Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 17, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-33245 | |
Entity Registrant Name | EMPLOYERS HOLDINGS, INC. | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 04-3850065 | |
Entity Address, Address Line One | 10375 Professional Circle | |
Entity Address, City or Town | Reno, | |
Entity Address, State or Province | NV | |
Entity Address, Postal Zip Code | 89521 | |
City Area Code | 888 | |
Local Phone Number | 682-6671 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | EIG | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 31,814,678 | |
Entity Central Index Key | 0001379041 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Investments: | ||
Fixed maturity securities at fair value (amortized cost $2,394.6 at September 30, 2019 and $2,513.7 at December 31, 2018) | $ 2,480,800 | $ 2,496,400 |
Equity securities at fair value (cost $199.0 at September 30, 2019 and $131.9 at December 31, 2018) | 284,700 | 199,900 |
Equity securities at cost | 6,700 | 6,400 |
Other invested assets | 24,700 | 0 |
Short-term investments at fair value (amortized cost $25.0 at December 31, 2018) | 0 | 25,000 |
Total investments | 2,796,900 | 2,727,700 |
Cash and cash equivalents | 140,300 | 101,400 |
Restricted cash and cash equivalents | 300 | 600 |
Accrued investment income | 17,500 | 18,000 |
Premiums receivable (less bad debt allowance of $5.7 at September 30, 2019 and $6.7 at December 31, 2018) | 314,700 | 333,100 |
Reinsurance recoverable for: | ||
Paid losses | 7,100 | 6,700 |
Unpaid losses | 527,100 | 504,400 |
Deferred policy acquisition costs | 51,200 | 48,200 |
Deferred income taxes, net | 100 | 26,900 |
Property and equipment, net | 23,900 | 18,200 |
Operating lease right-of-use assets | 15,000 | 0 |
Intangible assets, net | 13,600 | 7,700 |
Goodwill | 36,200 | 36,200 |
Contingent commission receivable—LPT Agreement | 13,200 | 32,000 |
Cloud computing arrangements | 30,400 | 26,000 |
Other assets | 37,400 | 32,100 |
Total assets | 4,024,900 | 3,919,200 |
Liabilities and stockholders’ equity | ||
Unpaid losses and loss adjustment expenses | 2,197,300 | 2,207,900 |
Unearned premiums | 360,300 | 336,300 |
Commissions and premium taxes payable | 52,000 | 57,300 |
Accounts payable and accrued expenses | 27,300 | 37,100 |
Deferred reinsurance gain—LPT Agreement | 139,400 | 149,600 |
Notes payable | 0 | 20,000 |
Operating lease liability | 17,100 | 0 |
Non-cancellable obligations | 20,400 | 18,800 |
Other liabilities | 50,700 | 74,000 |
Total liabilities | 2,864,500 | 2,901,000 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock, $0.01 par value; 150,000,000 shares authorized; 57,178,320 and 56,975,675 shares issued and 31,814,678 and 32,765,792 shares outstanding at September 30, 2019 and December 31, 2018, respectively | 600 | 600 |
Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued | 0 | 0 |
Additional paid-in capital | 393,000 | 388,800 |
Retained earnings | 1,134,300 | 1,030,700 |
Accumulated other comprehensive income (loss), net of tax | 68,100 | (13,700) |
Treasury stock, at cost (25,363,642 shares at September 30, 2019 and 24,209,883 shares at December 31, 2018) | (435,600) | (388,200) |
Total stockholders’ equity | 1,160,400 | 1,018,200 |
Total liabilities and stockholders’ equity | $ 4,024,900 | $ 3,919,200 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues | ||||
Net premiums earned | $ 175,800 | $ 192,900 | $ 526,100 | $ 547,500 |
Net investment income | 22,300 | 20,200 | 65,500 | 59,900 |
Net realized and unrealized (losses) gains on investments | 2,600 | 15,600 | 33,300 | 13,200 |
Other income | 300 | 200 | 600 | 400 |
Total revenues | 201,000 | 228,900 | 625,500 | 621,000 |
Expenses | ||||
Losses and loss adjustment expenses | 92,900 | 106,600 | 268,200 | 289,700 |
Commission expense | 21,900 | 24,800 | 67,700 | 73,100 |
Underwriting and other operating expenses | 45,300 | 38,800 | 136,600 | 118,100 |
Interest and financing expenses | 0 | 400 | 600 | 1,100 |
Total expenses | 160,100 | 170,600 | 473,100 | 482,000 |
Net income before income taxes | 40,900 | 58,300 | 152,400 | 139,000 |
Income tax expense | 8,100 | 10,700 | 27,000 | 23,300 |
Net income | 32,800 | 47,600 | 125,400 | 115,700 |
Comprehensive income | ||||
Unrealized AFS investment gains (losses) arising during the period (net of tax (expense) benefit of $(4.3) and $2.4 for the three months ended September 30, 2019 and 2018, respectively, and $(22.3) and $15.0 for the nine months ended September 30, 2019 and 2018, respectively) | 16,400 | (9,200) | 84,100 | (56,300) |
Reclassification adjustment for realized AFS investment (gains) losses in net income (net of tax (expense) benefit of $0.4 for the three months ended September 30, 2019, and $0.6 and $0.1 for the nine months ended September 30, 2019 and 2018, respectively) | (1,600) | 0 | (2,300) | 400 |
Other comprehensive income (loss), net of tax | 14,800 | (9,200) | 81,800 | (55,900) |
Total comprehensive income | 47,600 | 38,400 | 207,200 | 59,800 |
Net realized and unrealized gains on investments | ||||
Net realized and unrealized gains on investments before impairments | 2,600 | 15,600 | 33,300 | 15,200 |
Other than temporary impairment recognized in earnings | 0 | 0 | 0 | (2,000) |
Net realized and unrealized (losses) gains on investments | $ 2,600 | $ 15,600 | $ 33,300 | $ 13,200 |
Earnings per common share (Note 13): | ||||
Basic | $ 1.03 | $ 1.45 | $ 3.90 | $ 3.52 |
Diluted | 1.01 | 1.43 | 3.85 | 3.48 |
Cash dividends declared per common share and eligible RSUs and PSUs | $ 0.22 | $ 0.20 | $ 0.66 | $ 0.60 |
Consolidated Balance Sheets Con
Consolidated Balance Sheets Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Available for sale: | ||
Debt securities, available-for-sale, amortized cost | $ 2,394,600 | $ 2,513,700 |
Equity Securities, FV-NI, Cost | 199,000 | 131,900 |
Available for sale, short-term investments, at amortized cost | 0 | 25,000 |
Premiums receivable, bad debt allowance | 5,700 | 6,700 |
Reinsurance recoverables on unpaid losses, allowance | $ 0 | $ 0 |
Stockholders' equity | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 57,178,320 | 56,975,675 |
Common stock, shares outstanding (in shares) | 31,814,678 | 32,765,792 |
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) | 25,363,642 | 24,209,883 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement Parenthetical [Abstract] | ||||
Other comprehensive income (loss), unrealized holding gain (loss) on securities arising during period, tax | $ (4,300) | $ 2,400 | $ (22,300) | $ 15,000 |
Other comprehensive income (loss), reclassification adjustment for sale of securities included in net income, tax | $ 400 | $ 0 | $ 600 | $ (100) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders Equity Statement - USD ($) | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income, Net | Treasury Stock [Member] |
Stockholders' equity, shares at Dec. 31, 2017 | 56,695,174 | |||||
Stockholders' equity, value at Dec. 31, 2017 | $ 947,700,000 | $ 600,000 | $ 381,200,000 | $ 842,200,000 | $ 107,400,000 | $ (383,700,000) |
Stock-based obligations, shares | 0 | |||||
Stock-based obligations, value | $ 5,900,000 | $ 0 | 5,900,000 | 0 | 0 | 0 |
Stock-options exercised, shares | 51,091 | 51,091 | ||||
Stock-options exercised, value | $ 1,000,000 | $ 0 | 1,000,000 | 0 | 0 | 0 |
Vesting of RSUs and PSUs, net of shares withheld to satisfy minimum tax withholding, shares | 157,753 | |||||
Vesting of RSUs and PSUs, net of shares withheld to satisfy minimum tax withholding, value | (2,900,000) | $ 0 | (2,900,000) | 0 | 0 | 0 |
Acquisition of common stock, shares | 0 | |||||
Acquisition of common stock, value | (300,000) | $ 0 | 0 | 0 | (300,000) | |
Dividends declared, shares | 0 | |||||
Dividends declared, value | (19,900,000) | $ 0 | 0 | (19,900,000) | 0 | 0 |
Net income | 115,700,000 | 0 | 0 | 115,700,000 | 0 | 0 |
Change in net unrealized gains in investments, net of tax | (55,900,000) | $ 0 | 0 | 0 | (55,900,000) | 0 |
Stockholders' equity, shares at Sep. 30, 2018 | 56,904,018 | |||||
Stockholders' equity, value at Sep. 30, 2018 | 991,200,000 | $ 600,000 | 385,200,000 | 1,011,900,000 | (22,500,000) | (384,000,000) |
Stockholders' equity, shares at Dec. 31, 2017 | 56,695,174 | |||||
Stockholders' equity, value at Dec. 31, 2017 | $ 947,700,000 | $ 600,000 | 381,200,000 | 842,200,000 | 107,400,000 | (383,700,000) |
Stock-options exercised, shares | 57,091 | |||||
Stockholders' equity, shares at Dec. 31, 2018 | 56,975,675 | 56,975,675 | ||||
Stockholders' equity, value at Dec. 31, 2018 | $ 1,018,200,000 | $ 600,000 | 388,800,000 | 1,030,700,000 | (13,700,000) | (388,200,000) |
Stockholders' equity, shares at Jun. 30, 2018 | 56,866,727 | |||||
Stockholders' equity, value at Jun. 30, 2018 | 956,500,000 | $ 600,000 | 382,400,000 | 970,800,000 | (13,300,000) | (384,000,000) |
Stock-based obligations, shares | 0 | |||||
Stock-based obligations, value | 2,000,000 | $ 0 | 2,000,000 | 0 | 0 | 0 |
Stock-options exercised, shares | 37,291 | |||||
Stock-options exercised, value | 800,000 | $ 0 | 800,000 | 0 | 0 | 0 |
Dividends declared, shares | 0 | |||||
Dividends declared, value | (6,600,000) | $ 0 | 0 | (6,600,000) | 0 | 0 |
Net income | 47,600,000 | 0 | 0 | 47,600,000 | 0 | 0 |
Change in net unrealized gains in investments, net of tax | (9,200,000) | $ 0 | 0 | 0 | (9,200,000) | 0 |
Stockholders' equity, shares at Sep. 30, 2018 | 56,904,018 | |||||
Stockholders' equity, value at Sep. 30, 2018 | 991,200,000 | $ 600,000 | 385,200,000 | 1,011,900,000 | (22,500,000) | (384,000,000) |
Reclassification adjustment for adoption of ASU | $ 0 | $ 0 | 0 | 74,000,000 | (74,000,000) | 0 |
Stockholders' equity, shares at Dec. 31, 2018 | 56,975,675 | 56,975,675 | ||||
Stockholders' equity, value at Dec. 31, 2018 | $ 1,018,200,000 | $ 600,000 | 388,800,000 | 1,030,700,000 | (13,700,000) | (388,200,000) |
Stock-based obligations, shares | 0 | |||||
Stock-based obligations, value | $ 6,800,000 | $ 0 | 6,800,000 | 0 | 0 | 0 |
Stock-options exercised, shares | 25,580 | 25,580 | ||||
Stock-options exercised, value | $ 600,000 | $ 0 | 600,000 | 0 | 0 | 0 |
Vesting of RSUs and PSUs, net of shares withheld to satisfy minimum tax withholding, shares | 177,065 | |||||
Vesting of RSUs and PSUs, net of shares withheld to satisfy minimum tax withholding, value | (3,200,000) | $ 0 | (3,200,000) | 0 | 0 | 0 |
Acquisition of common stock, shares | 0 | |||||
Acquisition of common stock, value | (47,400,000) | $ 0 | 0 | 0 | 0 | (47,400,000) |
Dividends declared, shares | 0 | |||||
Dividends declared, value | (21,800,000) | $ 0 | 0 | (21,800,000) | 0 | 0 |
Net income | 125,400,000 | 0 | 0 | 125,400,000 | 0 | 0 |
Change in net unrealized gains in investments, net of tax | $ 81,800,000 | $ 0 | 0 | 0 | 81,800,000 | 0 |
Stockholders' equity, shares at Sep. 30, 2019 | 57,178,320 | 57,178,320 | ||||
Stockholders' equity, value at Sep. 30, 2019 | $ 1,160,400,000 | $ 600,000 | 393,000,000 | 1,134,300,000 | 68,100,000 | (435,600,000) |
Stockholders' equity, shares at Jun. 30, 2019 | 57,157,926 | |||||
Stockholders' equity, value at Jun. 30, 2019 | 1,121,500,000 | $ 600,000 | 389,800,000 | 1,108,700,000 | 53,300,000 | (430,900,000) |
Stock-based obligations, shares | 0 | |||||
Stock-based obligations, value | 2,700,000 | $ 0 | 2,700,000 | 0 | 0 | 0 |
Stock-options exercised, shares | 20,394 | |||||
Stock-options exercised, value | 500,000 | $ 0 | 500,000 | 0 | 0 | 0 |
Acquisition of common stock, shares | 0 | |||||
Acquisition of common stock, value | (4,700,000) | $ 0 | 0 | 0 | 0 | (4,700,000) |
Dividends declared, shares | 0 | |||||
Dividends declared, value | (7,200,000) | $ 0 | 0 | (7,200,000) | 0 | 0 |
Net income | 32,800,000 | 0 | 0 | 32,800,000 | 0 | 0 |
Change in net unrealized gains in investments, net of tax | $ 14,800,000 | $ 0 | 0 | 0 | 14,800,000 | 0 |
Stockholders' equity, shares at Sep. 30, 2019 | 57,178,320 | 57,178,320 | ||||
Stockholders' equity, value at Sep. 30, 2019 | $ 1,160,400,000 | $ 600,000 | $ 393,000,000 | $ 1,134,300,000 | $ 68,100,000 | $ (435,600,000) |
Consolidated Statements of St_2
Consolidated Statements of Stockholders Equity (Parentheticals) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||
Change in net unrealized (losses) gains on investments, net of tax | $ (3.9) | $ 2.4 | $ (21.7) | $ 14.9 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Sep. 30, 2019 | Dec. 31, 2018 | |
Operating activities | |||||||
Net income | $ 32,800 | $ 47,600 | $ 125,400 | $ 115,700 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 6,500 | 5,100 | |||||
Stock-based compensation | 6,800 | 5,900 | |||||
Amortization of cloud computing arrangements | 1,700 | 3,800 | 0 | $ 800 | |||
Amortization of premium on investments, net | 7,100 | 6,400 | |||||
Allowance for doubtful accounts | (1,000) | (2,100) | |||||
Deferred income tax expense | 5,100 | 23,000 | |||||
Net realized and unrealized gains on investments | (33,300) | (13,200) | |||||
Change in operating assets and liabilities: | |||||||
Premiums receivable | 19,400 | (23,900) | |||||
Reinsurance recoverable on paid and unpaid losses | 25,900 | 24,500 | |||||
Cloud computing arrangements | (8,200) | (21,800) | |||||
Operating lease right-of-use-assets | (15,000) | 0 | |||||
Current federal income taxes | (5,800) | (2,900) | |||||
Unpaid losses and loss adjustment expenses | 58,900 | 32,400 | |||||
Unearned premiums | 24,000 | 37,700 | |||||
Accounts payable, accrued expenses and other liabilities | (12,000) | 3,800 | |||||
Deferred reinsurance gain—LPT Agreement | (10,200) | (11,500) | |||||
Contingent commission receivable—LPT Agreement | 18,800 | 0 | |||||
Operating lease liabilities | 17,100 | 0 | |||||
Non-cancellable obligations | 1,600 | 15,500 | |||||
Other | (4,500) | 3,300 | |||||
Net cash provided by operating activities | 112,600 | 133,100 | |||||
Investing activities | |||||||
Purchases of fixed maturity securities | (250,100) | (472,900) | |||||
Purchases of equity securities | (219,700) | (31,200) | |||||
Purchases of short-term investments | 0 | (34,900) | |||||
Purchases of other invested assets | (24,900) | 0 | |||||
Proceeds from sale of fixed maturity securities | 52,900 | 1,500 | 147,300 | 169,800 | |||
Proceeds from sale of equity securities | 80,300 | 58,100 | |||||
Proceeds from maturities and redemptions of fixed maturity securities | 313,100 | 294,700 | |||||
Proceeds from maturities of short-term investments | 25,000 | 38,900 | |||||
Net change in unsettled investment purchases and sales | (24,300) | 5,000 | |||||
Capital expenditures and other | (12,400) | (7,600) | |||||
Payments to Acquire Businesses, Net of Cash Acquired | (15,900) | 0 | |||||
Net cash provided by investing activities | 18,400 | 19,900 | |||||
Financing activities | |||||||
Acquisition of common stock | (47,800) | (300) | |||||
Cash transactions related to stock-based compensation | (2,600) | (1,900) | |||||
Dividends paid to stockholders | (21,800) | (19,900) | |||||
Redemption of notes payable | (20,000) | 0 | |||||
Payments on capital leases | 200 | 200 | |||||
Net cash used in financing activities | (92,400) | (22,300) | |||||
Net increase in cash, cash equivalents and restricted cash | 38,600 | 130,700 | |||||
Cash, cash equivalents, restricted cash and restricted cash equivalents at the beginning of the period | 102,000 | 74,300 | 74,300 | ||||
Cash, cash equivalents, restricted cash and restricted cash equivalents at the end of the period | 140,600 | 205,000 | 140,600 | 205,000 | 102,000 | ||
Cash and cash equivalents | $ 140,300 | $ 101,400 | |||||
Restricted cash and cash equivalents | 300 | 600 | |||||
Total cash, cash equivalents, restricted cash | $ 140,600 | $ 205,000 | $ 140,600 | $ 74,300 | $ 74,300 | $ 140,600 | $ 102,000 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Basis of Presentation and Summary of Operations Employers Holdings, Inc. (EHI) is a Nevada holding company. Through its wholly owned insurance subsidiaries, Employers Insurance Company of Nevada (EICN), Employers Compensation Insurance Company (ECIC), Employers Preferred Insurance Company (EPIC), Employers Assurance Company (EAC), and Cerity Insurance Company (CIC), EHI is engaged in the commercial property and casualty insurance industry, specializing in workers’ compensation products and services. Unless otherwise indicated, all references to the “Company” refer to EHI, together with its subsidiaries. In 1999, the Nevada State Industrial Insurance System (the Fund) entered into a retroactive 100% quota share reinsurance agreement (the LPT Agreement) through a loss portfolio transfer transaction with third party reinsurers. The LPT Agreement commenced on June 30, 1999 and will remain in effect until all claims under the covered policies have closed, the LPT Agreement is commuted or terminated, upon the mutual agreement of the parties, or the reinsurers’ aggregate maximum limit of liability is exhausted, whichever occurs first. The LPT Agreement does not provide for any additional termination terms. On January 1, 2000, EICN assumed all of the assets, liabilities and operations of the Fund, including the Fund’s rights and obligations associated with the LPT Agreement (See Note 9 ). 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. The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) necessary for a fair presentation of the Company’s consolidated financial position and results of operations for the periods presented have been included. The results of operations for an interim period are not necessarily indicative of the results for an entire year. These financial statements have been prepared consistent with the accounting policies described in the Company’s Form 10-K for the year ended December 31, 2018 (Annual Report). 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. Acquisition On August 11, 2017, the Company entered into a stock purchase agreement (as amended, 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). On July 31, 2019, the Company completed the Acquisition. The purchase price was equal to the sum of: (i) $47.6 million , the amount of statutory capital and surplus of PRNY at closing; and (ii) $5.8 million . The Company funded the Acquisition with cash on hand. As a result of the purchase, the Company acquired $37.5 million of cash and cash equivalents, $10.2 million of fixed maturity securities, $5.8 million of intangible assets (comprised of state licenses), $6.9 million of other assets, $7.0 million of other liabilities, and $48.3 million of gross loss and LAE reserves, which were offset by $48.3 million of reinsurance recoverables, resulting in no net loss and LAE reserves. The Company did not acquire any employees or ongoing business operations pursuant to the Acquisition. Pursuant to the Purchase Agreement, all liabilities and obligations of PRNY existing as of the closing date, whether known or unknown, will be indemnified 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. If PRUS and PartnerRe Ltd. were to fail to honor their obligations to the Company under the Purchase Agreement, all or a portion of the remaining gross loss and LAE reserves acquired by the Company pursuant to the Acquisition would become the Company’s responsibility. Subsequent to completing the Acquisition, PRNY was renamed CIC and will offer digital, direct-to-customer workers’ compensation insurance solutions. |
Change in Estimates (Notes)
Change in Estimates (Notes) | 9 Months Ended |
Sep. 30, 2019 | |
Change in Estimates [Abstract] | |
Changes in Estimates | Change in Estimates The Company reduced its estimated loss and LAE reserves ceded under the Loss Portfolio Transfer Agreement (LPT Reserve Adjustment) during the second quarter of 2019 as a result of the determination that an adjustment was necessary to reflect observed favorable paid loss trends. The following table shows the financial statement impact related to the LPT Reserve Adjustment. Nine Months Ended September 30, 2019 (in millions, except per share data) LPT Reserve Adjustment $ (5.3 ) Cumulative adjustment to the Deferred Gain (1) (1.8 ) Net income impact from this change in estimate 1.8 Earnings per common share impact from this change in estimate: Basic and Diluted 0.06 (1) The cumulative adjustment to the Deferred reinsurance gain–LPT Agreement (Deferred Gain) was also recognized in losses and LAE incurred in the Company’s Consolidated Statement 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 Adjustment) during the second quarter of 2019 as a result of the determination that an adjustment was necessary to reflect observed favorable paid loss trends. The following table shows the financial statement impact related to the LPT Contingent Commission Adjustment. Nine Months Ended September 30, 2019 (in millions, except per share data) LPT Contingent Commission Adjustment $ 0.3 Net income impact from this change in estimate 0.2 Earnings per common share impact from this change in estimate: Basic and Diluted 0.01 |
New Accounting Standards Level
New Accounting Standards Level 1 (Notes) | 9 Months Ended |
Sep. 30, 2019 | |
New Accounting Standards [Abstract] | |
New Accounting Standards | New Accounting Standards Recently Issued Accounting Standards In April 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Updated ( ASU) 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments . The amendments in this update represent changes to clarify, correct errors in, or improve the codification within various Accounting Standards Codification (ASC) topics. The Company will adopt the updates related to Topic 815 when it adopts ASU 2016-13 . The Company will adopt any remaining codification improvements as they become applicable and has determined that the impact of these improvements will not be material to its consolidated financial condition and results of operations. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. This update removes the disclosure requirements for the amounts of and the reasons for transfers between Level 1 and Level 2 and disclosure of the policy for timing of transfers between levels. This update also removes disclosure requirements for the valuation processes for Level 3 fair value measurements. Additionally, this update adds disclosure requirements for the changes in unrealized gains and losses for recurring Level 3 fair value measurements and quantitative information for certain unobservable inputs in Level 3 fair value measurements. This update becomes effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company does not expect that this update will have a material impact on its consolidated financial condition and results of operations. In January 2017, the FASB issued ASU 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 on its consolidated financial condition and results of operations. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326). This update replaces the incurred loss impairment methodology for recognizing credit losses on financial instruments with a methodology that reflects an entity’s current estimate of all expected credit losses. This update requires financial assets (including receivables and reinsurance recoverables) measured at amortized cost to be presented net of an allowance for credit losses. Additionally, this update requires credit losses on available-for-sale fixed maturity securities to be presented as an allowance rather than as a write-down, allowing an entity to also record reversals of credit losses in current period net income. This update becomes effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Additionally, in December 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses. This update provides clarification on the effective and transition dates and the exclusion of operating lease receivables from Topic 326. In May 2019, the FASB issued ASU 2019-05, Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief . This update adds optional transition relief for entities to elect the fair value option for certain financial assets previously measured at amortized cost basis to increase comparability of similar financial assets. The Company is currently evaluating the impact that the adoption of these updates will have on its consolidated financial condition and results of operations. Recently Adopted Accounting Standards In July 2019, the FASB issued ASU 2019-07, Codification Updates to SEC Sections . This update aligns the guidance in various SEC sections of the codification with the requirements of certain SEC final rules along with other miscellaneous updates, which are effective upon issuance. The Company adopted these updates where applicable and has determined that there was no impact to its consolidated financial condition and results of operations. In July 2018, the FASB issued ASU 2018-09, Codification Improvements . This update provides clarification, corrects errors in and makes minor improvements to the codification within various ASC topics. Many of the amendments in this update have transition guidance with effective dates for annual periods beginning after December 15, 2018 and some amendments in this update do not require transition guidance and became effective upon issuance of this update. The Company has adopted these amendments and has determined that there was no impact to its consolidated financial condition and results of operations. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements . This update provides entities with an additional and optional transition method to adopt ASU 2016-02 with a cumulative-effect adjustment in the period of adoption. This update also provides guidance for a practical expedient that permits lessors to not separate non-lease components from the associated lease components. Additionally, in July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases . This update provides additional guidance on the new lease model with improvements in numerous aspects of the guidance in ASC 842 including, but not limited to, implicit rates, reassessment of lease classification, terms and purchase options, investment tax credits, and various other transition guidance. In December 2018, the FASB issued ASU 2018-20, Leases (Topic 842): Narrow-Scope Improvements for Lessors . This update provides amendments to various lease topics including sales taxes collected from lessees, certain lessor costs paid to third parties, and variable payments for contracts with lease and non-lease components. In March 2019, the FASB issued ASU 2019-01, Leases Topics (842) Codification Improvements. The amendments in this update increase transparency and comparability for the recognition of leases and disclosures about leasing transactions. This update provides additional clarity on determining the value of the underlying asset by lessors that are not manufacturers or dealers. This update further clarifies the presentation of the statement of cash flows related to lessors that are depository and lending institutions within the scope of Topic 942. Additionally, this update provides guidance on transition disclosures related to leases. The Company adopted these updates concurrently with ASU 2016-02 . See Note 6 regarding the impact of adopting this standard on the Company’s Consolidated Financial Statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This update provides guidance on a new lease 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 became effective for annual reporting periods, including interim periods within those annual periods, beginning after December 15, 2018 and early adoption is permitted. As a result of the implementation of this standard, the Company recognized an Operating lease right-of-use asset of $16.8 million and $19.0 million of Lease liabilities on its Consolidated Balance Sheet at March 31, 2019 . See Note 6 for additional detail regarding the adoption of this standard. |
Valuation of Financial Instrume
Valuation of Financial Instruments | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | Valuation of Financial Instruments Financial Instruments Carried at Fair Value The carrying value and the estimated fair value of the Company’s financial instruments at fair value were as follows: September 30, 2019 December 31, 2018 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value (in millions) Financial assets Total investments at fair value $ 2,765.5 $ 2,765.5 $ 2,721.3 $ 2,721.3 Cash and cash equivalents 140.3 140.3 101.4 101.4 Restricted cash and cash equivalents 0.3 0.3 0.6 0.6 Financial liabilities Notes payable $ — $ — $ 20.0 $ 23.5 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 it 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 non-binding broker quotes are classified as Level 3. The Company performs quarterly analyses on the prices it receives from third parties to determine whether the prices are reasonable estimates of fair value, including confirming the fair values of these securities through observable market prices using an alternative pricing source, as it is ultimately management’s responsibility to ensure that the fair values reflected in the Company’s consolidated financial statements are appropriate. If differences are noted in these analyses, the Company may obtain additional information from other pricing services to validate the quoted price. The Company bases all of its estimates of fair value for assets on the bid prices, when available, as they represent what a third-party market participant would be willing to pay in an arm’s length transaction. For securities not actively traded, third party pricing services may use quoted market prices of similar instruments or discounted cash flow analyses, incorporating inputs that are currently observable in the markets for similar securities. Inputs that are often used in the valuation methodologies include, but are not limited to, broker quotes, benchmark yields, credit spreads, default rates, and prepayment speed assumptions. There were no material adjustments made to the prices obtained from third party pricing services as of September 30, 2019 and December 31, 2018 . These methods of valuation only produce an estimate of fair value if there is objectively verifiable information to produce a valuation. When objectively verifiable information is not available, the Company produces 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 notes payable 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 December 31, 2018 . As of September 30, 2019 , all outstanding notes payable were redeemed. See Note 10 for further details. EICN, ECIC, EPIC, and EAC are members 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. The Company’s investment in FHLB stock is recorded at cost, which approximates fair value, 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. The following table presents the Company’s investments at fair value and the corresponding fair value measurements. September 30, 2019 December 31, 2018 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in millions) Fixed maturity securities: U.S. Treasuries $ — $ 84.2 $ — $ — $ 106.4 $ — U.S. Agencies — 2.9 — — 11.4 — States and municipalities — 492.7 — — 528.0 — Corporate securities — 1,077.8 — — 1,090.4 — Residential mortgage-backed securities — 480.4 — — 451.5 — Commercial mortgage-backed securities — 105.3 — — 94.3 — Asset-backed securities — 58.0 — — 64.5 — Other securities — 179.5 — — 149.9 — Total fixed maturity securities $ — $ 2,480.8 $ — $ — $ 2,496.4 $ — Equity securities at fair value: Industrial and miscellaneous $ 246.1 $ — $ — $ 174.8 $ — $ — Other 38.6 — — 25.1 — — Total equity securities at fair value $ 284.7 $ — $ — $ 199.9 $ — $ — Short-term investments $ — $ — $ — $ — $ 25.0 $ — Total investments at fair value $ 284.7 $ 2,480.8 $ — $ 199.9 $ 2,521.4 $ — The following table provides a reconciliation of the beginning and ending balances of investments that are recorded at fair value and are measured using Level 3 inputs for the nine months ended September 30, 2019 and 2018 . Nine Months Ended September 30, 2019 September 30, 2018 Level 3 Securities: (in millions) Beginning balance, January 1 $ — $ 4.7 Transfers out of Level 3 (1) — (4.7 ) Purchases and sales, net — — Ending balance, September 30 $ — $ — (1) The transfer during the nine months ended September 30, 2018 was the result of adoption of ASU 2016-01, which specified that FHLB stock shall be carried at cost and is therefore excluded from the fair value hierarchy. Financial Instruments Carried at Net Asset Value (NAV) The Company has investments in private equity limited partnership interests that are included in Other invested assets on the Company’s Consolidated Balance Sheets. These investments do not have readily determinable fair values and are carried at NAV and therefore are excluded from the fair value hierarchy. The Company initially estimates the value of these investments using the transaction price. In subsequent periods, the Company measures these investments using NAV per share provided quarterly by the general partner, based on financial statements that are audited annually. The Company performs certain control procedures to validate the appropriateness of using NAV as a measurement. These investments are generally not redeemable by the investees and cannot be sold without approval of the general partner. These investments have a fund term of 12 years , subject to three one year extensions at the general partner’s discretion. The Company will receive distributions of proceeds from dividends and interest from fund investments, as well as from the disposition of a fund investment, or portion thereof. The Company expects these distributions from time-to-time during the full course of the fund term. As of September 30, 2019 , the Company had unfunded commitments to these private equity limited partnerships totaling $45.1 million . Additionally, certain cash equivalents, principally money market securities, are measured using NAV, which approximates fair value. The following table presents cash and investments carried at NAV on the Company’s Consolidated Balance Sheets. September 30, 2019 December 31, 2018 (in millions) Cash equivalents carried at NAV $ 100.2 $ 57.5 Other invested assets carried at NAV 4.7 — |
Investments
Investments | 9 Months Ended |
Sep. 30, 2019 | |
Investments [Abstract] | |
Investments | Investments The Company’s investments in fixed maturity securities and short-term investments are classified as available-for-sale (AFS) 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 (loss) (AOCI) on the Company’s Consolidated Balance Sheets. Other securities within fixed maturity securities consist of bank loans, which are classified as AFS and are reported at fair value. The amortized cost, gross unrealized gains, gross unrealized losses, and estimated fair value of the Company’s AFS investments were as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in millions) At September 30, 2019 Fixed maturity securities U.S. Treasuries $ 82.0 $ 2.2 $ — $ 84.2 U.S. Agencies 2.7 0.2 — 2.9 States and municipalities 464.8 27.9 — 492.7 Corporate securities 1,035.9 41.9 — 1,077.8 Residential mortgage-backed securities 472.6 8.6 (0.8 ) 480.4 Commercial mortgage-backed securities 100.7 4.6 — 105.3 Asset-backed securities 56.7 1.3 — 58.0 Other securities 179.2 1.1 (0.8 ) 179.5 Total fixed maturity securities $ 2,394.6 87.8 (1.6 ) $ 2,480.8 At December 31, 2018 Fixed maturity securities U.S. Treasuries $ 106.7 $ 0.9 $ (1.2 ) $ 106.4 U.S. Agencies 11.3 0.1 — 11.4 States and municipalities 513.4 15.3 (0.7 ) 528.0 Corporate securities 1,106.2 5.8 (21.6 ) 1,090.4 Residential mortgage-backed securities 459.1 2.2 (9.8 ) 451.5 Commercial mortgage-backed securities 96.7 0.1 (2.5 ) 94.3 Asset-backed securities 64.7 0.2 (0.4 ) 64.5 Other securities 155.6 — (5.7 ) 149.9 Total fixed maturity securities $ 2,513.7 24.6 (41.9 ) $ 2,496.4 Total short-term investments $ 25.0 — — $ 25.0 The Company’s investment in equity securities are recorded at fair value with changes in the fair value included in Net realized and unrealized gains (losses) on investments on the Company’s Consolidated Statements of Comprehensive Income. The Company’s investment in FHLB stock is presented within Equity securities at cost on the Company’s Consolidated Balance Sheets. The cost and estimated fair value of the Company’s equity securities recorded at fair value at September 30, 2019 and December 31, 2018 were as follows: Cost Estimated Fair Value (in millions) At September 30, 2019 Equity securities at fair value Industrial and miscellaneous $ 171.8 $ 246.1 Other 27.2 38.6 Total equity securities at fair value $ 199.0 $ 284.7 At December 31, 2018 Equity securities at fair value Industrial and miscellaneous $ 114.6 $ 174.8 Other 17.3 25.1 Total equity securities at fair value $ 131.9 $ 199.9 The Company has investments in private equity limited partnerships that totaled $4.7 million (initial cost of $4.9 million ) at September 30, 2019 , which are carried at NAV based on information provided by the general partner. The Company also has investments in convertible preferred shares of real estate investment trusts that totaled $20.0 million at September 30, 2019 , which are carried at cost and approximate fair value. These investments are non-redeemable until conversion and are periodically evaluated by the Company for impairment based on the ultimate recovery of the investment. Both of these investments are included in Other invested assets on the Company’s Consolidated Balance Sheets, and changes in the value of these investments are recorded through net realized and unrealized gains and losses on the Company’s Consolidated Statements of Comprehensive Income. The Company had no Other invested assets at December 31, 2018 . The amortized cost and estimated fair value of the Company’s fixed maturity securities at September 30, 2019 , 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 $ 131.1 $ 132.1 Due after one year through five years 796.1 818.6 Due after five years through ten years 783.1 826.0 Due after ten years 54.3 60.4 Mortgage and asset-backed securities 630.0 643.7 Total $ 2,394.6 $ 2,480.8 The following is a summary of AFS 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 September 30, 2019 and December 31, 2018 . September 30, 2019 December 31, 2018 Estimated Fair Value Gross Number of Issues Estimated Fair Value Gross Number of Issues (in millions, except number of issues data) Less than 12 months: Fixed maturity securities U.S. Treasuries $ — $ — — $ 12.2 $ (0.1 ) 7 States and municipalities — — — 70.1 (0.7 ) 21 Corporate securities — — — 624.4 (13.4 ) 205 Residential mortgage-backed securities — — — 156.9 (2.5 ) 59 Commercial mortgage-backed securities — — — 30.9 (0.5 ) 13 Asset-backed securities — — — 25.1 (0.2 ) 18 Other securities 46.4 (0.8 ) 125 137.1 (5.7 ) 215 Total less than 12 months $ 46.4 $ (0.8 ) 125 $ 1,056.7 $ (23.1 ) 538 12 months or greater: Fixed maturity securities U.S. Treasuries $ — $ — — $ 72.7 $ (1.1 ) 25 Corporate securities — — — 193.7 (8.2 ) 69 Residential mortgage-backed securities 65.1 (0.8 ) 28 199.8 (7.3 ) 72 Commercial mortgage-backed securities — — — 55.0 (2.0 ) 22 Asset-backed securities — — — 16.5 (0.2 ) 17 Total 12 months or greater $ 65.1 $ (0.8 ) 28 $ 537.7 $ (18.8 ) 205 There were no other-than-temporary impairments on fixed maturity securities recognized during the nine months ended September 30, 2019 . The Company recognized impairments on fixed maturity securities of $2.0 million (consisting of fifty-seven securities) during the nine months ended September 30, 2018 as a result of the Company’s intent to sell these securities. The Company determined that the remaining unrealized losses on fixed maturity securities for the nine months ended September 30, 2018 were primarily the result of changes in prevailing interest rates and not the credit quality of the issuers. The fixed maturity securities whose total fair value was less than amortized cost were not determined to be other-than-temporarily impaired given the lack of severity and duration of the impairment, the credit quality of the issuers, the Company’s intent to not sell the securities, and a determination that it is not more likely than not that the Company will be required to sell the securities at an amount less than their amortized cost. Realized gains and losses on investments include the gain or loss on a security at the time of sale compared to its original or adjusted cost (equity securities) or amortized cost (fixed maturity securities). Realized losses on fixed maturity securities are also recognized when securities are written down as a result of an other-than-temporary impairment. Net realized gains (losses) on investments and the change in unrealized gains on the Company’s investments recorded at fair value are determined on a specific-identification basis and were as follows: Gross Realized Gains Gross Realized Losses Change in Net Unrealized Gains (Losses) Changes in Fair Value Reflected in Earnings Changes in Fair Value Reflected in AOCI, before tax (in millions) Three Months Ended September 30, 2019 Fixed maturity securities $ 2.3 $ (0.3 ) $ 18.7 $ 2.0 $ 18.7 Equity securities 14.0 (3.0 ) (10.3 ) 0.7 — Other invested assets — — (0.2 ) (0.2 ) — Cash equivalents 0.1 — — 0.1 — Total investments $ 16.4 $ (3.3 ) $ 8.2 $ 2.6 $ 18.7 Nine Months Ended September 30, 2019 Fixed maturity securities $ 3.9 $ (1.0 ) $ 103.5 $ 2.9 $ 103.5 Equity securities 16.7 (3.9 ) 17.7 30.5 — Other invested assets — — (0.2 ) (0.2 ) — Cash equivalents 0.1 — — 0.1 — Total investments $ 20.7 $ (4.9 ) $ 121.0 $ 33.3 $ 103.5 Three Months Ended September 30, 2018 Fixed maturity securities $ — $ — $ (11.6 ) $ — $ (11.6 ) Equity securities 4.9 (0.5 ) 11.2 15.6 — Total investments $ 4.9 $ (0.5 ) $ (0.4 ) $ 15.6 $ (11.6 ) Nine Months Ended September 30, 2018 Fixed maturity securities $ 2.1 $ (2.6 ) $ (70.8 ) $ (0.5 ) $ (70.8 ) Equity securities 13.0 (1.1 ) 1.8 13.7 — Total investments $ 15.1 $ (3.7 ) $ (69.0 ) $ 13.2 $ (70.8 ) Proceeds from the sales of fixed maturity securities were $52.9 million and $147.3 million for the three and nine months ended September 30, 2019 , respectively, compared to $1.5 million and $169.8 million for the three and nine months ended September 30, 2018 . Net investment income was as follows: Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (in millions) Fixed maturity securities $ 20.2 $ 18.8 $ 60.8 $ 56.5 Equity securities 2.8 1.5 6.6 4.8 Cash equivalents and restricted cash 0.5 0.9 1.5 1.4 Gross investment income 23.5 21.2 68.9 62.7 Investment expenses (1.2 ) (1.0 ) (3.4 ) (2.8 ) Net investment income $ 22.3 $ 20.2 $ 65.5 $ 59.9 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 September 30, 2019 and December 31, 2018 , securities having a fair value of $846.5 million and $867.7 million , respectively, were on deposit. Additionally, standby letters of credit from the FHLB were in place in lieu of $260.0 million of securities on deposit as of September 30, 2019 (See Note 10 ). 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 September 30, 2019 and December 31, 2018 was $3.2 million and $23.2 million |
Property and Equipment Level 1
Property and Equipment Level 1 (Notes) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | Property and Equipment Property and equipment consists of the following: As of September 30, As of December 31, 2019 2018 (in millions) Furniture and equipment $ 2.5 $ 3.3 Leasehold improvements 6.0 3.2 Computers and software 66.3 61.9 Automobiles 1.1 1.1 Property and equipment, gross 75.9 69.5 Accumulated depreciation (52.0 ) (51.3 ) Property and equipment, net $ 23.9 $ 18.2 Depreciation expenses related to property and equipment for the three and nine months ended September 30, 2019 were $2.8 million and $6.5 million , respectively, and $6.1 million for the year ended December 31, 2018 . Internally developed software costs of $0.9 million and $2.5 million were capitalized during the three and nine months ended September 30, 2019 , respectively, and $2.9 million in internally developed software costs were capitalized during the year ended December 31, 2018 . Cloud Computing Arrangements The Company’s capitalized costs associated with cloud computing arrangements totaled $30.4 million and $26.0 million , which were comprised of service contract fees and implementation costs associated with hosting arrangements on the Company’s Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018 , respectively. Total amortization for hosting arrangements for the three and nine months ended September 30, 2019 was $1.7 million and $3.8 million , respectively, and $0.8 million for the year ended December 31, 2018 . Leases The Company determines if an arrangement is a lease at the inception of the transaction. Operating leases for offices are presented as a right-of-use asset (ROU asset) and lease liability on the Company’s Consolidated Balance Sheets. Financing leases for automobiles are included in property and equipment and other liabilities on the Company’s Consolidated Balance Sheets. The Company elected the practical expedients provided in ASU Number 2018-11, Leases (Topic 842): Targeted Improvements and ASU Number 2016-02, Leases (Topic 842), allowing the Company to apply provisions of the new guidance at the date of adoption without adjusting comparative periods presented. ROU assets represent the right to use an underlying asset for the lease term and the lease liability represents the obligation to make lease payments arising from the lease transaction. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of the lease payments over the lease term. The Company uses collateralized incremental borrowing rates to determine the present value of lease payments. The ROU assets also include lease payments less any lease incentives within a lease agreement. The Company’s lease terms may include options to extend or terminate a lease. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company’s operating leases have remaining terms of 1 year to 8 years , with options to extend up to 10 years with no termination provision. The Company’s finance leases have an option to terminate after 1 year . Components of lease expense were as follows: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 (in millions) Operating lease expense $ 1.3 $ 3.8 Finance lease expense 0.1 0.2 Total lease expense $ 1.4 $ 4.0 As of September 30, 2019 , the weighted average remaining lease term for operating leases was 6.6 years and for finance leases was 2.7 years . The weighted average discount rate was 3.3% and 3.7% for operating and finance leases, respectively . Maturities of lease liabilities were as follows: As of September 30, 2019 Operating Leases Finance Leases (in millions) 2019 $ 1.3 $ 0.2 2020 4.5 0.2 2021 3.1 0.2 2022 1.9 — 2023 2.0 — Thereafter 6.1 — Total lease payments 18.9 0.6 Less: inputed interest (1.8 ) — Total $ 17.1 $ 0.6 Supplemental balance sheet information related to leases was as follows: As of September 30, 2019 (in millions) Operating leases: Operating lease right-of-use asset $ 15.0 Operating lease liability 17.1 Finance leases: Property and equipment, gross 1.1 Accumulated depreciation (0.5 ) Property and equipment, net 0.6 Other liabilities $ 0.6 Supplemental cash flow information related to leases was as follows: Nine Months Ended September 30, 2019 (in millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases $ 3.8 Financing cash flows used for finance leases 0.2 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Taxes [Abstract] | |
Income Taxes | Income Taxes Income tax expense for interim periods is measured using an estimated effective tax rate for the annual period. The Company’s effective tax rates were 19.8% and 17.7% for the three and nine months ended September 30, 2019 , respectively, compared to 18.4% and 16.8% for the same periods of 2018 . Tax-advantaged investment income, Deferred Gain amortization, LPT Reserve Adjustments, LPT Contingent Commission Adjustments, and certain other adjustments reduced the Company’s effective income tax rate below the U.S. statutory rate of 21% . |
Liability for Unpaid Losses and
Liability for Unpaid Losses and Loss Adjustment Expenses | 9 Months Ended |
Sep. 30, 2019 | |
Liability for Unpaid Losses and Loss Adjustment Expenses [Abstract] | |
Liability for Unpaid Losses and Loss Adjustment Expenses | Liability for Unpaid Losses and Loss Adjustment Expenses The following table represents a reconciliation of changes in the liability for unpaid losses and LAE. Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (in millions) Unpaid losses and LAE at beginning of period $ 2,161.8 $ 2,227.9 $ 2,207.9 $ 2,266.1 Less reinsurance recoverable, excluding bad debt allowance, on unpaid losses and LAE 484.2 512.5 504.4 537.0 Net unpaid losses and LAE at beginning of period 1,677.6 1,715.4 1,703.5 1,729.1 Losses and LAE, net of reinsurance, incurred during the period related to: Current period 115.4 121.1 344.8 342.5 Prior periods (20.2 ) (11.9 ) (66.1 ) (40.8 ) Total net losses and LAE incurred during the period 95.2 109.2 278.7 301.7 Paid losses and LAE, net of reinsurance, related to: Current period 32.9 31.2 63.5 56.9 Prior periods 69.7 71.5 248.5 252.0 Total net paid losses and LAE during the period 102.6 102.7 312.0 308.9 Ending unpaid losses and LAE, net of reinsurance 1,670.2 1,721.9 1,670.2 1,721.9 Reinsurance recoverable, excluding bad debt allowance, on unpaid losses and LAE 527.1 511.8 527.1 511.8 Unpaid losses and LAE at end of period $ 2,197.3 $ 2,233.7 $ 2,197.3 $ 2,233.7 Total net losses and LAE included in the above table exclude amortization of the deferred reinsurance gain—LPT Agreement, LPT Reserve Adjustments, and LPT Contingent Commission Adjustments, which totaled $2.3 million and $2.6 million for the three months ended September 30, 2019 and 2018 , respectively and $10.5 million and $12.0 million for the nine months ended September 30, 2019 and 2018 , respectively (See Note 9 ). The change in incurred losses and LAE attributable to prior periods included $20.0 million and $66.0 million of favorable development on the Company’s voluntary risk business for the three and nine months ended September 30, 2019 , respectively, and $0.2 million and $0.1 million of favorable development on the Company’s assigned risk business for the same periods. The change in incurred losses and LAE attributable to prior periods for the three and nine months ended September 30, 2018 included $12.0 million and $40.5 million of favorable development on the Company’s voluntary risk business, respectively, and $0.1 million of unfavorable development and $0.3 million of favorable development on the Company’s assigned risk business for the three and nine months ended September 30, 2018 , respectively. The favorable prior accident year loss development on voluntary business during the three and nine months ended September 30, 2019 and 2018 was the result of the Company’s determination that adjustments were necessary to reflect observed favorable paid loss trends, which have been impacted by cost savings associated with accelerated claims settlement activity that began in 2014 and continued in 2019. |
LPT Agreement
LPT Agreement | 9 Months Ended |
Sep. 30, 2019 | |
LPT Agreement [Abstract] | |
LPT Agreement | LPT Agreement The Company is party to the LPT Agreement under which $1.5 billion in liabilities for losses and LAE related to claims incurred by the Fund prior to July 1, 1995 were reinsured for consideration of $775.0 million . The LPT Agreement provides coverage up to $2.0 billion . The Company records its estimate of contingent profit commission in the accompanying Consolidated Balance Sheets as Contingent commission receivable–LPT Agreement and a corresponding liability is recorded in the accompanying Consolidated Balance Sheets in Deferred reinsurance gain–LPT Agreement. The Deferred Gain is being amortized using the recovery method. Amortization is determined by the proportion of actual reinsurance recoveries to total estimated recoveries over the life of the LPT Agreement, except for the contingent profit commission, which is amortized through June 30, 2024, the date through which the Company is entitled to receive a contingent profit commission under the LPT Agreement. The amortization is recorded in losses and LAE incurred in the accompanying consolidated statements of comprehensive income. Any adjustments to the Deferred Gain are recorded in losses and LAE incurred in the accompanying consolidated statements of comprehensive income. The Company amortized $2.3 million and $2.6 million of the Deferred Gain for the three months ended September 30, 2019 and 2018 , respectively, and $8.5 million and $9.3 million for the nine months ended September 30, 2019 and 2018 , respectively. Additionally, the Deferred Gain was further reduced by $1.8 million and $2.2 million for the nine months ended September 30, 2019 and 2018 , respectively, due to a favorable LPT Reserve Adjustment and by $0.2 million and $0.5 million due to favorable LPT Contingent Commission Adjustments for the nine months ended September 30, 2019 and 2018 , respectively. The remaining Deferred Gain was $139.4 million and $149.6 million as of September 30, 2019 and December 31, 2018 , respectively. The estimated remaining liabilities subject to the LPT Agreement were $385.8 million and $408.2 million as of September 30, 2019 and December 31, 2018 , respectively. Losses and LAE paid with respect to the LPT Agreement totaled $790.8 million and $773.7 million from inception through September 30, 2019 and December 31, 2018 , respectively. |
Notes Payable Level 1 (Notes)
Notes Payable Level 1 (Notes) | 9 Months Ended |
Sep. 30, 2019 | |
Notes Payable [Abstract] | |
Debt Disclosure [Text Block] | Notes Payable and Other Financing Arrangements Notes payable is comprised of the following: September 30, 2019 December 31, 2018 (in millions) Dekania Surplus Note, due April 29, 2034 $ — $ 10.0 Alesco Surplus Note, due December 15, 2034 — 10.0 Total $ — $ 20.0 EPIC had a $10.0 million surplus note to Dekania CDO II, Ltd. (Dekania) issued as part of a pooled transaction. On April 12, 2019, the Florida Office of Insurance Regulation approved EPIC’s request to pay off the Dekania surplus note. Subsequently, on April 15, 2019, EPIC formally called this note. The outstanding principal, plus accrued and unpaid interest, in the amount of $10.2 million , was paid on May 14, 2019. EPIC had a $10.0 million surplus note to Alesco Preferred Funding V, LTD (Alesco) issued as part of a pooled transaction. On April 12, 2019, the Florida Office of Insurance Regulation approved EPIC’s request to pay off the Alesco surplus note. Subsequently, on May 6, 2019, EPIC formally called this note. The outstanding principal, plus accrued and unpaid interest, in the amount of $10.2 million , was paid on June 13, 2019. Other financing arrangements are comprised of the following: EICN, ECIC, EPIC, and EAC are members of the FHLB. Membership allows the insurance subsidiaries access to collateralized advances, which may be used to support and enhance liquidity management. The amount of advances that may be taken is dependent on statutory admitted assets on a per company basis. Currently, none of the Company’s insurance subsidiaries has advances outstanding under the FHLB facility. FHLB membership also allows the Company’s insurance subsidiaries access to standby letters of credit. On March 9, 2018, ECIC, EPIC, and EAC entered into standby Letter of Credit Reimbursement Agreements (Letter of Credit Agreements) with the FHLB. On March 1, 2019, FHLB and ECIC, EPIC, and EAC each amended their Letter of Credit Agreements to increase their respective credit amounts. The Letter of Credit Agreements are between the FHLB and each of EAC, in the amount of $60.0 million , ECIC, in the amount of $90.0 million , and EPIC, in the amount of $110.0 million . The amended Letter of Credit Agreements will expire on March 31, 2020; however, the Letter of Credit Agreements will remain evergreen with automatic one-year extensions unless the FHLB notifies the beneficiary at least 60 days prior to the then applicable expiration date of its election not to renew. The Letter of Credit Agreements may only be used to satisfy, in whole or in part, insurance deposit requirements with the State of California and are fully secured with eligible collateral at all times. The Letter of Credit Agreements are subject to annual maintenance charges and a fee of 15 basis points on issued amounts. As of September 30, 2019 , letters of credit totaling $260.0 million were issued in lieu of securities on deposit with the State of California under these Letter of Credit Agreements. As of September 30, 2019 , investment securities having a fair value of $351.0 million were pledged to the FHLB by the Company’s insurance subsidiaries in support of the collateralized advance facility and the Letter of Credit Agreements. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2019 | |
Accumulated Other Comprehensive Income [Abstract] | |
Accumulated Other Comprehensive Income, Net | Accumulated Other Comprehensive Income Accumulated other comprehensive income is comprised of unrealized gains (losses) on investments classified as AFS, net of deferred tax expense. Beginning in 2018, with the adoption of ASU 2016-01, the Company’s investments in equity securities at fair value are no longer considered to be AFS and are reported at fair value with unrealized gains and losses included in Net realized and unrealized gains (losses) on investments on the Company’s Consolidated Statements of Comprehensive Income. Prior to 2018, investments in equity securities at fair value were classified as AFS and changes in fair value were excluded from earnings and reported in accumulated other comprehensive income. The following table summarizes the components of accumulated other comprehensive income (loss): September 30, 2019 December 31, 2018 (in millions) Net unrealized gains (losses) on investments, before taxes $ 86.2 $ (17.3 ) Deferred tax (expense) benefit on net unrealized gains (losses) (18.1 ) 3.6 Total accumulated other comprehensive income (loss) $ 68.1 $ (13.7 ) |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Stock-Based Compensation [Abstract] | |
Stock-Based compensation | Stock-Based Compensation The Company awarded restricted stock units (RSUs) and performance share units (PSUs) to certain employees and non-employee Directors of the Company as follows: Number Awarded Weighted Average Fair Value on Date of Grant Aggregate Fair Value on Date of Grant (in millions) March 2019 RSUs (1) 72,060 $ 40.54 $ 2.9 PSUs (2) 95,940 40.54 3.9 May 2019 RSUs (3) 17,050 $ 40.76 $ 0.7 August 2019 PSUs (2) 9,587 $ 41.72 $ 0.4 (1) The RSUs awarded in March 2019 were awarded to certain employees of the Company and vest 25% on March 15, 2020, and each of the subsequent three anniversaries of that date . The RSUs are subject to accelerated vesting in certain circumstances, including but not limited to: death, disability, retirement, or in connection with a change of control of the Company. (2) The PSUs awarded in March 2019 and August 2019 were awarded to certain employees of the Company and have a performance period of two years followed by an additional one year vesting period. The PSU awards are subject to certain performance goals with payouts that range from 0% to 200% of the target awards. The value shown in the table represents the aggregate number of PSUs awarded at the target level. (3) The RSUs awarded in May 2019 were awarded to non-employee Directors of the Company and vest in full on May 23, 2020 . Employees who were awarded RSUs and PSUs are entitled to receive dividend equivalents for eligible awards, payable in cash, when the underlying award vests and becomes payable. If the underlying award does not vest or is forfeited, any dividend equivalents with respect to the underlying award will also fail to become payable and will be forfeited. Stock options exercised totaled 25,580 for the nine months ended September 30, 2019 , 51,091 for the nine months ended September 30, 2018 , and 57,091 for the year ended December 31, 2018 . As of September 30, 2019 , the Company had 160,066 options, 237,077 RSUs, and 258,765 PSUs (based on target number awarded) outstanding. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing net income by the weighted average number of shares outstanding for the period. Diluted earnings per share reflects the potential dilutive impact of all common stock equivalents on earnings per share. Diluted earnings per share includes shares that are assumed to be issued under the “treasury stock method,” which reflects the potential dilution that would occur if outstanding RSUs and PSUs had vested and options were to be exercised. Commencing in 2017, certain stock-based compensation awards are eligible to receive dividend equivalents on awards that fully vest or become payable. The dividend equivalents are reflected in the Company’s net income; therefore, these awards are not considered participating securities for the purposes of determining earnings per share. The following table presents the net income and the weighted average number of shares outstanding used in the earnings per common share calculations. Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (in millions, except share data) Net income—basic and diluted $ 32.8 $ 47.6 $ 125.4 $ 115.7 Weighted average number of shares outstanding—basic 31,946,851 32,906,250 32,168,826 32,864,612 Effect of dilutive securities: PSUs 255,663 253,612 278,641 253,269 Stock options 80,889 104,450 79,954 101,907 RSUs 34,614 51,852 60,034 59,002 Dilutive potential shares 371,166 409,914 418,629 414,178 Weighted average number of shares outstanding—diluted 32,318,017 33,316,164 32,587,455 33,278,790 |
Change in Estimates Change in E
Change in Estimates Change in Estimates (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Change in Estimates [Abstract] | |
Change due to Estimated Reserves Ceded Under the LPT agreement [Table Text Block] | The following table shows the financial statement impact related to the LPT Reserve Adjustment. Nine Months Ended September 30, 2019 (in millions, except per share data) LPT Reserve Adjustment $ (5.3 ) Cumulative adjustment to the Deferred Gain (1) (1.8 ) Net income impact from this change in estimate 1.8 Earnings per common share impact from this change in estimate: Basic and Diluted 0.06 (1) The cumulative adjustment to the Deferred reinsurance gain–LPT Agreement (Deferred Gain) was also recognized in losses and LAE incurred in the Company’s Consolidated Statement 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 to Contingent Profit Commission [Table Text Block] | The following table shows the financial statement impact related to the LPT Contingent Commission Adjustment. Nine Months Ended September 30, 2019 (in millions, except per share data) LPT Contingent Commission Adjustment $ 0.3 Net income impact from this change in estimate 0.2 Earnings per common share impact from this change in estimate: Basic and Diluted 0.01 |
Valuation of Financial Instru_2
Valuation of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 at fair value were as follows: September 30, 2019 December 31, 2018 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value (in millions) Financial assets Total investments at fair value $ 2,765.5 $ 2,765.5 $ 2,721.3 $ 2,721.3 Cash and cash equivalents 140.3 140.3 101.4 101.4 Restricted cash and cash equivalents 0.3 0.3 0.6 0.6 Financial liabilities Notes payable $ — $ — $ 20.0 $ 23.5 |
Fair value, assets and liabilities measured on recurring basis table | The following table presents the Company’s investments at fair value and the corresponding fair value measurements. September 30, 2019 December 31, 2018 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in millions) Fixed maturity securities: U.S. Treasuries $ — $ 84.2 $ — $ — $ 106.4 $ — U.S. Agencies — 2.9 — — 11.4 — States and municipalities — 492.7 — — 528.0 — Corporate securities — 1,077.8 — — 1,090.4 — Residential mortgage-backed securities — 480.4 — — 451.5 — Commercial mortgage-backed securities — 105.3 — — 94.3 — Asset-backed securities — 58.0 — — 64.5 — Other securities — 179.5 — — 149.9 — Total fixed maturity securities $ — $ 2,480.8 $ — $ — $ 2,496.4 $ — Equity securities at fair value: Industrial and miscellaneous $ 246.1 $ — $ — $ 174.8 $ — $ — Other 38.6 — — 25.1 — — Total equity securities at fair value $ 284.7 $ — $ — $ 199.9 $ — $ — Short-term investments $ — $ — $ — $ — $ 25.0 $ — Total investments at fair value $ 284.7 $ 2,480.8 $ — $ 199.9 $ 2,521.4 $ — |
Fair value, assets measured on recurring basis, unobservable input reconciliation table | The following table provides a reconciliation of the beginning and ending balances of investments that are recorded at fair value and are measured using Level 3 inputs for the nine months ended September 30, 2019 and 2018 . Nine Months Ended September 30, 2019 September 30, 2018 Level 3 Securities: (in millions) Beginning balance, January 1 $ — $ 4.7 Transfers out of Level 3 (1) — (4.7 ) Purchases and sales, net — — Ending balance, September 30 $ — $ — (1) The transfer during the nine months ended September 30, 2018 was the result of adoption of ASU 2016-01, which specified that FHLB stock shall be carried at cost and is therefore excluded from the fair value hierarchy. Financial Instruments Carried at Net Asset Value (NAV) The Company has investments in private equity limited partnership interests that are included in Other invested assets on the Company’s Consolidated Balance Sheets. These investments do not have readily determinable fair values and are carried at NAV and therefore are excluded from the fair value hierarchy. The Company initially estimates the value of these investments using the transaction price. In subsequent periods, the Company measures these investments using NAV per share provided quarterly by the general partner, based on financial statements that are audited annually. The Company performs certain control procedures to validate the appropriateness of using NAV as a measurement. These investments are generally not redeemable by the investees and cannot be sold without approval of the general partner. These investments have a fund term of 12 years , subject to three one year extensions at the general partner’s discretion. The Company will receive distributions of proceeds from dividends and interest from fund investments, as well as from the disposition of a fund investment, or portion thereof. The Company expects these distributions from time-to-time during the full course of the fund term. As of September 30, 2019 , the Company had unfunded commitments to these private equity limited partnerships totaling $45.1 million . Additionally, certain cash equivalents, principally money market securities, are measured using NAV, which approximates fair value. The following table presents cash and investments carried at NAV on the Company’s Consolidated Balance Sheets. September 30, 2019 December 31, 2018 (in millions) Cash equivalents carried at NAV $ 100.2 $ 57.5 Other invested assets carried at NAV 4.7 — |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Table Text Block] | The following table presents cash and investments carried at NAV on the Company’s Consolidated Balance Sheets. September 30, 2019 December 31, 2018 (in millions) Cash equivalents carried at NAV $ 100.2 $ 57.5 Other invested assets carried at NAV 4.7 — |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Investments [Abstract] | |
Available-for-sale securities table | The amortized cost, gross unrealized gains, gross unrealized losses, and estimated fair value of the Company’s AFS investments were as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in millions) At September 30, 2019 Fixed maturity securities U.S. Treasuries $ 82.0 $ 2.2 $ — $ 84.2 U.S. Agencies 2.7 0.2 — 2.9 States and municipalities 464.8 27.9 — 492.7 Corporate securities 1,035.9 41.9 — 1,077.8 Residential mortgage-backed securities 472.6 8.6 (0.8 ) 480.4 Commercial mortgage-backed securities 100.7 4.6 — 105.3 Asset-backed securities 56.7 1.3 — 58.0 Other securities 179.2 1.1 (0.8 ) 179.5 Total fixed maturity securities $ 2,394.6 87.8 (1.6 ) $ 2,480.8 At December 31, 2018 Fixed maturity securities U.S. Treasuries $ 106.7 $ 0.9 $ (1.2 ) $ 106.4 U.S. Agencies 11.3 0.1 — 11.4 States and municipalities 513.4 15.3 (0.7 ) 528.0 Corporate securities 1,106.2 5.8 (21.6 ) 1,090.4 Residential mortgage-backed securities 459.1 2.2 (9.8 ) 451.5 Commercial mortgage-backed securities 96.7 0.1 (2.5 ) 94.3 Asset-backed securities 64.7 0.2 (0.4 ) 64.5 Other securities 155.6 — (5.7 ) 149.9 Total fixed maturity securities $ 2,513.7 24.6 (41.9 ) $ 2,496.4 Total short-term investments $ 25.0 — — $ 25.0 |
Equity securities table | The cost and estimated fair value of the Company’s equity securities recorded at fair value at September 30, 2019 and December 31, 2018 were as follows: Cost Estimated Fair Value (in millions) At September 30, 2019 Equity securities at fair value Industrial and miscellaneous $ 171.8 $ 246.1 Other 27.2 38.6 Total equity securities at fair value $ 199.0 $ 284.7 At December 31, 2018 Equity securities at fair value Industrial and miscellaneous $ 114.6 $ 174.8 Other 17.3 25.1 Total equity securities at fair value $ 131.9 $ 199.9 |
Other invested assets | . |
Investments classified by contractual maturity date table | The amortized cost and estimated fair value of the Company’s fixed maturity securities at September 30, 2019 , 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 $ 131.1 $ 132.1 Due after one year through five years 796.1 818.6 Due after five years through ten years 783.1 826.0 Due after ten years 54.3 60.4 Mortgage and asset-backed securities 630.0 643.7 Total $ 2,394.6 $ 2,480.8 |
Unrealized loss on investments table | The following is a summary of AFS 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 September 30, 2019 and December 31, 2018 . September 30, 2019 December 31, 2018 Estimated Fair Value Gross Number of Issues Estimated Fair Value Gross Number of Issues (in millions, except number of issues data) Less than 12 months: Fixed maturity securities U.S. Treasuries $ — $ — — $ 12.2 $ (0.1 ) 7 States and municipalities — — — 70.1 (0.7 ) 21 Corporate securities — — — 624.4 (13.4 ) 205 Residential mortgage-backed securities — — — 156.9 (2.5 ) 59 Commercial mortgage-backed securities — — — 30.9 (0.5 ) 13 Asset-backed securities — — — 25.1 (0.2 ) 18 Other securities 46.4 (0.8 ) 125 137.1 (5.7 ) 215 Total less than 12 months $ 46.4 $ (0.8 ) 125 $ 1,056.7 $ (23.1 ) 538 12 months or greater: Fixed maturity securities U.S. Treasuries $ — $ — — $ 72.7 $ (1.1 ) 25 Corporate securities — — — 193.7 (8.2 ) 69 Residential mortgage-backed securities 65.1 (0.8 ) 28 199.8 (7.3 ) 72 Commercial mortgage-backed securities — — — 55.0 (2.0 ) 22 Asset-backed securities — — — 16.5 (0.2 ) 17 Total 12 months or greater $ 65.1 $ (0.8 ) 28 $ 537.7 $ (18.8 ) 205 |
Unrealized gain (loss) on investments | Net realized gains (losses) on investments and the change in unrealized gains on the Company’s investments recorded at fair value are determined on a specific-identification basis and were as follows: Gross Realized Gains Gross Realized Losses Change in Net Unrealized Gains (Losses) Changes in Fair Value Reflected in Earnings Changes in Fair Value Reflected in AOCI, before tax (in millions) Three Months Ended September 30, 2019 Fixed maturity securities $ 2.3 $ (0.3 ) $ 18.7 $ 2.0 $ 18.7 Equity securities 14.0 (3.0 ) (10.3 ) 0.7 — Other invested assets — — (0.2 ) (0.2 ) — Cash equivalents 0.1 — — 0.1 — Total investments $ 16.4 $ (3.3 ) $ 8.2 $ 2.6 $ 18.7 Nine Months Ended September 30, 2019 Fixed maturity securities $ 3.9 $ (1.0 ) $ 103.5 $ 2.9 $ 103.5 Equity securities 16.7 (3.9 ) 17.7 30.5 — Other invested assets — — (0.2 ) (0.2 ) — Cash equivalents 0.1 — — 0.1 — Total investments $ 20.7 $ (4.9 ) $ 121.0 $ 33.3 $ 103.5 Three Months Ended September 30, 2018 Fixed maturity securities $ — $ — $ (11.6 ) $ — $ (11.6 ) Equity securities 4.9 (0.5 ) 11.2 15.6 — Total investments $ 4.9 $ (0.5 ) $ (0.4 ) $ 15.6 $ (11.6 ) Nine Months Ended September 30, 2018 Fixed maturity securities $ 2.1 $ (2.6 ) $ (70.8 ) $ (0.5 ) $ (70.8 ) Equity securities 13.0 (1.1 ) 1.8 13.7 — Total investments $ 15.1 $ (3.7 ) $ (69.0 ) $ 13.2 $ (70.8 ) |
Investment income table | Net investment income was as follows: Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (in millions) Fixed maturity securities $ 20.2 $ 18.8 $ 60.8 $ 56.5 Equity securities 2.8 1.5 6.6 4.8 Cash equivalents and restricted cash 0.5 0.9 1.5 1.4 Gross investment income 23.5 21.2 68.9 62.7 Investment expenses (1.2 ) (1.0 ) (3.4 ) (2.8 ) Net investment income $ 22.3 $ 20.2 $ 65.5 $ 59.9 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment [Table Text Block] | Property and equipment consists of the following: As of September 30, As of December 31, 2019 2018 (in millions) Furniture and equipment $ 2.5 $ 3.3 Leasehold improvements 6.0 3.2 Computers and software 66.3 61.9 Automobiles 1.1 1.1 Property and equipment, gross 75.9 69.5 Accumulated depreciation (52.0 ) (51.3 ) Property and equipment, net $ 23.9 $ 18.2 |
Lease, Cost [Table Text Block] | Components of lease expense were as follows: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 (in millions) Operating lease expense $ 1.3 $ 3.8 Finance lease expense 0.1 0.2 Total lease expense $ 1.4 $ 4.0 |
Lessee, Operating and Finance Lease Liability Maturity [Table Text Block] | Maturities of lease liabilities were as follows: As of September 30, 2019 Operating Leases Finance Leases (in millions) 2019 $ 1.3 $ 0.2 2020 4.5 0.2 2021 3.1 0.2 2022 1.9 — 2023 2.0 — Thereafter 6.1 — Total lease payments 18.9 0.6 Less: inputed interest (1.8 ) — Total $ 17.1 $ 0.6 |
Supplemental Balance Sheet Information related to Leases [Table Text Block] | Supplemental balance sheet information related to leases was as follows: As of September 30, 2019 (in millions) Operating leases: Operating lease right-of-use asset $ 15.0 Operating lease liability 17.1 Finance leases: Property and equipment, gross 1.1 Accumulated depreciation (0.5 ) Property and equipment, net 0.6 Other liabilities $ 0.6 |
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block] | Supplemental cash flow information related to leases was as follows: Nine Months Ended September 30, 2019 (in millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases $ 3.8 Financing cash flows used for finance leases 0.2 |
Liability for Unpaid Losses a_2
Liability for Unpaid Losses and Loss Adjustment Expenses (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Liability for Unpaid Losses and Loss Adjustment Expenses [Abstract] | |
Changes in the liability for unpaid losses and LAE table | The following table represents a reconciliation of changes in the liability for unpaid losses and LAE. Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (in millions) Unpaid losses and LAE at beginning of period $ 2,161.8 $ 2,227.9 $ 2,207.9 $ 2,266.1 Less reinsurance recoverable, excluding bad debt allowance, on unpaid losses and LAE 484.2 512.5 504.4 537.0 Net unpaid losses and LAE at beginning of period 1,677.6 1,715.4 1,703.5 1,729.1 Losses and LAE, net of reinsurance, incurred during the period related to: Current period 115.4 121.1 344.8 342.5 Prior periods (20.2 ) (11.9 ) (66.1 ) (40.8 ) Total net losses and LAE incurred during the period 95.2 109.2 278.7 301.7 Paid losses and LAE, net of reinsurance, related to: Current period 32.9 31.2 63.5 56.9 Prior periods 69.7 71.5 248.5 252.0 Total net paid losses and LAE during the period 102.6 102.7 312.0 308.9 Ending unpaid losses and LAE, net of reinsurance 1,670.2 1,721.9 1,670.2 1,721.9 Reinsurance recoverable, excluding bad debt allowance, on unpaid losses and LAE 527.1 511.8 527.1 511.8 Unpaid losses and LAE at end of period $ 2,197.3 $ 2,233.7 $ 2,197.3 $ 2,233.7 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Notes Payable [Abstract] | |
Schedule of long-term debt instruments table | Notes payable is comprised of the following: September 30, 2019 December 31, 2018 (in millions) Dekania Surplus Note, due April 29, 2034 $ — $ 10.0 Alesco Surplus Note, due December 15, 2034 — 10.0 Total $ — $ 20.0 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accumulated Other Comprehensive Income [Abstract] | |
Schedule of accumulated other comprehensive income (loss) table | The following table summarizes the components of accumulated other comprehensive income (loss): September 30, 2019 December 31, 2018 (in millions) Net unrealized gains (losses) on investments, before taxes $ 86.2 $ (17.3 ) Deferred tax (expense) benefit on net unrealized gains (losses) (18.1 ) 3.6 Total accumulated other comprehensive income (loss) $ 68.1 $ (13.7 ) |
Stock-Based Compensation Stock-
Stock-Based Compensation Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Stock-Based Compensation [Abstract] | |
Share-based compensation arrangements by share-based payment award table | The Company awarded restricted stock units (RSUs) and performance share units (PSUs) to certain employees and non-employee Directors of the Company as follows: Number Awarded Weighted Average Fair Value on Date of Grant Aggregate Fair Value on Date of Grant (in millions) March 2019 RSUs (1) 72,060 $ 40.54 $ 2.9 PSUs (2) 95,940 40.54 3.9 May 2019 RSUs (3) 17,050 $ 40.76 $ 0.7 August 2019 PSUs (2) 9,587 $ 41.72 $ 0.4 (1) The RSUs awarded in March 2019 were awarded to certain employees of the Company and vest 25% on March 15, 2020, and each of the subsequent three anniversaries of that date . The RSUs are subject to accelerated vesting in certain circumstances, including but not limited to: death, disability, retirement, or in connection with a change of control of the Company. (2) The PSUs awarded in March 2019 and August 2019 were awarded to certain employees of the Company and have a performance period of two years followed by an additional one year vesting period. The PSU awards are subject to certain performance goals with payouts that range from 0% to 200% of the target awards. The value shown in the table represents the aggregate number of PSUs awarded at the target level. (3) The RSUs awarded in May 2019 were awarded to non-employee Directors of the Company and vest in full on May 23, 2020 . |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net income and weighted average common shares outstanding used in earnings per share calculations table | The following table presents the net income and the weighted average number of shares outstanding used in the earnings per common share calculations. Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (in millions, except share data) Net income—basic and diluted $ 32.8 $ 47.6 $ 125.4 $ 115.7 Weighted average number of shares outstanding—basic 31,946,851 32,906,250 32,168,826 32,864,612 Effect of dilutive securities: PSUs 255,663 253,612 278,641 253,269 Stock options 80,889 104,450 79,954 101,907 RSUs 34,614 51,852 60,034 59,002 Dilutive potential shares 371,166 409,914 418,629 414,178 Weighted average number of shares outstanding—diluted 32,318,017 33,316,164 32,587,455 33,278,790 |
Basis of Presentation Purchase
Basis of Presentation Purchase of PRUS (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Business Acquisition [Line Items] | |
Estimated statutory capital and surplus of pending acquisition | $ 47,600,000 |
Net cash payment to acquire business | 5,800,000 |
Cash Acquired from Acquisition | 37,500,000 |
Noncash or Part Noncash Acquisition, Investments Acquired | 10,200,000 |
Finite-lived Intangible Assets Acquired | 5,800,000 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets | 6,900,000 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities | 7,000,000 |
Business Combination, Consideration Transferred, Liabilities Incurred | 48,300,000 |
Business Combination, Consideration Transferred | 48,300,000 |
Business Combination, Consideration Transferred, Other | $ 0 |
Change in Estimates (Details)
Change in Estimates (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Change in Accounting Estimate [Line Items] | |||||
Net income | $ 32,800 | $ 47,600 | $ 125,400 | $ 115,700 | |
Change Due To Estimated Reserves Ceded Under LPT Agreement Member [Member] | |||||
Change in Accounting Estimate [Line Items] | |||||
LPT reserve adjustment | (5,300) | ||||
Cumulative adjustment to the Deferred Gain | [1] | (1,800) | (2,200) | ||
Net income | $ 1,800 | ||||
Basic and Diluted | $ 0.06 | ||||
Change to Contingent Profit Commission [Member] | |||||
Change in Accounting Estimate [Line Items] | |||||
Net income | $ 200 | $ 500 | |||
Change in estimate of contingent commission receivable | $ 300 | ||||
Basic and Diluted | $ 0.01 | ||||
[1] | The cumulative adjustment to the Deferred reinsurance gain–LPT Agreement (Deferred Gain) was also recognized in losses and LAE incurred in the Company’s Consolidated Statement 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. |
New Accounting Standards Adopte
New Accounting Standards Adopted ASU (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Operating lease right-of-use assets | $ 15 | $ 16.8 | $ 0 |
Operating lease liability | $ 17.1 | $ 19 | $ 0 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total investments at fair value | $ 2,765,500 | $ 2,721,300 |
Total Investments at fair value, estimated fair value | 2,765,500 | 2,721,300 |
Cash and cash equivalents | 140,300 | 101,400 |
Cash and cash equivalents, estimated fair value | 140,300 | 101,400 |
Equity securities at cost | 6,700 | 6,400 |
Restricted cash and cash equivalents | 300 | 600 |
Notes payable | 0 | 20,000 |
Notes Payable, estimated fair value | 0 | 23,500 |
Estimate of Fair Value, Fair Value Disclosure [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Restricted cash and cash equivalents | $ 300 | $ 600 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments, Fair Value Inputs (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | $ 2,480,800 | $ 2,496,400 | ||
Equity Securities, FV-NI | 284,700 | 199,900 | ||
Short-term Investments | 0 | 25,000 | ||
Investments | 2,796,900 | 2,727,700 | ||
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Equity Securities, FV-NI | 284,700 | 199,900 | ||
Short-term Investments | 0 | 0 | ||
Investments | 284,700 | 199,900 | ||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Equity Securities, FV-NI | 0 | 0 | ||
Short-term Investments | 25,000 | |||
Investments | 2,480,800 | 2,521,400 | ||
Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments | 0 | 0 | $ 0 | $ 4,700 |
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Equity Securities, FV-NI | 0 | 0 | ||
Short-term Investments | 0 | 0 | ||
Investments | 0 | 0 | ||
Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 0 | 0 | ||
Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 2,480,800 | 2,496,400 | ||
Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 0 | 0 | ||
US Treasury Securities [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 84,200 | 106,400 | ||
US Treasury Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 0 | 0 | ||
US Treasury Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 84,200 | 106,400 | ||
US Treasury Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 0 | 0 | ||
US Government Agencies Debt Securities [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 2,900 | 11,400 | ||
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 0 | 0 | ||
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 2,900 | 11,400 | ||
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 0 | 0 | ||
US States and Political Subdivisions Debt Securities [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 492,700 | 528,000 | ||
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 0 | 0 | ||
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 492,700 | 528,000 | ||
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 0 | 0 | ||
Corporate Debt Securities [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 1,077,800 | 1,090,400 | ||
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 0 | 0 | ||
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 1,077,800 | 1,090,400 | ||
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 0 | 0 | ||
Residential Mortgage Backed Securities [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 480,400 | 451,500 | ||
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 0 | 0 | ||
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 480,400 | 451,500 | ||
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 0 | 0 | ||
Commercial Mortgage Backed Securities [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 105,300 | 94,300 | ||
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 0 | 0 | ||
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 105,300 | 94,300 | ||
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 0 | 0 | ||
Asset-backed Securities [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 58,000 | 64,500 | ||
Asset-backed Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 0 | 0 | ||
Asset-backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 58,000 | 64,500 | ||
Asset-backed Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 0 | 0 | ||
Other Debt Obligations [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 179,500 | 149,900 | ||
Other Debt Obligations [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 0 | 0 | ||
Other Debt Obligations [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 179,500 | 149,900 | ||
Other Debt Obligations [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturity securities, fair value | 0 | 0 | ||
Industrial and Miscellaneous [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Equity Securities, FV-NI | 246,100 | 174,800 | ||
Industrial and Miscellaneous [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Equity Securities, FV-NI | 246,100 | 174,800 | ||
Industrial and Miscellaneous [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Equity Securities, FV-NI | 0 | 0 | ||
Industrial and Miscellaneous [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Equity Securities, FV-NI | 0 | 0 | ||
Other [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Equity Securities, FV-NI | 38,600 | 25,100 | ||
Other [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Equity Securities, FV-NI | 38,600 | 25,100 | ||
Other [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Equity Securities, FV-NI | 0 | 0 | ||
Other [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Equity Securities, FV-NI | $ 0 | $ 0 |
Valuation of Financial Instru_3
Valuation of Financial Instruments Fair Value of Financial Instruments, Reconciliation of Level 3 Securities (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Beginning balance, January 1 | $ 2,727.7 | ||
Ending balance, September 30 | 2,796.9 | ||
Fair Value, Inputs, Level 3 [Member] | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Beginning balance, January 1 | 0 | $ 4.7 | |
Transfers out of Level 3 (1) | [1] | 0 | (4.7) |
Purchases and sales, net | 0 | 0 | |
Ending balance, September 30 | $ 0 | $ 0 | |
[1] | The transfer during the nine months ended September 30, 2018 was the result of adoption of ASU 2016-01, which specified that FHLB stock shall be carried at cost and is therefore excluded from the fair value hierarchy. |
Valuation of Financial Instru_4
Valuation of Financial Instruments Investments at NAV (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Investments at NAV [Abstract] | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Liquidating Investment, Remaining Period | 12 years | |
Fair value investments entities that calculate net asset value per share liquidating investment original expected lives increments | 1 year | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Unfunded Commitments | $ 45.1 | |
Cash Equivalents Measured at Net Asset Value | 100.2 | $ 57.5 |
Other invested assets at NAV | $ 4.7 | $ 0 |
Investments Available for Sale
Investments Available for Sale Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, amortized cost | $ 2,394,600 | $ 2,513,700 |
Debt securities, available-for-sale, gross unrealized gain | 87,800 | 24,600 |
Debt securities, available-for-sale, gross unrealized loss | (1,600) | (41,900) |
Fixed maturity securities, fair value | 2,480,800 | 2,496,400 |
Short-term Investments | 0 | 25,000 |
US Treasury Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, amortized cost | 82,000 | 106,700 |
Debt securities, available-for-sale, gross unrealized gain | 2,200 | 900 |
Debt securities, available-for-sale, gross unrealized loss | 0 | (1,200) |
Fixed maturity securities, fair value | 84,200 | 106,400 |
US Government Agencies Debt Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, amortized cost | 2,700 | 11,300 |
Debt securities, available-for-sale, gross unrealized gain | 200 | 100 |
Debt securities, available-for-sale, gross unrealized loss | 0 | 0 |
Fixed maturity securities, fair value | 2,900 | 11,400 |
US States and Political Subdivisions Debt Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, amortized cost | 464,800 | 513,400 |
Debt securities, available-for-sale, gross unrealized gain | 27,900 | 15,300 |
Debt securities, available-for-sale, gross unrealized loss | 0 | (700) |
Fixed maturity securities, fair value | 492,700 | 528,000 |
Corporate Debt Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, amortized cost | 1,035,900 | 1,106,200 |
Debt securities, available-for-sale, gross unrealized gain | 41,900 | 5,800 |
Debt securities, available-for-sale, gross unrealized loss | 0 | (21,600) |
Fixed maturity securities, fair value | 1,077,800 | 1,090,400 |
Residential Mortgage Backed Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, amortized cost | 472,600 | 459,100 |
Debt securities, available-for-sale, gross unrealized gain | 8,600 | 2,200 |
Debt securities, available-for-sale, gross unrealized loss | (800) | (9,800) |
Fixed maturity securities, fair value | 480,400 | 451,500 |
Commercial Mortgage Backed Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, amortized cost | 100,700 | 96,700 |
Debt securities, available-for-sale, gross unrealized gain | 4,600 | 100 |
Debt securities, available-for-sale, gross unrealized loss | 0 | (2,500) |
Fixed maturity securities, fair value | 105,300 | 94,300 |
Asset-backed Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, amortized cost | 56,700 | 64,700 |
Debt securities, available-for-sale, gross unrealized gain | 1,300 | 200 |
Debt securities, available-for-sale, gross unrealized loss | 0 | (400) |
Fixed maturity securities, fair value | 58,000 | 64,500 |
Other Debt Obligations [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, amortized cost | 179,200 | 155,600 |
Debt securities, available-for-sale, gross unrealized gain | 1,100 | 0 |
Debt securities, available-for-sale, gross unrealized loss | (800) | (5,700) |
Fixed maturity securities, fair value | $ 179,500 | 149,900 |
Short-term Investments [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Total AFS, amortized cost | 25,000 | |
Total AFS, gross unrealized gain | 0 | |
Total AFS, gross unrealized loss | 0 | |
Total AFS investments | $ 25,000 |
Investments Equity Securities (
Investments Equity Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Schedule of Equity Securities and Other [Line Items] | ||
Equity Securities, FV-NI, Cost | $ 199,000 | $ 131,900 |
Equity Securities, FV-NI | 284,700 | 199,900 |
Industrial and Miscellaneous [Member] | ||
Schedule of Equity Securities and Other [Line Items] | ||
Equity Securities, FV-NI, Cost | 171,800 | 114,600 |
Equity Securities, FV-NI | 246,100 | 174,800 |
Other [Member] | ||
Schedule of Equity Securities and Other [Line Items] | ||
Equity Securities, FV-NI, Cost | 27,200 | 17,300 |
Equity Securities, FV-NI | $ 38,600 | $ 25,100 |
Investments, Amortized Cost and
Investments, Amortized Cost and Estimated Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Amortized Cost | ||
Due in one year or less, amortized cost | $ 131,100 | |
Due after one year through five years, amortized cost | 796,100 | |
Due after five years through ten years, amortized cost | 783,100 | |
Due after ten years, amortized cost | 54,300 | |
Mortgage and asset-backed securities, amortized cost | 630,000 | |
Total, amortized cost | 2,394,600 | $ 2,513,700 |
Estimated Fair Value | ||
Due in one year or less, fair value | 132,100 | |
Due after one year through five years, fair value | 818,600 | |
Due after five years through ten years, fair value | 826,000 | |
Due after ten years, fair value | 60,400 | |
Mortgage and asset-backed securities, fair value | 643,700 | |
Total, fair value | $ 2,480,800 | $ 2,496,400 |
Investments, Continuous Loss Po
Investments, Continuous Loss Position (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($)shares | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)shares | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Debt Securities, Available-for-sale [Line Items] | |||||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months | $ 46,400,000 | $ 46,400,000 | $ 1,056,700,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer | 65,100,000 | 65,100,000 | 537,700,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 800,000 | 800,000 | 23,100,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 800,000 | $ 800,000 | $ 18,800,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract] | |||||
Debt Securities, number of issues in loss position, less than 12 months | 125 | 125 | 538 | ||
Debt Securities, number of issues in loss position, 12 months or greater | 28 | 28 | 205 | ||
Other than temporary impairment, credit losses recognized in earnings | $ 0 | $ 0 | $ 0 | $ 2,000,000 | |
Debt Securities [Member] | |||||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract] | |||||
Other than temporary impairment, credit losses recognized in earnings | $ 0 | $ 2,000,000 | |||
Total impairments, number of securities | shares | 57 | 57 | |||
US Treasury Securities [Member] | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months | $ 0 | $ 0 | $ 12,200,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer | 0 | 0 | 72,700,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 0 | 0 | 100,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 0 | $ 0 | $ 1,100,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract] | |||||
Debt Securities, number of issues in loss position, less than 12 months | 0 | 0 | 7 | ||
Debt Securities, number of issues in loss position, 12 months or greater | 0 | 0 | 25 | ||
US States and Political Subdivisions Debt Securities [Member] | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months | $ 0 | $ 0 | $ 70,100,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | $ 0 | $ 0 | $ 700,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract] | |||||
Debt Securities, number of issues in loss position, less than 12 months | 0 | 0 | 21 | ||
Corporate Debt Securities [Member] | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months | $ 0 | $ 0 | $ 624,400,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer | 0 | 0 | 193,700,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 0 | 0 | 13,400,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 0 | $ 0 | $ 8,200,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract] | |||||
Debt Securities, number of issues in loss position, less than 12 months | 0 | 0 | 205 | ||
Debt Securities, number of issues in loss position, 12 months or greater | 0 | 0 | 69 | ||
Residential Mortgage Backed Securities [Member] | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months | $ 0 | $ 0 | $ 156,900,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer | 65,100,000 | 65,100,000 | 199,800,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 0 | 0 | 2,500,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 800,000 | $ 800,000 | $ 7,300,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract] | |||||
Debt Securities, number of issues in loss position, less than 12 months | 0 | 0 | 59 | ||
Debt Securities, number of issues in loss position, 12 months or greater | 28 | 28 | 72 | ||
Commercial Mortgage Backed Securities [Member] | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months | $ 0 | $ 0 | $ 30,900,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer | 0 | 0 | 55,000,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 0 | 0 | 500,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 0 | $ 0 | $ 2,000,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract] | |||||
Debt Securities, number of issues in loss position, less than 12 months | 0 | 0 | 13 | ||
Debt Securities, number of issues in loss position, 12 months or greater | 0 | 0 | 22 | ||
Asset-backed Securities [Member] | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months | $ 0 | $ 0 | $ 25,100,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer | 0 | 0 | 16,500,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 0 | 0 | 200,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 0 | $ 0 | $ 200,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract] | |||||
Debt Securities, number of issues in loss position, less than 12 months | 0 | 0 | 18 | ||
Debt Securities, number of issues in loss position, 12 months or greater | 0 | 0 | 17 | ||
Other Debt Obligations [Member] | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months | $ 46,400,000 | $ 46,400,000 | $ 137,100,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | $ 800,000 | $ 800,000 | $ 5,700,000 | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract] | |||||
Debt Securities, number of issues in loss position, less than 12 months | 125 | 125 | 215 |
Investments Investments, Net Re
Investments Investments, Net Realized Gains and Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Equity securities: | ||||
Equity Securities, FV-NI, Realized Gain | $ 16,700 | $ 13,000 | ||
Equity Securities, FV-NI, Realized Loss | 3,900 | 1,100 | ||
AFS, change in unrealized gains (losses) | ||||
AFS, change unrealized gains (losses) on fixed maturity and equity securities reflected in AOCI | $ 18,700 | $ (11,600) | 103,500 | (70,800) |
AFS, net realized gains (losses) | ||||
AFS, Gross gains from sales | 4,900 | |||
AFS, Gross losses from sales | (500) | |||
Net realized and unrealized (losses) gains on investments | 2,600 | 15,600 | 33,300 | 13,200 |
Total gross realized gains | 16,400 | 20,700 | 15,100 | |
Investments, Gross Realized Losses | (3,300) | (4,900) | (3,700) | |
Total change in net unrealized gains (losses) | 8,200 | (400) | 121,000 | (69,000) |
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||||
Equity Securities, FV-NI, Unrealized Gain (Loss) | 11,200 | 17,700 | 1,800 | |
Proceeds from sale of fixed maturity securities | 52,900 | 1,500 | 147,300 | 169,800 |
Debt Securities [Member] | ||||
AFS, change in unrealized gains (losses) | ||||
AFS, change unrealized gains (losses) on fixed maturity and equity securities reflected in AOCI | 18,700 | (11,600) | 103,500 | (70,800) |
AFS, net realized gains (losses) | ||||
AFS, Gross gains from sales | 2,300 | 0 | 3,900 | 2,100 |
AFS, Gross losses from sales | (300) | 0 | (1,000) | (2,600) |
Net realized and unrealized (losses) gains on investments | 2,000 | 0 | 2,900 | (500) |
Equity Securities [Member] | ||||
AFS, change in unrealized gains (losses) | ||||
AFS, change unrealized gains (losses) on fixed maturity and equity securities reflected in AOCI | 0 | 0 | 0 | 0 |
AFS, net realized gains (losses) | ||||
AFS, Gross gains from sales | 4,900 | |||
AFS, Gross losses from sales | (500) | |||
Net realized and unrealized (losses) gains on investments | 700 | $ 15,600 | 30,500 | $ 13,700 |
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||||
Trading Securities, Realized Gain | 14,000 | |||
Trading Securities, Realized Loss | (3,000) | |||
Trading Securities, Change in Unrealized Holding Gain (Loss) | (10,300) | |||
Other Investments [Member] | ||||
AFS, change in unrealized gains (losses) | ||||
AFS, change unrealized gains (losses) on fixed maturity and equity securities reflected in AOCI | 0 | 0 | ||
AFS, net realized gains (losses) | ||||
Net realized and unrealized (losses) gains on investments | (200) | (200) | ||
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||||
Trading Securities, Realized Gain | 0 | 0 | ||
Trading Securities, Realized Loss | 0 | 0 | ||
Trading Securities, Change in Unrealized Holding Gain (Loss) | (200) | (200) | ||
Cash Equivalents [Member] | ||||
AFS, change in unrealized gains (losses) | ||||
AFS, change unrealized gains (losses) on fixed maturity and equity securities reflected in AOCI | 0 | 0 | ||
AFS, net realized gains (losses) | ||||
Net realized and unrealized (losses) gains on investments | 100 | 100 | ||
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||||
Trading Securities, Realized Gain | 100 | 100 | ||
Trading Securities, Realized Loss | 0 | 0 | ||
Trading Securities, Change in Unrealized Holding Gain (Loss) | $ 0 | $ 0 |
Net Investment Income (Details)
Net Investment Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Gross investment income | $ 23.5 | $ 21.2 | $ 68.9 | $ 62.7 |
Investment expenses | 1.2 | 1 | 3.4 | 2.8 |
Net investment income | 22.3 | 20.2 | 65.5 | 59.9 |
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 | 20.2 | 18.8 | 60.8 | 56.5 |
Equity Securities [Member] | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Investment income related to equity securities | 2.8 | 1.5 | 6.6 | 4.8 |
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 | $ 0.5 | $ 0.9 | $ 1.5 | $ 1.4 |
Investments Investments, Held i
Investments Investments, Held in Trust or on Deposit (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Deposit Assets [Abstract] | ||
Investments | $ 2,796.9 | $ 2,727.7 |
Assets Held-in-trust [Abstract] | ||
Funds Held under Reinsurance Agreements, Asset | 3.2 | 23.2 |
Federal Home Loan Bank [Member] | ||
Deposit Assets [Abstract] | ||
Investments | 260 | |
Required by various state laws and regulations to hold securities or letters of credit in depository account [Member] | ||
Deposit Assets [Abstract] | ||
Investments | $ 846.5 | $ 867.7 |
Investments Other Invested Asse
Investments Other Invested Assets (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Other Invest Assets [Abstract] | ||
Other invested assets at NAV | $ 4.7 | $ 0 |
Total other invested assets | 24.7 | $ 0 |
Other Investments and Securities, at Cost | 4.9 | |
Real Estate Investments, Unconsolidated Real Estate and Other Joint Ventures | $ 20 |
Property and Equipment Property
Property and Equipment Property and Equipment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Property and Equipment [Line Items] | ||||
Property and equipment, gross | $ 75.9 | $ 75.9 | $ 69.5 | |
Accumulated depreciation, depletion and amortization, property and equipment | (52) | (52) | (51.3) | |
Property and equipment, net | 23.9 | 23.9 | 18.2 | |
Utilities operating expense, depreciation and amortization | 2.8 | 6.5 | 6.1 | |
Payments to develop software | 0.9 | 2.5 | 2.9 | |
Cloud computing arrangements | 30.4 | 30.4 | 26 | |
Amortization of cloud computing arrangements | 1.7 | 3.8 | $ 0 | 0.8 |
Furniture and equipment | ||||
Property and Equipment [Line Items] | ||||
Property and equipment, gross | 2.5 | 2.5 | 3.3 | |
Leasehold improvements | ||||
Property and Equipment [Line Items] | ||||
Property and equipment, gross | 6 | 6 | 3.2 | |
Computer and software | ||||
Property and Equipment [Line Items] | ||||
Property and equipment, gross | 66.3 | 66.3 | 61.9 | |
Automobiles | ||||
Property and Equipment [Line Items] | ||||
Property and equipment, gross | $ 1.1 | $ 1.1 | $ 1.1 |
Property and Equipment Leases (
Property and Equipment Leases (Details) | 9 Months Ended |
Sep. 30, 2019 | |
Minimum [Member] | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, remaining lease term | 1 year |
Lessee, operating lease, renewal term | 1 year |
Maximum [Member] | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, remaining lease term | 8 years |
Lessee, operating lease, renewal term | 10 years |
Property and Equipment Leases,
Property and Equipment Leases, Components of Lease Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Components of Lease Expense [Abstract] | ||
Operating lease expense | $ 1.3 | $ 3.8 |
Finance lease expense | 0.1 | 0.2 |
Total lease expense | $ 1.4 | $ 4 |
Property and Equipment Leases_2
Property and Equipment Leases, Maturities of Lease Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Lessee, operating lease liabilities due | |||
Operating lease liabilities due next twelve months | $ 1.3 | ||
Operating lease liabilities due year two | 4.5 | ||
Operating lease liabilities due year three | 3.1 | ||
Operating lease liabilities due year four | 1.9 | ||
Operating lease liabilities due year five | 2 | ||
Operating lease liabilities due after year five | 6.1 | ||
Operating lease liabilities due | 18.9 | ||
Less: inputed interest, Operating lease liability | (1.8) | ||
Operating lease liability | $ 17.1 | $ 19 | $ 0 |
Operating lease, weighted average remaining lease term | 6 years 7 months 6 days | ||
Operating lease, weighted average discount rate, percent | 3.30% | ||
Lessee, finance lease liabilities due | |||
Finance lease liabilities due next twelve months | $ 0.2 | ||
Finance lease liabilities due year two | 0.2 | ||
Finance lease liabilities due year three | 0.2 | ||
Finance lease liabilities due year four | 0 | ||
Finance lease liabilities due year five | 0 | ||
Finance lease liabilities due after year five | 0 | ||
Finance lease liabilities due | 0.6 | ||
Less: inputed interest, finance lease | 0 | ||
Finance lease, liability | $ 0.6 | ||
Finance lease, weighted average remaining lease term | 2 years 8 months 12 days | ||
Finance lease, weighted average discount rate, percent | 3.70% |
Property and Equipment Leases_3
Property and Equipment Leases, Supplement Balance Sheet Information (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Lessee, Lease, Description [Line Items] | |||
Operating lease right-of-use assets | $ 15 | $ 16.8 | $ 0 |
Operating lease liability | 17.1 | $ 19 | 0 |
Property and equipment, gross | 75.9 | 69.5 | |
Accumulated depreciation, depletion and amortization, property and equipment | (52) | (51.3) | |
Property and equipment, net | 23.9 | 18.2 | |
Other liabilities | 50.7 | $ 74 | |
Finance leases [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Property and equipment, gross | 1.1 | ||
Accumulated depreciation, depletion and amortization, property and equipment | (0.5) | ||
Property and equipment, net | 0.6 | ||
Other liabilities | $ 0.6 |
Property and Equipment Leases_4
Property and Equipment Leases, Supplemental Cash Flow Information (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Leases, Supplement Balance Sheet Information [Abstract] | |
Operating cash flows from operating leases | $ 3.8 |
Financing cash flows from finance leases | $ 0.2 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract] | ||||
Statutory tax rate | 21.00% | |||
Effective tax rate | 19.80% | 18.40% | 17.70% | 16.80% |
Liability for Unpaid Losses a_3
Liability for Unpaid Losses and Loss Adjustment Expenses (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||||
Unpaid losses and LAE at beginning of period | $ 2,161.8 | $ 2,227.9 | $ 2,207.9 | $ 2,266.1 |
Less reinsurance recoverable, excluding bad debt allowance, on unpaid losses and LAE | 484.2 | 512.5 | 504.4 | 537 |
Net unpaid losses and LAE at beginning of period | 1,677.6 | 1,715.4 | 1,703.5 | 1,729.1 |
Losses and LAE, net of reinsurance, incurred during the period related to: | ||||
Current period | 115.4 | 121.1 | 344.8 | 342.5 |
Prior periods | (20.2) | (11.9) | (66.1) | (40.8) |
Total net losses and LAE incurred during the period | 95.2 | 109.2 | 278.7 | 301.7 |
Deduct payments for losses and LAE, net of reinsurance, related to: | ||||
Current period | 32.9 | 31.2 | 63.5 | 56.9 |
Prior periods | 69.7 | 71.5 | 248.5 | 252 |
Total net paid losses and LAE during the period | 102.6 | 102.7 | 312 | 308.9 |
Ending unpaid losses and LAE, net of reinsurance | 1,670.2 | 1,721.9 | 1,670.2 | 1,721.9 |
Reinsurance recoverable, excluding bad debt allowance, on unpaid losses and LAE | 527.1 | 511.8 | 527.1 | 511.8 |
Unpaid losses and LAE at end of period | 2,197.3 | 2,233.7 | 2,197.3 | 2,233.7 |
Impact of the LPT Agreement | 2.3 | 2.6 | 10.5 | 12 |
Involuntary Assigned Risk Business [Member] | ||||
Losses and LAE, net of reinsurance, incurred during the period related to: | ||||
Prior periods | (0.2) | 0.1 | (0.1) | (0.3) |
Voluntary Risk Business [Member] | ||||
Losses and LAE, net of reinsurance, incurred during the period related to: | ||||
Prior periods | $ (20) | $ (12) | $ (66) | $ (40.5) |
LPT Agreement (Details)
LPT Agreement (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | ||
Reinsurance Agreement [Line Items] | ||||||
Liabilities for the incurred but unpaid losses and LAE related to claims prior to July 1, 1995 | $ 1,500,000 | $ 1,500,000 | ||||
Ceded premiums written | 775,000 | |||||
Amortization of deferred gain | 2,300 | $ 2,600 | 8,500 | $ 9,300 | ||
Net income | 32,800 | $ 47,600 | 125,400 | 115,700 | ||
Deferred reinsurance gain—LPT Agreement | 139,400 | 139,400 | $ 149,600 | |||
Estimated remaining liabilities - LPT Agreement | 385,800 | 385,800 | 408,200 | |||
Paid losses and LAE claims related to LPT | 790,800 | 790,800 | $ 773,700 | |||
Indemnification Agreement [Member] | ||||||
Reinsurance Agreement [Line Items] | ||||||
Coverage provided under LPT Agreement | $ 2,000,000 | 2,000,000 | ||||
Change to Contingent Profit Commission [Member] | ||||||
Reinsurance Agreement [Line Items] | ||||||
Net income | 200 | 500 | ||||
Change in estimate of contingent commission receivable | (300) | |||||
Change Due To Estimated Reserves Ceded Under LPT Agreement Member [Member] | ||||||
Reinsurance Agreement [Line Items] | ||||||
Cumulative adjustment to the Deferred Gain | [1] | 1,800 | $ 2,200 | |||
Net income | $ 1,800 | |||||
[1] | The cumulative adjustment to the Deferred reinsurance gain–LPT Agreement (Deferred Gain) was also recognized in losses and LAE incurred in the Company’s Consolidated Statement 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 | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Notes payable | $ 0 | $ 20,000 |
Dekania Surplus Note [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | 0 | 10,000 |
Repayments of Notes Payable | $ 10,200 | |
Interest rate, basis points in excess of the 90-day LIBOR | 425 basis points in excess of the 90-day LIBOR | |
Alesco Surplus Note [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | $ 0 | $ 10,000 |
Repayments of Notes Payable | $ 10,200 | |
Interest rate, basis points in excess of the 90-day LIBOR | 405 basis points in excess of the 90-day LIBOR |
Notes Payable Letters of Credit
Notes Payable Letters of Credit (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Letters of Credit Facilities [Line Items] | |
Letters of credit, unused capacity, commitment fee percentage | 0.15% |
Federal Home Loan Bank [Member] | |
Letters of Credit Facilities [Line Items] | |
Letters of credit facilities, maximum borrowing capacity | $ 260 |
Letters of credit collateral amount | 351 |
Federal Home Loan Bank [Member] | EAC | |
Letters of Credit Facilities [Line Items] | |
Letters of credit facilities, maximum borrowing capacity | 60 |
Federal Home Loan Bank [Member] | ECIC | |
Letters of Credit Facilities [Line Items] | |
Letters of credit facilities, maximum borrowing capacity | 90 |
Federal Home Loan Bank [Member] | EPIC | |
Letters of Credit Facilities [Line Items] | |
Letters of credit facilities, maximum borrowing capacity | $ 110 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Accumulated Other Comprehensive Income [Abstract] | ||
Net unrealized gains (losses) on investments, before taxes | $ 86,200 | $ (17,300) |
Deferred tax (expense) benefit on net unrealized gains (losses) | (18,100) | 3,600 |
Total accumulated other comprehensive income (loss) | $ 68,100 | $ (13,700) |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-options exercised | 25,580 | 51,091 | 57,091 | |
Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of outstanding options or share units | 160,066 | |||
Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation award, shares issued | [1] | 17,050 | ||
Share-based compensation options, exercise price on grant date | [1] | $ 40.76 | ||
Fair value of awards awarded on grant date | [1] | $ 0.7 | ||
Vesting rights for RSUs awarded | vest in full on May 23, 2020 | |||
Number of outstanding options or share units | 237,077 | |||
Restricted Stock Units (RSUs) [Member] | Officer [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation award, shares issued | [2] | 72,060 | ||
Share-based compensation options, exercise price on grant date | [2] | $ 40.54 | ||
Fair value of awards awarded on grant date | [2] | $ 2.9 | ||
Vesting rights for RSUs awarded | vest 25% on March 15, 2020, and each of the subsequent three anniversaries of that date | |||
Performance Shares [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation award, shares issued | [3] | 9,587 | ||
Share-based compensation options, exercise price on grant date | [3] | $ 41.72 | ||
Fair value of awards awarded on grant date | [3] | $ 0.4 | ||
Number of outstanding options or share units | 258,765 | |||
Performance Shares [Member] | Officer [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation award, shares issued | [3] | 95,940 | ||
Share-based compensation options, exercise price on grant date | [3] | $ 40.54 | ||
Fair value of awards awarded on grant date | [3] | $ 3.9 | ||
Performance share awards performance period | two years | |||
Share-based compensation arrangement by share-based payment award, award vesting period | 1 year | |||
Performance share awards, minimum payout | 0.00% | |||
Performance share awards, maximum payout | 200.00% | |||
[1] | The RSUs awarded in May 2019 were awarded to non-employee Directors of the Company and vest in full on May 23, 2020 . | |||
[2] | The RSUs awarded in March 2019 were awarded to certain employees of the Company and vest 25% on March 15, 2020, and each of the subsequent three anniversaries of that date . The RSUs are subject to accelerated vesting in certain circumstances, including but not limited to: death, disability, retirement, or in connection with a change of control of the Company. | |||
[3] | The PSUs awarded in March 2019 and August 2019 were awarded to certain employees of the Company and have a performance period of two years followed by an additional one year vesting period. The PSU awards are subject to certain performance goals with payouts that range from 0% to 200% of the target awards. The value shown in the table represents the aggregate number of PSUs awarded at the target level. |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share, Basic and Diluted, by Common Class [Line Items] | ||||
Net income available to stockholders - basic and diluted | $ 32,800 | $ 47,600 | $ 125,400 | $ 115,700 |
Weighted average number of shares outstanding - basic | 31,946,851 | 32,906,250 | 32,168,826 | 32,864,612 |
Effect of dilutive securities: | ||||
Dilutive securities | 371,166 | 409,914 | 418,629 | 414,178 |
Weighted average number of shares outstanding - diluted | 32,318,017 | 33,316,164 | 32,587,455 | 33,278,790 |
Performance Shares [Member] | ||||
Effect of dilutive securities: | ||||
Dilutive securities | 255,663 | 253,612 | 278,641 | 253,269 |
Share-based Payment Arrangement, Option [Member] | ||||
Effect of dilutive securities: | ||||
Dilutive securities | 80,889 | 104,450 | 79,954 | 101,907 |
Restricted Stock Units (RSUs) [Member] | ||||
Effect of dilutive securities: | ||||
Dilutive securities | 34,614 | 51,852 | 60,034 | 59,002 |