adjustment expenses 109.0 106.1 116.9 85.2 Commission expense 21.5 21.5 23.7 24.7 Underwriting and other operating expenses 35.9 32.6 33.6 37.8 Other expenses — — 7.5 — Income tax expense 6.3 7.8 7.0 21.7 Net income 23.2 24.8 21.9 31.3 Earnings per common share: Basic 0.72 0.76 0.67 0.96 Diluted 0.70 0.75 0.66 0.94 2016 Quarters Ended March 31 June 30 September 30 December 31 (in millions, except per share data) Net premiums earned $ 172.6 $ 176.9 $ 173.3 $ 172.0 Net realized gains on investments 1.5 6.0 1.6 2.1 Losses and loss adjustment expenses 107.3 111.7 109.0 89.9 Commission expense 20.3 21.9 21.3 20.0 Underwriting and other operating expenses 36.3 33.6 31.7 34.5 Income tax expense 5.9 7.4 7.8 12.9 Net income 21.8 26.8 22.6 35.5 Earnings per common share: Basic 0.67 0.82 0.70 1.10 Diluted 0.66 0.81 0.69 1.08 |
Basis of Presentation Pending P
Basis of Presentation Pending Purchase of PRUS (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Business Acquisition [Line Items] | |
Estimated statutory capital and surplus of pending acquisition | $ 40,000 |
Net cash payment to acquire business | $ 5,800 |
Schedule II - Balance Sheet Par
Schedule II - Balance Sheet Parenthetical (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Amortized cost | $ 2,541.7 | $ 2,438 |
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) | 56,695,174 | 56,226,277 |
Common stock, shares outstanding (in shares) | 32,597,819 | 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 |
Parent Company [Member] | ||
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) | 56,226,277 | 55,589,454 |
Common stock, shares outstanding (in shares) | 32,128,922 | 32,216,480 |
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 | 23,372,974 |
Debt Securities [Member] | ||
Amortized cost | $ 2,421 | $ 2,305.9 |
Debt Securities [Member] | Parent Company [Member] | ||
Amortized cost | 14.7 | 40.2 |
Equity Securities [Member] | ||
Amortized cost | 116.7 | 116.1 |
Equity Securities [Member] | Parent Company [Member] | ||
Amortized cost | $ 0 | $ 46 |
Changes in Estimates (Details)
Changes in Estimates (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Change in Accounting Estimate [Line Items] | |||||||||||||
Unpaid losses and loss adjustment expenses | $ 2,266,100 | $ 2,301,000 | $ 2,266,100 | $ 2,301,000 | $ 2,347,500 | $ 2,369,700 | |||||||
Amortization of deferred gain | (11,300) | (11,700) | (11,400) | ||||||||||
Net income | $ 31,300 | $ 21,900 | $ 24,800 | $ 23,200 | $ 35,500 | $ 22,600 | $ 26,800 | $ 21,800 | $ 101,200 | $ 106,700 | $ 94,400 | ||
Basic | $ 0.96 | $ 0.67 | $ 0.76 | $ 0.72 | $ 1.10 | $ 0.70 | $ 0.82 | $ 0.67 | $ 3.11 | $ 3.29 | $ 2.94 | ||
Diluted | $ 0.94 | $ 0.66 | $ 0.75 | $ 0.70 | $ 1.08 | $ 0.69 | $ 0.81 | $ 0.66 | $ 3.06 | $ 3.24 | $ 2.90 | ||
Change to Contingent Profit Commission [Member] | |||||||||||||
Change in Accounting Estimate [Line Items] | |||||||||||||
Change in estimate of contingent commission receivable | $ 300 | $ 1,900 | $ 2,800 | ||||||||||
Amortization of deferred gain | [1] | (300) | (1,800) | (2,600) | |||||||||
Net income | $ 300 | $ 1,800 | $ 2,600 | ||||||||||
Basic | $ 0.01 | $ 0.06 | $ 0.08 | ||||||||||
Diluted | $ 0.01 | $ 0.05 | $ 0.08 | ||||||||||
Change Due to Estimated Reserves Ceded Under the LPT Agreement [Member] | |||||||||||||
Change in Accounting Estimate [Line Items] | |||||||||||||
Unpaid losses and loss adjustment expenses | $ 0 | $ (5,000) | $ 0 | $ (5,000) | $ (10,000) | ||||||||
Amortization of deferred gain | [2] | (3,100) | (6,400) | ||||||||||
Net income | 0 | $ 3,100 | $ 6,400 | ||||||||||
Basic | $ 0.10 | $ 0.20 | |||||||||||
Diluted | $ 0.09 | $ 0.20 | |||||||||||
Due to change in reserves for non-taxable periods | |||||||||||||
Change in Accounting Estimate [Line Items] | |||||||||||||
Reserves reallocated to taxable years | $ 0 | $ 0 | $ 56,300 | ||||||||||
Effective income tax rate reconciliation, percent | (15.40%) | ||||||||||||
Net income | $ 15,300 | ||||||||||||
Basic | $ 0.48 | ||||||||||||
Diluted | $ 0.47 | ||||||||||||
[1] | The cumulative adjustments to the Deferred Gain were also recognized in losses and LAE incurred in the Company's Consolidated Statements of Comprehensive Income, so that the Deferred Gain reflects the balance that would have existed had the revised loss and LAE reserves been recognized at the inception of the LPT Agreement. | ||||||||||||
[2] | The cumulative adjustments to the Deferred Gain were also recognized in losses and LAE incurred in the Company's Consolidated Statements of Comprehensive Income, so that the Deferred Gain reflects the balance that would have existed had the revised loss and LAE reserves been recognized at the inception of the LPT Agreement. |
Summary of Significant Accoun48
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Investments | $ 2,677,700,000 | $ 2,552,600,000 | |
Restricted cash and cash equivalents | 1,000,000 | 3,600,000 | |
Premiums receivable from policyholders for final audit | 64,200,000 | 58,400,000 | |
Premiums receivable, bad debt allowance | 10,000,000 | 9,800,000 | |
Write-offs, net of recoveries of amounts previously written off | 3,200,000 | 6,000,000 | $ 2,400,000 |
Deferred policy acquisition cost, amortization expense | 108,200,000 | 104,500,000 | 103,900,000 |
Premium Deficiency | 0 | 0 | 0 |
Unpaid losses | $ 537,000,000 | 580,000,000 | |
LPT - loss expense as a percentange of losses paid, for management of LPT claims | 7.00% | ||
LPT favorable/ unfavorable difference, percentage | 30.00% | ||
LPT actual amounts paid versus expected amounts, period | every five years | ||
LPT actual amounts paid versus expected amounts, expiration period | 25 | ||
Collateralized by cash or letter of credit | $ 3,500,000 | ||
LPT collateral held in trust account | 380,800,000 | 355,700,000 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Intangible assets, gross carrying amount | 17,100,000 | 17,100,000 | |
Intangible assets, accumulated amortization | (9,200,000) | (8,900,000) | |
Intangible assets, net | 7,900,000 | 8,200,000 | |
Amortization of intangible assets | 300,000 | 300,000 | $ 500,000 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
Future amortization expense, year two | 200,000 | ||
Intangible assets, future amortization total | 200,000 | ||
Funds Held in Trust, Reinsurance Agreement [Domain] | |||
Investments | 24,500,000 | 27,200,000 | |
Restricted cash and cash equivalents | 1,000,000 | 3,600,000 | |
Licensing Agreements [Member] | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Intangible assets, gross carrying amount | 7,700,000 | 7,700,000 | |
Intangible assets, net | 7,700,000 | 7,700,000 | |
Service Agreements [Member] | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Intangible assets, gross carrying amount | 9,400,000 | 9,400,000 | |
Intangible assets, accumulated amortization | (9,200,000) | (8,900,000) | |
Intangible assets, net | $ 200,000 | $ 500,000 | |
Leasehold improvements | |||
Finite-Lived intangible assets, amortization method | amortized over three to five years | ||
Electronic Data Processing Equipment, Software, Furniture and Equipment and Automobiles [Member] | |||
Finite-Lived intangible assets, amortization method | straight-line method over three to seven years |
New Accounting Standards Recent
New Accounting Standards Recently issued ASUs (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Net impact of tax enactment on net unrealized gains on investments | $ 0 |
Retained Earnings | |
Net impact of tax enactment on net unrealized gains on investments | (17.8) |
Accumulated Other Comprehensive Income, Net | |
Net impact of tax enactment on net unrealized gains on investments | $ 17.8 |
Fair Value of Financial Instr50
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Investments | $ 2,677,700 | $ 2,552,600 | ||
Cash and cash equivalents | 73,300 | 67,200 | $ 56,600 | $ 103,600 |
Restricted cash and cash equivalents | 1,000 | 3,600 | ||
Notes payable | 20,000 | 32,000 | ||
Investments, fair value | 2,677,700 | 2,552,600 | ||
Cash and cash equivalents, estimated fair value | 73,300 | 67,200 | ||
Notes payable, fair value | $ 23,600 | $ 33,000 |
Fair Value of Financial Instr51
Fair Value of Financial Instruments, Fair Value Inputs (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 2,677,700 | $ 2,552,600 |
Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 2,463,400 | 2,344,400 |
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 | 2,463,400 | 2,337,400 |
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 | 7,000 |
US Treasury Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 137,000 | 127,400 |
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 | 137,000 | 127,400 |
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 | 11,800 | 12,800 |
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 | 11,800 | 12,800 |
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 | 642,500 | 851,600 |
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 | 642,500 | 851,600 |
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 | 1,118,000 | 956,700 |
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 | 1,118,000 | 956,700 |
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 | 389,300 | 258,000 |
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 | 389,300 | 258,000 |
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 | 106,000 | 95,500 |
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 | 106,000 | 95,500 |
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 | 58,800 | 42,400 |
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 | 58,800 | 35,400 |
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 | 0 | 7,000 |
Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 210,300 | 192,200 |
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 | 205,600 | 187,300 |
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 | 4,700 | 4,900 |
Industrial and miscellaneous | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 181,700 | 167,200 |
Industrial and miscellaneous | 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 | 181,700 | 167,200 |
Industrial and miscellaneous | 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 | 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 |
Federal home loan bank stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 4,700 | 4,900 |
Federal home loan bank stock | 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 |
Federal home loan bank stock | 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 |
Federal home loan bank stock | 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 | 4,700 | 4,900 |
Other equities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 23,900 | 20,100 |
Other equities | 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 | 23,900 | 20,100 |
Other equities | 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 equities | 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 | 4,000 | 16,000 |
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 | 4,000 | 16,000 |
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 Instr52
Fair Value of Financial Instruments Cash Equivalents at NAV and Total Cash and Cash Equivalents Carried at Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents at fair value | $ 34.3 | $ 9.7 |
Cash equivalents measured at NAV, which approximates fair value | 39 | 57.5 |
Total cash and cash equivalents | $ 73.3 | $ 67.2 |
Fair Value of Financial Instr53
Fair Value of Financial Instruments Fair Value of Financial Instruments, Reconciliation of Level 3 Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Beginning balance, January 1 | $ 2,552,600 | ||
Transfers out of Level 3(1) | [1] | (7,000) | $ 0 |
Ending balance, December 31 | 2,677,700 | 2,552,600 | |
Fair Value, Inputs, Level 3 [Member] | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Beginning balance, January 1 | 11,900 | 0 | |
Purchases and sales, net | (200) | 11,900 | |
Ending balance, December 31 | $ 4,700 | $ 11,900 | |
[1] | (1)Transferred from Level 3 to Level 2 because observable market data became available for the securities. |
Investments (Details)
Investments (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | $ 2,541.7 | $ 2,438 |
Gross unrealized gains | 144.5 | 129.9 |
Gross unrealized loss | (8.5) | (15.3) |
Investments | 2,677.7 | 2,552.6 |
Deposit Assets | ||
Investments | 2,677.7 | 2,552.6 |
Assets Held-in-trust | ||
Investments | 2,677.7 | 2,552.6 |
Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 2,421 | 2,305.9 |
Gross unrealized gains | 50.3 | 53.1 |
Gross unrealized loss | (7.9) | (14.6) |
Investments | 2,463.4 | 2,344.4 |
Deposit Assets | ||
Investments | 2,463.4 | 2,344.4 |
Assets Held-in-trust | ||
Investments | 2,463.4 | 2,344.4 |
US Treasury Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 135.8 | 124.1 |
Gross unrealized gains | 2 | 3.5 |
Gross unrealized loss | (0.8) | (0.2) |
Investments | 137 | 127.4 |
Deposit Assets | ||
Investments | 137 | 127.4 |
Assets Held-in-trust | ||
Investments | 137 | 127.4 |
US Government Agencies Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 11.3 | 11.9 |
Gross unrealized gains | 0.5 | 0.9 |
Gross unrealized loss | 0 | 0 |
Investments | 11.8 | 12.8 |
Deposit Assets | ||
Investments | 11.8 | 12.8 |
Assets Held-in-trust | ||
Investments | 11.8 | 12.8 |
US States and Political Subdivisions Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 617 | 833 |
Gross unrealized gains | 25.5 | 24.7 |
Gross unrealized loss | 0 | (6.1) |
Investments | 642.5 | 851.6 |
Deposit Assets | ||
Investments | 642.5 | 851.6 |
Assets Held-in-trust | ||
Investments | 642.5 | 851.6 |
Corporate Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 1,103.4 | 942.3 |
Gross unrealized gains | 18 | 18.9 |
Gross unrealized loss | (3.4) | (4.5) |
Investments | 1,118 | 956.7 |
Deposit Assets | ||
Investments | 1,118 | 956.7 |
Assets Held-in-trust | ||
Investments | 1,118 | 956.7 |
Residential Mortgage Backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 388.3 | 255.9 |
Gross unrealized gains | 3.6 | 4.7 |
Gross unrealized loss | (2.6) | (2.6) |
Investments | 389.3 | 258 |
Deposit Assets | ||
Investments | 389.3 | 258 |
Assets Held-in-trust | ||
Investments | 389.3 | 258 |
Commercial Mortgage Backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 106.5 | 96.1 |
Gross unrealized gains | 0.4 | 0.4 |
Gross unrealized loss | (0.9) | (1) |
Investments | 106 | 95.5 |
Deposit Assets | ||
Investments | 106 | 95.5 |
Assets Held-in-trust | ||
Investments | 106 | 95.5 |
Asset-backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 58.7 | 42.6 |
Gross unrealized gains | 0.3 | 0 |
Gross unrealized loss | (0.2) | (0.2) |
Investments | 58.8 | 42.4 |
Deposit Assets | ||
Investments | 58.8 | 42.4 |
Assets Held-in-trust | ||
Investments | 58.8 | 42.4 |
Equity Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 116.7 | 116.1 |
Gross unrealized gains | 94.2 | 76.8 |
Gross unrealized loss | (0.6) | (0.7) |
Investments | 210.3 | 192.2 |
Deposit Assets | ||
Investments | 210.3 | 192.2 |
Assets Held-in-trust | ||
Investments | 210.3 | 192.2 |
Industrial and miscellaneous | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 100.8 | 100.5 |
Gross unrealized gains | 81.5 | 67.4 |
Gross unrealized loss | (0.6) | (0.7) |
Investments | 181.7 | 167.2 |
Deposit Assets | ||
Investments | 181.7 | 167.2 |
Assets Held-in-trust | ||
Investments | 181.7 | 167.2 |
Federal home loan bank stock | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 4.7 | 4.9 |
Gross unrealized gains | 0 | 0 |
Gross unrealized loss | 0 | 0 |
Investments | 4.7 | 4.9 |
Deposit Assets | ||
Investments | 4.7 | 4.9 |
Assets Held-in-trust | ||
Investments | 4.7 | 4.9 |
Other equities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 11.2 | 10.7 |
Gross unrealized gains | 12.7 | 9.4 |
Gross unrealized loss | 0 | 0 |
Investments | 23.9 | 20.1 |
Deposit Assets | ||
Investments | 23.9 | 20.1 |
Assets Held-in-trust | ||
Investments | 23.9 | 20.1 |
Short-term Investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 4 | 16 |
Gross unrealized gains | 0 | 0 |
Gross unrealized loss | 0 | 0 |
Investments | 4 | 16 |
Deposit Assets | ||
Investments | 4 | 16 |
Assets Held-in-trust | ||
Investments | 4 | $ 16 |
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 | 1,009.7 | |
Deposit Assets | ||
Investments | 1,009.7 | |
Assets Held-in-trust | ||
Investments | $ 1,009.7 |
Investments, Amortized Cost and
Investments, Amortized Cost and Estimated Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Amortized Cost | ||
Due in one year or less, amortized cost | $ 220.5 | |
Due after one year through five years, amortized cost | 766.6 | |
Due after five years through ten years, amortized cost | 754.7 | |
Due after ten years, amortized cost | 125.7 | |
Mortgage and asset-backed securities, amortized cost | 553.5 | |
Total, amortized cost | 2,421 | |
Estimated Fair Value | ||
Due in one year or less, fair value | 221.3 | |
Due after one year through five years, fair value | 782.1 | |
Due after five years through ten years, fair value | 772.1 | |
Due after ten years, fair value | 133.8 | |
Mortgage and asset-backed securities, fair value | 554.1 | |
Total, fair value | $ 2,463.4 | $ 2,344.4 |
Investments, Continuous Loss Po
Investments, Continuous Loss Position (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($)shares | |
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 643.6 | $ 752.9 | |
Estimated fair value, 12 months or greater | 178.8 | 16.9 | |
Estimated fair value, total | 822.4 | 769.8 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 Months | 4.6 | 14.8 | |
Gross unrealized losses, 12 months or greater | (3.9) | (0.5) | |
Estimated unrealized loss, total position | $ 8.5 | $ 15.3 | |
Number of issues in loss position, less than 12 months | shares | 254 | 285 | |
Number of issues in loss position, 12 months or greater | shares | 67 | 10 | |
Number of issues in loss position, aggregate | shares | 321 | 295 | |
Debt Securities [Member] | |||
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 629.7 | $ 739.3 | |
Estimated fair value, 12 months or greater | 178.8 | 15.2 | |
Estimated fair value, total | 808.5 | 754.5 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 Months | 4 | 14.2 | |
Gross unrealized losses, 12 months or greater | (3.9) | (0.4) | |
Estimated unrealized loss, total position | $ 7.9 | $ 14.6 | |
Number of issues in loss position, less than 12 months | shares | 230 | 257 | |
Number of issues in loss position, 12 months or greater | shares | 67 | 5 | |
Number of issues in loss position, aggregate | shares | 297 | 262 | |
Total impairments, value | $ 0.5 | $ 0 | $ 0 |
Total impairments, number of securitites | shares | 9 | 0 | 0 |
US Treasury Securities [Member] | |||
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 86 | $ 33.3 | |
Estimated fair value, 12 months or greater | 23.4 | 0 | |
Estimated fair value, total | 109.4 | 33.3 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 Months | 0.5 | 0.2 | |
Gross unrealized losses, 12 months or greater | (0.3) | 0 | |
Estimated unrealized loss, total position | $ 0.8 | $ 0.2 | |
Number of issues in loss position, less than 12 months | shares | 28 | 14 | |
Number of issues in loss position, 12 months or greater | shares | 10 | 0 | |
Number of issues in loss position, aggregate | shares | 38 | 14 | |
US States and Political Subdivisions Debt Securities [Member] | |||
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 0 | $ 200.9 | |
Estimated fair value, total | 0 | 200.9 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 Months | 0 | 6.1 | |
Estimated unrealized loss, total position | $ 0 | $ 6.1 | |
Number of issues in loss position, less than 12 months | shares | 0 | 50 | |
Number of issues in loss position, aggregate | shares | 0 | 50 | |
Corporate Debt Securities [Member] | |||
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 307.6 | $ 289.5 | |
Estimated fair value, 12 months or greater | 53.2 | 15.2 | |
Estimated fair value, total | 360.8 | 304.7 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 Months | 2.3 | 4.1 | |
Gross unrealized losses, 12 months or greater | (1.1) | (0.4) | |
Estimated unrealized loss, total position | $ 3.4 | $ 4.5 | |
Number of issues in loss position, less than 12 months | shares | 113 | 101 | |
Number of issues in loss position, 12 months or greater | shares | 17 | 5 | |
Number of issues in loss position, aggregate | shares | 130 | 106 | |
Residential Mortgage Backed Securities [Member] | |||
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 165 | $ 137.5 | |
Estimated fair value, 12 months or greater | 77.1 | 0 | |
Estimated fair value, total | 242.1 | 137.5 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 Months | 0.8 | 2.6 | |
Gross unrealized losses, 12 months or greater | (1.8) | 0 | |
Estimated unrealized loss, total position | $ 2.6 | $ 2.6 | |
Number of issues in loss position, less than 12 months | shares | 45 | 51 | |
Number of issues in loss position, 12 months or greater | shares | 32 | 0 | |
Number of issues in loss position, aggregate | shares | 77 | 51 | |
Commercial Mortgage Backed Securities [Member] | |||
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 41.8 | $ 48 | |
Estimated fair value, 12 months or greater | 25.1 | 0 | |
Estimated fair value, total | 66.9 | 48 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 Months | 0.2 | 1 | |
Gross unrealized losses, 12 months or greater | (0.7) | 0 | |
Estimated unrealized loss, total position | $ 0.9 | $ 1 | |
Number of issues in loss position, less than 12 months | shares | 19 | 21 | |
Number of issues in loss position, 12 months or greater | shares | 8 | 0 | |
Number of issues in loss position, aggregate | shares | 27 | 21 | |
Asset-backed Securities [Member] | |||
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 29.3 | $ 30.1 | |
Estimated fair value, total | 29.3 | 30.1 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 Months | 0.2 | 0.2 | |
Estimated unrealized loss, total position | $ 0.2 | $ 0.2 | |
Number of issues in loss position, less than 12 months | shares | 25 | 20 | |
Number of issues in loss position, aggregate | shares | 25 | 20 | |
Equity Securities [Member] | |||
Estimated Fair Value | |||
Estimated fair value, less than 12 months | $ 13.9 | $ 13.6 | |
Estimated fair value, total | 13.9 | 15.3 | |
Gross Unrealized Losses | |||
Gross unrealized losses, less than 12 Months | 0.6 | 0.6 | |
Estimated unrealized loss, total position | $ 0.6 | $ 0.7 | |
Number of issues in loss position, less than 12 months | shares | 24 | 28 | |
Number of issues in loss position, aggregate | shares | 24 | 33 | |
Total impairments, value | $ 0.9 | $ 5.8 | $ 17.2 |
Total impairments, number of securitites | shares | 7 | 37 | 27 |
Investments, Net Realized Gains
Investments, Net Realized Gains (Losses) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net realized gains (losses) | |||
Net realized gains (losses) on investments | $ 7.4 | $ 11.2 | $ (10.7) |
Change in unrealized gains (losses) | |||
Change in unrealized gains (losses) on fixed maturity and equity securities | 21.4 | (14) | (35.9) |
Debt Securities [Member] | |||
Net realized gains (losses) | |||
Gross gains from sales | 4.7 | 1.9 | 0.5 |
Gross losses from sales | (2.2) | (0.7) | (0.4) |
Net realized gains (losses) on investments | 2.5 | 1.2 | 0.1 |
Change in unrealized gains (losses) | |||
Change in unrealized gains (losses) on fixed maturity and equity securities | 3.9 | (28.9) | (22.2) |
Equity Securities [Member] | |||
Net realized gains (losses) | |||
Gross gains from sales | 9.3 | 16.6 | 8.1 |
Gross losses from sales | (4.4) | (6.6) | (18.9) |
Net realized gains (losses) on investments | 4.9 | 10 | (10.8) |
Change in unrealized gains (losses) | |||
Change in unrealized gains (losses) on fixed maturity and equity securities | $ 17.5 | $ 14.9 | $ (13.7) |
Net Investment Income (Details)
Net Investment Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Available-for-sale Securities | $ 2,677.7 | $ 2,552.6 | |
Investment income | 78 | 76.3 | $ 74.8 |
Investment expenses | (3.4) | (3.1) | (2.6) |
Net investment income | 74.6 | 73.2 | 72.2 |
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 | 70.4 | 68.5 | 68.8 |
Equity Securities [Member] | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Investment income related to equity securities | 6.9 | 7.4 | 5.9 |
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 | 0 |
Cash and Cash Equivalents [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 | $ 0.6 | $ 0.4 | $ 0.1 |
Property and Equipment Property
Property and Equipment Property and Equipment breakout (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property and Equipment [Line Items] | ||||
Property and equipment, gross | $ 59.9 | $ 66.8 | ||
Accumulated depreciation, depletion and amortization, property and equipment | 46 | 44.6 | ||
Property and equipment, net | 13.9 | 22.2 | ||
Utilities operating expense, depreciation and amortization | 7.9 | 8.2 | $ 7.8 | |
Payments to develop software | 2.1 | 1.3 | ||
Asset impairment charges | $ 7.5 | 7.5 | ||
Furniture and equipment | ||||
Property and Equipment [Line Items] | ||||
Property and equipment, gross | 1.7 | 2.3 | ||
Leasehold improvements | ||||
Property and Equipment [Line Items] | ||||
Property and equipment, gross | 2.9 | 4.3 | ||
Computer and software | ||||
Property and Equipment [Line Items] | ||||
Property and equipment, gross | 54.2 | 59 | ||
Automobiles | ||||
Property and Equipment [Line Items] | ||||
Property and equipment, gross | $ 1.1 | $ 1.2 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statutory federal tax rate | 35.00% | |||||||||||
Current Income Tax Expense (Benefit), Continuing Operations [Abstract] | ||||||||||||
Current federal tax expense (benefit) | $ 17,900,000 | $ 20,300,000 | $ 9,500,000 | |||||||||
Current state and local tax expense (benefit) | 700,000 | 300,000 | 1,100,000 | |||||||||
Current income tax expense (benefit) | 18,600,000 | 20,600,000 | 10,600,000 | |||||||||
Deferred Income Tax Expense (Benefit), Continuing Operations [Abstract] | ||||||||||||
Routine/other | 17,200,000 | 13,400,000 | (5,600,000) | |||||||||
Revaluation of deferred tax asset | $ 7,000,000 | 7,000,000 | 0 | 0 | ||||||||
Deferred income tax expense (benefit) | 24,200,000 | 13,400,000 | (5,600,000) | |||||||||
Income tax expense | 21,700,000 | $ 7,000,000 | $ 7,800,000 | $ 6,300,000 | $ 12,900,000 | $ 7,800,000 | $ 7,400,000 | $ 5,900,000 | 42,800,000 | 34,000,000 | 5,000,000 | |
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract] | ||||||||||||
Expense computed at statutory rate | 50,400,000 | 49,300,000 | 34,800,000 | |||||||||
Dividends received deduction and tax-exempt interest | (7,600,000) | (8,500,000) | (8,600,000) | |||||||||
Pre-privatization reserve adjustment | 0 | 0 | (15,300,000) | |||||||||
LPT deferred gain amortization | (4,000,000) | (4,700,000) | (4,900,000) | |||||||||
LPT reserve adjustment | 0 | (1,100,000) | (2,200,000) | |||||||||
Stock based compensation | (3,400,000) | (1,600,000) | 0 | |||||||||
Revaluation of deferred tax asset | 7,000,000 | 7,000,000 | 0 | 0 | ||||||||
Income tax reconciliation, other | 400,000 | 600,000 | 1,200,000 | |||||||||
Downward adjustment of pre-privatization unpaid loss reserve | 0 | 0 | 56,300,000 | |||||||||
Net income | 31,300,000 | $ 21,900,000 | $ 24,800,000 | $ 23,200,000 | 35,500,000 | $ 22,600,000 | $ 26,800,000 | $ 21,800,000 | 101,200,000 | 106,700,000 | 94,400,000 | |
Unrecognized tax benefits | 0 | 0 | 0 | 0 | ||||||||
Income Taxes Paid, Net | 21,300,000 | 13,700,000 | 12,700,000 | |||||||||
Deferred Tax Liabilities [Abstract] | ||||||||||||
Unrealized capital gains, net | 28,500,000 | 40,100,000 | 28,500,000 | 40,100,000 | ||||||||
Deferred policy acquisition cost | 9,700,000 | 15,700,000 | 9,700,000 | 15,700,000 | ||||||||
Intangible assets | 1,700,000 | 2,900,000 | 1,700,000 | 2,900,000 | ||||||||
Other deferred tax liabilities | 4,800,000 | 7,900,000 | 4,800,000 | 7,900,000 | ||||||||
Total deferred tax liabilities | 44,700,000 | 66,600,000 | 44,700,000 | 66,600,000 | ||||||||
Deferred Tax Assets [Abstract] | ||||||||||||
Loss reserves discounting for tax reporting | 29,000,000 | 51,700,000 | 29,000,000 | 51,700,000 | ||||||||
Unearned premiums | 12,800,000 | 20,900,000 | 12,800,000 | 20,900,000 | ||||||||
Allowance for bad debt | 2,100,000 | 3,400,000 | 2,100,000 | 3,400,000 | ||||||||
Stock based compensation | 2,500,000 | 4,400,000 | 2,500,000 | 4,400,000 | ||||||||
Accrued liabilities | 4,200,000 | 8,100,000 | 4,200,000 | 8,100,000 | ||||||||
Minimum tax credit | 20,000,000 | 27,800,000 | 20,000,000 | 27,800,000 | ||||||||
Other deferred tax assets | 2,800,000 | 9,700,000 | 2,800,000 | 9,700,000 | ||||||||
Total deferred tax assets | 73,400,000 | 126,000,000 | 73,400,000 | 126,000,000 | ||||||||
Deferred income taxes, net | 28,700,000 | $ 59,400,000 | 28,700,000 | 59,400,000 | ||||||||
Impact to the company's minimum tax credit due to tax enactment | $ 0 | 0 | ||||||||||
Change Due to Estimated Reserves Ceded Under the LPT Agreement [Member] | ||||||||||||
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract] | ||||||||||||
Net income | 0 | 3,100,000 | 6,400,000 | |||||||||
Change to Contingent Profit Commission [Member] | ||||||||||||
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract] | ||||||||||||
Net income | $ 300,000 | $ 1,800,000 | $ 2,600,000 | |||||||||
Scenario, Forecast [Member] | ||||||||||||
Statutory federal tax rate | 21.00% |
Liability for Unpaid Losses a61
Liability for Unpaid Losses and Loss Adjustment Expenses (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||||
Prior year claims and claims adjustment expense Including LPT amortization and adj | $ (30.1) | $ (35) | $ (27.6) | ||||||||||||
Losses and loss adjustment expenses | $ 85.2 | $ 116.9 | $ 106.1 | $ 109 | $ 89.9 | $ 109 | $ 111.7 | $ 107.3 | 417.2 | 417.9 | 429.4 | ||||
Paid losses and LAE, including LPT amortization and adj related to prior periods | 332.2 | 337.5 | 334.8 | ||||||||||||
Payments for losses and loss adjustment expense including LPT amortization and adj | 409.1 | 416.2 | 410.2 | ||||||||||||
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | |||||||||||||||
Unpaid losses and LAE, gross of reinsurance, at beginning of period | 2,301 | 2,347.5 | 2,301 | 2,347.5 | 2,369.7 | ||||||||||
Loss reinsurance recoverable, excluding bad debt, on unpaid losses | 580 | 628.2 | 580 | 628.2 | 669.5 | ||||||||||
Net unpaid losses and LAE at beginning of period | $ 1,721 | $ 1,719.3 | 1,721 | 1,719.3 | 1,700.2 | ||||||||||
Losses and LAE, net of reinsurance, incurred in: | |||||||||||||||
Current year | 447.3 | 452.9 | 456.9 | ||||||||||||
Prior years | (18) | (16.9) | (18.5) | [1] | (18.4) | [1] | (7.2) | [1] | |||||||
Total net losses and LAE incurred during the period | [1] | 428.8 | 434.5 | 449.7 | |||||||||||
Deduct payments for losses and LAE, net of reinsurance, related to: | |||||||||||||||
Current year | 76.9 | 78.7 | 75.4 | ||||||||||||
Prior years | [2] | 343.8 | 354.1 | 355.2 | |||||||||||
Total net payments for losses and LAE during the period | [2] | 420.7 | 432.8 | 430.6 | |||||||||||
Ending unpaid losses and LAE, net of reinsurance | 1,729.1 | 1,721 | 1,729.1 | 1,721 | 1,719.3 | ||||||||||
Loss reinsurance recoverable, excluding bad debt, on unpaid losses | 537 | 580 | 537 | 580 | 628.2 | ||||||||||
Unpaid losses and LAE, gross of reinsurance, at end of period | 2,266.1 | 2,301 | 2,266.1 | 2,301 | 2,347.5 | ||||||||||
Salvage and subrogation recoveries, value | $ 35 | $ 28.1 | 35 | 28.1 | |||||||||||
Voluntary risk business | |||||||||||||||
Losses and LAE, net of reinsurance, incurred in: | |||||||||||||||
Prior years | (17.4) | (17) | (9) | ||||||||||||
Involuntary assigned risk business | |||||||||||||||
Losses and LAE, net of reinsurance, incurred in: | |||||||||||||||
Prior years | $ (1.1) | $ (1.4) | $ 1.8 | ||||||||||||
[1] | Losses and LAE, net of reinsurance, incurred during the period related to prior years and Total net losses and LAE incurred during the period included in the above table excludes the impact of the amortization of the Deferred Gain and LPT Reserve Adjustments (Note 10). Including these amounts, Losses and LAE, net of reinsurance, incurred during the period related to prior years was $(30.1) million, $(35.0) million, and $(27.6) million and Total net losses and LAE incurred during the period was $417.2 million, $417.9 million, and $429.4 million for the years ended December 31, 2017, 2016, and 2015, respectively. | ||||||||||||||
[2] | Paid losses and LAE, net of reinsurance, related to prior years and Total net paid losses and LAE during the period included in the above table excludes the impact of the amortization of the Deferred Gain and LPT Reserve Adjustments (Note 10). Including these amounts, Paid losses and LAE, net of reinsurance, related to prior years was $332.2 million, $337.5 million, and $334.8 million and Total net paid losses and LAE during the period was $409.1 million, $416.2 million, and $410.2 million for the years ended December 31, 2017, 2016, and 2015, respectively. |
Liability for Unpaid Losses a62
Liability for Unpaid Losses and Loss Adjustment Expenses Historical Incurred Losses and LAE (Details) $ in Millions | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | [1] | Dec. 31, 2015USD ($) | [1] | Dec. 31, 2014USD ($) | [1] | Dec. 31, 2013USD ($) | [1] | Dec. 31, 2012USD ($) | [1] | Dec. 31, 2011USD ($) | [1] | Dec. 31, 2010USD ($) | [1] | Dec. 31, 2009USD ($) | [1] | Dec. 31, 2008USD ($) | [1] |
Claims Development [Line Items] | |||||||||||||||||||
Incurred losses and LAE, net of reinsurance | $ 3,717.4 | ||||||||||||||||||
Cumulative paid losses and LAE, net of reinsurance | 2,447.3 | ||||||||||||||||||
Liabilities for unpaid losses and LAE, net of reinsurance | 1,634.3 | ||||||||||||||||||
Accident years prior to 2007 | |||||||||||||||||||
Claims Development [Line Items] | |||||||||||||||||||
Cumulative paid losses and LAE, net of reinsurance | 364.2 | ||||||||||||||||||
Accident year 2007 | |||||||||||||||||||
Claims Development [Line Items] | |||||||||||||||||||
Incurred losses and LAE, net of reinsurance | 342.1 | $ 341.4 | $ 343.8 | $ 336.9 | $ 335.1 | $ 329.5 | $ 329.2 | $ 317.8 | $ 315.3 | $ 315.9 | |||||||||
IBNR | $ 15.4 | ||||||||||||||||||
Cumulative number of reported claims | 28,088 | ||||||||||||||||||
Cumulative paid losses and LAE, net of reinsurance | $ 307.1 | 300.7 | 293.6 | 284.2 | 271.1 | 255.3 | 234.7 | 201.8 | 155.4 | $ 71.1 | |||||||||
Accident year 2008 | |||||||||||||||||||
Claims Development [Line Items] | |||||||||||||||||||
Incurred losses and LAE, net of reinsurance | 290.5 | 290.5 | 291.2 | 283.7 | 283.6 | 280.1 | 279 | 266.9 | 255.4 | ||||||||||
IBNR | $ 13.5 | ||||||||||||||||||
Cumulative number of reported claims | 22,673 | ||||||||||||||||||
Cumulative paid losses and LAE, net of reinsurance | $ 255.1 | 249.5 | 242.3 | 232.1 | 219.3 | 202 | 174.1 | 130.6 | $ 59 | ||||||||||
Accident year 2009 | |||||||||||||||||||
Claims Development [Line Items] | |||||||||||||||||||
Incurred losses and LAE, net of reinsurance | 258.8 | 259.9 | 262 | 250.2 | 246.1 | 228.1 | 224.4 | 204.9 | |||||||||||
IBNR | $ 19.8 | ||||||||||||||||||
Cumulative number of reported claims | 18,543 | ||||||||||||||||||
Cumulative paid losses and LAE, net of reinsurance | $ 221.3 | 215.4 | 206.2 | 190.7 | 171.7 | 143.8 | 105.6 | $ 47.1 | |||||||||||
Accident year 2010 | |||||||||||||||||||
Claims Development [Line Items] | |||||||||||||||||||
Incurred losses and LAE, net of reinsurance | 288.8 | 292.6 | 296.3 | 277.4 | 272 | 267.3 | 253.7 | ||||||||||||
IBNR | $ 27.5 | ||||||||||||||||||
Cumulative number of reported claims | 19,571 | ||||||||||||||||||
Cumulative paid losses and LAE, net of reinsurance | $ 238.2 | 230.1 | 217.5 | 193.8 | 162.6 | 115.1 | $ 47.4 | ||||||||||||
Accident year 2011 | |||||||||||||||||||
Claims Development [Line Items] | |||||||||||||||||||
Incurred losses and LAE, net of reinsurance | 382.8 | 388.2 | 386.4 | 360.9 | 359.9 | 348.8 | |||||||||||||
IBNR | $ 50.7 | ||||||||||||||||||
Cumulative number of reported claims | 25,972 | ||||||||||||||||||
Cumulative paid losses and LAE, net of reinsurance | $ 305 | 289.9 | 261.4 | 214.2 | 148.3 | $ 58.6 | |||||||||||||
Accident year 2012 | |||||||||||||||||||
Claims Development [Line Items] | |||||||||||||||||||
Incurred losses and LAE, net of reinsurance | 468.9 | 472.6 | 478.6 | 460.6 | 452.6 | ||||||||||||||
IBNR | $ 73.6 | ||||||||||||||||||
Cumulative number of reported claims | 28,816 | ||||||||||||||||||
Cumulative paid losses and LAE, net of reinsurance | $ 346.1 | 317.4 | 263.8 | 184.4 | $ 68.5 | ||||||||||||||
Accident year 2013 | |||||||||||||||||||
Claims Development [Line Items] | |||||||||||||||||||
Incurred losses and LAE, net of reinsurance | 434.6 | 432.9 | 445.8 | 463.4 | |||||||||||||||
IBNR | $ 86.1 | ||||||||||||||||||
Cumulative number of reported claims | 28,449 | ||||||||||||||||||
Cumulative paid losses and LAE, net of reinsurance | $ 297.2 | 248.9 | 172.7 | $ 65.3 | |||||||||||||||
Accident year 2014 | |||||||||||||||||||
Claims Development [Line Items] | |||||||||||||||||||
Incurred losses and LAE, net of reinsurance | 423.9 | 425.8 | 422.2 | ||||||||||||||||
IBNR | $ 98.7 | ||||||||||||||||||
Cumulative number of reported claims | 26,993 | ||||||||||||||||||
Cumulative paid losses and LAE, net of reinsurance | $ 246.9 | 174.5 | $ 65.5 | ||||||||||||||||
Accident year 2015 | |||||||||||||||||||
Claims Development [Line Items] | |||||||||||||||||||
Incurred losses and LAE, net of reinsurance | 414.6 | 419 | |||||||||||||||||
IBNR | $ 140.8 | ||||||||||||||||||
Cumulative number of reported claims | 25,305 | ||||||||||||||||||
Cumulative paid losses and LAE, net of reinsurance | $ 166.8 | $ 65.6 | |||||||||||||||||
Accident year 2016 | |||||||||||||||||||
Claims Development [Line Items] | |||||||||||||||||||
Incurred losses and LAE, net of reinsurance | 412.4 | ||||||||||||||||||
IBNR | $ 244.6 | ||||||||||||||||||
Cumulative number of reported claims | 21,214 | ||||||||||||||||||
Cumulative paid losses and LAE, net of reinsurance | $ 63.5 | ||||||||||||||||||
[1] | Data presented for these calendar years is required supplementary information, which is unaudite |
Liability for Unpaid Losses a63
Liability for Unpaid Losses and Loss Adjustment Expenses Reconciliation of Claims Development to Aggregate Carrying Amount of the Liability for Unpaid Losses and LAE (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Liabilities for unpaid losses and LAE, net of reinsurance | $ 1,634.3 | |||
Reinsurance recoverable on unpaid losses | 537 | $ 580 | $ 628.2 | $ 669.5 |
Unallocated LAE | 94.8 | |||
Unpaid losses and loss adjustment expenses | $ 2,266.1 | $ 2,301 | $ 2,347.5 | $ 2,369.7 |
Liability for Unpaid Losses a64
Liability for Unpaid Losses and Loss Adjustment Expenses Short Duration Insurance Contracts, Historcial Claims Duration (Details) | Dec. 31, 2017 |
Average annual percentage payout of incurred claims by age, net of reinsurance | |
Year one | 16.70% |
Year two | 24.30% |
Year three | 16.10% |
Year four | 10.80% |
Year five | 6.90% |
Year six | 4.70% |
Year seven | 3.40% |
Year eight | 2.50% |
Year nine | 2.00% |
Year ten | 1.90% |
Reinsurance Reinsurance Premium
Reinsurance Reinsurance Premium Note (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Premiums Written, Net | |||
Direct premiums, written | $ 719.5 | $ 691 | $ 684.9 |
Assumed premiums written | 10.2 | 10.4 | 12.8 |
Gross premiums, written | 729.7 | 701.4 | 697.7 |
Ceded premiums written | (6) | (6.8) | (8.4) |
Premiums written, net | 723.7 | 694.6 | 689.3 |
Premiums Earned, Net | |||
Direct premiums earned | 712.5 | 691 | 686 |
Assumed premiums earned | 10 | 10.6 | 12.8 |
Gross premiums, earned | 722.5 | 701.6 | 698.8 |
Ceded premiums earned | (6) | (6.8) | (8.4) |
Premiums earned, net | 716.5 | 694.8 | 690.4 |
Ceded losses and LAE incurred | $ (0.5) | $ 0.1 | $ 10.1 |
Reinsurance Excess of Loss (Det
Reinsurance Excess of Loss (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Effects of Reinsurance [Line Items] | |||
Retention amount on a per occurrence basis | $ 10 | $ 7 | |
Excess of retention amount on a per occurrence basis | $ 190 | $ 193 | |
Scenario, Forecast [Member] | |||
Effects of Reinsurance [Line Items] | |||
Retention amount on a per occurrence basis | $ 10 | ||
Maximum reinsurance for losses from single occurence or event | $ 200 |
Reinsurance LPT Agreement (Deta
Reinsurance LPT Agreement (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Reinsurance Agreement [Line Items] | ||||
Available-for-sale Securities | $ 2,677,700 | $ 2,552,600 | ||
Unpaid losses | 537,000 | 580,000 | ||
Recoverables was related to the LPT agreement | $ 438,900 | 465,500 | ||
Reinsurance quota share, percentage | 100.00% | |||
LPT collateral held in trust account | $ 380,800 | 355,700 | ||
Ceded premiums written | 6,000 | 6,800 | $ 8,400 | |
Coverage provided under LPT agreement | 2,000,000 | |||
Paid losses and LAE claims related to LPT | 749,300 | |||
Amortization of deferred gain | 11,300 | 11,700 | 11,400 | |
LPT Agreement [Member] | ||||
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 | |||
Change Due to Estimated Reserves Ceded Under the LPT Agreement [Member] | ||||
Reinsurance Agreement [Line Items] | ||||
Amortization of deferred gain | [1] | 3,100 | 6,400 | |
Change to Contingent Profit Commission [Member] | ||||
Reinsurance Agreement [Line Items] | ||||
Amortization of deferred gain | [2] | $ 300 | $ 1,800 | $ 2,600 |
[1] | The cumulative adjustments to the Deferred Gain were also recognized in losses and LAE incurred in the Company's Consolidated Statements of Comprehensive Income, so that the Deferred Gain reflects the balance that would have existed had the revised loss and LAE reserves been recognized at the inception of the LPT Agreement. | |||
[2] | The cumulative adjustments to the Deferred Gain were also recognized in losses and LAE incurred in the Company's Consolidated Statements of Comprehensive Income, so that the Deferred Gain reflects the balance that would have existed had the revised loss and LAE reserves been recognized at the inception of the LPT Agreement. |
Notes Payable Outstanding (Deta
Notes Payable Outstanding (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||
Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
Debt Instrument [Line Items] | |||||||||
Notes payable | $ 20,000 | $ 32,000 | |||||||
Redemption of notes payable | 9,900 | 0 | $ 60,000 | ||||||
Gain on redemption of notes payable | $ 2,100 | 2,100 | 0 | 0 | |||||
Dekania Surplus Note [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Notes payable | $ 10,000 | 10,000 | |||||||
Notes payable, maturity date | Apr. 30, 2034 | ||||||||
Notes payable, callable | 2,009 | ||||||||
Interest rate, basis points in excess of the 90-day LIBOR | 425 | ||||||||
Cash paid for interest | $ 600 | 500 | 500 | ||||||
Accrued interest | 100 | 100 | |||||||
ICONS Surpuls Note [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Notes payable | $ 12,000 | 0 | 12,000 | ||||||
Redemption of notes payable | 9,900 | ||||||||
Gain on redemption of notes payable | 2,100 | ||||||||
Cash paid for interest | 300 | 600 | 600 | ||||||
Accrued interest | 100 | ||||||||
Alesco Surplus Note [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Notes payable | $ 10,000 | $ 10,000 | |||||||
Notes payable, maturity date | Dec. 15, 2034 | ||||||||
Notes payable, callable | 2,009 | ||||||||
Interest rate, basis points in excess of the 90-day LIBOR | 405 | ||||||||
Cash paid for interest | $ 500 | $ 500 | 400 | ||||||
Accrued interest | $ 100 | $ 100 | |||||||
Line of Credit [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Notes payable | $ 60,000 | $ 70,000 | $ 80,000 | $ 90,000 | $ 100,000 | ||||
Line of credit, percentage above prime rate | 1.75% | ||||||||
Line of credit, percentage above LIBOR rate | 1.75% | ||||||||
Cash paid for interest | 1,300 | ||||||||
Line of credit facility, decrease, repayments | $ 60,000 |
Notes Payable Principal payment
Notes Payable Principal payment obligations on notes payable outstanding (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Capitalization, Long-term Debt [Line Items] | ||
Repayments of principal in next twelve months | $ 0 | |
Repayments of principal in year two | 0 | |
Repayments of principal in year three | 0 | |
Repayments of principal in year four | 0 | |
Repayments of principal in year five | 0 | |
Repayments of principal after year five | 20 | |
Notes payable | $ 20 | $ 32 |
Commitments and Contingencies F
Commitments and Contingencies Future Lease Payments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies [Abstract] | |||
Remaining lease terms expire over the next | 10 years | ||
Future lease payments for non-cancelable operating and capital leases, in years | 5 years | ||
Operating Leases, Future Minimum Payments Due [Abstract] | |||
Operating leases, future minimum payments due, current | $ 4.8 | ||
Operating leases, future minimum payments, due in two years | 4.8 | ||
Operating leases, future minimum payments, due in three years | 4.2 | ||
Operating leases, future minimum payments, due in four years | 2.8 | ||
Operating leases, future minimum payments, due in five years | 1.8 | ||
Operating leases, future minimum payments, due thereafter | 7.9 | ||
Operating leases, future minimum payments due | 26.3 | ||
Capital Leases, Future Minimum Payments Due [Abstract] | |||
Capital leases, future minimum payments due, current | 0.3 | ||
Capital leases, future minimum payments due in two years | 0.3 | ||
Capital leases, future minimum payments due in three years | 0.2 | ||
Capital leases, future minimum payments due in four years | 0.2 | ||
Capital leases, future minimum payments due in five years | 0.1 | ||
Capital leases, Future minimum payments due thereafter | 0 | ||
Capital leases, future minimum payments due | 1.1 | ||
Future interest charges included in capital lease payments | 0.1 | ||
Facilities rent expense | $ 4.8 | $ 4.9 | $ 4.9 |
Commitments and Contingencies P
Commitments and Contingencies Property held under capital leases is included in property and equipment (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Property held under capital leases | ||
Accumulated depreciation, depletion and amortization, property and equipment | $ (46) | $ (44.6) |
Automobiles | ||
Property held under capital leases | ||
Property held under captial leases | 1.1 | 1.2 |
Assets Held under Capital Leases [Member] | ||
Property held under capital leases | ||
Property held under captial leases | 1.1 | 1.2 |
Accumulated depreciation, depletion and amortization, property and equipment | (0.3) | (0.6) |
Total property held under capital leases | $ 0.8 | $ 0.6 |
Commitments and Contingencies C
Commitments and Contingencies Contingencies Surrounding Insurance Assessments (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Loss Contingencies [Line Items] | ||
Amount of Insurance-related assessment liability | $ 12.4 | $ 18.6 |
Payment period for assessment liability based on individual states regulations | one to eighty year periods | |
Other assets, prepaid policy surcharges | $ 14.1 | $ 21.6 |
Expected realization period for assets related to policy surcharges | one to ten year periods |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | 24 Months Ended | 132 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2017 | Feb. 16, 2016 | |
Accelerated Share Repurchases [Line Items] | ||||
Stock Repurchase Program, Authorized Amount | $ 50 | |||
Stock repurchased during period, shares | 0 | 724,381 | 24,097,355 | |
Accelerated share repurchases, final price paid per share | $ 29.08 | $ 15.92 | ||
Stock Repurchased During Period, Value | $ 21.1 |
Stock-Based Compensation Expens
Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum number of shares reserved for grants | 5,500,000 | ||
Grant date fair value adjustment | $ (0.2) | ||
Stock-based compensation expense [Abstract] | |||
Stock-based compensation expense | 6.8 | $ 5.8 | $ 4.6 |
Less: related tax benefit | 2.4 | 2 | 1.6 |
Net stock-based compensation expense | 4.4 | 3.8 | 3 |
Stock Option [Member] | |||
Stock-based compensation expense [Abstract] | |||
Stock-based compensation expense | 0.5 | 0.7 | 1 |
Restricted stock units (RSUs) | |||
Stock-based compensation expense [Abstract] | |||
Stock-based compensation expense | 2 | 1.9 | 2 |
Performance shares units [Member] | |||
Stock-based compensation expense [Abstract] | |||
Stock-based compensation expense | 4.3 | $ 3.2 | $ 1.6 |
Retained Earnings | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Grant date fair value adjustment | $ 1.3 |
Stock-Based Compensation Fair M
Stock-Based Compensation Fair Market Value of Stock Options Granted, Calculated (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Market Value of Stock Options Granted, Calculated [Abstract] | ||
Expected volatility | 38.00% | 38.00% |
Expected life (in years) | 4 years 274 days | 4 years 274 days |
Dividend yield | 1.30% | 1.00% |
Risk free interest rate | 1.40% | 1.60% |
Weighted average grant date fair value | $ 8.46 | $ 7.63 |
Stock-Based Compensation Change
Stock-Based Compensation Changes in Outstanding Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average grant date fair value | $ 8.46 | $ 7.63 | ||
Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of outstanding options or share units | 247,347 | 564,096 | 1,121,545 | 1,521,290 |
Number of options or share units, granted | 0 | 67,431 | 80,800 | |
Stock-options exercised, shares | (307,076) | (586,132) | (463,466) | |
Number of options or share units, expired | (6,075) | |||
Number of options or share units, forfeited | (9,673) | (32,673) | (17,079) | |
Number of exercisable options or share units | 156,517 | |||
Weighted average exercise price, grants | $ 27.72 | $ 24.20 | ||
Weighted average exercise price, exercises | $ 19.44 | 16.39 | 16.43 | |
Weighted average exercise price, expirations | 22.48 | |||
Weighted average exercise price, forfeitures | 24.45 | 24.35 | 20.21 | |
Weighted average exercise price, outstanding | 22.90 | $ 21.04 | $ 18.31 | $ 17.45 |
Weighted average exercisable price | $ 21.71 | |||
Weighted average remaining contractual life | 3 years 150 days | 3 years 125 days | 2 years 300 days | 2 years 324 days |
Share-based compensation expense, deferred | $ 0.5 | |||
Share-based compensation expense, Period for Recognition | 27 months | |||
Options vested, fair value | $ 0.6 | $ 0.8 | $ 1.3 | |
Options outstanding, intrinsic value | 5.3 | 10.6 | 10.1 | |
Options exercisable, intrinsic value | 3.6 | 7.6 | 8.5 | |
Options exercised, intrinsic value | $ 7.6 | $ 7.6 | $ 4 | |
Stock Options Granted [Domain] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average remaining contractual life | 6 years 73 days | 6 years 73 days | ||
Stock Options Exercisable [Domain] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average remaining contractual life | 2 years 300 days | |||
Restricted stock units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Service vesting period for options awarded | 4 years | |||
Vesting rights for options awarded | vest 25% on or after each of the subsequent four anniversaries of such date | |||
Number of outstanding options or share units | 327,072 | 324,384 | 319,033 | 306,867 |
Number of options or share units, granted | 87,276 | 100,218 | 112,048 | |
Number of options or share units, forfeited | (13,711) | (21,872) | (7,749) | |
Number of vested options or share units | (70,877) | (72,995) | (92,133) | |
Weighted average exercise price, grants | $ 37.94 | $ 28.20 | $ 24.19 | |
Weighted average exercise price, forfeitures | 29.28 | 24.87 | 20.99 | |
Weighted average exercise price, vested | 24.97 | 21.56 | 19.74 | |
Weighted average grant date fair value | $ 25.85 | $ 22.55 | $ 20.71 | $ 19.15 |
Share-based compensation expense, deferred | $ 4.2 | |||
Share-based compensation expense, Period for Recognition | 39 months | |||
Options vested, fair value | $ 1.8 | $ 1.6 | $ 1.7 | |
Options outstanding, intrinsic value | 14.5 | 12.8 | 8.7 | |
Options exercisable, intrinsic value | $ 2.8 | $ 2.1 | $ 2.2 | |
Restricted Stock Units Vested but Unsettled [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of outstanding options or share units | 152,644 | |||
Weighted average grant date fair value | $ 19.54 |
Stock-Based Compensation Perfor
Stock-Based Compensation Performance Share Awards (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Performance share awards, minimum payout | 0.00% | ||||
Performane share awards, maximum payout | 200.00% | ||||
Performance share awards, expected target | 127.00% | 200.00% | |||
Performance share awards, ultimate payout | 200.00% | ||||
Performance shares units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of outstanding options or share units | 97,440 | [1] | 97,236 | [1] | 110,000 |
Share-based compensation options, exercise price on grant date | $ 37.60 | [1] | $ 27.72 | [1] | $ 24.20 |
Fair value of awards awarded on grant date | $ 3.7 | [1] | $ 2.7 | [1] | $ 2.7 |
Share-based compensation expense, deferred | $ 4.7 | ||||
Share-based compensation expense, Period for Recognition | 24 months | ||||
[1] | The PSUs awarded in March 2015, 2016 and 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 values shown in the table represent the aggregate number of PSUs awarded at the target level. |
Statutory Matters Statutory Mat
Statutory Matters Statutory Matters (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2018 | Aug. 09, 2018 | Aug. 08, 2018 | |
Statutory Accounting Practices [Line Items] | ||||||
Capital stock and unassigned surplus | $ 510.6 | $ 447.1 | ||||
Paid in capital | 349.8 | 349.8 | ||||
Surplus notes | 32 | 32 | ||||
Total statutory surplus | 892.4 | 828.9 | ||||
SAP, net income amount | 116.8 | 101.4 | $ 87.8 | |||
Total stockholders’ equity | $ 947.7 | $ 840.6 | ||||
Will maintain a risk based capital (RBC) level of at least | 350.00% | |||||
EICN | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Capital stock and unassigned surplus | $ 196.7 | |||||
Extraordinary dividends, approves or does not disapprove the payment within | 30 days | |||||
Percentage of surplus of EICN's statutory surplus as regards to policyholders | 10.00% | |||||
Dividends paid, without approval of regulatory agency | $ 0 | |||||
EICN | Scenario, Forecast [Member] | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Maximum dividends that may be paid without prior approval | $ 19.9 | |||||
EPIC | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Percentage of surplus used to calculate the lesser of 10% of surplus or net income, not including realized capital gains, plus a 2-year carry forward. | 10.00% | |||||
Percentage of surplus used to calculate 10% of surplus, with dividends payable limited to unassigned funds minus 25% of unrealized capital gains | 10.00% | |||||
Percentage of surplus used to calculate the lesser of 10% of surplus or net investment income plus a 3-year carry forward with dividends payable limited to unassigned funds minus 25% of unrealized capital gains | 10.00% | |||||
Percentage of unassigned gains used to calculate 10% of surplus, with dividends payable limited to unassigned funds minus 25% of unrealized capital gains | 25.00% | |||||
Percentage of unassigned gains used to calculate the lesser of 10% of surplus or net investment income plus a 3-year carry forward with dividends payable limited to unassigned funds minus 25% of unrealized capital gains | 25.00% | |||||
Dividends paid, without approval of regulatory agency | $ 0 | |||||
EPIC | Scenario, Forecast [Member] | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Maximum dividends that may be paid without prior approval | 15.9 | |||||
EAC | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Dividends paid, without approval of regulatory agency | $ 0 | |||||
EAC | Scenario, Forecast [Member] | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Maximum dividends that may be paid without prior approval | $ 19 | |||||
ECIC | ||||||
Statutory Accounting Practices [Line Items] | ||||||
ECIC must initiate discussions of its business plan with the California DOI if its premium to policyholder surplus ratio exceeds | 1.5 to 1 | |||||
ECIC will not exceed a ratio of premium to policyholder surplus of | 2 to 1 | |||||
If at any time ECIC's policyholder surplus decreases to | 80.00% | |||||
Dividends paid, without approval of regulatory agency | $ 38 | |||||
ECIC | Scenario, Forecast [Member] | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Maximum dividends that may be paid without prior approval | $ 48.4 | $ 10.4 | ||||
EAC and EPIC | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Total statutory surplus | $ 4 | |||||
Florida statute section 624.408 requires EPIC and EAC to maintain minimum capital and surplus of the greater of $4.0 million or 10% of total liabilities. | 10.00% | |||||
Used to calculate ratio of written premium to surplus | 1.25 | |||||
Net gross premiums to surplus ratio. Florida statute section 624.4095 requires net gross premiums times 1.25 not exceed this ratio. | 10-to-1 | |||||
Net written premiums to surplus ratio. Florida statute section 624.4095 requires net written premiums times 1.25 not exceed this ratio. | 4-to-1 |
Accumulated Other Comprehensi79
Accumulated Other Comprehensive Income, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Net unrealized gain on investments, before taxes | $ 136,000 | $ 114,600 |
Deferred tax expense | (28,600) | (40,100) |
Total accumulated other comprehensive income, net | $ 107,400 | $ 74,500 |
Employee Benefit and Retireme80
Employee Benefit and Retirement Plans Employee Benefit and Retirement Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employee Benefit and Retirement Plans [Abstract] | |||
Safe habor matching, 100% | 100.00% | ||
Employee contributions, 100% match, percentage | 3.00% | ||
Safe harbor matching 50% | 50.00% | ||
Employee contributions 50% match, percentage | 3.00% | ||
Employee contributions, maximum match, percentage | 5.00% | ||
Company's contributions to Employers 401(k) | $ 1.9 | $ 1.9 | $ 1.8 |
Earnings Per Share Earnings Per
Earnings Per Share Earnings Per Share (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share, Basic and Diluted, by Common Class [Line Items] | |||||||||||
Net income | $ 31.3 | $ 21.9 | $ 24.8 | $ 23.2 | $ 35.5 | $ 22.6 | $ 26.8 | $ 21.8 | $ 101.2 | $ 106.7 | $ 94.4 |
Weighted average number of shares outstanding - basic | 32,501,576 | 32,434,580 | 32,070,911 | ||||||||
Effect of diluted securities: | 559,184 | 542,255 | 490,542 | ||||||||
Weighted average number of shares outstanding - diluted | 33,060,760 | 32,976,835 | 32,561,453 | ||||||||
Employee Stock Option [Member] | |||||||||||
Earnings Per Share, Basic and Diluted, by Common Class [Line Items] | |||||||||||
Effect of diluted securities: | 208,602 | 246,562 | 286,764 | ||||||||
Performance shares units [Member] | |||||||||||
Earnings Per Share, Basic and Diluted, by Common Class [Line Items] | |||||||||||
Effect of diluted securities: | 271,738 | 222,594 | 155,768 | ||||||||
Restricted stock units (RSUs) | |||||||||||
Earnings Per Share, Basic and Diluted, by Common Class [Line Items] | |||||||||||
Effect of diluted securities: | 78,844 | 73,099 | 48,010 |
Earnings Per Share Antidilutive
Earnings Per Share Antidilutive Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of EPS | 0 | 89,221 | 257,405 |
Employee Stock Option [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of EPS | 0 | 0 | 20,200 |
Selected Quarterly Financial 83
Selected Quarterly Financial Data Selected Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net premiums earned | $ 181.6 | $ 187.9 | $ 171.7 | $ 175.3 | $ 172 | $ 173.3 | $ 176.9 | $ 172.6 | $ 716.5 | $ 694.8 | $ 690.4 |
Net realized gains (losses) on investments | 0 | 4.1 | 1.1 | 2.2 | 2.1 | 1.6 | 6 | 1.5 | 7.4 | 11.2 | (10.7) |
Losses and loss adjustment expenses | 85.2 | 116.9 | 106.1 | 109 | 89.9 | 109 | 111.7 | 107.3 | 417.2 | 417.9 | 429.4 |
Commission expense | 24.7 | 23.7 | 21.5 | 21.5 | 20 | 21.3 | 21.9 | 20.3 | 91.4 | 83.5 | 85.4 |
Underwriting and other operating expenses | 37.8 | 33.6 | 32.6 | 35.9 | 34.5 | 31.7 | 33.6 | 36.3 | 139.9 | 136.1 | 135.2 |
Other expenses | 0 | 7.5 | 0 | 0 | 7.5 | 0 | 0 | ||||
Income tax expense | 21.7 | 7 | 7.8 | 6.3 | 12.9 | 7.8 | 7.4 | 5.9 | 42.8 | 34 | 5 |
Net income | $ 31.3 | $ 21.9 | $ 24.8 | $ 23.2 | $ 35.5 | $ 22.6 | $ 26.8 | $ 21.8 | $ 101.2 | $ 106.7 | $ 94.4 |
Earnings per common share (Note 18): | |||||||||||
Basic | $ 0.96 | $ 0.67 | $ 0.76 | $ 0.72 | $ 1.10 | $ 0.70 | $ 0.82 | $ 0.67 | $ 3.11 | $ 3.29 | $ 2.94 |
Diluted | $ 0.94 | $ 0.66 | $ 0.75 | $ 0.70 | $ 1.08 | $ 0.69 | $ 0.81 | $ 0.66 | $ 3.06 | $ 3.24 | $ 2.90 |
Selected Quarterly Financial 84
Selected Quarterly Financial Data Significant Quarterly Adjustments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Gain on redemption of notes payable | $ 2,100 | $ 2,100 | $ 0 | $ 0 | |||||||
Notes payable | $ 20,000 | $ 32,000 | 20,000 | 32,000 | |||||||
Asset impairment charges | $ 7,500 | 7,500 | |||||||||
Prior years | (18,000) | (16,900) | (18,500) | [1] | (18,400) | [1] | (7,200) | [1] | |||
Reduction in Current Accident Year Losses and LAE Due Provision Rate | 10,600 | ||||||||||
Revaluation of deferred tax asset | 7,000 | 7,000 | 0 | 0 | |||||||
Losses and loss adjustment expense primarily due to four large losses | $ 6,500 | ||||||||||
ICONS Surpuls Note [Member] | |||||||||||
Gain on redemption of notes payable | 2,100 | ||||||||||
Notes payable | $ 0 | $ 12,000 | $ 12,000 | 0 | 12,000 | ||||||
Voluntary risk business | |||||||||||
Prior years | (17,400) | (17,000) | (9,000) | ||||||||
Involuntary assigned risk business | |||||||||||
Prior years | $ (1,100) | $ (1,400) | $ 1,800 | ||||||||
[1] | Losses and LAE, net of reinsurance, incurred during the period related to prior years and Total net losses and LAE incurred during the period included in the above table excludes the impact of the amortization of the Deferred Gain and LPT Reserve Adjustments (Note 10). Including these amounts, Losses and LAE, net of reinsurance, incurred during the period related to prior years was $(30.1) million, $(35.0) million, and $(27.6) million and Total net losses and LAE incurred during the period was $417.2 million, $417.9 million, and $429.4 million for the years ended December 31, 2017, 2016, and 2015, respectively. |
Schedule II. Condensed Financ85
Schedule II. Condensed Financial Information of Registrant (Condensed Balance Sheets) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Investments | ||||
Fixed maturity securities at fair value (amortized cost $40.2 in 2017 and $14.7 in 2016) | $ 2,677,700 | $ 2,552,600 | ||
Short-term investments at fair value (amortized cost $3.7 at December 31, 2017) | 4,000 | 16,000 | ||
Total investments | 2,677,700 | 2,552,600 | ||
Cash and cash equivalents | 73,300 | 67,200 | $ 56,600 | $ 103,600 |
Accrued investment income | 19,600 | 20,600 | ||
Deferred income taxes, net | 28,700 | 59,400 | ||
Other assets | 33,700 | 34,600 | ||
Total assets | 3,840,100 | 3,773,400 | ||
Liabilities and stockholders’ equity | ||||
Accounts payable and accrued expenses | 23,700 | 24,200 | ||
Total liabilities | 2,892,400 | 2,932,800 | ||
Stockholders’ equity: | ||||
Common stock, $0.01 par value; 150,000,000 shares authorized; 56,695,174 and 56,226,277 shares issued and 32,597,819 and 32,128,922 shares outstanding at December 31, 2017 and 2016, respectively | 600 | 600 | ||
Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued | 0 | 0 | ||
Additional paid-in capital | 381,200 | 372,000 | ||
Retained earnings | 842,200 | 777,200 | ||
Accumulated other comprehensive income, net of tax | 107,400 | 74,500 | ||
Treasury stock, at cost (24,097,355 shares at December 31, 2017 and December 31, 2016) | (383,700) | (383,700) | ||
Total stockholders’ equity | 947,700 | 840,600 | ||
Total liabilities and stockholders’ equity | 3,840,100 | 3,773,400 | ||
Parent Company [Member] | ||||
Investments | ||||
Investment in subsidiaries | 849,600 | 757,500 | ||
Fixed maturity securities at fair value (amortized cost $40.2 in 2017 and $14.7 in 2016) | 41,400 | 16,000 | ||
Short-term investments at fair value (amortized cost $3.7 at December 31, 2017) | 3,700 | 0 | ||
Total investments | 894,700 | 773,500 | ||
Cash and cash equivalents | 39,600 | 41,400 | $ 1,400 | $ 10,900 |
Accrued investment income | 300 | 300 | ||
Federal income taxes recoverable | 4,200 | 9,600 | ||
Deferred income taxes, net | 14,500 | 20,000 | ||
Other assets | 800 | 700 | ||
Total assets | 954,100 | 845,500 | ||
Liabilities and stockholders’ equity | ||||
Accounts payable and accrued expenses | 4,500 | 4,800 | ||
Intercompany payable | 1,900 | 100 | ||
Total liabilities | 6,400 | 4,900 | ||
Stockholders’ equity: | ||||
Common stock, $0.01 par value; 150,000,000 shares authorized; 56,695,174 and 56,226,277 shares issued and 32,597,819 and 32,128,922 shares outstanding at December 31, 2017 and 2016, respectively | 600 | 600 | ||
Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued | 0 | 0 | ||
Additional paid-in capital | 381,200 | 372,000 | ||
Retained earnings | 842,200 | 777,200 | ||
Accumulated other comprehensive income, net of tax | 107,400 | 74,500 | ||
Treasury stock, at cost (24,097,355 shares at December 31, 2017 and December 31, 2016) | (383,700) | (383,700) | ||
Total stockholders’ equity | 947,700 | 840,600 | ||
Total liabilities and stockholders’ equity | $ 954,100 | $ 845,500 |
Schedule II. Condensed Financ86
Schedule II. Condensed Financial Information of Registrant (Condensed Statements of Income) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues | |||||||||||
Net investment income | $ 74.6 | $ 73.2 | $ 72.2 | ||||||||
Net realized gains on investments | $ 0 | $ 4.1 | $ 1.1 | $ 2.2 | $ 2.1 | $ 1.6 | $ 6 | $ 1.5 | 7.4 | 11.2 | (10.7) |
Total revenues | 801.4 | 779.8 | 752.1 | ||||||||
Expenses | |||||||||||
Other operating expenses | 0 | 7.5 | 0 | 0 | 7.5 | 0 | 0 | ||||
Interest expense | 1.4 | 1.6 | 2.7 | ||||||||
Total expenses | 657.4 | 639.1 | 652.7 | ||||||||
Income tax expense | 21.7 | 7 | 7.8 | 6.3 | 12.9 | 7.8 | 7.4 | 5.9 | 42.8 | 34 | 5 |
Net income | $ 31.3 | $ 21.9 | $ 24.8 | $ 23.2 | $ 35.5 | $ 22.6 | $ 26.8 | $ 21.8 | $ 101.2 | $ 106.7 | $ 94.4 |
Earnings per common share for the stated periods (Note 18): | |||||||||||
Basic | $ 0.96 | $ 0.67 | $ 0.76 | $ 0.72 | $ 1.10 | $ 0.70 | $ 0.82 | $ 0.67 | $ 3.11 | $ 3.29 | $ 2.94 |
Diluted | $ 0.94 | $ 0.66 | $ 0.75 | $ 0.70 | $ 1.08 | $ 0.69 | $ 0.81 | $ 0.66 | 3.06 | 3.24 | 2.90 |
Cash dividends declared per common share | $ 0.60 | $ 0.36 | $ 0.24 | ||||||||
Parent Company [Member] | |||||||||||
Revenues | |||||||||||
Net investment income | $ 1.3 | $ 1.9 | $ 4 | ||||||||
Net realized gains on investments | 0 | 8 | 2.4 | ||||||||
Total revenues | 1.3 | 9.9 | 6.4 | ||||||||
Expenses | |||||||||||
Other operating expenses | 15.2 | 13.8 | 13.8 | ||||||||
Interest expense | 0 | 0 | 1.1 | ||||||||
Total expenses | 15.2 | 13.8 | 14.9 | ||||||||
Income (loss) before income taxes and equity in earnings of subsidiaries | (13.9) | (3.9) | (8.5) | ||||||||
Income tax expense | (5.8) | (3.5) | (3.3) | ||||||||
Net income (loss) before equity in earnings of subsidiaries | (8.1) | (0.4) | (5.2) | ||||||||
Equity in earnings of subsidiary | 109.3 | 107.1 | 99.6 | ||||||||
Net income | $ 101.2 | $ 106.7 | $ 94.4 | ||||||||
Earnings per common share for the stated periods (Note 18): | |||||||||||
Basic | $ 3.11 | $ 3.29 | $ 2.94 | ||||||||
Diluted | $ 3.06 | $ 3.24 | $ 2.90 |
Schedule II. Condensed Financ87
Schedule II. Condensed Financial Information of Registrant (Condensed Balance Sheets Parenthetical) (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Fixed maturity securities, amortized cost | $ 2,541.7 | $ 2,438 |
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) | 56,695,174 | 56,226,277 |
Common stock, shares outstanding (in shares) | 32,597,819 | 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 |
Parent Company [Member] | ||
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) | 56,226,277 | 55,589,454 |
Common stock, shares outstanding (in shares) | 32,128,922 | 32,216,480 |
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 | 23,372,974 |
Debt Securities [Member] | ||
Fixed maturity securities, amortized cost | $ 2,421 | $ 2,305.9 |
Debt Securities [Member] | Parent Company [Member] | ||
Fixed maturity securities, amortized cost | 14.7 | 40.2 |
Equity Securities [Member] | ||
Fixed maturity securities, amortized cost | 116.7 | 116.1 |
Equity Securities [Member] | Parent Company [Member] | ||
Fixed maturity securities, amortized cost | $ 0 | $ 46 |
Schedule II. Condensed Financ88
Schedule II. Condensed Financial Information of Registrant (Condensed Statements of Cash Flows) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating activities | |||||||||||
Net income | $ 31.3 | $ 21.9 | $ 24.8 | $ 23.2 | $ 35.5 | $ 22.6 | $ 26.8 | $ 21.8 | $ 101.2 | $ 106.7 | $ 94.4 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||
Realized gains on investments | (7.4) | (11.2) | 10.7 | ||||||||
Stock-based compensation | 6.8 | 5.8 | 4.6 | ||||||||
Excess Tax Benefit from Share-based Compensation, Operating Activities | 0 | 0 | 1.2 | ||||||||
Amortization of premium on investments, net | 14.3 | 14.6 | 12.8 | ||||||||
Deferred income tax expense | 24.2 | 13.4 | (5.6) | ||||||||
Change in operating assets and liabilities: | |||||||||||
Accounts payable, accrued expenses and other liabilities | (7) | (4.2) | 8.6 | ||||||||
Federal income taxes | (2.7) | 7.7 | (3.9) | ||||||||
Other | 15.3 | (0.5) | (6.9) | ||||||||
Net cash provided by operating activities | 142.3 | 122.8 | 116.4 | ||||||||
Investing activities | |||||||||||
Purchases of fixed maturity securities | (592.3) | (466.8) | (476.9) | ||||||||
Purchase of equity securities | (36.8) | (49.1) | (85.1) | ||||||||
Purchases of short-term investments | (8.2) | (10) | 0 | ||||||||
Proceeds from sale of fixed maturity securities | 249.8 | 132.4 | 105.4 | ||||||||
Proceeds from maturities and redemptions of fixed maturity securities | 215.7 | 230.6 | 323.9 | ||||||||
Proceeds from sale of equity securities | 41.2 | 80.4 | 34.7 | ||||||||
Capital Contributions to subsidiary | (5.6) | (8) | 0 | ||||||||
Restricted cash used in investing activities | 2.6 | (1.1) | 8.3 | ||||||||
Net cash provided by investing activities | (110.2) | (88.6) | (101.2) | ||||||||
Financing activities | |||||||||||
Acquisition of common stock | 0 | (21.1) | 0 | ||||||||
Cash transactions related to stock-based compensation | 3.8 | 9 | 4.8 | ||||||||
Dividends paid to stockholders | (19.7) | (11.5) | (7.7) | ||||||||
Excess tax benefits from stock-based compensation | 0 | 0 | 1.2 | ||||||||
Net cash used in financing activities | (26) | (23.6) | (62.2) | ||||||||
Net increase (decrease) in cash and cash equivalents | 6.1 | 10.6 | (47) | ||||||||
Cash and cash equivalents at the beginning of the period | 67.2 | 56.6 | 67.2 | 56.6 | 103.6 | ||||||
Cash and cash equivalents at the end of the period | 73.3 | 67.2 | 73.3 | 67.2 | 56.6 | ||||||
Parent Company [Member] | |||||||||||
Operating activities | |||||||||||
Net income | 101.2 | 106.7 | 94.4 | ||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||
Equity in net income of subsidiaries | 71.5 | 107.1 | 99.6 | ||||||||
Realized gains on investments | 0 | (8) | (2.4) | ||||||||
Stock-based compensation | 6.8 | 5.8 | 4.6 | ||||||||
Excess Tax Benefit from Share-based Compensation, Operating Activities | 0 | 0 | (1.2) | ||||||||
Amortization of premium on investments, net | 0.1 | 0.4 | 0.9 | ||||||||
Deferred income tax expense | 5.3 | 2.9 | (4.6) | ||||||||
Change in operating assets and liabilities: | |||||||||||
Accounts payable, accrued expenses and other liabilities | (0.3) | (0.7) | 1.7 | ||||||||
Federal income taxes | 5.4 | (7.9) | 4.9 | ||||||||
Other assets | 0.1 | (0.8) | (0.4) | ||||||||
Intercompany payable/receivable | 1.8 | 0.3 | 0.1 | ||||||||
Other | 0 | 0.4 | (1.2) | ||||||||
Net cash provided by operating activities | 48.7 | (7.2) | 0.4 | ||||||||
Investing activities | |||||||||||
Purchases of fixed maturity securities | (30.6) | (31) | (21.6) | ||||||||
Purchase of equity securities | 0 | (3.6) | (19) | ||||||||
Purchases of short-term investments | (7.9) | 0 | 0 | ||||||||
Proceeds from sale of fixed maturity securities | 5 | 0 | 18.3 | ||||||||
Proceeds from maturities and redemptions of fixed maturity securities | 4.5 | 24.9 | 45.5 | ||||||||
Proceeds from sale of equity securities | 0 | 88.5 | 24 | ||||||||
Restricted cash used in investing activities | 0 | 0 | 4.6 | ||||||||
Net cash provided by investing activities | (34.6) | 70.8 | 51.8 | ||||||||
Financing activities | |||||||||||
Acquisition of common stock | 0 | (21.1) | 0 | ||||||||
Cash transactions related to stock-based compensation | 3.8 | 9 | 4.8 | ||||||||
Dividends paid to stockholders | (19.7) | (11.5) | (7.7) | ||||||||
Payments on notes payable and capital leases | 0 | 0 | (60) | ||||||||
Excess tax benefits from stock-based compensation | 0 | 0 | 1.2 | ||||||||
Net cash used in financing activities | (15.9) | (23.6) | (61.7) | ||||||||
Net increase (decrease) in cash and cash equivalents | (1.8) | 40 | (9.5) | ||||||||
Cash and cash equivalents at the beginning of the period | $ 41.4 | $ 1.4 | 41.4 | 1.4 | 10.9 | ||||||
Cash and cash equivalents at the end of the period | $ 39.6 | $ 41.4 | $ 39.6 | $ 41.4 | $ 1.4 |